Financial Crisis - 2013 - ????

[Malsua]

I don't think the bankers will let the system collapse. The ultimate revolution that follows will find them first against the wall.

[Ryan Ruck]

Unemployment Is Really 14.3%--Not 7.6%

April 8, 2013

The current job-creation numbers are meaningfully below the level we might expect during a period of record corporate earnings and the reaching of new peaks in the major stock market indices.

Let’s go to the videotape –

The unemployment rate is 7.7%. But, there is another 0.6% of discouraged workers,(about 800,000) mainly the young, minorities and those without the all-necessary high school diploma. Another 0.9% are only marginally employed (whatever that means) and have mostly stopped looking for a job recently. More crushing is the 5.1% of the workforce most impacted by the 2008 downturn, who are working only part-time and would prefer to have a full-time position. That 5.1% part-time workers total 8 million people, who mostly are having trouble making ends meet and most likely have no health plan from their employer, according to Bob Eisenbreis, vice chairman and chief monetary economist at Cumberland Advisers, a New York-based investment firm that makes useful comments on the economy.

These numbers added together suggest that the true unemployment level– when part-time workers are included– is 14.3%–meaning that one in seven of every potential full-time employee in the U.S. economy is not able to earn a proper living wage–and thereby contribute to the snails-pace of economic growth.

To my way of thinking the dropout rate is the most perplexing, because how do these people survive? Moreover, the percentage of people employed is only 58.5%, down from 61%, the level hit in 2008 when Obama was first elected–and to be fair before the meltdown on Wall Street. And the jump in first-time unemployment claims last week was the highest level since last November.

Now comes the sequester–which is meant to slice 1.75% from GDP at a time the economy is supposed to be growing at only a 1.6% pace at best. In other words, fewer people will be earning wages just as bullish sentiment is gaining momentum for a risk-on long position in equities. Everywhere I go seasoned veterans believe the market’s current valuation of about 14 times earnings makes them comfortable for a long-lasting bull market. Because, after all, they argue–there is far more risk in the bond market. Incredibly, perversely almost–the public’s accumulation of fixed income mutual funds and ETFs continues big time.

I can only conclude that maybe corporate earnings will continue to increase, rewarding equity investors, because of the high unemployment rate.

Now, factor in all the people on welfare or "disabled"... A real rosy picture!

[vector7]

Yep, if a Republican was in office MSNBC would be reporting near 20% unemployment.



They and CNN, CBS, ABC, Link, Al Jazera...would be doing hit peices every other day on how terrible the leadership is in this country.

[Phil Fiord]

Today I saw a man of about 23 with a woman of about the same age. They walked up to a checkstand and had a couple bottle of soda. They bought the soda with EBT. Okay nothing new here, but what was new to see was this woman hanging on the guy like he pulled out a gold nugget to pay with. It was the very scene you would have seen a few years back with an AMEX commercial at a diamond store save for the nicer clothes and more civil demeanor. These folks were rude and to me, disgusting. Not from the use of EBT so much as the way they treated it. Like something they earned.

[American Patriot]

hahahaha.... thanks for the image. I can imagine it precisely. I've actually seen it before myself.

[American Patriot]

By the way, do they take EBTs at jewelry stores yet? How about car lots?

Cuz when they start doing it, I'm opening a business and I'm going to cater to those folks with EBTs. After all, might as well get MY piece of the pie, eh?

[American Patriot]

Gold down more than $90 since Friday. Stocks are plummeting for some reason.

Stocks stumbled out of the gate Monday, as weak economic data in China sparked a global commodities selloff and trumped an encouraging earnings report from Citigroup.

	Name	Price		Change	%Change
DJIA	Dow Jones Industrial Average	14778.51		-86.55	-0.58%
S&P 500	S&P 500 Index	1577.80		-11.05	-0.70%
NASDAQ	Nasdaq Composite Index	3269.36		-25.58	-0.78%

The Dow Jones Industrial Average tumbled nearly 100 points, led by AT&T and Chevron.

What's up?

[American Patriot]

[American Patriot]

Gartman on Gold: We’ve Never Ever Seen Anything Like It

Published: Monday, 15 Apr 2013 | 7:53 AM ET

By: Ansuya Harjani , Matt Clinch




Gold prices continued to plummet Monday on concern that Cyprus will have to sell excess reserves of the precious metal to raise about $522 million to help finance that country's $13 billion international bailout, Dennis Gartman, editor of The Gartman Letter, told CNBC.


"There are a lot of people throwing up their hands. Throwing positions overboard. Panic is everywhere," Gartman said in a "Squawk Box" interview on Monday. "I've never seen anything like this. I mean it."




Play Video


Gartman: Major Sell Off in Oil & Gold



A look at what's driving down the prices of crude and the precious metal recently, with Dennis Gartman, The Gartman Letter.


Gold prices broke below $1,400 Monday, their lowest level since March 2011. "Here we are under [$1,400]," Gartman observed. "Who would have thought it? Not I."

"I think it would be unfair to force the Cypriots to sell [gold] and not to have others do exactly the same thing," he argued. "I expect Spain and Portugal, Italy will also be rumored to do it, and that's weighing on prices."


Gold mining shares around the world were battered, with shares of Australian-listed Kingsgate Consolidated, a gold producer and exploration company, and miner Beadell Resources plunging 15 percent, while Newcrest Mining, which operates gold and copper mines, tumbled more than 8 percent.
(Read More: Has China's Economy Hit a 'Dead End'?)


Gold producers in China and the U.K. also fell sharply. Shanghai-listed Zhongjin Gold fell 6.5 percent, while Zhaojin Mining tumbled more than 9 percent in Hong Kong. In the U.K., Randgold Resources fell 7.2 percent, while Lonmin and Kazakmys were both down over 6 percent.


Analysts at Citigroup also sounded a bearish tone on Monday, pointing out in a note that the firm now had a "sell" rating on all U.K. silver and gold miners, except one.


"As you get closer to the cash cost production for gold, which is around $1,200 an ounce, people get nervous," Jonathan Barratt, founder of Barratt's Bulletin told CNBC.

But Barratt added that he believes this is a "significant overreaction" and offers a good entry point for investors. "For the amount of money that's going into the system, you have to take a longer-term view that stimulus will support gold prices," he said.


Gold miners have struggled to find favor with investors over the past year, due to their declining profitability in the face of rapidly escalating operational costs and poor performance of the precious metal.


(Read More: US, China Data Set Negative Tone for Oil Prices)


Play Video


Gold Will Touch $1,000 in Next 12 Months: Pro



Michael McCarthy, Chief Market Strategist at CMC Markets, on why conflicting macro flows in the U.S. could lead to markets faltering. He discusses why he sees gold falling to $1,000 per ounce over the next 12 months.



The precious metal has entered into bear market territory for the first time in 12 years. It is down about 25 percent from a peak hit in September 2011 at $1,920.

Reports last week that Cyprus was planning to sell some of its gold holdings have been the latest trigger for the sell-off in gold.


(Read More: Cyprus Central Bank Denies Plan to Sell Gold)


"Gold hasn't done anything for anyone for a long time," said Clay Carter, head of international equities at Perennial Investment Partners in Sydney. "If we were going to buy a gold producer it would have to be one that could really beat production."

[Malsua]

I need it to get back to $300 an ounce with $4 silver so I can stock up. heh.

[American Patriot]

Thats what I was thinking Mal! LOL

[Malsua]

Stocks are plummeting for some reason.

As gold plummets, speculators are forced to make margin calls so they sell their stocks to raise cash.

[American Patriot]

So... basically, they are panicking then?

[vector7]

Saw this...


The Upcoming Stock Market Crash brought to you by Gold


by John Galt
April 15, 2013 05:50 EDT


The bloodbath in precious metals and base metals continues this morning with gold down over $100 per oz. at one point in electronic trading in New York:


(charts from FinViz.com)



While many crazed souls in the precious metals community will act like a chicken with their head cut off, I simply remind everyone of what gold and silver predicted in the spring of 2008:



(charts from StockCharts.com)



The chart above demonstrates first a correction which was a normal 20% decline then a brief period of stability before the market cratered. This fits with a theory I have been promoting in the current markets where a true bull market correction from the $1900 and change highs down to the $1300 area would be normal and healthy, yet a major warning for equities. Gold has had a nasty habit of predicting stock market crashes and deflationary scares forcing the Federal Reserve and other central banks to double and triple down. Look at what happened to the S&P 500 after the major gold crash hit in the summer of 2008:





As the gold crash was gaining momentum, the stock market finally figured out the “oh crap deflation warning” signal that commodities and especially gold were sending. This same signal is being sent again with the sell off over the past week or so and sadly for the unprepared, a final bargain basement buying opportunity if one can find gold or silver at any dealers at these great prices. It also means for the patient investor, a pre-hyperinflationary entrance point into select equities is approaching and without a doubt in my mind a 30% to 40%+ market crash is in the cards.


When gold experiences a standard deviation in trading of 3.2, it will not be much longer that equities shall follow with an even more terrifying plummet, even if the Bubblevision celebrities get a moment to wear their Dow 15K party hats. This cold get seriously ugly gang but look for long term support for gold around the $1280 mark and around 890 for the S&P 500 this year.

[vector7]

Where is all this paper coming from?
“155 Tons Of Paper Gold Sold In Just One Hour!”

On the heels of another cascade of selling in gold and silver, today whistleblower Andrew Maguire told KWN that a stunning 155 tons of paper gold was sold in just one hour.

Maguire also spoke KWN about the remarkable amount of central bank buying which took place during that chaotic one hour time frame. Below is what Maguire had to say in this remarkable and exclusive interview.

"Nothing will unnerve the paper gold shorts more quickly and do more to undercut their confidence than to strip them of the real metal and force them to come up with more hard gold bullion to make good on deliveries. "Stand and Deliver or Go Home" should be the rallying cry of the gold longs to the paper gold shorts." --Trader Dan Norcini

QE to Infinity, followed by Gold balancing the balance sheets of the sovereign balance sheet disasters. Just as there is no tool other than QE to feign financial solvency, there is no tool to balance the balance sheet of the offending entities other than Gold. It is just that simple. --Jim Sinclair

My Dear Extended Family,

The following is the latest from our friend, Alf Fields.

Gold Confidence Shaken

Posted April 14th, 2013 by Alf Fields & filed under Alf Field.

Dear CIGAs,

Late Friday afternoon in New York (April 12, 2013) gold plunged through the critical support level around $1525 level that has held resolutely since the start of this 19 month correction from $1900 in September 2011. In the process of this sudden drop, confidence in gold by long term investors has been badly shaken.

The sad thing is that this late afternoon selloff was an orchestrated event by people wishing to see the gold price lower so that they could cover short positions in the paper gold markets. Proof of this is that London PM fixing on Friday was $1535. Once the London physical market closed, the orchestrated selling in the paper markets gathered momentum. By the close of the Comex paper gold market, gold had dropped $60 in just the last couple of hours on very high volume.

This is not something new. Observers of the gold market have been aware of many other occasions where similar events on a smaller scale have taken place on Friday afternoons. There is little point getting one’s knickers in a knot about this because every short sale in the paper market has to be covered by a corresponding purchase in due course. Thus if people who bought into the selling spree simply hold onto their positions, a short squeeze will eventually develop as the short sellers try to cover their positions, causing the gold price to rise.

Often the physical markets come to the rescue as the lower prices generated by the Friday selloff sparks increased buying in the physical markets, helping to spur the recovery. The result is that the price of gold recovers fairly quickly after a Friday afternoon selloff. The coming week will show whether this happens again this time.

In January this year I published an article indicating that there seemed to be a reasonable chance that the long gold correction was over. That article indicated that if gold dropped below $1636, that the analysis was incorrect and that something else was happening. Gold did drop below $1636 and has continued to decline, proving that the January analysis was faulty.

At that time last January I had assumed that the rise from $1540 to $1790 in 2012 was the first upleg of the new bull market and that the correction to $1636 was the first minor correction of the new bull market. These were incorrect assumptions. The big correction from $1900 in September 2011 was still under way. The low had still to be reached.

In my Keynote speech to the Sydney Gold Symposium in 2011 I had a target of $1480 for the low of the expected correction. Despite several plunges into the low $1500’s, the price never achieved that $1480 target. The low price for Comex was $1523 and the lowest PM fixing was $1531 in late December 2011.

It bothered me from time to time that gold had not achieved my target. Now the late Friday selloff last week has driven the gold price to a closing level of $1477, finally reaching the target of $1480 set 19 months ago. What remains to be seen is whether this target holds and that the bull market resumes. The coming weeks should indicate what is happening.

What we need to look for is a swift recovery to above $1500 and an ongoing strong up-move in a truly impulsive manner. The fundamentals for holding gold are as strong as ever. Gold is an insurance against a range of financial disasters that we don’t need to go into now. You do not cancel your fire insurance when you can see fires burning all around you.

Certainly confidence in gold has been shaken and sentiment indicators are at record lows in some cases. This is exactly what one would expect at a major low in the market after a brutal 19 month correction. The conclusion is that factors are now in place which could support a major low in the gold price.

[Malsua]

So... basically, they are panicking then?

Not particularly. It just means that if you are holding a long position, purchased on margin, and the spot price falls below your purchase price, you're going to get a margin call. Essentially it means "You've lost your bet, cash out now or come up with more collateral". Either way, they have to raise capital somehow and that is usually funded by selling off stock.

[American Patriot]

Are you FUCKING KIDDING ME????????????????

WAKE UP!
I've been warning people that all is not well in the world.
This morning I'm standing on the red button.




We are, right here and now, sitting on key support for copper. If it fails, and given the pattern I believe it will, we're going under $3 and could see an all-on crash in copper prices.



Why is this important? Because it's a measure of industrial demand -- that is, industrial production on a global basis.


Europe is a damned basket case. That their markets haven't collapsed are testament to the litany of lies promulgated by central bankers and politicians. But lies only are effective for a while and always eventually lose their luster.


Portugal is out of money. Spain's pension system is effectively all in Spanish government debt; zero diversity. Ireland's banking system, along with most of the rest of the continent, is about to roll over again and the idiots over in Europe, just as here, refused to force their banks to take the bogus leverage and swap crap out and shoot it after 2008. Politics trumped arithmetic -- for a while.


But politics never wins over arithmetic in the end; it is a poor substitute for fact.


There will be more intervention -- that much is a certainty. But note that even big companies like P&G are now extending payment for suppliers; the firm now wants 75 days to pay. What happened to 2% 10, Net 30? I'll tell you what happened to it -- it disappeared in a puff of bogus accounting games and "machined" earnings. When huge corporations start playing this game the end of the line has arrived.



Buried in that article is a nasty little ditty -- major companies are now taking 60-100 days to pay. That's outrageous.
What's worse is the so-called "earnings surprises and beats." Never-mentioned is the fact that companies have been buying back stock like crazy over the last few years, often with borrowed money rather than operating earnings. That is, they're increasing leverage and then so-called "analysts" are screaming about how "cheap" their stock is. In a word:



Now we have a problem. The economy has rolled over in Europe and they are locked in a deep recession fed by Germany and to a lesser extent France -- nations desperate to prevent their banks from being exposed as grossly insolvent. The ECB is going along with this because it has more worthless bonds in the kitty than its capital, which means that it is insolvent too.


The premise that Bernanke and the ECB have run is that low rates and "QE" style games will prompt a "recovery." Five years+ into this mess that is now known factually to be a blown thesis!



But admitting the truth means accepting that we have in fact been in a grossly ugly recessionary -- or even depression -- environment for the last five years that has been intentionally and fraudulently covered up by artificially low rates, market distortions and deficit spending enabled by the chief drug pushers themselves. The political implications of doing that are unacceptable, so it doesn't happen. Not here, not there.


It's not helped by the fact that "new math" doesn't bother to explain how exponents work in the real world despite the fact that every single 8th grader in the world should instantly recognize that the games being played both can't and aren't working.


China stoked their idiocy with ridiculous building for which there is no demand. All of that was fueled with cheap credit too, which is even easier to make happen in a communist nation. But the economic "expansion" that enabled this to happen without the BS ball going up and exploding is now slowing down as the weight of this lending presses its thumb on the scale. Within the next year or two that bubble should burst with catastrophic consequences. Never mind the internal and demographic problems.


Japan, for its part, thought it could "QE" its way to prosperity. The irony is that they have thought this for 20 years and it has failed. Their "big experiment" will also fail; their problems are structural and attempting to evade the decisions of 20 years previous in turning their banks into zombies -- exactly as we're doing here and Europe is doing there -- cannot be backed out of the equation. There is a small element of panic showing up over in Japan already and that's likely to grow.
Add to all of this the quiet repeal of the STOCK act here in America a few days ago. That's right -- while America was watching people get their legs blown off in Boston our Congress made legal once again insider trading by.... Congress. The "debate" over this change took a literal 10 seconds in the Senate and a whole 14 in the House. Neither chamber bothered with debate at all; it was passed by unanimous consent in both chambers.



All of those who claim to stand for transparency and proper government, including the man who I publicly supported for Congress in Michigan -- Kerry Bentivolio: Go **** yourselves. This is exactly the reason that nobody should respect any member of Congress, ever, period. Unanimous consent means just that -- each and every member of Congress stands guilty of not only accepting but explicitly supporting insider trading by Congress.


One final fact: Artificially-low interest rates actually hurt lending. Why would you lend someone your capital for less than a reasonable return? There's only way you'd do that -- if someone else was backstopping your supposed "lending." That's what printing credit is all about if you're "too big to fail", but the fact of the matter is that the cost comes out of everyone's pocket and as a result real firms with real prospects for real performance are shortchanged and those who would either be lenders at a market rate of return refuse to engage in the market.



Worse, those with good ideas refuse to hire and build businesses because those people, who actually can perform basic arithmetic and understand exponents, know they will get hammered to pay the bills for those who got uneconomic loans and will not be able to pay.
In this environment actual economic growth is factually impossible.
"Here it comes."

[Ryan Ruck]

Sweet! Cheap ammo may be on the horizon!

[American Patriot]

lol

[Phil Fiord]

It's starting to crumble.