Stocks, Gold, Silver, and the printing press.

[smokingman]

6/2/2013

Japanese bonds halted again.
Nikkei down 305 points or 2.22% at the open to 13,468(May 22,2013 the Nikkie was at 16,079).
Nikkei closed down 3.72% 13,261.8
Watch the US Treasury yields.

 

[smokingman]

6/5/2013
The Nikkei bounced a little on Monday 6/3 around 2.8% up.Today it declined again down 3.83% or 13014.87.The Japanese bonds are all over the place,and the Yen if extremely volatile.Japanese Government Bonds - Bloomberg They are getting inflation domestically to be sure with the cost of Rice up 14% in the last 2 weeks.

US markets where all down yesterday,breaking the POMO Tuesday 20 week trend.The Fed did purchase 3.9 billion in US treasuries,but it was not enough to hold back the decline.Japan's crisis will affect the world with the third largest economy.The US treasury notes are slowly creeping up in rates.The 10 year is currently 2.12%(up from 1.67%)with the Fed rate at .09(vs .17 a year ago).The lowest Fed rate ever,even lower than 2008 was yesterday(.09).

The COMEX added this disclaimer to inventory release data yesterday for the first time."“The information in this report is taken from sources believed to be reliable; however, the Commodity Exchange, Inc. disclaims all liability whatsoever with regard to its accuracy or completeness. This report is produced for information purposes only.”


JP Morgan seems to be in real trouble,with outstanding PAST delivery of gold higher than there current inventory.They are short over 72,177 ounces,and have not been able to increase their inventory in over 2 weeks.
Very detailed break down of the last two weeks here Harvey Organ's - The Daily Gold and Silver Report The COMEX dealer inventory in Gold is the lowest on record,silver is close behind.This month more gold is standing for delivery than the USA produced officially last year by 154.6%.Physical spot prices in China and India are more than $120 over spot(in US dollars)in Gold,and $19 over spot in Silver(US dollars).

Inflation may officially be low,but if calculated the same way it was in 1980 we are running at over 9%. Alternate Inflation Charts

It looks like today will be another down day for US markets.I do not expect many up days from this point forward.With Japan in crisis,and US GDP being revised down officially to 1.5% last quarter(Less than official inflation)things look to be headed down hill quickly for equities.
Premarket Stock Trading - CNNMoney

A nice quote from the Bernanke.
Here's this gem, courtesy of Senator Dan Coats, a Republican from Indiana:

"Chairman Bernanke, sometime earlier you and I had a conversation, and I asked you the question about why the United States was doing relatively better than its neighbors across the seas and others, and you said, 'Well, it's because we have the best-looking horse in the glue factory.'​

I'm wondering where that horse is now. Is our horse still in the glue factory? Is he in the pasture just outside the glue factory or is he back on the farm?"



To which, Bernanke responded: "We really have done better than some other countries for a variety of reasons" and "We are moving in the right direction."
(Just an FYI,we are still in the glue factory)

The EU is officially still in a recession with -.02 GDP for the last quarter(January-March) for a total of -1.1% in the last 12 months.
http://www.bdlive.co.za/world/europ...-stuck-in-recession-despite-signs-of-recovery
​

 

[smokingman]

6/5/2013

Demand for U.S. gold and silver bullion coins is still at "unprecedented" high levels almost two months after an historic sell-off in gold released years of pent-up demand from retail investors, the head of the U.S. Mint said on Wednesday.

"Demand right now is unprecedented. We are buying all the coin (blanks) they can make," Richard Peterson, acting director of the U.S. Mint, said in an interview referring to the Mint's suppliers.
U.S. bullion coin demand still at 'unprecedented' levels : Mint | Reuters

 

[pudly]

Interesting video. Far from perfectly setup, but it makes the point about the public's knowledge of precious metals:
http://youtu.be/ndshbH3qZ6Y

 

[smokingman]

6/6/2013

Nikkei officially in a bear market.Down 20% since May,22.
The dollar had the biggest drop in history vs the Yen a few hours ago.
Japanese bonds stopped trading for at least the 7th time in the last two weeks.Margin calls are pouring in at this point in Japanese markets.Derivatives are blowing up all over the place.

Nikkei sinks into bear market territory; JGBs gain | Reuters

 

[teddy12b]

6/6/2013

Nikkei officially in a bear market.Down 20% since May,22.
The dollar had the biggest drop in history vs the Yen a few hours ago.
Japanese bonds stopped trading for at least the 7th time in the last two weeks.Margin calls are pouring in at this point in Japanese markets.Derivatives are blowing up all over the place.

Nikkei sinks into bear market territory; JGBs gain | Reuters

Are you saying that "The Bubble" is popping?

 

[smokingman]

Are you saying that "The Bubble" is popping?

In Japan....it has already blown up.The FED and QE infinity,currency swaps,discount window,and QE1.5(still ongoing)will reduce the impact to a degree here.BUT they can not stop anything happening in the derivatives markets,it is out of their control.That could and very likely will result in banks blowing up(Japans largest bank is down 22% in the last week).So yes it could get ugly very quickly at this point even for the USA markets.

I think you can forget about the S&P making any new highs at this point unless the FED steps in and does a hell of a lot more than 85 billion per month(ie pulls an Abe).We may just bounce around a bit,Friday is a POMO day of 1-3.5 billion in the USA so hang on.POMO days will lessen the impact here to be sure,but I do not think it will be enough to offset what is happening in shadow banking and derivatives.The derivatives market alone is 1000 times the size of our GDP.

The FX markets,carry trade,and currency stability have already left the building.

In short.Yes I think the bubble is popped and we may slide a bit for a few weeks,but I think things go down hill from here(less more intervention from the FED).

 

[smokingman]

6/11/2013
All US markets down,and on a POMO Tuesday(the second in a row after 21 weeks of being up on pomo Tuesday).

DOW:15,122 down .76%
S&P 500 1626 down 1.02%
NAS 3436 down 1.06%
Lean Hogs hit a new 52 week high today at 99.2(cents per pound)

Traders Said to Rig Currency Rates to Profit Off Clients - Bloomberg
"Traders at some of the world’s biggest banks manipulated benchmark foreign-exchange rates used to set the value of trillions of dollars of investments, according to five dealers with knowledge of the practice.
Employees have been front-running client orders and rigging WM/Reuters rates by pushing through trades before and during the 60-second windows when the benchmarks are set, said the current and former traders, who requested anonymity because the practice is controversial. Dealers colluded with counterparts to boost chances of moving the rates, said two of the people, who worked in the industry for a total of more than 20 years." Rest at the source.


CBOE, largest U.S. options exchange, hit with SEC penalty over lax oversight - Jun. 11, 2013



"The CBOE (CBOE) is the largest U.S. options exchange, offering options for stocks, indexes and exchange-traded funds. The SEC accused the exchange, designated as a self-regulatory organization, of failing "to enforce or even fully comprehend rules to prevent abusive short selling."


No more Super Tuesdays: Stocks close down 1% - Jun. 11, 2013

Oh,and the Nikkei dropped another 1.8% yesterday,and just opened down another 1.9% to 13,057(It did go up almost 4% on Monday,but is back down into bear market territory at -21% from the highs a few weeks ago). Nikkei.com - Live

http://www.zerohedge.com/news/2013-...lides-fresh-record-low-withdrawals-accelerate

"With a massive 6,208 (or 80% of the total in the entire Comex system) Customer Delivery issues outstanding against JPM so far in June alone, many have been wondering - how and when will the firm reconcile what is seemingly more demand for JPM vaulted gold than the firm has in its possession? "

"While we still don't have the answer, what we do know is that as of an hour ago when the Comex released its daily vault depository statistics, JPM has said goodbye to another 28.4% of all of its vaulted gold - the largest one day withdrawal since April 25, the result of the departure of 61.5% of its Eligible gold, or 218k troy oz, as hundreds of thousands of registered ounces in the bast few weeks have seen warrant detachment.
Which means that as of last night, total gold held by JPM has fallen to a new fresh all time low of just 550k ounces, down from 768K the day before, and total eligible gold of only 136,380 troy oz in inventory (just over 4 metric tonnes) - also a record low."

 

[smokingman]

JPMorgan Chase stock is down 90% today,sort of.It seems over the last few days HFT programs have been having fun with the stock.It closed yesterday at $965.00 and today crashed back down to $96.5.This is the third time this has happened in the last week.Nothing to see here,move along.

 

[RockofStrength]

Unfortunately I am not well-versed in the world of derivatives and the stock market beyond the obvious basics, but what are we looking at in terms of effects within the short-term (say up to a year from now) as a result of the European recession and now the rapid destruction of the Japanese markets? I can generally understand why things are breaking down, but the next-steps are the things that I have a hard time wrapping my head around.

 

[lucky4034]

JPMorgan Chase stock is down 90% today,sort of.It seems over the last few days HFT programs have been having fun with the stock.It closed yesterday at $965.00 and today crashed back down to $96.5.This is the third time this has happened in the last week.Nothing to see here,move along.

I'm not getting the same graph when I look up JPM on both cnn and google finance?

 

[teddy12b]

I'm not getting the same graph when I look up JPM on both cnn and google finance?

You're using the wrong ticker symbol. Blow up the picture and use that one.

 

[smokingman]

I'm not getting the same graph when I look up JPM on both cnn and google finance?

Ticker JPYYL.

It is JPMorgan's over the counter derivatives company(over 50% owned by JPMorgan JPM).
Yahoo. JPYYL: Summary for JP MORGAN- Yahoo! Finance

Nasdaq JPYYL stock quote - JP Morgan Chase Bank NA New York Branch stock price - NASDAQ.com

MSN money JPYYL - Stock Quote for JP Morgan Chase Depositary Shares Representing 1/10th Pref S - MSN Money

The figures are correct,and anywhere you look for them.

Not to worry though it only controls 70 trillion in derivatives.http://www.businessinsider.com/9-banks-combine-for-over-200-trillion-derivatives-exposure-2012-4
http://www.zerohedge.com/news/2013-...t-derivative-exposure-world-hint-not-jpmorgan

 

[lucky4034]

I found them... thank you! Do you have any insight as to how/why this is happening?

(in simple terms)

 

[smokingman]

I found them... thank you! Do you have any insight as to how/why this is happening?

(in simple terms)

Just a semi educated guess.They manipulated a derivative,and ticked someone off.In return that entity is playing games with the stock.It also has to be an HFT program.The number of bids(millions every nano second)clearly shows it was an HFT program.

The other option.It is someone testing an HFT program.It could even be JPM testing it and it got a little out of hand.This actually happens a few times a week in the new normal in one stock,commodity,or market.

 

[smokingman]

Unfortunately I am not well-versed in the world of derivatives and the stock market beyond the obvious basics, but what are we looking at in terms of effects within the short-term (say up to a year from now) as a result of the European recession and now the rapid destruction of the Japanese markets? I can generally understand why things are breaking down, but the next-steps are the things that I have a hard time wrapping my head around.

Markets catching up to the reality of the economy.Stocks are up over 50% since 2008,does the economy feel up 50% to you?There has to be a correction to bring equities into line with reality.

We are also in a recession.Take the official GDP numbers,then subtract official inflation numbers.We have not grown at all since 2008.The "great" recession never ended.That is a huge part of the problem.It has been papered over with QE,currency swaps,derivatives,discount window,and the FED open market committie pumping 20 billion plus PER DAY into equities.

In the next year.Either they pull back,and everything takes a dive(equities markets,commodities)or they print more to just maintain the level we are at currently.The later of course leads to inflation,and possibly a collapse of the US dollar.With either option interest rates are going up.How fast and how high depends on the FED.

I expect in the next 52 weeks for at least a 30%+ correction in the markets(down) and the US 10 year treasury yield to be north of 5%.That is just based on what the FED says it is going to do(reduce stimulus).If they go the other way and increase stimulus then the DOW goes to 20k and we will get a real taste of inflation(15%+).I think they know that,and will reduce open market operations and QE.

There are other reasons interest rates are going up.Take social security.The only assets it can buy are US Treasuries.With the FED holding rates at 0 SS is going broke much more quickly.It needs rates to rise dramatically to stay solvent for even a few more years.The FED knows this,as do politicians(the CBO used 4% average it the latest solvency calculations).The derivatives market is based largely on "tier one" capitol.There are very few things acceptable as tier one capitol.US Treasuries,gold,and items that can immediately be converted to cash.Since the FED has been buying 93% of treasuries issued this year,the derivatives and shadow banking system are having a huge problem raising tier one levels.They NEED the fed to stop buying all the treasuries,and that is another reason the fed will reduce purchases.That will again force treasury rates(interest rates)higher.

In short markets will go down.Commodities may depending on what the FED does with the over 1 trillion in bank reserves parked at the FED.Inflation will be contained somewhat(1-3% officially 6-9 reality)if that money stays parked.If that money starts to move the money velocity we will get a spike in inflation(6-9 officially 8-15% reality).

All contingent on what the FED really does,vs what they are saying they will do.

Almost every market in the world was down today.6/12/2013

 

[smokingman]

Nikkei down another 5.57% so far today at 12,495

So we are over 20% down.That is billions in wealth vaporized.Coming to a market near you.

Just go here and look at the front page(if you do not want to get a membership,just look at the headlines).

Nikkei.com - Live

LOTS of margin calls going on now and they are spreading to other markets.The derivatives markets are a mess and some trades will end up being settled by Chicago Mercantile Exchange and ISDA - International Swaps and Derivatives Association, Inc. (the ISDA decided Greek bonds never defaulted,thus did not trigger derivatives...they will be fair I am sure *wink).

In other words they are going to try everything they can to keep the derivatives market from doing a daisy chain,best of luck to them...I think it is to late.

Prep.

In other news rofl...
Corporacion Financiera Colombiana SA +33.27 /+110,900.00%



Not to worry,just another out of control HFT program.The chart will not even load and errors out.http://money.cnn.com/quote/quote.html?symb=CRPFY

Oh,and PNC Financial is up(Thank you HFT program)a small 862% the chart also errors out.What a farce of a market.Someone out there is REALLY playing with financial stocks,daily.Swings of over 800% a day...wow.

 

[smokingman]

Total global wealth in US dollar terms.
223 Trillion(*source https://infocus.credit-suisse.com/app/article/index.cfm?fuseaction=OpenArticle&aoid=368967&lang=EN)

Some $2.5 trillion has been erased from the value of global equities since Federal Reserve Chairman Ben S. Bernanke said May 22 the Fed could scale back stimulus efforts should employment show “sustainable improvement.”
Asian Stocks Slip on World Bank as Kiwi Drops; Yen Gains - Bloomberg

So over 1% of the worlds wealth was erased by simply stating the FED could scale back stimulus.If you do not think stocks are in a bubble,and that things are headed down from here I do not know what to tell you.Maybe you need the FED to tell you?Here is what they had to say on the topic at the June 1st meeting in the FOMC minutes."There is also concern about the possibility of a breakout of inflation, although current inflation risk is not considered unmanageable, and of an unsustainable bubble in equity and fixed-income markets given current prices."

The next meeting of the FOMC is June 18 and 19th.FRB: Meeting calendars, statements, and minutes (2008-2014)

Get out if you are still in this market.Do not say no one could have seen this or buy for even a second the mainstream media news headline when every day it has a new "Unexpected" explanation for why things are falling apart.Anyone paying attention knows the rug is about to be pulled.

The FED is openly telling you stocks are in a bubble,and they are going to lower stimulus measures.Right now the door is open to exit...but it is a small door and can easily be clogged if there is a rush to exit.


Prep.

 

[smokingman]

FOMC Impact So Far: Nikkei -725 Points, Dow -570 Points | Zero Hedge

Picture worth 1000 words?

I did say a few pages ago to watch US Treasury yields....
Bond yields spike to 2-year highs after Bernanke - Jun. 20, 2013

In the last 24 hours a few trillion in global wealth evaporated.

 

[Brown]

Meh . it was all funny money printed out of thin air that was lost. Didn't see any of my gold and silver stack vaporizing.