Today, Kevin reveals how the government is ‘helping’ the economy by letting you get sick and why the rich are getting richer and the poor are getting poorer.
EPA Still Evades Zonolite Warnings
Toxin From Receipts May Lurk in Cash
HIV-Positive Porn Actor Wants Mandatory Condoms
Non-Melanoma Skin Cancers On The Rise
Gut Bacteria & Obesity May Be Linked
People Consume Up to 46 Teaspoons of Sugar a Day!
Swimming Pool Disinfectants Linked To Cancer
Americans Bombarded With Cancer Causing Chemicals
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April 5, 2012
By Tyler Durden
Treasury yields retraced more than 50% of their rise post-FOMC yesterday leaving them only marginally higher on the week as, despite another late afternoon light volume surge to VWAP, stocks closed with their second biggest daily loss of the year. Three days in a row now, ES (the S&P 500 e-mini futures contract) has closed at its VWAP – suggesting institutional blocks continue to look for opportune/efficient selling levels (as opposed to buying the dips which we are so used to). After Spain’s auction debacle and the ISM Services miss, it seems that with no Fed standing guard that good is good but bad is not better anymore as the S&P 500 cash lost over 1% (down 2% from Monday’s peak to today’s trough). Financials underperformed and the majors (which we noted on Monday sagging after Europe’s close) have been really hurt with Citi, BofA, and MS down 6 to 7% since then. Equity markets in the US and Europe played catch up once again to credit’s more realistic assessment of the world as HYG (the high-yield bond ETF) is back at one-month lows, down 2.7% from its end-Feb highs (or five months worth of yield, oops). Investment grade credit (which remains rich to its fair-value) was not helped as Treasuries were the place of refuge for the day as 30Y yields dropped their most in 2012. Commodities suffered significant damage as Silver tumbled to meet Gold’s loss for the week, both down 3% Copper and Oil also dropped notably and are now back in sync with the USD for the week -1% or so. Most major FX remained USD positive except for JPY which retraced its snap lower from yesterday as carry trades were generally exited (with EUR and AUD weakness mirroring JPY strength post-FOMC) leaving DXY near 3-week highs. Who-/What-ever was doing the buying in the afternoon clearly levered the position (using AAPL or options) as VIX dumped once again out of nowhere intraday – closing near its lows of the day. However, VIX did close up near one-month highs as it catches up to Europe’s VIX flare. Given the drop in implied correlation (and in-line VIX-S&P move) we suspect the covered-call strategy of the year was coming undone a little at the seams as single-name vol underperformed.
April 4, 2012
By Steve Saville
When reviewing the long-term performance of the gold sector in previous TSI commentaries we looked at performance in nominal dollar terms and in gold terms, but as far as we can recall we never looked at performance relative to the broad stock market. This is an omission we are now going to rectify.
The following weekly chart shows how the Barrons Gold Mining Index (BGMI) performed relative to the broad US stock market (as represented by the S&P500 Index) from 1960 through to this week. Clearly apparent on this chart is the secular bull market in gold-stock relative strength of the 1960s and 1970s, the secular bear market in gold-stock relative strength of the 1980s and 1990s, and the secular bull market in gold-stock relative strength that began in 2000. Also clearly apparent on this chart is that the secular trends contain many counter-trend moves. During the gold secular bull market of the 1960s and 1970s these counter-trend moves were sometimes dramatic and lasted more than two years. During the current secular bull market the counter-trend moves have been far less impressive, but even though they look trivial on the long-term chart they can still feel dramatic in real time.
March 30, 2012
By Amaterasu Solar
In order to understand the very basis of money, it is best to contemplate how it developed in the first place.
Once society developed past the clan stage, when barter, trade and so forth arose, it became the practice to place value on the products of human energy expended. If one used one’s energy to build a bow, go out hunting, kill an animal, process the carcass, and transport the meat back to be traded or bartered for, this gave that meat value. The bow components were free, as was the animal. The same was true for the farmer, who expended meaningful energy in tilling, sowing, tending, harvesting, and, if need be, transporting what that farmer produced. The produce had value. Even the gatherer expended meaningful energy in seeking things to gather, then transporting the find back to be used as “money” for other things. The miner expended the meaningful energy to find the (free) ore, hew it out of the earth, and transport it.
From these beginnings, the practice of using coin and other objects arose to represent this meaningful energy expended when transporting large amounts of goods, as well using to acquire something another had but not having the specific thing the other wanted. And from this, humans went on to bills when coins and jewels and other objects became too cumbersome. And, lately, we have added electronic funds, as even bills are cumbersome in million unit, billion unit and trillion unit transactions. But the foundation of all these monetary units is the meaningful energy expended, whether human or resource-based (oil, coal, nuclear, etc.) energy.
Given this, it becomes clear that an addition of abundant energy — in the form of overunity (“free energy”) and robotics (to replace human energy in necessary work nobody wants to do), the need for money in any form — barter, trade, work exchange, coin, bills, electronic funds — becomes unnecessary.
March 28, 2012
By Frank Holmes
To paraphrase the great Steve Martin, today’s investors are very passionate people and passionate people tend to overreact at times. An overreaction is exactly what’s happened in gold and global markets in recent weeks. While market bulls have been sniffing out data points to support their case, market bears have continued to take a glass-half-empty approach.
Gold and China are two areas that have been caught in the bear trap this week, but we believe the gold and China bulls still have room to run.
Short-Term Challenges for Gold
Rising bond yields, a stronger U.S. dollar and an improving U.S. economy have squelched expectations for a third round of quantitative easing (QE3) and consequently, spelled trouble for gold. Since late February, gold has declined more than 7 percent.
As confidence improves, UBS says the yellow metal is losing the dual role of safe haven and risk asset: “Gold is moving off center stage, while growth assets are moving to the fore.” Earlier this month, we saw the largest weekly contraction in long gold positions on the Comex since 2004.
As I wrote in my blog this week, the selloff has pushed the price of bullion below its 200-day moving average for only the 30th time over the past 10 years. Over this time period, gold has declined on average 2.1 percent over the 10 days following the cross-below date. This means we’re likely only one-third into the correction in terms of price and duration.
All is not lost for gold. In his latest Gold Monitor, Dundee Wealth Economics Chief Economist Martin Murenbeeld lists 10 positive factors for gold, one of which is monetary reflation. We are currently experiencing one of the greatest global liquidity booms the world has ever seen. Over the past seven months, there have been 122 stimulative policy initiatives from central banks around the world, according to ISI Group.
March 28, 2012
By Thandeka Gqubule and Andile Ntingi
South Africa will this week take some initial steps to unseat the US dollar as the preferred worldwide currency for trade and investment in emerging economies.
Thus, the nation is expected to become party to endorsing the Chinese currency, the renminbi, as the currency of trade in emerging markets.
This means getting a renminbi-denominated bank account, in addition to a dollar account, could be an advantage for African businesses that seek to do business in the emerging markets.
The move is set to challenge the supremacy of the US dollar. This, experts say, is the latest salvo in the greatest worldwide currency war since the 1930s.
In the 1930s, several nations competitively devalued their currencies to give their domestic economies an advantage over others.
And this led to a worldwide decline in overall trade volumes at the time.
The north will be pitted against the entire south in a historic competitive currency battle – whose terrain has moved to the Indian capital New Dehli – where the Brics (Brazil, Russia, India China and South Africa) nations will assemble next week.
March 15, 2012
By Eric Blair
Increasing numbers of global citizens are becoming aware that the monetary system and international cartel of banks are rotten to the core and represent the root cause of all economic disparity to mankind.
They can literally print all the wealth they need for their cabal, while at the same time transferring the interest attached to each monetary unit created to the general public.
It’s a scheme that has given them ownership of nearly every material object on earth, while placing the chains of debt servitude on the whole of humanity. Knowledge of this scheme is reaching a critical mass who are now becoming hungry for solutions.
A great many scholars have put forward models of monetary creation and banking that have tremendous merit for a new world system that better serves all of mankind. These scholars look to what has had some success in the past for presenting a better model for today.
Some propose returning to a gold or commodity standard to help control the supply of money, while others seek to remove interest (debt) attached to money creation. There are also out-of-the-box proposals like using electricity as currency or the already successful digital currency Bitcoin. Each display the desire for something new and show elements of promise in their own right.
However, there is much infighting over the best approach to replace the current system. Therefore, I propose that all of these factions who share solidarity that something must be done to end the banking cabal’s bondage at least unite behind principles first, and then design the new system to fit those principles.
March 13, 2012
By Matt Taibbi
It looks like Bank of America might have started circling the drain before the Occupy movement even had a chance to launch its campaign against the company. For weeks now there have been ominous signs of trouble at the bank, and yesterday we heard yet another dark piece of news.
Last year, there was an uproar when Bank of America announced a plan to slap customers with a monthly $5 fee for debit card usage. The bank eventually backed off that plan when the public and some politicians cried foul.
Now it seems the company is going to try to put a new package on the same crappy idea and sell it again. This time, the plan is to add charges that range from $6 to $25 a month. From an MSNBC report:
Pilot programs in Arizona, Georgia and Massachusetts are experimenting with charging $6 to $9 a month for what’s called an “Essentials” account. Other account options being tested in those states carry monthly charges of $9, $12, $15 and $25, but give customers opportunities to avoid the payments by maintaining minimum balances, using a credit card or taking a mortgage with Bank of America, according to an internal memo cited by the [Wall Street] Journal.
It’s a very bad sign that a bank is in a desperate cash crunch when it tries repeatedly to gouge its customers. David Trainer, an analyst for Market Watch, a WSJ publication, wrote that the new fees are a sign of series trouble at BAC. He writes:
15 Reasons Why The U.S. Economic Crisis Is Really An Economic Consolidation By The Elite Banking Powers
March 13, 2012
The American Dream
By The American Dream
Is the United States experiencing an “economic crisis” or an “economic consolidation”? Did the financial problems of the last several years “happen on their own”, or are they part of a broader plan to consolidate financial power in the United States? Before you dismiss that possibility, just remember what happened back during the Great Depression. During that era, the big financial powers cut off the flow of credit, hoarded cash and reduced the money supply. Suddenly nobody had any money and the economy tanked. The big financial powers were then able to swoop back in and buy up valuable assets and real estate for pennies on the dollar. So are there signs that such a financial consolidation is happening again?
Well, yes, there are.
The U.S. government is making sure that the big banks are getting all the cash they need to make sure that they don’t fail during these rocky economic times, but the U.S. government is letting small banks fail in droves. In fact, in many instances the U.S. government is actually directing these small banks to sell themselves to the big sharks.
So is this part of a planned consolidation of the U.S. banking industry? Just consider the following 15 points….
#1) The FDIC is planning to open a massive satellite office near Chicago that will house up to 500 temporary staffers and contractors to manage receiverships and liquidate assets from what they are expecting will be a gigantic wave of failed Midwest banks.
#2) But if the economic crisis is over, then why would the FDIC need such a huge additional office just to handle bank failures? Well, because the economic crisis is not over. The FDIC recently announced that the number of banks on its “problem list” climbed to 702 at the end of 2009. That is a sobering figure considering that only 552 banks were on the problem list at the end of September and only 252 banks that were on the problem list at the end of 2008.
#3) Waves of small and mid-size banks are going to continue to fail because the U.S. housing market continues to come apart at the seams. The U.S. government just announced that in January sales of new homes plunged to the lowest level on record. The reality is that the U.S. housing market simply is not recovering.
#4) In fact, a lot more houses may be on the U.S. housing market very shortly. The number of mortgages in the United States more than 90 days overdue has climbed to 5.1 percent. As the housing market continues to get increasingly worse, it will put even more pressure on small to mid-size banks.
#5) More than 24% of all homes with mortgages in the United States were underwater as of the end of 2009. Large numbers of American homeowners are deciding to walk away from these homes rather than to keep making payments on loans that are for far more than the homes themselves are worth.
#6) If all that wasn’t bad enough, now a huge “second wave” of adjustable rate mortgages is scheduled to reset beginning in 2010. We all saw what kind of damage the “first wave” of adjustable rate mortgages did. How many banks are going to be able to survive the devastation of the second wave?
March 9, 2012
By Carla Fried
Money market mutual funds have been taking it on the chin lately. The Securities and Exchange Commission is considering proposing regulatory changes that would make the funds less appealing for investors. At stake: whether share prices will float based on market values, rather than follow the practice of fixed $1 per share values, and whether up to 5 percent of a requested withdrawal may be held back for 30 days.
Any proposal is bound to engender fierce debate. If you own one of the nearly 30 million money market fund accounts, you might want to focus on a more pressing issue, though: Why are you content to earn bupkes? The average money fund yield is a you-can-barely-see-it 0.06 percent, according to Crane Data. And the Federal Reserve has telegraphed that it’s unlikely to budge on rates for a further two years. Still, there’s $2.7 trillion sitting in these funds.