Drunken Debauchery

It's been a long week. Between the hackings, the outages, the impending bank runs and the blatant price suppression, I'm worn out. Sweetness wants me to take the day off in order to watch basketball and hit the sauce. I think I'll take him up on it. But, first, some charts.

First of all, here's an updated Finviz hourly. If you were able to check the blogs yesterday, you likely noticed I posted this chart a couple of times. Why? Simple. Why would anyone expect yesterday's breakout, which was nearly identical to the breakout of $29 back on 3/12-13, to play out any differently than it did on 3/14? And now, of course, we know that it didn't. I've been dong this a long time and it still nauseates me. Today's raids being particularly egregious as they occurred while nothing else (crude, copper, equities etc) was going down. In fact, most everything else was rallying. <cough, hurl, gag>

So, where does this leave us? Basically the same place we've been for a month. Let's say it again, with meaning: Until silver trades through $29.40 and until gold trades through $1626, there's no reason to get excited. The ranges that have contained prices since February 20 are still in place.

But this won't go on forever. The clock you hear silently ticking in the background is the inevitable encounter with the down trendlines inside the broader, 18-month range. The only real question is: What will happen when price finally encounters these lines again? Will the lines serve to press prices even lower, back toward the bottom of the ranges, near 1550 and 26? Or, will price break through and establish a new UP trendline that will carry us back toward the top of the ranges?

Finally, today's CoT will be interesting, if only for the dichotomy. For the reporting week, gold was UP $19 while its OI fell by nearly 5,000. Contrast that to silver which was DOWN 33¢ while seeing its OI rise by 3,300. Since I plan to be well into the bag by 3:30 EDT, don't look for any CoT comments from me today. I will, however, type up a full post tomorrow for your reading pleasure over the weekend...a weekend which promises to be full of interesting headlines.

Have a great day!

TF

341 Comments

Hrunner's picture

1st.....Man!

You guys are slow! (After an exhaustive review of today's post, in honor of my 1st place finish, I repost what I think is an important reminder to stock market and economy watchers)

Chris,

Two comments:

1) We should be very vigilent about watching (and getting head-faked regarding) the market direction over the next couple of months. Karl Denninger illustrates an important point with his "Fools" post, (http://market-ticker.org/akcs-www?post=218871) where he points out that the S&P rallied over 150 points two months after Bear Stearns (1426 on 5/19/2008) only to do you-know-what over the next year (676 on 3/09/2013). In retrospect, Bear Stearns was the signal event (Black Swan?) that should have told you to get out of the market, but it took 2 months to peak and then fall.

I know your previous post, Chris, was looking for a post-May to Sep 2013 timing for a correction, but I'm sure you acknowledge that it is impossible to predict Black Swans (by definition), such as Cyprus, and people's reaction to them.

2) Don't know if you mentioned it, but one hypothesis on why the Cyprus deal strangely put depositors first on "contribute" list is that a normal default and restructuring would have put first on the hurt line "Senior Bondholders" in Cypriot Banks, which likely means other EU banks. If EU bank assets had taken a haircut, then a chain reaction may have been set off, due to their thin solvency situation. Are the bondholders in Cypriot banks public knowledge? To test this hypothesis?

Hrunner,

I think that's a perfect analogy....Cyprus = Bear Stearns.

I thought that stocks were over done and priced to perfection and running hot into what seems quite likely, all on its own, to be a pretty decent recession. But now? Well, there's nothing quite like a liquidity destroying bank run to really get things off to a strong start in that regard.

Is the US immune due to distance? No, not at all. The world banking system, at least the OECD portion of it, is one, gigantic, interlocked beast thanks to the 'miracle' of derivatives and the vast exposure of banks to sovereign debt.

Of course, the central banks will fight this tooth and nail but it has to becoming obvious to the most blind bat that all of this really isn't working and it's just a matter of figuring out who is going to eat the losses.

Bankers have been trying, quite hard, to get inflation roaring again as that's the easiest way to spread the losses over the most people and in a way that practically none of them will ever detect as a direct act of policy waged against them"

World Bank’s Basu Says Faster Inflation Can Ease Global Turmoil

Mar 19, 2013

World Bank Chief Economist Kaushik Basu recommended that developed nations let inflation accelerate for a limited period to prompt a faster exit from global economic stagnation he sees lasting two more years.

“Controlled inflation is very difficult but I think for industrialized countries, inflation is a way to balance out some of your debts without picking individuals who are winners and losers,” Basu said in Washington today. “Not a very nice thing to do but you have to do some non-nice things today given the world’s situation.”

Basu’s suggestion echoed a proposal by Olivier Blanchard, his International Monetary Fund counterpart who said in 2010 higher inflation targets would give central banks more scope to react to shocks. As Blanchard did in 2010, Basu cited a 4 percent inflation figure as an example.

Blanchard’s idea was dismissed by officials from Europe to the U.S., with Jean-Claude Trichet, then the European Central Bank president, calling it “plain wrong.”

Basu said today it was probably a better moment for such an idea, while cautioning against the risks of not being able to put inflation “back into the cage.”

“This is a time when this should be considered,” he told reporters after his speech. “We’ve overborrowed, we’ve overconsumed, and this needs to be corrected, and this is probably the best way to do it now.”

I mean, it really does not come in much plainer language than that. According to the World Bank the way to 'correct' over-borrowing and overspending is to devalue the money. How does that work? By lowering the claim of each unit of money on each unit of economic output. Recall, money is a claim on stuff and debt is a claim on future money, so inflation really does the trick, at least from a banking perspective.

From a social justice standpoint, inflation is quite regressive as its worst impacts preferentially fall on those who can least afford it. The main beneficiaries of inflation are those that get first dibs on the money as it floods out of the central bank. That would be the major banks and governments themselves, of course, and this is why such a policy always has a lot of high level support."

http://www.peakprosperity.com/insider/81243/cyprus-crisis-bank-runs-capital-controls

I disagree with Mr. Basu. Deliberate inflation does pick winners and losers. Winners: PM holders (sort of- at least not losers), commodities and income-generating property holders (ditto), fixed interest borrowers, over-spending governments, holders of toxic, over-priced, over-leveraged assets (banks and HNW individuals), equity holders- beneficiary of hot money. Losers: Responsible Producers and Savers, holders of fixed income assets, UST bond holders, fixed interest lenders.
Notice a pattern here?
I am personally in full-on risk limit mode to stock markets globally, at the mild risk of losing some upside gains.

Have a great day! (evening)

Beastly Stack's picture

No way

Could I be furst?

Mudsharkbytes's picture

Thurd

Sorry Zoltan.

Sweetness?

Zoltan's picture

Thurd? (Or Fourth, whatever)

Enjoy the day off Turd.

You deserve it.

Z

PS Silver Lease rates have stayed down for anyone who cares.

Beastly Stack's picture

Wow

Almost, to me that is amazing! I do not play lotto, but tomorrow the jackpot is for $320 million!
I would buy rounds for everyone in Turdville!
Silver Bullets!

ag1969's picture

6th amendment

In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the Assistance of Counsel for his defence

Just A Regular Guy's picture

Top 10

Weeee.
Reading John Butlers "The Golden Revolution" at the moment. Top book!

Anyone have any insight to the Japan 10-Year?

Bollocks - please provide more funny gifs! :)

Peace.

abguy4's picture

Don't git me started

I talked to my step son two nites ago. He's an entry level engineer for the Gov. He got 'sequestered'. His work week went to 4 days with a 20% pay cut.
I asked him if the upper echelons got the same. He says he doesn't know - but he'll find out from the rumor mill. You and I know the answer already.
They cut the bottom ranks and those working on domestic projects - to affect as many at home as possible - and he was working on a Naval base in Mississippi so he was a top candidate. It's just like that 'leaked' white house memo said. "Make the cuts hit as many (people) at the bottom as possible." The analysis is that they did that to turn the poor against the Repugnants. But, he said there are no cut-backs on the foreign spending. If you hear otherwise - its BS. Egypt just got another 100 billion and Israel gets gets a billion everyday - if not more. We are building bases in a hundred places you never heard of. The gov is at war with the US citizens. Period.
1.6 billion rounds of anti-personal rounds, and 4,000 armored vehicles for DHS???????????????
The Banks get a free 65 billion a month - forever. That is free money, that is NOT a loan. I just can't wait to pay my taxes so some wall st banker can get his billion dollar bonus - again.
Don't get me started. Have a nice day.

Turd Ferguson's picture

In my haste,

MODERATOR

I forgot to remind everyone that Monday is option expiration day for the April13 gold. First notice day is next Thursday.

After the extraordinarily large amount of contracts that stood in February, be prepared for significant volatility next week as The Cartel attempts to dissuade as many as possible from standing in April.

Mudsharkbytes's picture

At this rate

I might win that yellow hat with my $27 something bid.

I'd rather not win it, actually.

I know most have confidence this manipulation will eventually end, but how? Multiple defaults, crisis, scandals, QE to infinity, more crisis, more scandals, debt ceiling, blah-blah yadda yadda and Cyprus, and none of it has diverted silver from the nearly two year long downward mudslide it's been on.

About the only thing keeping me in this game is the lack of any viable alternative. I'm sure they're out there, but identifying them is not so easy. I turned my nose up at bitcoins when they were $7 each, but I'm not about to start chasing them now.

Mr. Fix's picture

Missed the top 10

By that much,
but at least the site is working.
I just looked at a chart, (I don't do that often) and it would appear to me that silver is right back where it was before any talk of a spike.
I find it utterly amazing and contemptible that we can be stuck in this range for this long.
No need for me to repeat my assertion that silver and gold will trade sideways until the system collapses.
Whoops, did I say that?
Anyway, I'm keeping my eyes on Cyprus this week, it's only going to take one little bank failure to wipe out the Western banking system, and short of divine intervention, Cyprus does not look salvageable.
As I put in the library yesterday, Jim Willie has recently stated that the global economic collapse would begin in Europe with a seemingly insignificant bank failure.
Not only does this look like it, it also appears to be intentionally arranged.
It's going to be and exciting day for news, I've got some catching up to do.
Have a wonderful day. :-)

Cononish1314's picture

Santa v Ivars (somewhere near the top of the bill)

" 14) Question about Gold Silver ratio. Sinclair: “He doesnt believe in ratios” " [from the SilverDocs 'Sederunt' of SinclairMeet]

Fight, fight, fight!

Bollocks's picture

6th amendment in the UK ...

"You're fucking nicked mate"

Mudsharkbytes's picture

So Santa Says Silver Sucks

Almost like a tongue twister eh?

So lets say Sinclair is right, silver is a chumps game. Lets also say his disbelief in the GSR is well founded. If true, it means I'm in a losing game being so heavily one-sided in silver.

I've been wanting a more balanced stack and been itching to trade back into more gold but the GSR, amongst other things, hasn't been cooperating. Hasn't cooperated for some time now.

Trade or wait? Who knows? Wish I had a crystal ball.

¤'s picture

FAMAGUSTA: "The next few hours..."

The next few hours will determine the future of Cyprus - spokesman

FAMAGUSTA GAZETTE

• Friday, 22 March, 2013

The next few hours will determine the country’s future, Government Spokesman Christos Stylianides has said, calling on everyone to rise to the occasion.

In a statement he delivered on Friday, Stylianides said the President and the government are in hard negotiations with Troika in order to conclude to solutions that will save the banking system, the economy in general and will return the country to calm waters.

In this extremely critical times, he added, “everyone must demonstrate the highest level of responsibility”.

He recalled that during his recent address to the people of Cyprus President Anastasiades had explained that “he assumed a high political cost and accepted the deal with the Eurogroup for the stability levy, despite his grave disagreements, bearing in mind the social misery that a possible rejection of the proposal would lead to”.

“In a few hours we will be called upon to take the big decisions and reply to the hard dilemmas”, he stressed.

Stylianides pointed out that the government has already submitted the relevant bills and that the reasoning behind them has already been made public.

“The House of Representatives will soon be called upon to take the big decisions”, he said, adding that “undoubtedly, there will also be painful aspects in any decision taken, but the country must be saved”.

The Cypriot spokesman further stressed that “the political leadership must, despite the different ideological and political approaches, provide the way out”.

He recalled that the President of the Republic as the guardian of unity kept the political leadership constantly briefed and respected the decision of the House of Representatives.

The aim, he explained was to proceed forward as a result of “collective wisdom”.

“The next few hours will determine the future of this country. We must all assume our responsibilities”, he concluded.

Stylianides explained that he would not take any question on the content of ongoing negotiations with the Troika as they are at a very sensitive stage.

Cypriot lawmakers began on Friday morning the examination of eight bills submitted by the government in the context of the discussions for a financial assistance package from the European Stability Mechanism.

The bills, which seek to avert a disorderly collapse of the Cypriot financial sector, were submitted following the rejection of a proposed tax levy on banking deposits that would unlock a €10 billion financial assistance package. The bills will later be debated by the House plenary that convenes under the extraordinary procedure.

http://famagusta-gazette.com/the-next-few-hours-will-determine-the-future-of-cyprus-spokesman-p18663-69.htm

koan's picture

Looking at silver for the

Looking at silver for the last couple of weeks, it's ridiculous, military precision - let it bounce around in range early this week then yesterday rip some shorts but stop it within a couple of cent of last week's top so as not to get any algos excited then turn her straight around and down passed last week's low by a couple of cents just to register a lower low and make it ugly looking for next week....unless another surprise awaits (seriously, can't stop myself seeing the positive!).

Bollocks's picture

٩(͡๏̯͡๏)۶

bwaaaaaaaaa, no pics, no icons, no vids today

ಠ_ಠ

Wizard's picture

We are already set up for the Slaughter

They have already set legal precedence here in the U.S. with the Sentinel case haven't they??
Effectively turning all depositors into shareholders in the institutions where they deposit their money.

According to a federal appeals court ruling, Thursday, Bank of New York Mellon’s secured loan will be put ahead of customer segregated accounts held by Sentinel—a landmark ruling that turns individual segregated accounts into the property of a third party under circumstances of duress. In other words, if a financial institution fails, clients, depositors and pension funds may not get some or all of their money back in a bankruptcy.

In essence, under the ruling, Securities Investor Protection Corporation (SPIC), Federal Deposit Insurance Corporation (FDIC) and other insurance programs no longer will/can protect customer funds, leaving millions of investors, depositors and retirees unaware that they are no longer account holders of their own funds, per se, but, instead, have suddenly become stockholders of the institution with which they have deposited their money.

http://dl.dropbox.com/u/32961642/SentinelRuling.pdf

achmachat's picture

Mudsharkbytes

By weight, i am pretty much exactly 10,000 to 1 - silver to gold at the moment.
Just like a lot of Turdites in Turdland, I am planning to let it slowly shift to 10 to 1 as we get closer to a GSR of 20.

GuerrillaCapitalist's picture

A Day of Drunken Debauchery

Turd:

I think your idea of listening to Sweetness is one of your better ones.
Get drunk, yell at the television and we'll be here waiting for you when you return.

¤'s picture

China needs a loan for...(wait for it)...solar panels???

World Bank loans $620 million to China

The World Bank announced Thursday that its board of directors has approved five loans totalling $620 million to China.

The money will be used to install rooftop solar panels for public schools in Beijing, fund low-carbon projects in Shanghai, improve a flood control system in Jingdezhen and enhance public services in selected cities and towns in the provinces of Jiangxi and Liaoning, according to a World Bank press release.

"We are pleased to support China's efforts to reduce energy intensity, carbon emissions and urban vulnerability to floods, as well as improve urban public services for the people," the release cited Mark Lundell, World Bank sector manager of the sustainable development department for China and Mongolia, as saying.

In 2011, the World Bank said it would extend $1.5 billion in loans to China every year over the following five years.

http://usa.chinadaily.com.cn/business/2013-03/22/content_16334050.htm

hammerman's picture

say happy 50th b-day to peter schiff

tomorrow (sat) if you see him.... turd what is the auction on the yellow hat at right now?

¤'s picture

Remember that JPM copper ETF ?

Just sayin'.

~~~~~~~~~~~~~~~~~~

Beijing, We Have A Problem: Warehoused Asian Copper Hits Record High

Submitted by Tyler Durden on 03/22/2013 - 11:18

Pardon this brief tangent from the hypnotic, sclerotic, quixotic, Cypriotic situation which will get no resolution today, or tomorrow, and may at best be resolved on Sunday night following yet another coordinated global bailout, (although our money is on a last, last minute resolution some time on Monday when Cyprus is closed but the European markets are widely open), but as it highlights a key follow up to our article from two days ago, "Dr. Copper's Deja Vu" it is worth being aware of a rather particular problem in Asia right now. A rather well-known problem for those who have tracked the warehousing woes of assorted industrial medals in China as an indication of the true state of the Chinese economy: as of right now, the stocks of copper in Asia (as determined by deliverable LME CLS and Shanghai copper) are at an all time high and up 90% from the previous three year average.

http://www.zerohedge.com/news/2013-03-22/beijing-we-have-problem-warehoused-asian-copper-hits-record-high

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

How copper lost its value as an economic bellwether

Commentary: Dr. Copper may be offering Wall Street a flawed economic prognosis.

http://www.marketwatch.com/story/does-dr-copper-deserve-a-malpractice-suit-2013-03-22?dist=lcountdown

lamare's picture

$900 Million Says Euro Crashes In 2 Weeks: PUT Trade Rocks Londo

http://beforeitsnews.com/international/2013/03/900-million-says-euro-crashes-in-2-weeks-put-trade-rocks-london-options-market-2454160.html

-:-
Someone has placed a GIGANTIC $900 million EURO PUT trade on the Euro to crash vs. the dollar within 2 weeks. Is this a 'smart bet' by someone who has seen the writing on the wall with the situation in Cyprus or does someone have inside knowledge that something big is about to happen? Beware! We have seen this before as shared in the videos below; in fact, it happened prior to September 11th, 2001, and we ALL saw what happened thereafter. This story is brought to us by Derivatives Intelligence.
-:-

Don't know who "Derivatives Intelligence" is nor how reliable this message is, but it would not suprise me at all if this were true.

¤'s picture

Euro 'put'

Thanks for that scoop.

(sarc on)
It would almost make sense if it were Russia doing so through a 3rd party.
(sarc off)

achmachat's picture

London and the EUR

me: good time to buy gold and silver
friend from London School of Economics: short the EUR
me: huh?
friend from London School of Economics: short the EUR!!

this was three weeks ago by the way.

dudestacker's picture

@Mudsharkbytes re: Sweetness

You must have missed it, 'cause it's common knowledge that Turd has an imaginary friend that takes the form of Walter Payton's ghost. As an aside, I prefer my imaginary friends to be at least among the living, like Dick Butkus or Jennifer Aniston.

Road_Scholar's picture

NCAA tourny-time!

Good idea Turd- I hope everyone enjoys a few cold beverages with the games over the weekend. Since most Turdville residents are anti-establishment, I'd guess that most of you are rooting for big upsets like me! I really want Indiana to take a dive since OBummer picked them to win his bracket (but can't spend the time to work on a budget)...

Mickey's picture

volatility

every week we have something that creates volatility: jobs reports, fed meetings, option expiry, whether futures or equity options.

tiring

Mickey's picture

but

gold holding 1600. hui is a stinker today but holding most of yesterdays gains.

In the end I will always take 2 steps forward with 1 step back.

We know it should be better.

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