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zerohedge.com / By Mark J. Grant / May 25, 2013, 10:27 -0400
Submitted by Mark J. Grant, author of Out of the Box,
“It’s the lure of easy money. It has a very strong appeal.”
-Glenn Frey, Smuggler’s Blues
Investors borrowed $384.4 billion in April, a 1.3% gain from the previous month and a 29% rise from the same month last year. This is an all-time record for margin debt and it exceeds the previous high mark set in June 2007. Some may see this as an increased sign of investor confidence but I am not one of them. To me this is a giant red warning flag blowing in the financial breeze indicating the leveraging of dumb money making very risky bets.
“Every swindle is driven by a desire for easy money; it’s the one thing the swindler and the swindled have in common.”
-Mitchell Zuckoff
Substances based upon some sort of white powder are quite dangerous. They can overcome your good sense and then they it can be quite difficult to extricate yourself from them. The Great Depression was caused, in large part, by massive leverage utilized in the equity markets.This was the white powder of 1929. It took a decade and a World War before America was able to loosen the grip of the stuff.
dollarvigilante.com / By Jeff Berwick / May 25, 2013
Hello from sunny and almost uncomfortably hot, Acapulco Bay,
I say “almost” because after sleeping on the cold floor for two nights with barely any sheets and pillows in Santiago last week I am more than happy to sweat a bit this week during the two hottest months in Acapulco – April and May! I’ve just arrived back from nearly two weeks in Santiago and unfortunately I’m only here for less than 48 hours and then I am flying up this weekend to rainy and cold, Vancouver, Canada for the World Resource Investment Conference to present my keynote speech, “Bitcoin, Bullion and Bullets – Your Toolkit to Survive The End Of The Monetary System As We Know It”.
My two weeks in Santiago and at Galt’s Gulch Chile were definitely fruitful though and I’ll likely have some incredibly exciting news on the development this weekend exclusively for TDV subscribers.
I had an enjoyable and informative week in Chile and here are some of my thoughts.
GLOBAL CHANGES… IN SHOPPING MALLS
Whenever in Santiago I spend a lot of time in and around the mall/business area called Costenera Center. The Costenera tower is almost complete now and is the largest building in South America emblematic of Chile’s growth. Here is a beautiful video produced during its construction that shows off the beauty of the city and, like I have stated before, how it is beginning to feel like Hong Kong in terms of its growth.
Costanera Center mall is one of the nicest and most luxurious I have been to in the world. The only one I can think of off the top of my head that is more opulent is Siam Paragon in Bangkok.
And this is coming from someone who grew up in a place called Edmonton, Canada where we were constantly told in the 1980s that we should be so proud we had the largest mall in the world, West Edmonton Mall (WEM – now it is the twelth largest). It was very popular with Edmontonians, but that was mainly because it was the only warm, social place to go for the eight months of the year when it was regularly -40C/F. In fact, it really wasn’t much of anything. It had three Gaps, three Banana Republics, six Cinnabons. And over the years it actually became its own mini city/slum even with various gangs who dominated certain parts of the mall!
thedailybell.com / By Anthony Wile / SATURDAY, MAY 25, 2013
Principia-Scientific.org is a site aimed at restoring legitimate scientific principles to the world. On its front page you’ll find exposes of the “fossil fuel” fraud (we’ve written a lot about that) and, of course, global warming, among other rebuttals of “dominant social themes.”
Principia Scientific and other such websites are doing important work to support and buttress the scientific method, which is surely under attack in this day and age. This phenomenon is little commented on, even in the alternative press, and so I want to take the time in this column to do so.
Nothing is much more important, in my view, than maintaining and supporting the validity of the scientific method, the idea of producing verifiable information that can be used to facilitate real social and cultural progress.
And the good news is that this website is only one of many aimed at debunking incorrect information that circulates around the world today and is too often used to create certain kinds of political consensus.
In fact, these themes – or memes – are generated by those who want to further their world control and are using various international organizations like the United Nations, World Bank and IMF to do so. In order to actuate such promotions, you need a crisis. Enter global warming, Peak Oil, food and water scarcity, etc.
Anything that gets people riled up and calling for expanded government intervention and “leadership” from sociopathic politicos and other rulers is to be utilized for this purpose. When a crisis isn’t available, one is made up. And most of them are made up, if not all.
We don’t need endless amounts of evidence to make this claim. We simply need what the Internet provides, which is a devastating portrayal of undeniable mechanical meretriciousness. Lies, in other words.
The Internet is a miracle because in one day you can look at as many articles and videos as you might be able to find in a year, pre-technology. Obscure articles, original source material and rare books are all available despite the best efforts of various gatekeepers to scour the Internet of material that contradicts the common wisdom.
testosteronepit.com / By wolf richter / FRIDAY, MAY 24, 2013 AT 5:37PM
(I’d posted parts of this today in the right-hand column, RUMBLINGS FROM THE PIT ===>but then moved it into this article.)
Stability in the Japanese government bond market is “extremely desirable,” said Bank of Japan Governor Haruhiko Kuroda in a sign of just how frazzled he was after the turmoil and craziness that his over-the-edge experimental policies have unleashed. “We are going to conduct our market operations in a flexible manner to head off, as much as possible, volatility in long-term interest rates,” he explained.
And he had some explaining to do. I’d always thought that the BOJ could control the Japanese Government Bond market with an iron fist, backed by the omnipotence of the printing press and supported by government-owned institutions that hold a big chunk of those JGBs, such as the Government Pension Investment Fund and the Post Bank. And then there are financial institutions that the government can lean on. So if the BOJ and the government work hand in glove, they can exercise total control over the government bond market. Or so it seemed.
But since April 5, doubts have crept into the scenario. That was the day when 10-year yields dropped to 0.315%, a record low, only to more than triple over the next six weeks to 1.0% on Thursday, the highest in a year. These yields are still very low, but the fact that they jump around like this, that there is such volatility suddenly in the system, that they rise at all when the BOJ is doing its darnedest to repress them, that’s a sign that it might be losing its grip – and that it will take desperate, ever more extreme measures to not lose its grip.
sunshineprofits.com / By Przemyslaw Radomski / May 23, 2013
Yesterday was a particularly volatile and interesting day on the precious metals market. The sector moved slightly higher, then it soared, stayed high for several minutes and crashed. Stocks did more or less the same and the USD Index did the opposite. The likely reason? Comments from Ben Bernanke who said the Fed could decide to scale back the pace of bond purchases at one of the “next few meetings” if the economic recovery looked set to maintain forward momentum.
So, what happened was markets discounted the information about the possible tapering of the stimulus. Will the Fed really decrease the Quantitative Easing? Actually, it could. The Fed has actually been quite good in making people believe that you can really get away with creating money out of thin air. We will provide a bigger discussion of the above, but first, we want to focus on what happened yesterday – technically speaking.
The USD Index reversed at the cyclical turning point and this technical indicator is no longer a threat to the rally in USD. We were supposed to see at least a consolidation based on it – and we did. Overall, we stick with what we wrote in last week’s Premium Update: “If anything, we could see stocks move back to this level [2007 highs], which could further verify the breakout and allow them to gather strength in advance of the next rally.”
We were asked what the increased volatility means, if anything. We think that it’s a signal that the end of the decline is getting closer, but not necessarily just a day or two away. We have previously written that gold is now in a reverse parabola – probably in the final stage thereof. The implication is that the volatility will increase and that it’s difficult to estimate just how low gold will go temporarily – which was also the reason why we adjusted our trading plan.
rickackerman.com / By RICK ACKERMAN / May 24, 2013, 7:06 AM GMT
Yesterday’s rally recouped a 200-point overnight selloff in the Dow, but because it was unpersuasive from a technical standpoint, we expect the week to end on a whimper at best. At worst, the selling could carry into next week, and if it persist so that shares fall on a Tuesday – something that has not occurred in more than four months – then we would view that as further evidence that Wednesday’s high was an important one. Regarding “weak technicals,” notice in the chart below how buyers of DJIA index futures failed to surpass even a single important peak on the hourly chart after devoting an entire night and day to the task. From our perspective this is telling, since, according to our Hidden Pivot Method of analysis, rallies destined for greatness, or even just goodness, must exceed a new peak on the hourly chart with each new thrust. Not this time, though, and that’s why we would classify yesterday’s rebound – all 200 points of it – as a bust.
“Europe needs to be rethought. We consider just one year of information and then hold a referendum to say yes or no to the euro and yes or no to Europe. ” Beppe Grillo to ride a strong theme of the last election campaign the 5 Star Movement. “Europe on the euro and the British teach us democracy. No party can claim the right to decide for 60 million people. “
financialsense.com / By DAVID KOTOK / May 24, 2013
Inflation is not on the radar anymore. We do hear occasional comments from central bankers who warn about future inflation arising from QE. We also recall a few statements in the media along the lines of, “They’re printing all this money, we’re going to have huge inflation, and interest rates are going to shoot up.”
We have been on the low-inflation side of that debate for years. We have supported the argument that there is a huge overhang of surplus capacity in the global labor force and that inflation is not a problem when labor income is flat, falling, or not rising robustly. This coincides with a wounded credit multiplier and a damaged financial credit system, conditions that have existed for the last five years. They are gradually improving, but only gradually. They are conditions that cause deflationary pressures.
Will we have deflation? We are not certain. The forces at work globally that could bring on deflation are being blunted by the huge quantitative easing (QE) being undertaken by most major central banks.
Let’s take a quick look at the US. All important measures of inflation in the US are on downward trends. Many thanks to Credit Suisse’s Neal Soss and Jay Feldman for a recap of the data in their research note of May 17. They report Core CPI, Cleveland Fed Median CPI, Cleveland Fed Trimmed Mean CPI, Core PCE, and Dallas Fed Trimmed Mean PCE. All are trending downward, as measured on a year-over-year basis, and those trends are accelerating. Commodities are also on downward price trends. So are the more esoteric inflation measures like market-based indices and chained indices.
jsmineset.com / By Jim Sinclair / May 24, 2013, 12:41 PM (CST)
For those who love to condemn the euro, please be rationale for a moment. In Euroland there has been much government inflicted economic suffering. In the Union of the Dollar, the USA, there has been nothing but stimulation and banksters getting free passes. As horrible as it is, Euroland has kicked off the confiscation of depositors funds called bail-ins. In Euroland the gold held in reserve is valued at market prices. In the USA the gold reserve is valued at a phony $42 and change. Gold will be worn as a neckless around the neck of the Euro.
The USA is a monetary union of individual states that are in as much financial difficulty, some more, as any member of the European Union. Mainstream media’s greatest success is to condemn Euroland while applauding the dollar and hiding the financial condition of the majority of states. That is total nonsense. When it is all done and finished Euroland took measures that no state of the USA will ever take
zerohedge.com / By Tyler Durden / May 24, 2013, 21:35 -0400
While some, we are sure, will view this brief clip as partisan showmanship by Representative Steve Pearce, the questions he asks Treasury Secretary should surely be responded to in some manner that is anything but the typical perfunctory shrug these matters normally garner. From Lew’s apparent disbelief that the IRS Audits debacle was in any way ‘political’ to Lew’s “waiting for the investigation’ on Jon Corzine’s misappropriation of funds, and finally to the “War on the Poor” that Pearce describes the current administration’s policies (for the benefit of Wall Street); these few minutes are well worth some time as we ‘remember’ this weekend.
“For New Mexico, we recognize a war on the poor when we see it”
dailyreckoning.com.au / By Nick Hubble / May 25, 2013
The central bankers print. The governments spend. But the economy stumbles. And only those rich enough to own shares get richer.
What’s gone wrong? Why haven’t record low interest rates, indefinite money printing, bailouts, record deficits and targeted stimulus spending worked to get the world out of its economic slump?
Europe struggles with record high unemployment. America’s jobless recovery still isn’t even much of a recovery. China’s growth is slowing. Japan’s trade position recently got worse despite a tumbling Yen. And Australia’s budget deficit crept up behind Wayne Swan and yelled ‘boo!’
Economists told us exactly how fast unemployment would fall, exactly how fast GDP would grow, exactly how big the surplus would be and exactly how to get back on the road to prosperity. And yet, the world struggles on, well below par.
The answer to our failures lies in Cargo Cult Science.
During World War 2, while the Americans were island hopping across the pacific, they built air bases. These bases would unload, and sometimes drop, vast amounts of resources onto islands to supply troops. The locals often ended up with the surplus and abandoned goods.
But when the war ended, the planes stopped coming. The food, technology and supplies stopped dropping out of the sky. And the locals didn’t like the effect this had on their lives one bit. So they decided to do something about their new found lack of consumption.
But how do you entice the giant birds back to your island? Well, you mimic how they turned up last time. Remembering what happened when the birds came the first time, the islanders decided to build a runway.
But for some reason, the birds didn’t come back. The island tribes were undeterred. They built empty ‘radio sheds’, empty hangars, and all sorts of imitation modern infrastructure around the runways.
Monsanto is a company feared and reviled by the public in equal measure. But whatever cases Monsanto has lost in the court of public opinion it has made up for in the courts of justice thanks to its revolving door with the upper reaches of Washington. Now, a new movement is seeking to galvanize grassroots resistance to the corporation, and derail its agenda. Find out more in this week’s Backgrounder from Global Research TV.
Exxon Mobil hasn’t asked federal regulatory authorities to restart the Pegasus oil pipeline, which burst open in a neighborhood in Mayflower, Ark. In March, a 22-foot rupture in the pipeline spilled about 5,000 barrels of diluted Canadian crude oil into an area of marshland, though the company said it’s been effectively cleaning the area with long-term remediation in mind. Policymakers on both sides of the Canadian crude oil debate have focused on issues ranging from emissions to economic stimulus. If pipelines like Keystone XL have any chance of approval, perhaps pipeline integrity should be the focal point of real policy debates.
Exxon said it was still looking into what caused a 22-foot gash to appear in the wall of its 65-year-old Pegasus oil pipeline. Arkansas Attorney General Dustin McDaniel said his office was pouring over 12,500 pages of information sent to his office by Exxon. Those documents were related to maintenance, inspection and safety of the 850-mile oil pipeline. Exxon, for its part, said it was combing over data taken from inside the pipeline itself in an effort to figure out what happened before the spill. That inspection, a spokesman said, could take at least another month.
Gold closed down $5.20 to $1386.80 (comex closing time). Silver fell by 1 cent to $22.48 (comex closing time)
In the access market at 5:30 pm, gold and silver finished trading at the following prices :
gold: 1386.30 silver: $22.39
Friday is generally a day that the bankers try and subdue to the price of gold and silver and they did not disappoint us with their criminal behaviour. Please remember that options expire Tuesday and first day notice for both the gold and silver contracts will be this coming Friday, the 31st of May.
At the Comex, the open interest in silver rose by 31 contracts to 147,342 contracts with silver’s rise in price yesterday by 3 cents. The silver OI is holding firm at elevated levels . The open interest on the gold contract fell by 5,818 contracts to 445,517. The gold deliveries for May rose a bit today to 9.48 tonnes and this is an off month for gold. The number of silver ounces, standing for delivery in May remained constant at 17.210 million oz. ( On first day notice: 14.860 million oz.)
Again, at the Comex, gold is departing as investors are frightened to death of a confiscation similar to what happened at MFGlobal or Refco. Tonight, the Comex registered or dealer gold remains at 1.641 million oz or 51.04 tonnes. The total of all gold at the comex rose slightly but still well below the 8 million oz at 7.993 million oz or 248.6 tonnes of gold.
zerohedge.com / By Tyler Durden / May 24, 2013, 20:20 -0400
With the first arrow of Abenomics perhaps hitting its limit, it will be the second and third arrows that need to occur quickly and aggressively to carry this momentum forward (and for the economy to grow into stock valuations). Barclays lays out 15 of its most frequently asked questions below but concerns remain as the BoJ’s planned absorption of nearly 80% of new JGB issuance from the markets this fiscal year has triggered a dramatic change not only in JGB supply/demand and ownership structure but in the JGB market risk profile itself, which has moved from “low carry, low volatility and high liquidity (superior to other assets from perspective of risk-adjusted returns or Sharpe ratio)” to “low carry, high volatility and low liquidity (inferior from same perspective)”. Barclays added that with a wave of major political and policy events ahead, starting with a crucial Upper House election, there was no big change in the basic belief among foreign investors that Japan is likely to be the main source of surprise for the global economy and of volatility in financial markets.
Via Barclays:
Q1: Is the BoJ’s 2% price stability target achievable? A1: It will be difficult through monetary easing alone
goldsilverworlds.com / By Michael Noonan / May 25, 2013
We cannot control the markets, but we can control how to respond to what they are saying. The paper market has been turned into a circus, thanks to JP Morgan, and abetted by the exchanges, COMEX and LME. Focus has to remain on the physical market, for it is where one can expect to find true value for price. What everyone has learned is that as price has declined, demand has disproportionately skyrocketed.
We have written extensively on the acquisition of physical gold and silver, regardless of price, because no one can know when the central bankers will lose control and price will erupt like Eyjafjallajökull. The world is in the middle of a huge central bank bubble, of which there are many sub-bubbles, as it were. [Anyone who pretends to believe whatever information is being disseminated by NWO-owned mainstream media, none of which makes any economic sense, and those who do not fully believe, (or at all), what is being said but do not know where else to turn, stay away from all central banks and central planners news or information.]
In addition to creating bubbles that will fail, the Western central bankers, and their puppet governments, are also doing battle with Eastern countries, mostly BRICS, but more and more countries are aligning with them and against the impending demise of fiat regimes. Western central banks are on the losing end, as their fraudulent rehypothecation of gold, several times over, and the virtually depleted reserves now rest comfortably in the hands of Russia, China, India, Turkey, et al, none of which will tolerate any more of the reckless mismanagement of the West. It will not end well for those of us in the Western sphere of influence.
You can see it clear as day in their hedging strategies…
Natural gas producers are increasingly bearish on prices for their sector.
The numbers tell the tale. Canadian gas producers surveyed for the Oil and Gas Investments Bulletin hedged AECO-sold production at $5.27 in 2011. Hedge prices have dropped steadily for gas sold since—to $4.27 in 2012, and to $3.29 for currently-hedged production in 2013.
Why the falling hedge price? Because it made sense – Natural gas prices fell steadily from the beginning of 2010 through to early 2012. Faced with two years of declines, producers looked to stave off further price risk by forward-selling (hedging) their output.
So what has happened since the second quarter of 2012?
Gas prices have been rising. The monthly average AECO (the Canadian benchmark price out of Edmonton AB) price is up 110% over the last year. NYMEX gas has gained 95%.
Producers, however, have not responded with the same confidence. Despite stellar gains in the gas price, firms continue to hedge at low levels. In fact, for the first time in years, hedges appear to be working against producers—forcing them to sell gas at prices below market value.
Here’s what one junior gas producer says about their hedging strategy…
“We’re actually thinking of unwinding some of our gas hedges now—at least in part,” says Heather Christie-Burns, President and COO of Angle Energy (NGL-TSX). “Our hedge book for natural gas is in a loss position right now, for what our strip pricing was then.” She adds that Angle does not have any hedging on for 2014.
Today Egon von Greyerz shocked King World News with more stunning news regarding clients having problems getting their physical gold out of Swiss banks as well as other major banks as the gold shortage intensifies. Greyerz also discussed the fact that suppliers cannot keep up with demand and the reason will surprise KWN readers around the world. Below is what Greyerz, who is founder of Matterhorn Asset Management out of Switzerland, had to say in this remarkable interview.
Greyerz: “Eric, at our company we are hearing more and more stories about banks not delivering gold that belongs to the client. We are talking about Swiss banks here once again. One client went to a Swiss bank to inspect his gold and the client manager said, ‘You can’t see it, but it looks like this,’ and he took a gold bar out of his drawer.
And the client showed me that he had a statement showing ounces of gold. Well, you don’t own physical gold in ounces in Europe. You own gold bars either in grams or in kilos, but not in ounces….
caseyresearch.com / By The Energy Report / May 24, 2013, 9:03pm
Casey Research’s Chief Energy Investment Strategist, Marin Katusa, whose portfolio profited nicely the last time the uranium bull broke loose a decade ago, recently interviewed a group of world-renowned energy experts to discuss the prospects for the sector that some considered doomed by the Fukushima disaster. Anti-nuclear power sentiment has by no means evaporated, but Katusa sees clear signals that the bulls are ready to run, not least of which is the recent attack on the Somair uranium mine in Niger.
Why? First, the 20-year Highly Enriched Uranium (HEU) Program agreement between the U.S. and Russia, aka “Megatons to Megawatts,” expires this year.
Second, the end of that program will allow Russia to sell its coveted uranium, which currently powers one of every 10 homes in the U.S., to the highest bidder. With 200 nuclear power plants under construction or on the drawing boards, China is likely to be first in line, with India and even oil-rich Saudi Arabia on its heels.
Third, the increase in nuclear plants being built around the world will stimulate huge demand while supply inevitably dwindles. Because it can take a decade to bring a uranium mine on-line, new mining production can’t grow fast enough to meet the demand.
Fourth, like it or not, nuclear energy is clean—while the average coal-fired power plant in the U.S. emits nearly 4 million metric tons of CO2 each year, nuclear power plants emit no carbon dioxide, sulfur dioxide, nitrogen oxides, mercury or other toxic gases.
Finally, last Thursday, an Al-Qaeda splinter group attacked the Somair uranium mine in Niger—owned by French uranium giant Areva. This will further disrupt global uranium supplies and emphasizes what the energy experts have been saying: Uranium is prime for price increases.
Casey Research agreed to share Katusa’s segment with Sprott U.S. Holdings Chairman Rick Rule with The Energy Report readers and invites you to listen to the rest.
zerohedge.com / By Tyler Durden / May 24, 2013, 17:39 -0400
ust as Ben Bernanke’s monetary easing program changes with the times (back then he believed it was the Stock that mattered, now it is Flow, but one thing is constant: always moar), so does his computer desktop. And while we know, tentatively, what his preferred computer space looked like three years ago, the times have changed. Behold Ben Bernanke’s new and improved PC desktop…
zerohedge.com / By Tyler Durden / May 24, 2013, 15:49 -0400
By now every single chart laying out every possible permutation of a hopelessly insolvent and overlevered world has been compiled, created, colored and in some cases, animated and socially networked. The following chart showing global debt dynamics over time from the WSJ is no different: it is animated (check) it has lots of pretty colors (check), and it is quite informative because it remembers that in addition to public sector debt, there is a thing called the private sector (sadly it avoids shadow debt: perhaps someone good at making 3D animated charts should take a stab?) and succeeds in incorporating everything in one cool animation.
Yet why it may be most memorable, or not as the case may be, is that it is merely the latest chart in a seemingly infinite series which are just not big enough to fit Japan. Perhaps it is time to make a chart of all the charts that need to be bigger to show the true Japanese state of affirs.
That, or in reverence to the sadist joke, pardon “experiment” (as Jens Weidmann would say) that is Abenomics, we can finally start making bigger charts.
Interactive global debt dynamics chart after the jump:
dailyreckoning.com.au / By Chris Mayer / May 25, 2013
The study of crowds has always fascinated people in finance. It’s not hard to understand why. Markets can go to crazy extremes, extremes no one can make sense of.
So, one favourite way to explain it away is to say that crowds do dumb things that individuals, upon cooler reflection, would never do. In a sense, a crowd become its own kind of organism — stupid, clumsy, emotional, etc.
This is basically the thesis of a longtime classic of the genre, The Crowd: A Study of the Popular Mind by Gustave Le Bon (1841–1931). The book came out in 1895. It seems to never be out of print.
Financial people love to quote from it, probably because it flatters their worldview. If you have unpopular opinions, Le Bon makes you feel as if you are above the rabble.
I have a copy of the book, and it is still a pretty good read. If you’ve never read it, you probably should get a copy and give it a go. It is mildly stuffy in the way 19th century books are stuffy. It is certainly not politically correct. It is a bit repetitive. Yet there are a number of pearls. Here is a marked passage:
‘By the mere fact that he forms part of an organized crowd, a man descends several rungs in the ladder of civilization. Isolated, he may be a cultivated individual; in a crowd, he is a barbarian — that is, a creature acting by instinct.
‘He possesses the spontaneity, the violence, the ferocity, and also the enthusiasm and heroism of primitive beings, whom he further tends to resemble by the facility with which he allows himself to be impressed by words and images — which would be entirely without action on each of the isolated individuals composing the crowd — and to be induced to commit acts contrary to his most obvious interests and his best-known habits. An individual in a crowd is a grain of sand amid other grains of sand, which the wind stirs up at will.’
zerohedge.com / By Tyler Durden / May 24, 2013, 15:22 -0400
With the long-weekend rapidly approaching, ConvergEx’s Nick Colas takes a trip to the Hamptons, but through a time warp back to the Great Depression. Examining the social registers (colloquially called the “Blue Book”) from 1927 and 1940, he finds that “The great and the good” of the day had real trouble holding their status during the social upheavals of the late 1920s and 1930s. Only 32% of the families appearing in the Blue Book in 1927 were still there in 1940. The ratio was even worse, at 29%, for the ultra-elite who belonged to the Meadow Club in Southampton. It’s too early to tell what the last few volatile years will do to the upper crust of East Coast society, of course. Or what may still be in store. But when the hedgie in the Bentley cuts you off on Route 27 this weekend, take some solace in knowing he may not be there in a few years.
Via ConvergEx’s Nick Colas:
F.Scott Fitzgerald is known for the phrase “The rich are different from you and me.” The full quote, from a 1925 short story, actually goes like this:
“Let me tell you about the very rich. They are different from you and me. They possess and enjoy early, and it does something to them, makes them soft when we are hard, and cynical when we are trustful, in a way that, unless you were born rich, it is very difficult to understand. They think, deep in their hearts, that they are better than we are because we had to discover the compensations and refuges of life for ourselves. Even when they enter deep into our world or sink below us, they still think that they are better than we are. They are different.”
Ernest Hemingway had a famous retort to “The rich are different” in his story “The Snows of Kilimanjaro”: “Yes, they have more money. But that was not humorous to Scott. He thought they were a special and glamorous race and when he found they weren’t it wrecked him as much as any other thing that wrecked him.” Yes, these two great American writers were friends. Sort of.
zerohedge.com / By Tyler Durden / May 24, 2013, 14:27 -0400
Despite ultra-low interest rates, practically unlimited liquidity, and a capital market seemingly willing to lend to anyone for anything on any terms, the very heart of Europe’s economy - German CapEx on machinery – is falling at a rate faster than during the Tech bust… the tough news for anyone looking for a silver lining is that this just goes to confirm what we saw in US durable goods orders -there is simply no ‘decoupling’, it is a lead-lag inter-linked global economy.
goldsilverworlds.com / By Zeal Research / May 24, 2013
Silver has suffered horrendously in 2013’s opening months, plunging dramatically to miserable lows. This exceptional weakness has naturally kindled extreme bearishness. Predictions abound for silver to continue selling off indefinitely. But amidst this severe carnage, the silver bullion held by the flagship silver ETF has remained flat. This is an extraordinary bullish divergence in the face of rotten sentiment.
Silver is almost certainly the most volatile of the world’s more-popular markets. When silver starts moving, it often moves fast. Fortunes are won and lost in a matter of months, a very exciting or terrifying prospect depending on which side of the trade you are on. The key to silver’s price action has always been gold. Silver follows gold, usually dramatically leveraging the yellow metal’s fortunes. Silver is a gold play.
Over the past decade I’ve sometimes teased silver’s hardcore enthusiasts, calling the white metal “gold’s little lapdog”. While flippant, technically this is absolutely true. Silver’s current secular bull was born near $4 way back in November 2001, a whopping 11.5 years ago. Ever since, its daily price action has had a correlation r-square with gold of an astounding 92.7%! That is just off-the-charts high statistically.
Over the entire 2,895 trading days of silver’s secular bull, nearly 93% of all its daily price action is directly statistically explainable by gold’s own! Gold’s fortunes are the only thing that matter for trading silver, its commanding driver. Silver is so exciting because it leverages gold’s moves. When gold rallies, silver amplifies its gains. When gold falls, silver magnifies its losses. Gold paves the way for silver to move.
zerohedge.com / By Tyler Durden / May 24, 2013, 14:27 -0400
Today’s binary message to vacuum tubes: “ignore the last available signal that has driven the market for months and make sure stocks close green” – simply just not to leave a bitter taste in the mouths of all those billionaire hedge-funders enjoying the launch of Hamptons season. The other best hope is that volume tapers (sorry Hilsenrath, we just said the word, oops) to zero, in which case the DJIA (now that nobody even pretends to care about the S&P) may just close limit up on a 1-lot trade.
"Why do you collect pieces of paper with drawings of old dead men on them? And why do you give those pieces of paper to gangsters that charge you to protect said paper?" - Mad Mohel
zerohedge.com / By Mark J. Grant / May 25, 2013, 10:27 -0400
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