Saturday, January 23, 2010

Jan 23.10 commentary...important.

Good morning Ladies and Gentlemen:
 
 
I thought we would get extreme volatility in the markets on Tuesday, the first day back from the Martin Luther King holiday.  I guess traders took an extra day
as the roller-coaster trading in all markets commenced on Wednesday and continued right through Friday.
 
On Friday, the Dow retreated by 212 points and the Nasdaq by 61 points.
 
As for gold, the precious metal declined by $13.50 to 1089.20. During the physical time zones, gold saw brisk action rising to 1096.00 but as soon as the afternoon fix was completed,
the not for profit gold cartel sold massive contracts on the comex and drove the price to close at 1089.20
 
Yesterdays, volume was immense at 260,000.  They do not tell us switches anymore, but from the data it looks like around 20,000 left the Feb. contract to the April contract.
 
At the conclusion of my commentary, I will forward to you results of the comex gold and silver trading for yesterday.
 
The volume of gold trading at the comex on Thursday turned out to be 328000.  In a rather strange development, the open interest declined by only  2400 contracts on that huge volume.
 
This no doubt infuriated our banking cartel as they could not shake the leaves off the tree.  The bankers had their own problems to contend with, with the announcement of Obama that the USA was going to restrict trading by bankers.  I will delve deeply into this in my commentary today.
 
 
As for silver, the volume on the comex was an astounding 51000 contracts  (250 million oz).  To give you an idea of the amount of silver offered:   the world produces 500 million oz of silver in a given year and have no above ground strategic supplies like their richer cousin, gold.
 
Thus in one day, the comex traded 1/2 its yearly production.  What is also strange, the comex is not the world's largest trader in silver and gold.  That belongs to the LBMA which trades on a daily basis
of around 100,000 contracts or 500 million oz of silver and for gold around 2100 metric tonnes. (75000 contracts)  In gold that equates to a full years production of gold sold at the LBMA in one day.
 
 
In another strange development, the OI in silver (basis Thursday) rose by 721 contracts to 126941.  Please recall that silver has lost almost 2.00$ per oz and yet the OI has gone up????
 
As for gold, we are nearing the completion of the Feb contract.  It goes off the board on Jan 26.10 as does the options. The OI for February stands tonight at 197000 which is extremely high for 4 days to go.
 
In another development we are seeing strange announcements at the comex at the various warehouses.
 
For gold:  16 tonnes of gold (physical) was adjusted out of the dealer inventory into the investor's inventory.  This caused the dealer inventory to fall to a dangerously low  1.8 million oz or 18,000 contracts.
This is the amount of gold that is available to be delivered upon!
 
For silver:  2.4 million oz were removed from the dealer inventory to investor inventory.  This caused the level of dealer inventory to fall to a dangerously low 47 million oz of silver or 9400 contracts of silver.
 
 
To boot, for January options (January is a non delivery month for both silver and gold)  in gold, a huge 2808 contracts are already standing for delivery  (280 thousand oz of gold or 10 tonnes of gold)
This is extremely high for just options in a non delivery month.  Not only that, but a further 45 contracts are standing which have not been hit.
 
I would like to point out, that this does not include February options which expire Jan 26.10.  There is no doubt that our wicked bankers will be trying to keep the option holders from exercising contracts.
 
In silver: the January options hit for metal total 286 contracts or 1.43 million oz of silver.  Only 1 contract remains to be hit.
 
There is no doubt that this coming week will be extremely volatile as the bankers wish to get those long holders from taking delivery.
 
 
 
The COT report was released after the market closed: (Remember that this is basis tuesday night)
 
 
The gold COT report revealed:

*The large specs decreased longs by 9,984 contracts and decreased shorts by 2111 contracts.

* The commercials increased longs by 8,746 contracts and decreased shorts by 95 contracts.

*The small specs decreased longs by 42 contracts and increased shorts by 926 contracts.

 
 
 
 
end.
 
 
 
 
Since most of the action was from Wednesday through Friday, this COT report is basically a dud.  It shows nothing.
 
 
 
In another strange development, the gold ETF  GLD remained the same inventory volume for the last three days at 1111 tonnes of gold:
 
 
MarketVane’s Bullish Consensus for gold slipped 2 points to 77% (the December low was 74%) and the HGNSI caught up, shedding 28.6 points to 32.3% (in December it got down to 10.9%, and may do so again when today’s action is reflected). Perversely, the GLD ETF turned in a third day with reported gold holdings at 1,111.92191 tonnes – the first time of 3 identical days in a row this year.
 
 
 
 
 
 
 
 
As mentioned above, here are the results of the Dow and  Nasdaq trading yesterday:
 
 
The uncertainty about the fate of the banks and Ben Bernanke as Fed chairman spooked the markets and it is about time. The DOW fell 217 to 10,172. The DOG lost 61 to 2705.
 
 
 
 
 
 
 
end.
 
 
 
 
 
 
 
 
 
Ok, lets start with the days economic developments, and there is plenty to think about as we go about our business.
 
 
I have received many questions concerning the new Obama banking initiative.
 
I will give you my opinion, plus other commentaries so you can grasp its importance.
 
You have heard me many times explain that it is impossible for Obama, the Fed and the bankers to recall all the liquidity that they have introduced into the economy.
 
Since the crisis started, approximately 13.7 trillion dollars as been committed.  The dollars are represented by
 
1. the printing press
2. federal guarantees of bonds and notes
 
Approximately 3.7 trillion of real paper money transcended the globe with the remainder guarantees.
 
On top of this, the large banks have huge derivative trades, which have been used to keep interest rates down,
buy securitized home mortgages and keep oil and the precious metals, gold and silver prices, lower than they ought to be.
 
Here is a summary of the largest banks derivative portfolio: (from Adrian Douglas)
 

Cheers
Adrian

***
 
 
 
 
 
Note that these 5 banks control 204 trillion dollars of derivatives.  These are all off balance sheet.
 
The total derivatives outstanding for all banks and all entities are rumoured to be 1.4 quadtrillion dollars.
 
Also please note the total assets of Goldman Sachs at 114.8 billion dollars and yet its derivatives are 41 trillion dollars.
 
JPMorgan has assets of 1.669 trillion dollars and total derivatives at 72 trillion dollars.
 
How on earth can these guys unwind all of these trades?  The entire world's global economy will come to a grinding halt
 
in a nano-second.
 
The stock market would plummet to around 2000.  The long bond yield would rise to say 8% which in turn would blow up just about every bank on the planet.
 
Agricultural products would rise to such levels that goods would disappear off shelves. We would go into a hyperinflationary depression almost immediately.
 
Why did Obama announce that he was going to rein in the banks?
He did this because of total anger on Main Street.  The real unemployment is 22% and jobs are scarce.
Detroit has unemployment at 45%. Illinois is close to bankruptcy as it cannot fund its huge pension liability.
Illinois is home to the greatest number of Federal penitentiaries in the usa. It has the highest deficit per capita in the nation
even beating derelict California. Obama is not stupid.  He sits on the Plunge Protection Team and knows full well that he cannot unwind these banker trades.
 
This coming November there are many senatorial seats up for grabs as well as House seats.  If he is to win the election, he must state one thing and do the opposite. Obama reacted promptly with verbal diarrhea on the loss of the senatorial seat in Mass. 
 
I strongly believe that there is no way that he can introduce legislation that would cause the entire economy to default.
 
end.
 
 
 
 
Here are other commentaries on the Obama initiative to rein in the bankers:
 
 
First from Adrian Douglas of GATA:
 
 
It was excellent propaganda from Obama today about stopping banks from speculating and trading for their own account but perhaps he hasn’t read the OCC US Bank Derivative report which shows that 5 US banks hold notional amounts of derivatives ranging from 4 T$ (Wells Fargo) to 78 T$ (JPM). All banks together own 204 T$ of derivatives. Note that almost 100% of these derivatives are held for trading by the top 4 derivative holders (see table below). The percentage of derivatives held for trading by all banks averages 98.9%. I don’t know how he contemplates getting the banks to unwind them. These derivatives include 102 B$ in gold derivatives and 9.3B$ in Precious Metals (mainly silver) derivatives. This massive derivatives monster demands a new denomination “Too Big to Comprehend”! I would bet that Obama doesn’t even know about the problem let alone comprehend it. If he does then his speech was the biggest lie ever told…unless of course he meant that the banks can’t speculate or trade for their own account with anything reported on their balance sheet; off balance sheet is OK or in accounts that are held in offshore special purpose vehicles! 
 
 
Here is the King report on this subject:
 

From The King Report…

Yesterday, a host of reporters and clients asked us for our opinion of the Volcker Rule, Obama’s proposal to restrict banks from proprietary trading as well as investments in hedge funds and private equity.

Our response was, "It is a year too late."

Just like both Bushes, Obama commenced his presidency with massive stimulus instead of taking the pain and doing the requisite purging and restructuring (like Reagan). Just like his predecessor, Obama delayed the inevitable but saved some elites on the back of taxpayers.

A big problem for Obama, Congress and the country is that the nation’s ire at the bailouts and bankster arrogance could provoke a discovery process of the true conditions of major banks. We believe Ben’s vehement obstruction to Fed and bank transparency is to prevent the consequences of such disclosure.

Now that the American public has demonstrated their displeasure by voting for Republicans in New Jersey, Virginia and Massachusetts, Obama and many Democrats will be forced to some kind of action.

But ideology prevents them from the requisite cleansing and restructuring. Instead Obama and other pols will vilify Wall Street, which we have been forecasting for the past year or so.

Unfortunately for Obama and the Democrats, the crackdown on Wall Street will provoke another downturn in the economy, which is already softening and faces a reduction of Fed juice. This will translate into even more ire, which should be at a fever pitch by the midterm elections.

Mort Zuckerman op-ed in the WSJ: The Great Recession Continues Americans haven't been fooled by the Dow's rise. What they see ahead are more taxes. Economists may see the recession as being over, but the man on the street does not. Roughly 60% of the public believes the recession still has a way to go, a NBC/Wall Street Journal poll reported last October…

There are sound reasons for this gloom. Consumers have learned a bitter lesson. They understand that increased consumption—private and public—will have to come from income and not borrowing, and income will have to come from employment.

Today, mainstream Americans are going on a financial diet amid deteriorating family finances…

http://online.wsj.com/article/SB1000142405274870383700457
5013592466508822.html?mod=WSJ_hpp_sections_opinion

-END-

 
And finally, from Bill Holter:
 
 

Bill H:

He didn't really mean what he said!

http://www.ft.com/cms/s/0/44f593ee-06a
7-11df-b426-00144feabdc0.html

http://huffpostfund.org/stories/2010/01/fdic-chief-got-ba
nk-america-loans-while-working-its-rescue

To all; surely President Obama didn't mean what he said yesterday, he couldn't have! The banks can't run proprietary trading, hedge funds or private equity? WHO does he think will step up and fill the void left to manipulate the markets? What does he propose? The Fed and Treasury manipulate everything on the planet directly without any middlemen or shrouded intermediaries? Surely he misspoke! Give him a couple of weeks and Wall Street will explain the error of his ways to him and all of this will go away.

All joking aside, if the banks could not trade for their own accounts, how will they make ANY money? They don't lend like they used to and they still have loans blowing up on a daily basis so if they can't rape the public in the markets anymore then where do they feed from? Yes we are in the midst of a massive deleveraging already but passing legislation forcing the banks to de lever will surely start a stampede toward the door to front run the banks.

Another humorous area would be the precious metals, WHO is going to step up and sell unlimited amounts of "paper Gold"? If the banks are precluded from trading and must unwind their books then WHERE and to WHOM does Mr. Obama think these banks are going sell theit S+P long positions and buy back their paper Gold shorts from? Ain't gonna happen bubba! It can't because everything, and I do mean EVERYTHING on the planet will come to a complete halt. Maybe Mr. Obama doesn't know that the banks run ALL the markets 24/7. Maybe he hasn't figured out yet that without "bank intervention" ie FRAUD and MANIPULATION that the stock markets and Treasury markets will crash and the metals will explode upward. Surely he doesn't want this!

Maybe the president is really a smart cookie and knows that unless they crash everything from soup to nuts the Treasury will not be able borrow anymore because they need more than is possibly available. Is the only way to continue Treasury funding by crashing everything and chasing capital into the "safety" of Treasuries? Maybe he figures that left to it's own the Treasury will end up "unfunded" which will result in a crash of everything anyway so why not just crash first and buy some valuable time for Timmy Geithner and the boys. Heck, why not propose legislation that the banks can ONLY invest in government securities? Why not propose legislation that they can ONLY buy and never sell until maturity?

No, all of this is strictly for public consumption and nothing more. THEY know, WE know, THE WORLD knows. The entire system is rotten to the core and has been a scam for years (since at least 1971), either they try to continue the scam and let the banks RE LEVER or everything crashes! What they really need to do is a $100 Trillion TARP and go forward like nothing happened! Like Richard Russell has said for years, either "INFLATE or DIE!".

We are surely at the "Uh Oh" moment of all time. Tim Geithner and Ben Bernanke have been caught making Goldman Sachs et al whole at taxpayer expense, Mr. Bernanke has his (non) confirmation hearings next week, Sheila Bair has been caught taking over $1 Million in mortgage loans from BOA WHILE she was negotiating their "salvation" (no conflict of interest here), the CFTC has a scheduled "we're going to make the markets fair" meeting and next week the "birth certificate" question hits a courtroom floor. All of this after the stock market has been on a 10 month "ramp" without any correction whatsoever. I don't have anything humorous to say about this because the only thing that comes to mind is Uh Oh! Have a nice weekend and regards, Bill H.

 

end.
 
 
 
We even heard from the legendary Frank  Venerosa as he commented on the meaning of Obama's attempt to rein in bank trading:
 
 

U.S. Economy
U.S. Stock Market
The Massachusetts Thunder Clap
Will Faith In The Bernanke And Geithner Puts Now Falter?

From: Frank Veneroso

January 22, 2010

Executive Summary

  1. The Massachusetts Senatorial upset was not about healthcare. It was about voter discontent across a broad range of issues.
  1. Politicians respond to the special interests that fund them after an election. They respond to the voters that elect them going into an election.
  1. The Massachusetts thunderclap has shifted forward this transition to the present.
  1. Obama has suddenly shifted from the anti Glass-Steagall Geithner policy regime to the pro Glass-Steagall Volcker policy regime. He is shifting from a focus on the wishes of vested interests to the wishes of an angry populace that will vote in the fall elections.
  1. The Supreme Court has removed the constraints on the ability of vested special interests to finance electoral campaigns. Obama has openly attacked the Supreme Court on this count – another example of his shift to populace positions.
  1. The public does not like endless fiscal deficits. In the wake of the Massachusetts thunderclap there will be no second fiscal stimulus.
  1. The public does not like Wall Street bailouts. In the wake of this thunderclap there will be no more financial sector bailouts. The Geithner put is in question.
  1. The public thinks Bernanke is a tool of Wall Street. In the wake of this thunderclap Bernanke may not be confirmed as Fed Chairman.
  1. Though this may have no implications for Fed policy, it may create uncertainty about the assumed Bernanke put.
  1. If I am right that the outsized move in the stock market last year was driven by echo bubble dynamics augmented by mega moral hazard, an erosion in investor confidence in the Geithner and Bernanke puts could lead to a significant stock market correction.
  1. As I have argued, the U.S. economy is not on sound footing going into 2010. The public wants jobs, but no more bailouts and no more fiscal stimulus. Political developments, by constraining the latter, may make the economy weaker. Stock market weakness may make the economy weaker. A weaker economy will exacerbate public antipathy to Wall Street, further a more hostile regime for investment, and threaten yet further stock market declines. There is a danger of a negative feedback loop as policy and psychology reflect more and more a pre-election populism aimed at devastated body politic.

 

end.
 
 
 
I hope I have given you food for thought on this extremely important development.  Please read everything carefully
and discern for yourself what will happen in the course of time.
 
 
OK lets go to other developlments.  I mentioned above Illinois....
 
This great article by Greg Hinz describes the horrible economic environment facing Illinois.  (courtesy of Jim Sinclair)
 
 

llinois enters a state of insolvency 
By: Paul Merrion, Greg Hinz and Steven R. Strahler 
January 18, 2010

As Illinois’ fiscal crisis deepens, the word "bankruptcy" is creeping more and more into the public discourse.

"We would like all the stakeholders of Illinois to recognize how close the state is to bankruptcy or insolvency," says Laurence Msall, president of the Civic Federation, a fiscal watchdog in Chicago.

"Bankruptcy is the reality that looms out there," Republican gubernatorial candidate Andrew McKenna Jr. says.

While it appears unlikely or even impossible for a state to hide out from creditors in Bankruptcy Court, Illinois appears to meet classic definitions of insolvency: Its liabilities far exceed its assets, and it’s not generating enough cash to pay its bills. Private companies in similar circumstances often shut down or file for bankruptcy protection.

"I would describe bankruptcy as the inability to pay one’s bills," says Jim Nowlan, senior fellow at the University of Illinois’ Institute of Government and Public Affairs. "We’re close to de facto bankruptcy, if not de jure bankruptcy."

Legal experts say the protections of the federal bankruptcy code are available to cities and counties but not states.

More…


 
 
The unemployment and jobless are rising.  Just look at Florida and other states with their rising unemployed:
 
 

Florida and Flagler County December Unemployment Rate Rises 
Flagler’s 16.9% unemployment rate is the highest in the state. The state unemployment rate is 11.8% 
By Toby Tobin

Palm Coast, FL – January 22, 2010 – Again, Flagler County leads Florida as the county with the highest rate of unemployment. December’s unemployment rate in the county was 16.9%, up from 16.8% in November and 11.8% in December 2008. Florida’s unemployment rate in December was 11.8% compared to 11.5% in November and 7.6% in December ‘08. Florida’s rate is the highest since May 1975 when it was 11.9%.

Flagler was followed by:

Hernando – 14.9% 
St. Lucie – 14.2% 
Indian River – 14.1% 
Marion – 14.0%

Nationally, the unemployment rate stayed at 10%. Eleven states and Washington DC were above the national average. Four states and the District of Columbia had rates higher than Florida:

California – 12.4% 
District of Columbia – 12.1% 
Michigan – 14.6% 
Rhode Island – 12.9% 
South Carolina – 12.6%

More…


Last night there were two bankers failures of minor consequences with the Premier American Bank the much larger default:
 

Bank Closing Information – January 22, 2010

These links contain useful information for the customers and vendors of these closed banks.

Premier American Bank, Miami, FL

http://www.fdic.gov/

 
 
 
 
end.
 
 
 
 
 
 
This is why Main Street is so angry.  It is the reason why the voters in Mass. decided that they had had enough of the free spending antics of the Deomcrats:
 
 

AIG Took Four Tries on Filing as Fed Asked to Withhold Data 
By Hugh Son and Michael J. Moore

Jan. 21 (Bloomberg) — American International Group Inc. submitted four rounds of regulatory filings in six months, with more than 1,000 redactions, as the Federal Reserve Bank of New York pressed the insurer to withhold data about bailout payments to banks.

The insurer made an initial filing on Dec. 2, 2008, about Maiden Lane III, the taxpayer-funded vehicle that bought assets from AIG’s trading partners. After the Securities and Exchange Commission asked for more information, AIG amended December filings three times. The last set of amendments, in May 2009, included more than 400 redactions, and the SEC granted the company permission to withhold the omitted data until 2018.

According to e-mails released this month, AIG was asked to limit what the public knew about the Maiden Lane transactions. The payments have been called a “backdoor bailout” by lawmakers because banks, including Goldman Sachs Group Inc. and Societe Generale SA, were reimbursed at 100 cents on the dollar for mortgage-linked securities that had declined in value.

“This has been terribly mishandled,” said James D. Cox, a professor of corporate and securities law at Duke University School of Law. “There’s this pattern that emerges that the New York Fed, for a variety of reasons including not causing nervousness about who was an AIG counterparty, covered up its rather heavy-handed approach to the bailout.”

Federal Reserve Chairman Ben S. Bernanke invited congressional auditors to do a “full review” of the AIG rescue and the New York Fed provided 250,000 pages of documents to a House panel this week. The New York Fed said Jan. 19 that it “assisted AIG in ensuring the accuracy of its disclosures and protected important U.S. taxpayer interests” and that the insurer was responsible for its disclosures.

More…

 
 
 
 
 
end.
 
 
The consumer is 70% of the GDP.  If they are not in good shape, the ecoomy just cannot recover.  Lets see how good a shape the credit card industry is in:
 
 
 

Fitch: U.S. Retail Credit Card Defaults Hit Near-Record Levels with No Relief in Sight 
January 20, 2010

U.S. consumers defaulted on store-branded credit cards at near-record levels during the holiday shopping season, with 2010 likely to bring more of the same trend, according to Fitch Ratings.

Fitch’s December Retail Credit Card Index results show that more than one in every eight dollars of receivables was written off as uncollectable during the November collection period on an annualized basis. Taken with the recent delinquency trends and Fitch’s expectation for unemployment, Fitch expects retail card chargeoffs to remain elevated throughout first half-2010.

"We do not foresee any meaningful improvement in the retail card credit quality in the coming months," said Managing Director Michael Dean. "U.S. consumers remain under stress on a number of fronts, most notably on the employment front, and retail card chargeoffs will continue to reflect those pressures."

Despite the elevated chargeoff and delinquency measures, Fitch expects retail card ABS ratings to remain stable throughout 2010. Excess spread remains robust, which coupled with loss coverage multiples and other structural protections will shield investors from potential downgrades or early amortization scenarios.

In December, Fitch’s Retail Credit Card Chargeoff Index snapped a two-month decline, rising 122 basis points (bps) to 12.56% from the previous month. Throughout 2009, chargeoffs surpassed the previous record (12.25% in January 2005) five times, establishing a new all-time high of 12.81% in August. Throughout the year, retail chargeoffs averaged 11.88% (more than 42% above the historical average of 8.34%).

More…

 

Just before releasing their earnings Goldman Sachs took precautionary measures.  What on earth were they afraid of:?
 

Goldman Sachs Had Bomb-Sniffing Dogs, Police Barricades At Its Headquarters Before Earnings Announcement 
First Posted: 01-22-10 08:59 AM

As Goldman Sachs prepared to announce its fourth quarter earnings and employee compensation levels yesterday, the bank had bomb-sniffing dogs and police barricades on hand at its New York City headquarters, the New York Post reports.

The decision to boost security as its offices was apparently driven by growing fervor over the bank’s huge profits and bonuses. Yesterday, the bank announced that it earned $13.4 billion for the year, and set aside $16 billion for employee compensation. Goldman was widely expected to set aside approximately $20 billion for employee pay, but CFO David Viniar suggested yesterday in a call with reporters that the bank wasn’t blind to the "pain and suffering in the world" and "wasn’t deaf to the calls for restraint."

Viniar’s remarks indicate an abrupt change in tone among Goldman Sachs execs. In November, CEO Lloyd Blankfein — who had previously bragged that the bank was doing "God’s work" — said the following at an industry conference:

I often hear references to higher compensation at Goldman. What people fail to mention is that net income generated per head is a multiple of our peer average. The people of Goldman Sachs are among the most productive in the world."

Despite what seems to be a new concern among the firm’s leaders about the PR implications of Goldman’s banner year, the bank’s announcement of the pay packages that individual executives receive will be closely scrutinized. Dealbook spoke to one Goldman insider, who suggested Blankfein’s bonus will be a measuring stick for employees who may see their pay cut. (Blankfein earned $68 million in 2007, but didn’t receive a bonus last year.) Here’s Dealbook:

More…


end.
 
This article from Dave Kranzler on the fate of the usa dollar and the huge increase in the Federal Debt limit:
 

Friday, January 22, 2010

A VIew From the Trenches: Is the Dollar Going to Roll Over Here?

This week's action has been a pure paper-driven cartel smack. The gold lease rates creeping higher are testament to the supply squeeze, especially the one in Asia (Shanghai premiums are an unheard of $10+ over spot, Viet Nam $30+). If the big physical buyers start to look for big supply below $1100 and it's not there, we could see a moon-launch in the next few weeks. China doesn't want paper, nor does India, Viet Nam, Russia, etc. Also, I'm not going to go out on a limb and call a dollar top here, but the momentum indicators are starting to roll over and there's some decent resistance at the 78.70 level/200 (simple)dma, which is where the dollar ripped in reverse yesterday. Our spineless leader's empty tirade against Wall Street yesterday may do nothing more than stimulate even more "diversification" away from the greenback.

Furthermore, we now know that the intent of our Government is to spend its way into AT LEAST a $2.2 trillion deficit this year, which is reflected by the year-end debt limit ceiling raise by $300 billion PLUS the additional $1.9 trillion debt ceiling raise being superficially debated in Congress. That's the minimum spending deficit this year, as States will need billions in loans and Unemployment Benefits will no doubt be extended. To be sure, Government payroll (of which Extended Unemployment Insurance beneficiaries are a part) may be the only source of Democratic votes in November. Anyone who looks at that picture and thinks the dollar can go higher from here is taking too many hits from the bong.

 

Current gold smack

I'm warming up to the conclusion that they are doing this ahead of announcing the next round of QE, which will be a lot bigger than the previous one. The Fed may not buy anymore mortgage paper, but they took the cap off FNM/FRE in order to use them to monetize mortgages. Congress is already telegraphing at least $2.3 trillion in deficit spending ($300 billion + $1.9 trillion), the housing market is going back into a tailspin (I'll post a blog hopefully this weekend demonstrating why), California and Illionois are both on the brink ($25 billion), and let's not forget a massive stimulus bill coming to try and stimulate jobs, but will result in just more Govt hiring and "make-work" at the State level. In case nobody bothered to look yesterday, the Extended Unemployment Claims jumped by over 10% with other 600k people shifting to the EUC category. If the Fed doesn't print trillions this year, we will collapse. Gold may go lower here, but within 6 months it will be up over the November high of $1220. The only unsettled question in my mind is how much higher will gold be by this summer and will Bernanke be replaced by Donald Kohn, who will be a lot less shy about pumping the printing presses.

***

 
 
 
end.
 
As promised, here are the summaries of gold comex and silver comex.  I hope that everyone has a great weekend and I will see you Monday night:
Harvey;
 
About this Report
Futures
|
Options
Trade Date
Daily Settlements for Gold Futures (FINAL)Trade Date: 01/22/2010
Month Open High Low Last Change Settle Estimated
Volume		 Prior Day
Open Interest
JAN 10 1091.4 1095.4 1083.0 1090.5B -13.5 1089.2 58 45
FEB 10 1095.4 1098.9 1081.9 1092.0A -13.5 1089.7 213,630 197,322
MAR 10 1095.6 1098.7 1082.5 1094.9 -13.4 1090.3 787 1,072
APR 10 1095.9 1100.0 1083.0 1089.7 -13.4 1090.8 33,463 164,706
JUN 10 1095.5 1099.9 1084.0 1094.3 -13.4 1091.7 4,370 50,260
AUG 10 1097.6 1100.5 1087.0 1096.1 -13.3 1092.6 818 22,281
OCT 10 - - - - -13.3 1093.3 76 7,260
DEC 10 1098.7 1102.2 1087.0 1099.3 -13.3 1094.4 4,489 29,362
FEB 11 1099.4 1099.4 1099.3 1099.3 -13.3 1096.0 798 7,947
APR 11 - - - - -13.3 1098.0 400 4,039
JUN 11 - - - - -13.4 1100.7 800 7,170
AUG 11 - - - - -13.5 1103.6 - 1,486
OCT 11 - - - - -13.7 1106.8 - 1,360
DEC 11 1111.2 1117.0 1106.6 1113.0 -13.9 1110.5 185 10,932
JUN 12 - - - - -14.1 1123.9 50 6,146
DEC 12 - - - - -14.3 1140.5 65 8,341
JUN 13 - - - - -14.4 1160.1 - 927
DEC 13 - - - - -14.5 1181.6 557 3,456
JUN 14 1199.0 1199.0 1199.0 1199.0 -14.5 1205.7 1 1,176
DEC 14 - - - - -14.5 1233.1 - 52
Total 260,547 525,340

Last Updated 01/22/2010 06:00 PM
 
 
 
 
 
 
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silver:
 
About this Report
Futures
|
Options
Trade Date
Daily Settlements for Silver Futures (FINAL)Trade Date: 01/22/2010
Month Open High Low Last Change Settle Estimated
Volume		 Prior Day
Open Interest
JAN 10 17.140 17.140 17.010 17.015 -.578 16.918 5 4
FEB 10 17.400 17.450 16.900 17.070 -.578 16.922 101 136
MAR 10 17.455 17.520 16.880 16.935 -.578 16.932 46,790 73,803
MAY 10 17.435 17.510 16.950 17.025 -.579 16.952 2,155 15,772
JLY 10 17.470 17.530 16.985 17.075 -.578 16.970 786 9,794
SEP 10 17.435 17.435 17.015 17.100 -.579 16.987 8 2,879
DEC 10 17.485 17.500 16.980 17.135 -.581 17.013 1,259 11,088
JAN 11 17.010 17.030 17.010 17.030 -.582 17.022 2 8
MAR 11 17.450 17.450 17.050 17.180B -.583 17.040 15 771
MAY 11 17.020 17.120 17.020 17.120 -.585 17.058 14 1,718
JLY 11 17.265 17.265 17.160 17.160 -.586 17.076 68 3,636
SEP 11 - - - - -.587 17.094 12 207
DEC 11 17.265 17.355 17.265 17.280 -.588 17.122 133 5,145
JLY 12 - - - - -.588 17.205 23 933
DEC 12 - - - - -.589 17.265 30 316
JLY 13 - - - - -.591 17.355 - 107
DEC 13 17.640 17.640 17.635A 17.640 -.591 17.406 154 613
JLY 14 - - - - -.591 17.521 - 5
DEC 14 17.700 17.700 17.700 17.700 -.591 17.601 1 6
Total 51,556 126,941

Last Updated 01/22/2010 06:00 PM
 
end.
Posted by Harvey Organ at 7:39 AM 5 comments
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