The BS Thickens

Fri, Nov 4, 2011 - 9:25am

It's the first Friday of the month so we were once again treated to another edition of The Shill, The Coug and LIESman this morning. Truth be told, I couldn't stand to watch. I flipped on CNBS at 8:29 and turned it off at 8:31.

Here's an approximation of what I missed:

"Blah, blah, blah....payroll numbers...blah blah blah...manufacturing...blah blah blah...private sector....blah blah blah...seasonal adjustments...blah blah blah...public sector...blah blah blah..." Joe Kernen trying to look professorial. Michelle Cabrera trying to look sexy. Rick Santelli trying to look interested. All the while, the LSHI reached a peak of about a 7.

Look, here's all you need to know. No sense in me repeating. Just click the link:

And you wonder why we call it the "BLSBS Report"?

And while we're at it, go back to ZH and read this. Please take your time as you read it as it is critical that you understand the general thesis:

Now, the next time you hear a bank analyst, or any "analyst" for that matter, try to tell you that "financial stocks are undervalued" or that "the banking sector is healthy", remember what you just read. Knowing what you now know about the ongoing balance sheet shenanigans of the TBTF banks, you are only able to draw one of two possible conclusions:

1) The analyst is completely clueless and should be ignored.

2) The analyst is deliberately attempting to mislead you about the health of the banks and the U.S. economy, in general.

While we're at it, remember the two reasons that the TBTF banks are even still functioning:

1) Politically-forced FASB accounting changes in 2009 allow banks to value worthless securities as if they actually retain their original value.

2) To fund The Great Ponzi, TBTF banks borrow unlimited funds from the Fed at 0.00%. They then "invest" this free money into treasuries at 2-3%. They book the risk-free, taxpayer-supplied spread as "profit". They have used these "profits" in the charade of "paying back TARP". Additionally, this process allows the Fed to mask their quantitative easing efforts by having the TBTF banks do the dirty work for them. The process of QE2 and POMO was just an overt process of funding the U.S. government while at the same time injecting massive amounts of capital directly into the Fed's primary dealer banks. 

But don't just take my word for it, The Wicked Witch explained this to you months ago:

The Wicked Witch Explains Her Motives.mp4

Ah, screw it. I better stop there. I'm getting all worked up and I don't have the time to continue. Maybe we can discuss this scheme in greater detail over the weekend. In the meantime, here are your charts with the levels to watch as we go through the morning:


Speaking of the weekend, I will have another podcast for you tomorrow. A slightly different take this time as its about 25 minutes with an author who has made some interesting projections about where this all is headed. I think you'll enjoy listening and you'll likely end up wanting to read his book.

Keep the faith and hang in there. Turd out.

About the Author

turd [at] tfmetalsreport [dot] com ()


MIDDIE · Nov 4, 2011 - 9:26am

Good Morning


treefrog · Nov 4, 2011 - 9:32am



Insight · Nov 4, 2011 - 9:33am

Let's start with some good news re: miners

Never been on the board this early, so here's a bit of cheer!

Gold miner divs are getting some attention and hopefully this will help drive the stock prices...
Both articles mention Yamana...Now, maybe more miners will start offering them or increase the payouts if they are already giving dividends...

same note, but with different headlines....

MARKET TALK: Gold Miners Are Taking A Page From Utilities

3:16 (Dow Jones) For many investors, gold stocks as an extension of bullion have benefited from the yellow metal's safe-haven status as a store of value during market and economic volatility. But assuming gold prices remain relatively strong, gold miners' willingness to introduce and raise their dividends offers investors another source of safety. Yamana's (AUY) 67% dividend hike and the 40% increase in Alamos' (AGI.T) semi-annual dividend are among the latest examples of gold companies increasingly deciding to return cash to shareholders. AUY climbs 5.7% but AGI.T falls 2.9%. (ben[dot]dummett[at]dowjones[dot]com)


WSJ BLOG/MarketBeat: Gold Miners: The New Dividend Kings

(This story has been posted on The Wall Street Journal Online's Market Beat blog at
By Ben Dummett
For many investors, gold stocks are seen as an extension of bullion, benefiting from the yellow metal's (occasional) safe-haven status as a store of value during market and economic volatility.
But assuming gold prices remain relatively strong, gold miners' willingness to introduce and raise their dividends offers investors another source of safety.
Yamana Gold's 67% dividend hike and the 40% increase in Alamos Gold's semi- annual dividend are among the latest examples of gold companies increasingly deciding to return cash to shareholders.
Yamana was recently up 5.4%, but Alamos was down 3.4%.

silverstool · Nov 4, 2011 - 9:33am
SilverTree · Nov 4, 2011 - 9:39am


¤ · Nov 4, 2011 - 9:40am

Almost worked yourself up, didn't you?

I started reading the Fed/Treasury/POMO stuff and I almost went there myself thinking about the scheme.

I can't believe (almost) that no one in Govt. has exposed this aspect of what's going on. It makes sense though if you think about what would happen if all of that POMO/Treasury auction stuff just stopped abruptly. 

That would be one helluva' bad market day I bet. Kaboom!

Thanks for the update and your relevant charts and thoughts on this going forward.

Shill · Nov 4, 2011 - 9:45am



Thanks for the input Chief.

Bobbejaan · Nov 4, 2011 - 9:48am

@Louie ... RE:- Lloyd's- Without warning

Has anyone seen any further sources on this article? Would seem to me that this would be HUGE, but I can't find anything other than the one article.




Bear in mind that "Lloyds of London" (= The INSURERS) ... is NOT ... "Lloyds TSB" (= The Banking Group).


Having said that ... It is still a HUGE Negative Indicator ... AND ... Lloyds TSB Banking Group are doing their OWN "Multi-Billion shenanigans & corporate reshuffling", for example :-

I also note a word-for-word DIRECT QUOTE from one of my own local (Lloyds TSB) Bank Managers :-

"Your bank account is not a very safe place to put or keep your money" ... and I use that quote against him whenever they try on any of their "We don't want to give you back your own money" crap to me.

FriedEggs · Nov 4, 2011 - 9:54am


Fryday all and thanks Turd & loyal Turdites.


Even yesterday on BNN (Canadian business) news channel over the lunch hour... They had a guy from Toronto Gold Bullion showing off some tasty silver and gold bullion... going over some of the basics about owning physical.


But again, they always always leave and end the segment for the viewers on a negative note. For example, 'but don.t forget its risky and gold/silver prices could go down.' End segment. Conditioning again.


Fried(e)... wake N' bake...

aurum argentum · Nov 4, 2011 - 9:56am


Here comes the 10 a.m. London fix waterfall attempt... Nice fight at $1752....

· Nov 4, 2011 - 9:57am

seeking advice...

Fellow Turdites

After much turmoil this week, and much concern for people I love, I have decided to write them a letter. I woke up this morning and everything seemed crystal clear to me. But if you have some suggestions for strengthening the argument in this letter without loading it down with charts, stats, and jargon, I would love your input before I send it out. My mother needs to be able to understand it in a single reading! You can send me a PM or post here.


Open letter to my relatives and friends,

I have felt troubled this week, troubled about the financial system of this nation, indeed our whole world. My bad feelings were sparked by the bankruptcy filing of MF Global—a large investment firm. But I was unable to put my finger on the chain of logic my intuitions had grasped until this morning. Now I have something to share with you beyond a feeling.

Many of you know that I have devoted my scholarly energies the past three years into understanding economics. Along the way I have started investing and trading stocks. I have lost some money and earned most of it back as I learned.

With the MF Global collapse, clients like you and me are at risk—150,000 of them. I have a very smart friend who has his money tied up—perhaps gone. Either the bankruptcy court has frozen their accounts or MF Global spent it. They are under investigation by the FBI, and the SEC for using customer funds to pay back the “loan sharks” (bigger banks) that covered bets on European bonds from Greece, Italy, Portugal and Spain. If true, this act was blatantly criminal.

My training in rhetoric points to two “arguments” and prompts me to ask you a question. First, If an investment firm, with such a strong and credible reputation, may be guilty of criminal acts and the betrayal of their clients’ trust, are other credible financial institutions engaging in parallel criminal behavior? It is likely that they are.

Second, if a respected securities broker and one of only 22 primary dealer banks with the privilege of borrowing money from the Federal Reserve, has been bankrupted by European investments, it follows that other securities brokers are equally vulnerable to the systemic risk in Europe.

Where is your money? Where does your investment firm invest it? How much do you trust the firm that holds your retirement funds, your savings, your investments?

Many leading economists worry about a “contagion” from an event like this. The subsidiaries of MF Global are now in limbo. Their creditors are dealing with large losses. On Nov 4 the markets halted trading in another primary dealer bank, Jefferies & Company, Inc., as their stock plunged by 20%.

I guarantee that whatever firm holds your retirement & savings, that firm could have exposure to enough toxic investments to push them into bankruptcy. Are they financially stronger than MF Global? Jefferies? What guarantee do you have that they have stayed away from investment in risky assets? Do you believe your IRA customer service rep when they tell you that everything is insured and all their investments are in AAA rated securities? Do sales reps and brokers know what goes on at the top levels?

Can you afford to lose your retirement account? I lost 60% of mine in 2008 and have just now recovered to my original level. But it has pushed my retirement to age 78, if our economy ever recovers.

There is always risk in investing. The question is “How large is the risk?” Events of the past week have convinced me that there are levels of risk that are much higher than we know, even what seem to be the most stable investments. My tolerance for risk has moved to zero—especially with my retirement fund. Where is your risk level?

Government and corporate bonds used to be the safest of investments. Today, they have much higher levels of risk. And this week’s events reveal that in addition to the known risks, there is a hidden systemic collapse risk that can literally wipe you out. The rumors begin on Friday after the markets close and the bankruptcy filing occurs Monday morning before the markets open. Just ask any of the 150,000 MF Global clients.

So, if you want to eliminate most of that risk, I advise you to consider moving your funds into investments that are not vulnerable to a collapse of the banking system.

· Cash under the mattress is vulnerable to inflation.

· Banks are not paying interest.

· Bonds have inherent risk and are vulnerable to a 2008 style collapse.

· Mutual funds can suffer severe losses within days.

Most of us are not rich enough or trained enough to purchase Credit Default Swaps to hedge our money. This points us to investments that are less vulnerable to a collapse or securities that are inflation resistant.

· Gold bullion? Good choice! As long as we have inflation, gold will rise in value. Keep it in your personal possession though.

· Silver bullion? Another good choice! But it can be very volatile and large sums turn into hundreds of pound of silver.

· Stock in a very stable corporation? Some risk here. They pay dividends that can be reinvested. Demand that your broker obtain the actual stock certificates for you and keep them in your safe.

· Agricultural farmland? Good choice! A nearby farmer will lease it from you. Nobody can steal it.

· Stock in Energy companies is another good choice. How about your local utility company?

But Jerome, if I withdraw retirement money, I’ll pay tax AND a penalty (if you are over 65). Yes, that is true, but you will secure 70-85% of it for investment into something safe. That sure beats a 60 to 100% loss. Lainey and I did it with the portion we were legally able to withdraw. We have no regrets. Even after two severe crashes in the price of silver, we made 15% in the past 12 months. This year we are looking at purchasing agricultural land.

Bottom line: Please do not leave your life savings where it is vulnerable to a collapse of the banking system or where unscrupulous investment tactics put it at risk. Now is the time to make a move. When actual news starts breaking, it will be too late. The rumblings on the internet blogs by professional investors are increasing--the first sign that trouble is ahead. The mainstream news will be the last to report it—and certainly too late for action.

If there is no collapse, if Congress balances our budget, if Europe finds a way to shore up their bankrupt nations, then you can always move back into mutual funds. But I suspect that you will find these other investments to be more profitable. They are certainly safer.

What is your tolerance for risk?

agNau · Nov 4, 2011 - 9:59am

No surprise.

A monetary system based on debt must reach a point of saturation. That point being the inability to find new borrowers to expand the debt. New takers now are totally unaware, or gaming the system still. The "unwind" now is the tricky part. Exiting positions on a pyramid of this scale will not happen. (ie no exit strategy) Any thought of unwind always end with derivatives. Today, just as with the mortgage bust, banks of all stripes can trust no one. We are now looking at another episode of contagion unfolding. Trust and confidence will rule the day going forward.(@some point the "system" will lose these. There will be no bid.) Then we will be in the end game. Zimbabwe style. I have posted multiple times Contagion. Confidence. End Game.

Dr Durden · Nov 4, 2011 - 9:59am

Mountains of BS

Yeah, they sure do get bigger and more rancid , don't they? But that doesn't mean a brother cant make mega fiat skiing them, now does it? Have my fingers crossed the big Papa in Greece stays and tells the kleptocrats to F off.

RedRover · Nov 4, 2011 - 10:02am

Pennant Forming in Silver?

There seems to be a pennant forming, in silver? right?

ewc58 · Nov 4, 2011 - 10:08am

Turd my Man, CNBS is now a total wasteland

Now that Erin is gone, Maria is too busy being an elitist and Battista babe"Michy" Cabrera is the main floozey, God why even bother?

Add in Joe "Uber Moron" Kiernan and the point is even more stark. CNBS is playing on a busted flush, they know it, and it shows.

As I said, I made the move to Faux (Fox) Biz News earlier this year, it is now my Bullshit of choice for keeping on in the background. Faux is eating CNBS's lunch out from under them... Case in point: I just watched the lovely and talented Nicole Petallides speak about Starbucks and Linked In. I realized again what a wise choice I made :-) CNBS looks and feels dead and richly deserves that outcome.

Hell, even cpn and I agree on this one: Go Faux.

¤ · Nov 4, 2011 - 10:09am

Dr Jerome

Pretty awesome and heartfelt stuff you have laid out there and logical to follow. Nice job!

I laid out something roughly in a e-mail I send out here and there depending on the person it's getting sent to. Timing is everything. I kind of hashed it out here on a thread where TF or the Mods. talked about ambassadors and welcome wagon greeters etc.

I'll drag it out when I can find it and repost it later maybe. It doesn't compare to yours at all (not even close). It's nice to hear that your thinking on that level with genuine concern for others. 

You come across as a nice person, so no surprise there.yes

¤ · Nov 4, 2011 - 10:12am

Italy asks IMF to monitor reforms

Nov. 4, 2011, 8:35 a.m. EDT

EU's Barroso: Italy asks IMF to monitor reforms

By William L. Watts

FRANKFURT (MarketWatch) -- European Commission President Jose Manuel Barroso on Friday said Italy asked the International Monetary Fund to monitor its implementation of planned economic reforms in order to shore up market confidence in its ability to meet its fiscal targets. Speaking to reporters on the sidelines of the Group of 20 summit in Cannes, France, Barroso said the move acknowledges "doubts in the market" that have seen Italy's 10-year bond yield push back above 6%. European Council President Herman Van Rompuy said Italy wasn't pressured into taking the action. "We haven't put Italy in a corner," he said. Barroso said the EU continues to support Greece and wants it to remain in the euro zone.

RevoltingLemming · Nov 4, 2011 - 10:13am

Marc Faber

Marc has been saying financials are undervalued. What is going on with that?

RevoltingLemming · Nov 4, 2011 - 10:13am

Marc Faber

Marc has been saying financials are undervalued. What is going on with that?

Shill · Nov 4, 2011 - 10:13am

Italy accepts IMF monitoring

Italy accepts IMF monitoring in bid to rebuild - Yahoo! Finance

CANNES, France (Reuters) - Italy will allow the IMF to monitor its progress with long overdue reforms of pensions, labor markets and privatizations, European leaders announced on Friday, looking beyond the crisis in Greece to the far graver threat to the euro zone.

Doctor J · Nov 4, 2011 - 10:16am


Eloquent and persuasive! If your friends and relatives refuse to act on your informative letter, it's time to "sit shiva" for them.

· Nov 4, 2011 - 10:24am

Doc J: Kudos

Well done- it is an honorable and admirable thing to try and educate/protect the people you love. Good on you, sir.

One small suggestion- add a note at the bottom that you would truly welcome further discussion with anyone thinking about diversifying their investments, then pre-make and have at the ready a short list of the very best individual articles, and a few websites to direct them to. Best of luck.

RevoltingLemming · Nov 4, 2011 - 10:24am

Makes you wonder, doesn't

Makes you wonder, doesn't it? Even if he's calling them undervalued for a short term trade, why take the risk?

Eric Original · Nov 4, 2011 - 10:26am

Good Stuff Doc J

I like it. I like it a lot. Mostly I just love that you are making the effort on behalf of those you care about. More than most of us are doing.

Nothing to add, though the old proof reader in me did catch "hundreds of pound of silver".

ewc58 · Nov 4, 2011 - 10:29am

I guess IMF "monitoring" is one way to describe

the IMF up your butt :-)

Watch your gold carefully mi amici, 'cause that's what these f*ckers are really after.... Italy has the No. 4 Au stash in the entire world. Italy is a superpower in:



-limoncello (if you like vodka and like lemons, OMG you'll love this... also great made with Grain Alcohol)


Buon Appetito!


Giada De Laurentiis

Recipe courtesy Giada De Laurentiis

Show: Everyday Italian Episode: Summers in Capri

Picture of Limoncello Recipe Rated 4 stars out of 5
Yield: 7 cups
Level: Easy


  • 10 lemons
  • 1 (750-ml) bottle vodka
  • 3 1/2 cups water
  • 2 1/2 cups sugar


Using a vegetable peeler, remove the peel from the lemons in long strips (reserve the lemons for another use). Using a small sharp knife, trim away the white pith from the lemon peels; discard the pith. Place the lemon peels in a 2-quart pitcher. Pour the vodka over the peels and cover with plastic wrap. Steep the lemon peels in the vodka for 4 days at room temperature.

Stir the water and sugar in a large saucepan over medium heat until the sugar dissolves, about 5 minutes. Cool completely. Pour the sugar syrup over the vodka mixture. Cover and let stand at room temperature overnight. Strain the limoncello through a mesh strainer. Discard the peels. Transfer the limoncello to bottles. Seal the bottles and refrigerate until cold, at least 4 hours and up to 1 month.

Shill · Nov 4, 2011 - 10:29am

  Italy refused IMF support:

Italy refused IMF support: Berlusconi FRANKFURT (MarketWatch) -- Italian Prime Minister Silvio Berlusconi on Friday said Italy refused an offer from the International Monetary Fund of financial support, news reports said. In a news conference at the conclusion of the Group of 20 summit in Cannes, Berlusconi said the support "wasn't necessary," but confirmed that Italy asked the International Monetary Fund to help monitor its economic reform efforts, Agence France-Presse reported. He also said he didn't believe a rebellion by government supporters would bring his tenure in government to an end, Reuters reported.

cpnscarlet ewc58 · Nov 4, 2011 - 10:33am

@ewc58 - Marginally. I think

@ewc58 - Marginally. I think Fox Business has way too much political fluff thrown in to the financial news and CNBS is just getting tiresome (I just can't take Kudlow's format degrading week to week). For straight financial news, Bloomberg still seems to be the place to go prima facia, but it gives me a "kweezy" feeling when I watch ... don't really know why... You just feel "something's going on". The only thing I can say in favor of anyone is that CNBS-HD still has the best tickers.

cpnscarlet TF · Nov 4, 2011 - 10:37am

Faber on Financials

Marc Faber tells it "like it is" and is no slouce in his analysis. Perhaps he is simply making the assumption that there will be QE to infinity - this will lead to bailouts in various forms, primarily to financial institutions. Those on life support will suddenly appear "healthy - their stocks go up. And the general lift in equities from QE will primarily lift the financials. Seems like a no-brainer analysis IF QE DOES HAPPEN the way some people think it will.

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