Turd Needs A Vacation

Tuesday, July 10, 2012 at 10:54 am

It's time for Turd to get away for a little while. Between dealing with the depressed metals, the login/registration issues of TTM and my personal, little band of trolls/stalkers...I'm more than a little worn out. Tomorrow, I'll begin a hiatus that will about 10 days. Though I'll still be posting content each day here at TFMR and at TTM, it just won't be as much.

Before that begins, though, we've got some regular business to attend to. First of all, you've likely seen by now that we have another MFingGlobal on our hands. In a stunning development, $220,000,000 in client, supposedly-segregated funds have once again been "vaporized" and...wouldn't you know it...the custodian of the funds is/was The Morgue. No! Really? I guess if you can steal 700MM from Chicago, you can just as easily steal 200MM from Iowa. What a freaking disaster.

http://www.zerohedge.com/news/pfgbest-now-mf-global-part-2-220-million-segregated-client-money-has-just-vaporized

ZeroHedge posted this morning a chart summary which shows some other futures/clearing firms which may soon be in the same boat. IF YOU ARE TRADING, you would be wise to check this post:

http://www.zerohedge.com/news/first-mfglobal-now-pfg-who-next

Against that happy backdrop, we've got to talk about the "DAG". Recall that DAG is an ETF which is comprised of 25% soybean futures, 25% corn futures, 25% wheat futures and 25% sugar futures. ( http://finance.yahoo.com/q/pr?s=DAG+Profile) When we last discussed it about 4 weeks ago ( http://www.tfmetalsreport.com/blog/3902/not-all-glitters-gold?page=1), it was about $9/share. Look at it now:

Holy cow! Got any other ETFs which have moved UP 40% in the past month? Me, neither. In fact, I don't even own DAG, though I wish I did. I'll give you this, though: Back in early May, I was looking at my RJObrien account and noticed that I had about $300 left in it. I called them up and bought a Nov12 $20 soybean call for 6c ($300 + comm.). I sold that sucker back on Friday for 19c ($950 - comm.) Yippee! Now, I'm waiting for a pullback. I do not think the drought/heat wave is over. In fact, I expect it to get a lot worse later this month and into August. Anyway, as you can see on the charts below, all four components of the DAG have had stellar performance lately. This could become a very dangerous situation.

Input costs could send retail food prices soaring.
Any kind of crop failure in the U.S. would have a catastrophic impact on global food supplies.
Hungry people lead to civil unrest.
Tyrannical despots often start wars when their populations are starving.

(Anyway, this is the kind of shit I worry about all day. Another reason why I need a vacation!)

The metals are higher again today...at least they were the last time I looked...though they are, once again, being capped just above 1600 and near the 50-day MA. The rally of yesterday and early today can once again be written off as "Happy Tuesday" CoT painting by The Cartels. (After the declines of Thursday and Friday, The Cartels are squaring some of their fresh shorts before the CoT survey later today.)

As stated yesterday, the latest CoT has me concerned that JPM will soon attempt to harvest the sell stops that almost certainly exist below $26 in silver. ( http://www.tfmetalsreport.com/blog/3940/lookout) & ( http://www.tfmetalsreport.com/blog/3963/lookout-part-ii) Again, I'm NOT saying that this WILL happen, only that it COULD happen and you must be prepared both mentally AND financially for this.

Also, I've noticed quite a few comments regarding my "Hot and Explosive Summer" thesis. Let's get this straight. I have NOT said:

Silver will be at a certain price level by a certain date.
That any one, single factor (like new QE) is the basis for this "forecast".

What I HAVE said is this:

I expect a hot and explosive summer, particularly in silver.
Northern hemisphere summer lasts from June 21 to September 21.
I further expect an exciting and powerful autumn.
I have no specific price forecast because, IF I am correct and events that I expect to come to pass actually come to pass, even I cannot predict just how high silver may soar.

So there you go. That's all for now. TTM is back up (for now) and subscribers should be able to go there and play yesterday's podcast. I'll be adding another podcast today, right on schedule.

Have a great day.

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Comments

Finally Zero Hedge on Gold Manipulation

Submitted by indosil on July 11, 2012 - 8:41am.

http://www.zerohedge.com/news/libor-manipulation-leads-questions-regarding-gold-manipulation

Financial Movies

Submitted by Dr Jerome on July 11, 2012 - 8:44am.

Several weeks ago my wife and I watched Margin Call. I came away with a better understanding of Wall Street's complicity. The movie portrayed a psychopathic CEO who didn't seem t know what his company had been up to. Then an analyst figured out they were in trouble and they dumped their toxic mortgage crap on the markets (unethically) to avoid a margin call and bankruptcy. The overall tone of the movie suggested they unknowingly got themselves into trouble and perhaps the guy at the top knew more than he was saying. There were a few good people who were trying to do the right thing.

By contrast...

Last night we watched Inside Job. What different story. No heroes. Only villains. Wall Street Banks have done all of the following :

Cultivated the placement of their people into high Federal offices,
Created complicated and risky derivative products,
Stood in the way of regulation of those products (and still does),
Constructed a system of lucrative subprime toxic mortgages (CDOs),
Paid politicians to look the other way and oppose regulation,
Packaged bad loans into CDOs and sold them as AAA rated investments to pension funds
Paid off the rating agencies to give the products AAA ratings,
Purchased derivative products (CDSs) to bet against the toxic CDOs they no longer owned
Billed cocaine laced partying and prostitution services to the firms
Influenced officials to force AIG to pay 100% of Goldman's CDS profits as the system crashed
Used their influence to get Taxpayers bailouts -- then more business as usual
Bought off notable professors at top Universities to keep teaching Keynesian economics
Staffed the Oversight agencies with their people (SEC & CFTC) to ensure no prosecution
Took multi, multi, multi million $$ bonuses, even when their firms went bankrupt
Stammered out their lies to congressional committees when they were called on the carpet, knowing there would be no further action against them, none!

And I bet that's not the half of it. Flash crashes, algo trading, commodities manipulation, interest rate manipulation, where does it end?

How could these Wall Street Banksters be any more powerful or corrupt? What more could they do to steal from us and ruin the country. Well, they could be murdering those who stand in their way? But why get your hands bloody when easy money solves the problems? But really, I cannot imagine how they could be more corrupt than this. The scary part though? They all may be doing the bidding of a clandestine group that is even more psychopathic and corrupt, seeking to maintain their dominance over the world... <tin foil hat/>

My wife's first comment at the end of the movie was "I want to go underground, live off our land and not participate in this corrupt system.

I wonder how much time we have?

Is Romney as plain spoken as Steve Forbes ?

Submitted by Monedas on July 11, 2012 - 8:48am.

I like the way Steve puts out his free market thoughts in plain Monedian English .... has Romney spoken as openly as Steve ? I'd feel a lot better about Romney if he didn't mince his words and pussy foot around ! Monedas 1929 If chaos is the question .... the Orthodox Capitalist Manifesto is the answer ! I believe in God, Guns and Gold .... and Capitalism !

@OpticsGuy

Submitted by Roark on July 11, 2012 - 8:49am.

Optics Guy, I agree with you. It's just a test balloon being floated to see who will scream and how loudly. Notice the author "wishes to remain anon". Nawp. Either source the article properly Gizmodo, or dont bother running it.

Funny bit you might appreciate: Years ago I was involved on the development side of a company working on a biometric scanner. It scanned the retina and used the retina much like a fingerprint. It wasn't long before law enforcement realized the product was great for getting a positive ID on convicts during a lockdown. March 'em up, scan 'em, and you had a positive ID in less than a second. Had a bunch of these gadgets installed at jails and prisons all over.

Things were going well until somebody from the fruitcake sector picked-up a datasheet at a tradeshow and realized the last 4 digits of our engineering fax line was "6666". Suddenly it was the "Mark of the Beast", and the conspiracy sector had a field day. Folks claimed that soon you'd have to submit to an eyescan just to buy a loaf of bread. In fact, somewhere I still have a VCR tape of a Southern preacher on a roll who claimed that our fractional milliwatt laser was actually etching the verses of Satan into all these unsuspecting eyes. Subliminal messages were being etched directly into the brain dontchaknow. You just can't make this stuff up. They absolutely believed it. Of course, technically it was a howler considering we were using a circular sweep technique and the laser was nearly 4 orders of magnitude underpowered to etch ANYTHING.

The development team took it all in stride and made fun of ourselves in the process. Then we got ourselves pretty hammered just before Christmas break and conspired with the drafting department to make a few drawing changes. What changed was the labels on some parts. A sampling:

BEAST: Short for the "Bare Essential Anterior Shield Terminal" (It was a grounding lug on the rear cover).

SATAN: Short for "System Autoload, Testing And eNumeration" (It was the EPROM containing the bootstrap loader)

Eventually someone from Management decided the joke wasn't that funny, and the "revised" drawing was pulled. But nobody, and I mean *nobody* ever tried to take-down the archival copy posted in the lunchroom. :)

After 20 years of use, that technology never changed the world, never unleashed the Hellhounds, or ushered-in the New World Order. But we did make a pretty buck and had a lot of fun in the process. :)

Are we arguing 100 to 1 Again after all this time, Really?

Submitted by Wizard on July 11, 2012 - 8:49am.

This is an old CFTC meeting Video where Jeffery Christian informs the CFTC Board that Metals are in fact sold 100 to 1 Paper vs. Physical. This is basically common knowledge material in the world of the metals market.

To be perfectly clear for every 1 ounce of physical metal in their vault, be it Gold or Silver there are 100 paper claims for that 1 ounce of Metal. And that is the number they admit to. Who knows what the real numbers are.

The interesting part starts at about 3:50 into the video for those that are crunched for time.

Also here is the transcript from the video:

CHAIRMAN GENSLER: That's really remarkable because we don't seem to have a lot of similar views, but, you know, a lot of people were at Goldman Sachs.

CHRISTIAN: Well, I didn't like the trends at Goldman, so I left in 1986. But honestly, and bad jokes aside, if you look at a bullion bank's book -- its gold book, for example -- you will see an enormous number of things. There will be gold forward purchases from mining companies. There will be forward purchases from refineries. There will be gold that has been leased out to electronics manufacturers, component manufacturers, and countless manufacturers and jewelers. As gold flows through the beneficiation process -- and again, these are all long, complex issues that are hard to reduce -- but, you know, a lot of producers will sell their gold the moment it leaves their possession at the mine. It might be in concentrate form or it might be in dore form. It then goes to a smelter or a refinery. The bullion bank buys that and it agrees a price at the time it is buying it but it won't be allowed to sell that metal until the refinery outturn, which is maybe two weeks but it could be six months. So they will go into the market and short the market in order to cover the commitment they have made to buy at that price and then when they get the metal in the physical market, then they can either sell that metal in the physical market and unwind the hedge in the futures market or the forward market or do something else. There are all sorts of other derivative contracts that investment banks and bullion banks will sell to investors, to other banks, pension funds, to insurance companies, and each of those will often have a long exposure in gold, which will be hedged with an offsetting short position. [NOTE: There he goes again with that blonde idea that when you sell gold to someone, you hedge that with a short position.] So if you look at a bullion bank's gold book or silver book, you would find a large range of topics. One of the things that the people who criticize the bullion banks and talk about this undue large position don't understand what is the nature of the long positions of the physical market and we don't help it. The CFTC, when it did its most recent report on silver, used the term that we use, "the physical market." We use that term as did the CFTC in that report to talk about the OTC market -- in other words, forwards, OTC options, physical metal, and everything else. People say, and you heard it today, there is not that much physical metal out there, and there isn't. But in the "physical market," as the market uses that term, there is much more metal than that. There is a hundred times what there is. If I look at the large short positions on the Comex, my question is: Where are the other shorts being hedged? Because the short position that I believe the bullion banks use to hedge their physicals is larger than their short position on the Comex, and the answer is that they hedge it in the OTC market in London.

Jeff Christian confirms OTC Gold Market sells 100 ozs of claims to each ounce of physical gold

@Katie

Submitted by Keg on July 11, 2012 - 8:51am.

Rather than just listen to rumors, I would at least drive by the facility to verify it exists and see what it looks like. And I would challenge anyone passing on rumors as to what is reasonably fact and what is bullcrap. Obviously, building an "office building" in a low population rural area would not make a lot of sense. But there have been many false rumors of federal detention centers. I don't trust the feds (or the states) but false rumors hurts our cause. We need to do our best to sort fact and fiction.

vonburp

Submitted by boatman on July 11, 2012 - 8:52am.

romney has already said ben's toast if he's elected...so the handwriting is on the wall.....warm up the helicopters

http://blogs.reuters.com/talesfromthetrail/2012/04/26/romney-looks-to-gi...

Hal ...

Submitted by Cottonbelt21 on July 11, 2012 - 8:55am.

… hmmmm - 2021 for the PM ‘blow-off’ phase (?), worthwhile when time permits

http://www.safehaven.com/article/26119/has-hal-gone-crazy

excerpt:

Right now, and increasingly as long as currency debasement rates remain insufficient to bring an inflationary tone back into the markets / economy (which are one in the same now in our mature fiat currency based economy), the economy is stalling and blue chip stocks have generated a Dow Theory sell signal, which may need to be dealt with eventually. Of course what usually happens is after the equity markets and economy break down, the Fed (Hal) sees this in its all knowing wisdom (heavy on the sarcasm) and reacts with an accelerated currency debasement response, which is all they really do you should realize -- that being debase the currency at an accelerating rate until all value is exploited. You should also realize Hal is at the root of our societal collapse; and that they (and their owners) are pilfering your wealth at an accelerating rate as part of the larger process of the clandestine confiscation known as monetary inflation.

If Harvey Organ simplifies the Comex jargon .... !

Submitted by Monedas on July 11, 2012 - 9:06am.

.... I will translate the Holy Bible into plain Monedian English ! I will also, as a bonus, edit it down to the size of a Cliff's Notes booklet ! There is a lot of boring, repititious historical filler ! I will purify the Bible and purge any confused passages that conflict with Strict Libertarian Orthodoxy ! Monedas 1929 Hell is for the heretics of non Libertarian heresy !

@Roark

Submitted by opticsguy on July 11, 2012 - 9:09am.

speaking of marks of the beast, I worked with a company that could identify the vein patterns on your forehead quickly with a little camera and some light of a certain wavelength. The vein structure of your forehead is as unique as your retina, and is very hard to duplicate. This technology is so good they could scan your forehead while your boarding pass was scanned, or walking through a turnstile at a subway or ball game. The fact that we haven't heard about it may mean that it's ready for prime time.

The company started in Memphis, and IIRC, is also owned by the Canadians.

Scranton mayor gets it

Submitted by Patrancus on July 11, 2012 - 9:13am.

Scranton, PA mayor gets it, their is no more money, so the minimum will be the wage , take it, or leave it. Comes now the judge, and even the judge don't get it, their ain't no more money to pay the wage is coming to a city near you, it's only a matter of time. keep stackin and packin

http://www.businessweek.com/ap/2012-07-10/pa-dot-mayor-cuts-city-workers...

Wizard

Submitted by DrkPurpleHaze on July 11, 2012 - 9:14am.

Thanks for that vid. That should settle the issue moving forward.

If the CFTC was willing to admit to 100:1 it's probably more like 200:1 or far more leveraged then that. 500-1,000:1?

I'm not willing to give corrupt or indifferent govt. agencies or banking entities the benefit of any doubt as the whole facade is starting to crumble around them right in front of our eye's today.

The market crash and disbelief/anger from citizens will be epic....and so will the QE or whatever stimulus they need to throw at the situation. The CFTC derivatives inquiry will lead to another financial emergency and another layer of the bankers/pol's sick need to gamble/steal will be revealed there as well.

Hawaii Trading classic indicators

Submitted by steveo on July 11, 2012 - 9:17am.

Some of my classic indicators, mixed signals.
Possible more fear, after 4 days of pretty good fear.
All the classics here, and a few trade ideas

Fear Factor, 78 Fibo retrace on Fear and now ....more fear? These patterns certainly allow for it. However, the cumulative up down volume pattern have had 4 mostly down days now, although the advance decline issues has tried to claw back up on 2 of those days. It is odd to 4 sell volume days in a row, even odder to get 5, so may be that says we are due for relief rally of sorts.
http://oahutrading.blogspot.com/2012/07/ht-classic-indicators.html

Kiss my A$$

Submitted by beach_bum on July 11, 2012 - 9:27am.

A little humor from Denis Leary to offset some of the serious (but great) posts today

manages to touch on quite a few of the topics here and be irreverent at the same time.

Gap-italism ?

Submitted by Monedas on July 11, 2012 - 9:30am.

A mixed Socialist economy where overpaid bureaucrats and their welfare wards have an INCOME GAP advantage over the people who do the real work, take the risks and pay the taxes ! Monedas 1929 Weren't government workers supposed to get less pay in exchange for job security ?

@ClinkinKY - re Obama vs Romney

Submitted by TJeffson on July 11, 2012 - 9:38am.

You miss the whole point. To use your analogy, you're choice is voting for the judge that will hang you or the judge that will put you in front of the firing squad. There is no option if it's just Romney or Obama. I would actually argue that Romney is the far worse choice..because he will have an all GOP Congress that will go along with his every whim and ram their neocon bs down our throats, just like obama and the dems did in 09 and 10. At least with Obama he'd be a lame duck for 2 years, probably all 4. If we get Romney we get his policies for 8 years. So you see, there is no real choice... voting for either isn't the lesser of 2 evils, it's just pure evil. Romney will not buy you time. Romney will run bigger deficits than Obama, IF he even gets elected. That's just a mathematical fact. Romney already admitted he won't cut spending his first year until the economy ramps up. That will never happen as long as we keep printing and deficit spending and not allowing failure. So that means he's guaranteed to run 1.5+ trillion dollar deficits that will continue to grow each and every year.

Voting for evil is still evil and THAT is playing into the game I abhor. It's a flawed logic argument that voting for someone other than the 2 "pre-ordained" hacks is a vote for Obama. Voting for your convictions and beliefs is the proper way to vote, even if your guy loses. I haven't given up, I just choose not to play their stupid game anymore. When I walk out of the voting booth, I have a clear conscience. (not that voting will do any good anyway, the system is rigged to favor the bankers... until it all collapses, voting is pretty much a joke).

Re: Scranton mayor gets it

Submitted by QE to infinity on July 11, 2012 - 9:41am.

Nobody else there seems to get it, do they? It is just shocking really. "Some union members had to cancel their vacations". Oh what a tragedy!

At least they are still getting something (minimum wage), if they were not loaded down with a lot of debts and still wanting to go on vacations, it's still possible to live on their wages. And some already qualify for food stamps. What are people going to do, when there is NO pay for them, because there is NO money? Sue and starve?

And really it worse than that

Submitted by steveo on July 11, 2012 - 9:43am.

And really it worse than that too. Inflation same as stealing wealth from savers, but they are also stealing directly to through illegal manipulations of little things like Libor,

@Katie Rose

Submitted by Dagney Taggart on July 11, 2012 - 9:44am.

Narcissists and sociopaths don't have any idea how easily destroyed they are. I hope they eventually realize that they don't even make it to the doorbell on house #3. I truly hope none of your friends or family decide to sell their soul for fictitious script from a morally and financially bankrupt corporation.

PS. I like Keg's idea above.

PPS. "I was just doing my job" didn't save the nazis at Nuremberg.

Nobody else there seems to

Submitted by steveo on July 11, 2012 - 9:46am.

Nobody else there seems to get it, do they? It is just shocking really. "Some union members had to cancel their vacations". Oh what a tragedy!

Exactly, it shows the arrogance of the union cartels. Oh my, some people actually had to cancel vacation! Sheesh, some 44 million just happy to eat with food stamps, OK so put things in perspective.

You going to tax me more!! effen more!!!!!!!!!! so you can go on vacation?

Why don't you move to Greece.

It's all moot !

Submitted by Monedas on July 11, 2012 - 10:06am.

TJeffson ! You are not obligated to vote ! I never fell for the liberal mantra that low voter turnout represents despair for their Capitalist slavery ! Low vote turn out means contentment, confidence in the status quo and a warm liberal glow all over ! If you don't perceive a difference between the candidates .... your share will be proxy voted by the shareholders ! Monedas 1929 Comedy Jihad I wouldn't say Romney was Gold .... he's maybe silver .... but Obama is dead lead !

The Best?

Submitted by Xeno on July 11, 2012 - 10:14am.

Sure, and DHS actually protects you.

@Monedas

Submitted by Dagney Taggart on July 11, 2012 - 10:22am.

Why do you think Romney pussy-foots around? He's controlled and has no principles. He's searching for his words now and any honest man can hear it. Bilderberg fed his giant authoritarian ego and he obviously liked the rush. Principled men don't have to fumble and search for words.

Question of the day: If Ron Paul grabs the Republican nomination, are the status quo Republican idiots going to vote for Obama? On paper it would actually be in their interest to because they are just as big of welfare whores, just from a different proxy, as the Obama welfare whores.

@Roark and opticsguy

Submitted by Bongo Jim on July 11, 2012 - 10:25am.

For the past few years, I have trained Marines. They (and the rest of the military) have a handheld portable unit called the "Bat and Hyde" system. It looks like a bigger version of a 35mm digital camera. It takes a retina scan and finger prints (all 10), along with data entry of the person being "detained." They have had this for the last five years. I have also seen the "xray" vans, and other technologies that are pretty interesting. Think they can't see through your walls at half a mile away? Think again.

What do you mean, half a mile away.

Submitted by Short Stack on July 11, 2012 - 10:35am.

So let me get this straight, one of these devices is capable of seeing through eight to ten houses, multiple trees, businesses and birds flying past to see in my apartment three stories up to see if I have a gun !!!!!

The best satellite in orbit can't even "see" through a cloud but this device can see me at a half mile away.

Give me a break.

If Ron Paul grabs the Republican nomination

Submitted by Physical_only on July 11, 2012 - 10:36am.

If it could only be......

Unfortunately; I wait-on/serve/sell to/give driving directions to/ the general population every day.

And from talking with them; it's not encouraging.

No, not through 8 to 10 houses

Submitted by Bongo Jim on July 11, 2012 - 10:40am.

Line of sight, first wall. Hey, you don't have to believe me, as far as you know this is all internet BS. But, I have seen it with my own eyes, and I believe what I saw. It's not the Bat & Hyde that does this.

@clinkin

Submitted by GDP on July 11, 2012 - 10:42am.

You would vote for a straight up cult member? Mormonism is cultish if I have ever seen a cult...multiple wives, finding golden scrolls a few decades ago in the ground? what? A vote for Romney is a vote for a liar, crook, cult member, etc...BO sucks balls too but Romney sucks balls just as bad...they're both empty suits...Your from KY so I guess it fits the norm...I'm from that area originally and everyone I know in the south watches faux news and bleeds republican no matter what so its expected I guess...I would rather not vote if I have to choose a worse loser...they both losers and I won't vote for either piece of shit...BTW- Romney won't change anything...bankers will still own our currency, more laws will be passed to lock us up, more drones killing women and children in the name of spreading democracy and freedom, no free markets, more manipulation, more crap, more crap...screw them all...

@Physical

Submitted by Dagney Taggart on July 11, 2012 - 10:45am.

You missed the point. Would the status quo Republicans vote for Obama if Ron Paul were nominated? It would be in their interest to considering who their gravy train is.

Would they?