Friday Afternoon Wrap-Up 11/16/2012
Andrew Hoffman

My "favorite" topic - MANIPULATION. The first of my "PM mantras" - first uttered in 2002 - was "worse each day"; referring, of course, to the Cartel's relentless suppression operatives.

 

At no time does it ring more true than the present; as in the past year alone, we've dealt with the "Autumn from Hell" (following gold's rise to an ALL-TIME HIGH in September 2011); the "LEAP DAY VIOLATION" when surging PMs sought to negate the Fall's losses; the "Summer from Hell" (as "ELECTION LOCKDOWN" set in); and now, the POST-ELECTION BLITZKRIEG - as the Cartel desperately tries to "undo" PMs' astonishing outperformance following Election Day.

 

Today was a "perfect storm" in and of itself - just as yesterday - including horrible economic data...

 

 

Prior

Consensus

Actual

Industrial Production

0.4 %

0.2 %

-0.4 %

Capacity Utilization

78.3 %

78.4 %

77.8 %

Manufacturing

0.2 %

0.3 %

-0.9 %

 

...and earnings ...

  

dell   

 

...a Hamas attack on Jerusalem...

 

Israel Re-escalates: Mobilizes 75,000

 

...a United Nations report of heightened Iranian nuclear activity...

 

UN Nuclear Agency: Iran Poised to Expand Nuke Work

 

...and not one...

 

Williams says Fed may buy $85 billion in bonds per month

 

...but two Fed governors speaking of AGGRESSIVE monetary stimulus...

 

Fed's Lockhart Says 'Aggressive' Easing Needed to Revive Jobs

 

Throw in American banks being ordered to "stress test" against a MAJOR downturn...

 

Banks told by Fed to test for 12% unemployment

 

...toxic bond fears from Spain...

 

Minor Glitch Emerges In Spanish "Bad Bank" Deployment: No Investor Interest

 

...and Argentina...

 

Meanwhile In Argentina...- Zero Hedge

 

...the ongoing paralysis...

 

Guest Post: Europe In the Grip of Anti-Austerity Protests

 

...of the COLLAPSING European Union...

 

150 Seconds Of "You Can't Handle The European Truth" From Kyle Bass

 

...and even a COMEX margin decrease, and the ingredients "on paper" were in place for a MAJOR violation of "Cartel Rule #1"; i.e., "thou shalt not allow PMs to surge when the Dow plunges...

 

CME Group Cutting Margin Requirements For Comex Gold, Silver And Copper

 

GLOBAL equity markets were indeed lower, with European stocks down 1.25% to 1.75% and the Dow opening down 60; very briefly, below the VERY KEY ROUND NUMBER of 12,500 the Cartel has been protecting all week.

 

However, just before noon the "DOW JONES PROPAGANDA AVERAGE" miraculously spiked 100 points...

  

dow nov 16 2012   

 

...simply because - per the MSM - House Minority Leader Boehner said he had "constructive" discussions with Obama about the "fiscal cliff."

 

I mean, c'mon, how dumb do we look? It matters not what they discuss AT ALL; and frankly, there is no "deal" to cut - other than CANCELLING the deficit-cutting sequestrations scheduled for year-end...

 

Risk Ramp On Boehner Banality

 

In REALITY, this story was planted to switch the algos from "sell" to "buy"; and equally importantly, provide cover for the PPT to push the Dow back above 12,500...

 

Today's "Fiscal Cliff Compromise" Moment Brought To You By The Congressional Short Squeeze Inception Team

 

Of course, the market that would benefit MOST from a fiscal cliff delay - PRECIOUS METALS - was viciously capped for the fifth straight day; via a RECORD four "CARTEL HERALDs" in one trading session - such as the one below at EXACTLY 12:00 PM EST - i.e., the "cap of last resort"...

  

gold nov 16 2012   

In fact, today was the "manipulation converse" of yesterday. That is, yesterday gold was subjected to a vicious WATERFALL DECLINE at EXACTLY the 9:30 AM EST NYSE open...

 

ny spot gold   

 

...while silver was capped with DLITG, or "Don't Let it Turn Green" algorithms, all day...

  

slv  

Conversely, today it was gold that dealt with the infernal DLITG algorithms...   

  

gld   

 

...while silver was subjected to the blatant WATERFALL DECLINE at EXACTLY the 9:30 AM NYSE open...

 

spot silver   

 

...in an act of obviousness even the PM-manipulation ignorant Zero Hedge picked up on...

 

Gold & Silver Plunge Deja Deja Deja Vu

 

Ultimately, "DOLLAR-PRICED GOLD" declined just a buck an ounce...

  

 

  

spot gold   

 

...and silver $0.30/oz...

  

silver   

 

However, the Cartel couldn't control EVERYTHING; and thus, as both the Euro and Rupee declined, the WORLD'S MOST IMPORTANT MARKETS crept closer to their ALL-TIME HIGHS...

 

Market

Price

Day (price)

Day (%)

From ALL-TIME HIGH

Euro Gold

1,346.76

3.35

0.2%

-2.1%

Rupee Gold

94,600

858

0.9%

-2.7%

 

 

To conclude, I cannot SCREAM louder for you to...

 

PROTECT YOURSELF, and do it NOW!

 

Call Miles Franklin at 800-822-8080, and talk to one of our brokers.  Through industry-leading customer service and competitive pricing, we aim to EARN your business.


 

 

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commentaryMonday Morning Commentary 11/19/2012

At the gym each morning, I keep my Brinks log book on the stair climber - to jot down RANT ideas the pop into my head. However, on weekends I leave it home; and try to simply work out without pondering the universe too deeply.

 

Irrespective, as I completed my Sunday morning workout - nearly finishing "WINTER OF THE WORLD" in the process - a major "light bulb" went on in my mind. Dove-tailing perfectly with today's RANT topic, it occurred to me that post-election, the WAR has just started. And by WAR, I don't just mean military confrontation; that is, one of the inevitable consequences of GLOBAL FINANCIAL ARMAGEDDON...

 

Photos from Gaza

 

...and its associated atrocities...

 

US Embassy, Athens Warns Of Rise In 'Unprovoked' Racist Attacks

 

...but the BIGGER PICTURE CONCEPT of a war on the population by its supposed leaders; proposing to "help" citizens...

 

Cameron says Britain in economic 'war'

 

...by unleashing the very weapons that will DESTROY them...

 

Miles Says Bank of England Can Do More If U.K. Slump Persists

 

In Japan alone, "DEMOGRAPHIC HELL" ensures the populace cannot support its vastly overvalued Treasury market...

 

And Now The Facts About Retail Appetite For Japanese Bonds...

 

...so the Bank of Japan will simply do so itself, "to infinity"...

 

Inaba Says BOJ Could Ease More

 

...offering nothing but platitudes to console its soon-to-be-hyperinflation-fearing citizenry...

 

Japan's Official Advice To Bond Investors: "Please Do Not Worry"

 

...while its "ugly stepsister" suffers a WORSE fate...

 

Economy Turns US, Japan Into Ugly Stepsisters

 

..as it runs headlong into its destiny...

 

Guest Post: Ceilings, Cliffs And TAG - 3 Immediate Risks

 

America's leaders continue to "whistle past the graveyard"...

 

Quelle Surprise! New York Fed Chair Dudley Confirms that TBTF Lives, Big Firms Still Can't Be Resolved

 

...as REALITY comes to the fore...

 

Fiscal cliff negotiators are facing high hurdles

 

...care of ongoing economic implosion...

 

U.S. Investment Falls off a Cliff - Wall Street Journal

 

...and last week's catastrophic election results, per Jim Willie...

 

Following Obama's re-election, thousands of businesses will no longer wait for more certainty. They know that new national health care system will be enforced, and will respond with job cuts and price hikes.

 

The so-called "resolution" - i.e., further "kicking the can down the road" - will only make things WORSE...

 

If August 2011 Is The "Fiscal Cliff Resolution" Template, Then Watch Out Below

 

...yielding continued "capital flight" from dying American markets...

 

China Persists In Refusing To Buy US Paper As Foreign LTM Purchases Of Treasurys Plunge To Three Year Lows

 

And then, of course, there's Europe; on the verge of massive, near-term cataclysm. In "big PIIG" Spain - for example - things have gotten so bad...

 

Spanish Bank Bad-Loans Ratio Rises to Record 10.71% in September

 

..its "leaders" are begging for investment...

 

Spain Begs Former Colonies For Bailout

 

...as its citizens rapidly AWAKEN to their fate...

 

Protesting Spanish Cops: "Forgive Us For Not Arresting Those Truly Responsible For This Crisis: Bankers & Politicians"

 

Yes; WAR is the operative word, on multiple fronts. Be it ground wars; currency wars; wars on human rights; or free markets, rest assured governments will be front and center in the "fight" to deprive you of "life, liberty, and the pursuit of happiness"...

 

Art Cashin - Prepare For Currency Wars & Ground Wars

 

...and even attempts to PROTECT oneself from their clutches with "PAPER PM Investments"; per the amazing "QUOTE OF THE DAY" from the below article...

 

Fool's Gold Miners: A Story Of What Can, And Will, Go Wrong With "Miners"

 

Just as has been the case in ALL decaying societies, the shifts toward socialism - or perhaps, communism; totalitarianism; and inflation are inevitable...

 

Commodities Gone Wild

 

...with no stone left unturned; but particularly life's most valued staples, as HYPERINFLATION wins the most devastating WAR of all...

 

Inverse Deflation Alert: Russia Hikes Minimum Vodka Price By 36%

 

As connoted above, COMMODITIES are the story this morning; with essentially ALL up sharply. Sure, stock markets are up 0.5% to 1.0%, too; yet again attributed by the clueless MSM to "hope" of something or other.

 

However, in the big picture, the only "hope" for preventing a deflationary collapse is the 100% GUARANTEED alternative of hyperinflation - of ALL fiat currencies...

 

The "DOW JONES PROPANDA AVERAGE" opened 130 points higher, but commodities are faring better. Gold is up nicely, but - what a shock - ran into its daily "CARTEL HERALD" just after the COMEX open at 8:20 AM EST, up EXACTLY 1.0%...

  

24hr gold   

Silver has thus far been the big star, recouping ALL of last week's Cartel-suppressed losses. This morning it is back up to the ROUND NUMBER of $33/oz that represented last week's post-election highs. And per below, it could not be more obvious the Cartel has arbitrarily drawn its temporary line in the sand at this level...

 

spot gold   

 

The HUI is up ten points - recouping a modest portion of last week's horrific losses - and the WORLD'S MOST IMPORTANT MARKETS appear ready to re-challenge their ALL-TIME HIGHS...

 

Market

Price

Day (price)

Day (%)

From ALL-TIME HIGH

Euro Gold

1,355.09

8.48

0.6%

-1.5%

Rupee Gold

95,214

625

0.7%

-2.0%

 

As noted above, the real WAR has just begun. The U.S. "fiscal cliff" and "debt ceiling" negotiations are just the beginning of a likely cataclysmic chain of events destined to envelop the ENTIRE WORLD in the coming months and years. Now more than ever, the necessity to simplify one's assets, lifestyle, and expectations could mean the difference between LIFE and DEATH; thus, I urge you to...

 

PROTECT YOURSELF, and do it NOW!

 

Call Miles Franklin at 800-822-8080, and talk to one of our brokers.  Through industry-leading customer service and competitive pricing, we aim to EARN your business.

  

 
Source: Zero Hedge 
 
http://www.zerohedge.com/news/2012-11-18/fools-gold-miners-story-what-can-and-will-go-wrong-miners-ten-pictures


Fool's Gold Miners: A Story Of What Can, And Will, Go Wrong With "Miners" In Ten Pictures
Submitted by Tyler Durden on 11/18/2012 11:23 -0500

Several weeks ago, when sharing his latest outlook at the Economist's Buttonwood gathering, Hugh Hendry had this to say about gold miners: "I am long gold and I am short gold mining equities. There is no rationale for owning gold mining equities. It is as close as you get to insanity. The risk premium goes up when the gold price goes up. Societies are more envious of your gold at $3000 than at $300. And there is no valuation argument that protects you against the risk of confiscation.” For those confused, what he means is quite simple: the higher the price of gold goes, the greater the temptation of those extracting it (usually mined in various locales where worker satisfaction with labor conditions is less than stellar - see recent events in South Africa) to strike and demand higher wages (i.e., lower EPS), or of host government to nationalize it. The end outcome is a collapse in the extracting miner's cash flows and profitability, if not outright liquidation. The paradox is that the fewer actual global miners in operation, the better for the price of the actual hard commodity, as less supply means lower price, means greater probability of more miners suffering the same fate, means even higher gold price and so on. But back to the topic of gold miners. Below, for those still confused, is a simple story courtesy of the BBC in 10 pictures, summarizing the bitter dispute over Kyrgyzstan's gold production.



Newager23
Newager23's picture

I like Hugh Hendry a lot. In fact, I think Hugh and Kyle Bass are the two best macro analysts out there today. However, I would like to know how he is shorting the miners. That seems a risky proposition. Why short at a bottom? The HUI is way off its highs. It makes no sense to short at the bottom.

I personally think that GDXJ (Mid Tier Gold Miners ETF) and SIL (Silver Miners ETF) are at fantastic entry points and will likely outperform just about any other investment over the next 3-5 years.

He has a point that there is substantial risk investing in gold & silver miners, but to call it insane is a bit over the top. I think it is perhaps the investment of a lifetime if you pick the right stocks. Many of these stocks (I like Canadian mining stocks the best) will be 10 and 20 baggers. Where else can you get those kind of returns? And once we get into the mania phase of this gold bull market the mining stocks WILL participate.

Ironically, some of the arguments he makes could actually be good for mining stocks. For instance, if mines close due to nationalization or labor problems, this will drive the gold supply down. A lower supply of gold will drive up the price of gold and thus the stock price of the strong mining stocks. Also, the weaker and more risky mining stocks will potentially collapse in price and be easy pickings for the stronger stocks, which will likely explode in value.

So, don't think the entire mining sector is going to languish at higher gold prices. If you think shorting gold & silver mining stocks is the way to go, that is a very risky proposition. We have seen mining stocks struggle since 2010, but I don't think that is going to last much longer. As soon as we get new highs ($1920 in gold and $49 in silver), I expect the mining stocks to do incredibly well.

www.goldsilverdata.com (for gold & silver mining stocks)