Another Interesting BLSBS Friday

Fri, Nov 7, 2014 - 11:17am

Olly olly oxen free! All is well, don't you know? C'mon in and kick the can a little farther!

Here's what we know:

  • American wages are stagnant and the median income remains 15% lower than it was 5 years ago
  • The labor force participation rate remains very near 35-year lows
  • Of the 214,000 "jobs" that were allegedly added in the just-concluded month of October, 42,000 came in the food service "industry". This means that roughly 20% of the statistical new "jobs" went to waiters and bartenders
  • And here's the best part...of the 683,000 new "jobs" that appeared in the Household Survey, 528,000 came from a statistical adjustment (make believe) in the 16-24 year old category. Rrrrriiiiggghhhttt....

Read all about it if you'd like by clicking through these four summaries from ZH:

Meh, whatever.The lies and illusions have gone on for so long now, it's really hard to get too worked up over it all...

On the bright side, the metals have rallied!

Let's start with the HUI. We've been discussing all week the importance of NOT closing below 150 on Friday as a weekly close below that level would amount to the lowest weekly close in over a decade. Thankfully, for this week at least, it appears we will dodge the bullet as I have a last of 160.65, UP over 8 points.

While this is all well, good and encouraging, it is still NOT time to be doing cartwheels. There remain several gaps to be filled and, if history is any guide, the HUI will likely come down and bang around 150 again a few more times before finally moving higher IF, indeed, this level is a bottom.

Anyway, the main and only story long will the direct 1:1 algo peg of gold to the yen remain. As we discussed yesterday, there are already anecdotal data points of physical delivery stress in the system from the US Mint story to the lowest GOFO rates in 15 years. As you can see on the chart below, twice earlier this week, the paper price of gold attempted to dislodge itself from the "peg". On both occasions, eventually a massive sell order appeared to drive gold back down and re-establish the link. Note the blue boxes and red arrows:

However, the action this morning (albeit related to short-covering, the BLSBS, Russian tanks back in Ukraine) has opened the relative gap to the widest it has been in quite some time. So, THE MAIN QUESTION IS, will this continue? IF gold can break away here and once again begin trading free of the yen peg that has pressed it lower since June, then we will see a very nice recovery and we will know that we have found a floor below which demand for physical breaks the long-held connection to paper.

As I said yesterday, this is a very exciting time! Painful, yes. However, it is very exciting to see such stress in the godforsaken fractional reserve bullion banking system. Again, let's not get the cart before the horse. Another slam may soon materialize that drives price back down to $1145 and back into lock-step with the yen. But let's watch this very closely the rest of the day, through Sunday night and into Monday. All those predicting a drop in gold to $950 and $800 may still be proven dead wrong.

Finally, just a few words about silver, which "broke" earlier today. This "market" is now so oversold with Spec shorts that there might literally be no one left to sell. After all, why did this break happen? Because buying pressure chewed up the entire offer stack in the same way massive sell orders are often placed in order to wipe out the bid stack. And how do you know when you've finally reached a selling climax? It doesn't always come with a massive, high-volume capitulation. Sometimes these things simply happen with a whisper...where everyone who was going to sell has sold. In that case, you're left with nothing but buyers...or at least a simple case of more buyers than sellers...and price begins to recover. All in all, this morning's market break in an UP move is actually a very positive sign.

(chart courtesy Nanex. Twitter @nannexllc)

As I close, gold and silver are both UP nearly 2%. Could this be a new beginning? Maybe. Quite possibly. However, we need to watch the remaining hours today and the action of early next week very closely.

Have a great weekend!


About the Author

turd [at] tfmetalsreport [dot] com ()


Nov 7, 2014 - 11:18am


To remember that bottoms are only obvious in the rear view mirror

AGAU AUandAGbull
Nov 7, 2014 - 11:23am

Two smooth bumps and an

Two smooth bumps and an asshole a rounded bottom make ! 

Nov 7, 2014 - 11:26am

uranium update

urre up 27% today. now 31%. sheesh

market cap of $46m (jamie dimon monthly wine budget!)

Nov 7, 2014 - 11:34am

Not to put you on the spot about HUI, Turd

but did you allude to a retest of 150 if we continue UP from here, but are unable to stage a close above 185-190? Or did you mean imminently as in the short term (early next week)?

Nov 7, 2014 - 11:37am

I'll take it

sure anything can still happen, but still, for the beating that's gone on of late, I'll take this little uptick as a good sign and let it quell the uneasy feeling in my belly for now! TGIF!

Nov 7, 2014 - 11:37am

Dive! Dive! Dive!

Just precautionary. Prepare for depth charges. It is Friday, you know. Algos must run away until Monday. Check back for the NY Close.

Nov 7, 2014 - 11:39am


2nd yA BABY


Conclusion: silver looks set to drop steeply now until the current dollar rally has played itself out, but this looks set to be the decline into the final low, after which we should see a major resurgence as the dollar comes under renewed pressure after the current deflationary boost is eclipsed by the looming prospect of its losing its reserve currency status GOLD

In conclusion it appears what we are about to witness is the sector collapse into the final low, before a recovery that promises to be amazingly robust. This collapse will trigger an industry wide cull and cleanout. It will be like the Black Death with bodies being taken away by the cartload, but the companies that pull through this terrible time can look forward to the prospect of an extraordinary resurgence in fortunes, and a correspondingly big increase in their share prices. Those of you who have any capital left should make sure you don’t miss out on this.


As to the yen carry trade and Japan one of the 2 major financiers of the 2008 2015 recessions the evidence of last desperation action is occurring and collapse is close and will be violent

Nov 7, 2014 - 11:42am

HUI history

If you look at the chart from 2008, there were a couple of consecutive weeks where the index banged down below 150, yet bounce every time. So, to answer your question, imminently is most likely followed by a retest in a few weeks.

Nov 7, 2014 - 11:46am

We all had our outrage yesterday

But glad to see ZH chime in today:

And their summary paragraph is beautiful. I wish I had written it:

"And the real punchline: nobody cares about justice as long as everyone is getting richer, if only on paper. It is what this nominal paper "wealth" disappears that things get scary for the Jamie Dimon's of the world, which is why the Fed will do everything to avert each and every market crash from now on until it finally loses control, because once people awake from the siren song of the printer, to realize they have nothing to show for years of labor and faith in a broken system the only justice that will be application will be that of vigilantes."

Nov 7, 2014 - 11:46am

9 billion woman

I am enjoying that Rolling Stone article by Taibbi immensely. Here is a gem of a quote:

"In September, at a speech at NYU, Holder defended the lack of prosecutions of top executives on the grounds that, in the corporate context, sometimes bad things just happen without actual people being responsible. "Responsibility remains so diffuse, and top executives so insulated," Holder said, "that any misconduct could again be considered more a symptom of the institution's culture than a result of the willful actions of any single individual." In other words, people don't commit crimes, corporate culture commits crimes! It's probably fortunate that Holder is quitting before he has time to apply the same logic to Mafia or terrorism cases." Link

Unfortunately, a culture cannot be prosecuted. The only wat to change a culture is to change key individuals who are the idea and opinion leaders of that culture. Thus, without prosecutions of Dimon, Blankfein and other top execs (including Holder, Obama...the list is long) then that culture will not change, sociopaths will continue to fine an express ladder to the top where thy will continue their sociopathic practices of stealing wealth from all of us, buying off prosecution with our f-ing money, and walking away with obscene profits invested in the very commodities we have been promoting all along. 

I'll stop preaching to the choir now...but I did link this article on facebook to my friends and relatives. Seems like an article that may get them thinking...

I am nowhere near a "liberal, but I am pleased that the Rolling Stone has the guts to publish this article. Perhaps the liberals are getting fed up as well. the recent election seems to suggest that.

Nov 7, 2014 - 11:55am


Some hedge fund didn't read the message on miners being up this AM. Maybe after their 9 martini lunch they will get the word from the other algo handlers and get EXK back in line.

Nov 7, 2014 - 12:11pm

Turd: Might want to track the Euro/Au as well

With QE rotating to the Yen for now, the euro would be the next target. Might want to track that correlation early when the YEN/AU breaks. The DOW could easily break 19000 and the DXY through .94 with a $1T Draghi announcement. And it would also force another hit on gold. If we ever see the final low ($1050) it will be with the euro QE initiated. If you think about it, there is quite a bit of room for QE with the euro. Japan is done but the euro could offer the CBs a good hammer for one final thunk before the next USD QE is announced. We have another 9 months of this BS unless GOFO does show real shortages (still skeptical) and gold really breaks from the yen and the euro. Leaving only mano y mano with the USD/AU. An when QE IV is announced, the final leg could drop as there is no where else to run. It would also be a great time for the Chinese to start gently raising the bid to tease a little more physical from the west.

So what market actions would act as the catalyst to announce euro QE and run the carry trade to US markets? 

Danforth Coxwell
Nov 7, 2014 - 12:12pm

Proper handwashing......

is a tremendous way to stop the spread of infectious disease. Contact your local Public Health Department for more details.

Nov 7, 2014 - 12:13pm

Some further encouragement

This is certainly a nice, bullish engulfing candle on the daily chart:

And a close above $1171 will actually flip this week's candle to green. NO ONE expected that after last week's weekly close below $1180, certainly not that Mountain Man character.

Last with 75 minutes to go, $1168.50.

Nov 7, 2014 - 12:20pm

mining the Comex

If you were a miner right now why would you take on mining risk and deplete reserves. Just buy on the comex and stand for delivery.

Nov 7, 2014 - 12:28pm

Jobs? What Jobs?

During the Great Depression, the citizens were told the truth. There were no jobs to be found. The people knew the importance of a pantry and a bug out bag. They made the necessary adjustments to survive, and they knew the truth of that era.

My uncle told me about life for him as a young man in those days. No jobs, no money, and bored to stay at home. I asked him what they did to pass the time. 

He said there was a large hill called "Starvation Peak" that was covered with filbert nut trees. The guys made homemade beer and wine and had "Blue Jay BBQ parties" for entertainment. One of my uncle's favorite meals until he passed onward was four fried Blue Jays and eggs for breakfast. He still owned that old 22 rifle when he was in his 80's and it had supplied many birds for meals. If he were still able, you could find him on Starvation Peak and surviving! (For those who do not know, the birds love those filberts and will keep coming into the orchards, even if they are being shot). There must be some kind of a lesson there for us!

Nov 7, 2014 - 12:32pm

Detour gold

Up 20% . Sucks because of my tiny position 

gamble gamble 

timing is everything!

Nov 7, 2014 - 12:32pm

War rally?

I certainly hope this bounce in gold isn't due to war buying via headline chasing algos

Nov 7, 2014 - 12:36pm

Way back then

Then: We had Steve Jobs, Ronald Reagan, Bob Hope and Johhny Cash.

Now: We have Obama, no jobs, no cash and no hope.

Chuck Diesel
Nov 7, 2014 - 12:39pm

SSRI up 17% on big volume

We'll have to see how the day ends, but this is certainly characteristic of a V-bottom reversal

GDX up almost 7% on big volume as well

Nov 7, 2014 - 12:58pm

Paul Singer, head of Elliott Management Corp.

Here’s what a Wall Street hedge fund mogul, Paul Singer, head of Elliott Management Corp., told his clients the other day:

“Nobody can predict how long governments can get away with fake growth, fake money, fake jobs, fake financial stability, fake inflation numbers and fake income growth,” Singer wrote. “When confidence is lost, that loss can be severe, sudden and simultaneous across a number of markets and sectors.”

Got gold?

Nov 7, 2014 - 1:00pm

@Gamble & CD

I'll see ya & raise ya:

Major miner moves again today!

Nov 7, 2014 - 1:11pm

Paul Singer

Wow. Too bad hedge funds don't place demands on the Federal Government to correct their lies, deceit and corruption.

Forgot. Hedge funds feed off those things.

Nov 7, 2014 - 1:52pm

Only monkeys bottom pick.....

....and I have smelly fingers!

Nov 7, 2014 - 2:05pm

Gold, Silver, Miners all going UP

Wow! It's nice to have an UP day for a change! Sentiment in gold, silver, and the miners has been at ZERO. One day sentiment will change and we will see HUGE upside. The fundamentals are massively bullish despite the metals and the miners being crushed. The FEAR is soon to be replaced by GREED. It will be awesome to see money move out of stocks and into metals and the miners.

Nov 7, 2014 - 2:07pm

Mint Eagles Sold Out

Seems like a bit of panic to own happening right now!! Very very good sign.

Nov 7, 2014 - 2:08pm

Will 1180 be the new Crimex capping point?

That'd be my guess. Keep a lid on 1180 for a week or two then make sure we take out 1130 right before the 11/30 Swiss Gold Initiative.

Nov 7, 2014 - 2:10pm

Greenspan's Stunning Admission: "Gold Is Currency;

Greenspan's Stunning Admission: "Gold Is Currency; No Fiat Currency, Including the Dollar, Can Match It"

Tyler Durden's picture

Submitted by Tyler Durden on 11/07/2014 13:28 -0500


For some reason, the Council of Foreign Relations, where ex-Fed-Chief Alan Greenspan spoke last week, decided the following discussion should be left out of the official transcript. We can perhaps understand why... as Gillian Tett concludes, "comments like that will be turning you into a rock star amongst the gold bug community."

Greenspan (Uncut):

TETT: Do you think that gold is currently a good investment?

GREENSPAN: Yes... Remember what we're looking at. Gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can macth it.

Which is missing from the official CFR transcript...

GREENSPAN: ...remember, we had that first tapering discussion, we got a very strong market response. And then we reassured everybody to have no -- remember, tapering is still (audio gap) of an agreement that the central banks have made -- European central banks, I believe -- about allocating their gold sales which occurred when gold prices were falling down (audio gap) has been renewed this year with a statement that gold serves a very important place in monetary reserves.

And the question is, why do central banks put money into an asset which has no rate of return, but cost of storage and insurance and everything else like that, why are they doing that? If you look at the data with a very few exceptions, all of the developed countries have gold reserves. Why?

TETT: I imagine right now, it's because of a question mark hanging over the value of fiat currency, the credibility going forward.

GREENSPAN: Well, that's what I'm getting at. Every time you get some really serious questions, the 50 percent of the gold price determination begins to move.

TETT: Right.

GREENSPAN: And I think it is fascinating and -- I don't know, is Benn Steil in the audience?

TETT: Yes.

GREENSPAN: There he is, OK. Before you read my book, go read Benn's book. The reason is, you'll find it fascinating on exactly this issue, because here you have the ultimate test at the Mount Washington Hotel in 1944 of the real intellectual debate between the -- those who wanted to an international fiat currency which was embodied in John Maynard Keynes' construct of a banker, and he was there in 1944, holding forth with all of his prestige, but couldn't counter the fact that the United States dollar was convertible into gold and that was the major draw. Everyone wanted America's gold. And I think that Benn really described that in extraordinarily useful terms, as far as I can see. Anyway, thank you.

TETT: Right. Well, I'm sure with comments like that, that will be turning you into a rock star amongst the gold bug community.

* * *

As a reminder, here is Ben Bernanke putting people straight on Gold...

As we noted at the time,

Ron Paul asks the Bernanke if he thought gold was money. Bernanke almost swallows his tongue, stares blankly for a few seconds and then says, “no.”

Paul then asks why banks hold gold on their balance sheet? Why not diamonds? Bernanke says, “tradition, I suppose.”

So let me get this straight, banks hold billions of dollars of an asset that pays no interest or dividends on their balance sheet for reasons of "tradition". nothing to do with anything else, just tradition. uh, yea. That must be it.

AGAU wildstylechef
Nov 7, 2014 - 2:24pm


And remember gold is NOT currency it's is money the only money!,!

Nov 7, 2014 - 2:25pm

Pierre Lassonde’s comments back on November 5th:

I just put $10 million into the market today in gold equities. I can’t help myself. From now until early December is the best time to buy shares because people are literally throwing the shares away. By the end of December the market will turn around, and at some time between January and March you will double your money.

IMO Pierre Lassonde (former NEM CEO) is one of the SMARTEST guys is the gold business

PATIENCE my fellow Turdites, PATIENCE wink

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