Friday, June 1, 2012

The Sound And The Fury Of Financial Nuclear Air Raid Sirens

Everyone stupid enough to sell their gold and buy Treasury bonds is climbing out of the lifeboat and getting back on board the Titanic - guest on Fox Business

Anyone rooting for Ben Bernanke to print more money and Obama to borrow more to spend on "jobs creating" projects like Solyndra is one of the chickens in the coop cheering for Colonel Sanders...Dave in Denver
I'm going to keep today short if I can.  Sometimes once I start writing there's no telling how amp'd up I'll get.  Obviously the jobs report came in significantly below the Wall St. Einstein forecast.  Because these numbers are mostly make-believe anyway I won't go into them in-depth.  But for the purposes of comparing make-believe to make-believe, the number of jobs Obama wants us to believe were created in May was 69,000 vs. the expectation of 150,000.  Even more troubling was the big downward revision in April. 

The highlight of the whole Disneyland affair was hearing Joe Kernen exclaim to Mark Zandi - CNBC's economic Einstein - "wow Zandi, how did you miss this so badly?"  The fact of the matter is that I remember trying to read Zandi when he was a junk bond credit analyst back in the 1990's.  I thought his work was so poor that it was entirely unreadable.  In other words, he was a moron back then and he's a moron now.  But I guess when the company you work for pays huge advertising fees, you get elevated to genius status on CNBC.  Zandi isn't "big hat, no cattle" - he's "no hat, no cattle."  Zandi has been wrong for past 10 years on housing, the economy and gold.  Especially on gold. 

It's all fairy tales and fantasy anyway, but when the fairy tale turns into a horror story - for real - you have problems.  And we have big problems right now.  The economy is collapsing - GM and Chrysler badly missed sales estimates, all the manufacturing data is coming in substantially weaker than expected by our resident TV Einsteins, like Zandi, and housing is doing another el cliffo.

But what really should be jerking people from Lego Land and into Friday the 13th is the Treasury bond market.  The yield on the 10-yr Treasury is at a record all-time low and the yield on the 30-yr Treasury - the Big Daddy - is below it's lowest point during the Lehman crisis.  That's not just warning signals flashing, that's the equivalent of financial nuclear air raid sirens going off.

What this means is that all liquidity is being sucked out of the global financial engine and it's going into Treasuries and precious metals.  I suspect today's big move in both reflects the expectation that we may get a heavy dose of QE3 in some form - likely not an obvious, overt form - at the June FOMC meeting.  Just like everything else going on in our system - of which the Obama farce and fraud is supremely emblematic - I'm sure our resident Talmudic scholar at the Fed, who masquerades as an economic expert, will do his best to inject as much electronically created currency into the system but disguise it in a way that the public will accept as nothing more than some temporary, "sterlized" lines of credit.

Trust me, that's a loan NO ONE wants to take unless they have a lot of physical gold and silver on the side...

12 comments:

  1. What guest was that on Fox Business?

    I hope it was not Dennis Gartman! lol

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    1. I dunno. My business partner saw it - some English dude. Was too lazy to find the source.

      Definitely not Gartman, thankfully

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  2. Well done Dave. I agree. I think today is critical mass day. The implosion is on. Gold up 62 bucks. Not hearing any of the asshats on CNBC raving about that.

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  3. "Talmudic scholar". I'm glad you said that Dave and not me. I got your back though if the truth is ever allowed to be discussed by adults.

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  4. LOL. Well, i can get away with it in a way. Even though I'm an atheist and i despise organized religion, I was raised in a Jewish household. Bernanke should have been a Bar Mitzvah tutor, not an economist.

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    1. I was raised a Catholic, but it didn't interest me. I think most people really don't give a shit about another person's religious beliefs. It's only when it becomes a political movement, like Zionism, that it gets to be dangerous.

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  5. My feeling is that at the June FOMC meeting, the Fed will not launch QE3 in order to disappoint the precious metals market. QE3 will come but not this month. We may have one more leg down before PMs bottom

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  6. Another fine post Dave...Dollar cost averaging in TBT calls.

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  7. I'm very impressed with your linguistic talents with this post! I don't remember "el cliffo" during my Rosetta Stone training. I’m going to have to do some refresher training if you continue flexing your muscles like this going forward. All sarcasm aside, I think Friday woke a lot of cheerleaders from their siesta. For me, I’ve been wondering what has taken so long. Nice post again Dave!

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  8. (Quinn, Littleton)

    Dave: I have great news. Check out what I just read on CNBC(S) today:

    "Gartman warned that gold won't act as a safe haven in the current environment, and suggested investors stay on the sidelines and remain in cash."

    This practically etches the bottom in stone! Q

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  9. Terrific news! Gartman is a total moron

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