Friday, August 30, 2013

Welcome To America

Home Of The Fourth Reich

(that's a must-watch video by the way)
Happy Labor Day Weekend
It's going to start getting really weird in this country

Thursday, August 29, 2013

Pending Homes Sale Report: The Housing Market Lurches Lower

Before I post my latest work on the housing market, I wanted to quickly follow up on my post about Syria from the other day.  The AP is now reporting that both U.S. and U.K. intelligence officials are back-pedalling on their original assessment that the chemical attack in Syria was done by the Assad Government:
The intelligence linking Syrian President Bashar Assad or his inner circle to an alleged chemical weapons attack is no "slam dunk," with questions remaining about who actually controls some of Syria's chemical weapons stores and doubts about whether Assad himself ordered the strike, U.S. intelligence officials say.
Here's the link to entire article:  LINK

Funny how Obama and Biden were adamant that Assad launched the chemical attack.  To reiterate, this situation reminds me exactly of Colin Powell giving his speech on Iraq's weapons of mass destruction and all the proof the U.S. had of those.  Turns out Powell was lying to entire the world.  I don't know why he was never prosecuted for war crimes.  It's just amazing what the American public is letting the Government get away with...

Yesterday the National Association of Realtor's Pending Home Sales Index was released.  On the surface it was bad.  When you dig through the whole report, it it further confirms my thesis that the housing market is re-entering its bear market downtrend:
The truth of the matter underlying the "dead cat" bounce in the housing market over the past 18 months is that since 2008 the Fed and the Obama Government spent a couple trillion dollars trying to revive the housing market. All they really accomplished was the transfer of a massive number of distressed homes from the big mortgage banks [JPMorgan (JPM), Wells Fargo (WFC) and Bank Of America (BAC)], and from Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB), to some large private equity funds looking to speculate on housing and to individual buyers who got sucked into the momentum that was generated. The stimulus has now lost its effect and the housing market is headed back to an eventual lower bottom.
Here's the link to the entire article:  The Housing Market Lurches Lower

I'm still trying to figure out how the remaining housing market bulls think that bounce over the last 18 months can continue when more and more people are being down-graded from full-time jobs to part-time jobs, real disposable income is now declining, interest rates are in an uptrend and the economy is in decline.  I guess for some people hope will always hold stronger than the facts which support the fundamentals...

Wednesday, August 28, 2013

Taper Or No Taper - Either Decision Is Bullish For Gold

A taper now would be the same mistake the Fed made back in 1929.  Please recall that it was this mistake by the 1929 Fed that Bernanke pointed to and claimed he knew exactly what to do to in order to avoid a depression and deflation. It seems unlikely that Bernanke wants to go down as the Fed Chairman who triggered the next big economic recession.  To Taper Or Not To Taper - That Is The Question
In what has become one of the most absurd rituals on Wall Street - and is really a sign of just how broken our system is - the entire financial media and all the Wall Street "Einsteins" are debating whether or not the Fed will begin to slow down its money printing when it announces its latest fatuously palaverous policy statement in September.

The golden truth is that gold doesn't care.  In fact, not only does gold not care, but either decision will be bullish for the world's oldest currency.  As it turns out, I've written thoughts on this matter, explaining why I've reached that conclusion and you can read my analysis here:  LINK

If the Fed were to announce a small "taper," it is likely that the metals will get hit hard, initially.  It is this smack-down that you need to buy with both hands, as the market will soon realize that the Fed is going to have to reverse itself and increase QE in subsequent months. 

My personal feeling is that the Fed will hold off on any decision and, ultimately, be forced to increase QE at some point.  In fact, in line with what I was thinking about Syria situation, others have come to the same conclusion as me:  Syria Is The Fed's "Out" on the Taper

Also, please note - and although I think it's a ridiculous report - the National Association of Realtors' Pending Homes Sales report for July showed a decline in "pending" home sales from June to July.  Given that the index is "seasonally adjusted," it should be registering a nice gain from June to July, unless contracts on new homes are seriously slowing down.  They are and the housing market is back in its bear tracks.

Monday, August 26, 2013

Iraq Redux

It's looks increasingly as if the United States is going to exert its military will in Syria.  They're basing their decision on a dubious report that the Assad Government there used chemical weapons to repel the U.S.-bolstered rebel forces.

"U.S.-bolstered rebel forces?"  Why are we backing the rebels against the Government over there?  I have no idea.  For all you who voted for Obama, ask him?  He promised an honest and transparent Government when he was campaigning for your vote.

As for whether or not chemicals were used - notwithstanding the fact that we have no idea whether or not the Assad forces or the rebels fired them - it's not this country's concern.  This country can't afford to keep the lights on without printing and borrowing money.  We have no business going on expensive, capricious imperial excursions.  Let the Syrian people decide their own fate.

All I can say is that this report posted on Zerohedge, LINK, tells me that Obama is going to exert his will the same way Dick Cheney - I mean George Bush - exerted his in Iraq.  We know that Colin Powell lied through his teeth to the U.N. about hidden weapons of mass destruction in Iraq.  I have complete confidence that Obama's evidence is just as fraudulent.  How anyone could possibly trust anything coming of out Obama's mouth at this point is beyond me.  Anyone who does must have their head up their ass.

It looks to me like our economy is collapsing and, like every falling empire before it in history, the U.S. Government is going to use war as a means of diverting attention from its utter and complete failures at home.

Bush, I Mean Obama, Picks Joseph Goebbels - I Mean Cass Sunstein - To Sit On NSA Ovesight Board

A couple years ago a good friend of mine started referring to Obama jokingly as "Bitler" - as in "Black Hitler."  I'm not so sure he was off base there when you read about Obama's latest appointment to his  Third Reich - I mean his administration.  Here's the latest and it needs no other commentary:  Heil Barack

It all has become so surreal in our country.  "Not here" everyone was raised to believe.  Well, it's here.

Wilkommen zu America  und veil Gluck

Friday, August 23, 2013

The Housing Market Could Well Be In Crash Mode Now

The massive mult-trillion Fed/Government stimulus dumped into the housing market is starting to fade now - hard.  In addition, the rapid move higher in interest in May triggered by Bernanke's flash of Tourette's syndrome when he blurted out his "taper" mistake is going to start showing up in the home sales numbers, starting with today's disastrous new home sales report for July.

I wrote an article for Seeking Alpha on the new home sales report this morning.  You can read it here:  New Home Sales Plunge.  If you are an aggressive trader, it's open season for shorting the homebuilders every time they spike higher on bogus news reports.  Have at it with no fear and I list my favorite short-sale ideas in the article.

In addition, I wrote an article after Wednesday's existing home sales report which explains why there is a "lag" effect between the interest rate spike in May and the way existing home sales are reported.  You read about it here:  Sell Today's (Wednesday's) Existing Home Sales Report.  As I explain in the article, we'll start to see existing homes sales start to decline pretty rapidly starting with the September reporting of August's existing home sales.

Again, anecdotally, I'm actually starting to feel some horror over the number of "for sale" signs popping up all over the metropolitan Denver area.  They're popping up like zits on an oily-skinned 13-yr old.

I have a feeling a lot of people are now being told that prices have gone up to the point where they can sell their home at a price that's above the value of the mortgage.  Unfortunately, if you want to sell a home you don't list it in late August - you list it by the end of April.  For all the talk in the media about low inventory, I can guarantee that inventory is not a problem now.

I especially love the "coming soon" signs on top of realtor signs.  It's as if the sign is saying, "don't go look at the four other homes for sale on this block because 'I'm coming soon!'"  This is just like a repeat of what was happening all around Denver in late 2007 and early 2008.  The avalanche of "for sale" and "coming soon" signs preceded the housing crash and the great financial crisis.

Hate say it on a Friday but were back to where we were back then, only this time around it will be a lot worse...Just like 2008, as the housing market crashes, gold is getting ready to make an extended move back to all-time new highs.  Have a great weekend.

Wednesday, August 21, 2013

Physical Demand For Gold Will Fuel A Spectacular Move Higher

The Grateful Dead is like licorice:  not everyone likes licorice but those who do like licorice, really like it.  - Jerry Garcia.   Gold is for the collapse of paper currencies:  most do not understand that this will happen; but those who do, really like their gold.  - Dave in Denver
I like licorice, the Grateful Dead and gold.

I 've been writing about the significance of the negative gold/dollar swap rates, otherwise known as the Gold Forward (GOFO) rates, published daily in London by the LBMA (London Bullion Marketing Association.   Unfortunately, the signficance of the negative GOFO rates are lost on most people.

However, the reason owners of physical gold being held in their possession are being paid a rate of interest to loan that gold out - with the loan being collateralized by dollars - is because of an extreme shortage of physical gold that can be delivered.

Where is this gold going?  Asia, of course - primarily China.  I wrote an article for Seeking Alpha which shows how we know this to be the case: -  Physical Gold/China (link) -  and why this "disintermediation" of physical gold will lead to a massive move higher in the price of gold.

I guess you could say we can fully expect that gold will keep on "Truckin.'"

Monday, August 19, 2013

The "Bear" Has Its Claws In The Housing Stocks Now

A wiser fella than myself once said, "sometimes you eat the bear...sometimes the bear, well,  he eat's you."  - The Stranger (Sam Elliot), "The Big Lebowski" - LINK
Last Thursday and Friday the Dow Jones homebuilding stock index had a two-day bounce connected to the National Association of Homebuilders "Market Index" (Thursday) and the Census Bureau's housing starts report (Friday).  The bounce came on the heels of an 8-day 10% plunge in the homebuilder index, so an "oversold" bounce was not unexpected.  Interestingly the Friday spike higher at the open didn't last, as the builder index closed flat on the day - which is very bearish.

Today the homebuilder stock index is down 4%.  I wrote an article on the housing market/housing stocks on Friday for Seeking Alpha which explains why the data released on Thursday/Friday was largely immaterial to the prospects of the housing market and why the housing market is firmly entrenched back in its bear market that really started in mid-2005.

You can read the article here:   The "Bear" Has Its Claws In The Housing Stocks.

Anecdotally, I'm really starting to see a deluge in "for sale" signs pop up all the around the Denver area - from the Highlands neighborhood north of downtown all the way down to the south metro area by Highlands Ranch.  It's especially acute in the central Denver area, where I live.  In addition, I've observed several stale "contract pending" signs on top of "for sale" signs, which indicates that financing is now a lot more difficult.

I fully expect that both the homebuilder stocks and the overall housing market - price/volume - will ultimately go below their lows set in 2008, before Bernanke and Obama dumped a few trillion dollars into all aspects of the housing market to try and generate a recovery.  Guess what?  They failed - badly.

Wednesday, August 14, 2013

Must-See TV: Steve Liesman Once Again Confirms His Stupidity For Us

Steve Liesman's brains must have fallen out of his head with all of his hair.  I have a better cost index than the Government CPI:  my monthly out of pocket living expenses.

Update On The Negative GOFO: Gold Has Bottomed - Headed Much Higher

It is important to note that while gold backwardation lasted a few days in 1999 and again in 2008 -- both of which marked major bottoms and key turning points in the price of gold -- we now have 31 trading days of backwardation and a gold price that has already risen $135 from when the backwardation began.  What we are seeing today is truly unprecedented and historic. - James Turk, from King World News interview - LINK
Just for reference, after 13 years of researching, studying, trading and investing in the precious metals markets, James Turk is one of the very few analysts who I still consider worth reading for insight and facts. "Backwardation" is when the spot price of gold is higher than the next month futures' price.  It means that the market is assigning a higher value to physical gold that can be delivered immediately than to cash.

About a month ago I wrote an article that discussed the significance of the negative gold forward interest rate (GOFO) that was being observed in London and is published by the London Bullion Market Association (LBMA).  The GOFO is the interest rate charged for a dollar/gold swap, which is when someone who owns gold needs a short term dollar loan and he collateralizes the loan with his gold.  When the rate is negative, it means that someone wants his gold more than he wants to borrow dollars and it signifies an extreme shortage in physical gold that can be immediately delivered to large buyers who are forcing the issue of delivery and it is another form of "backwardation."

I wrote an update for Seeking Alpha because the GOFO rate has been negative now for a historically unprecedented 28 days.  You can read the article here:  Update On The Negative GOFO: Gold Has Bottomed

The only conclusion that can be drawn from this situation is that the bullion banks in London are scrambling to find physical gold that can be delivered into the massive demand coming from Asia, specifically China.  I also believe that the duration and severity of the negative GOFO will translate directly intoa commensurate move higher in gold that will shock everyone.

Unfortunately, the best we can hope for is that the next move in gold does not culminate with the cataclysmic currency reset that we all know is coming - i.e. the dollar is replaced as the world's reserve currency, which will render the U.S. largely destitute:
I'm not worried about how high in price gold is going, I'm worried about what the world around us will look like when it gets there.

Monday, August 12, 2013

We're Letting Our Country And Constitution Go Down The Drain...

The best argument against democracy is a five minute conversation with the average voter  - Winston Churchill...In times of universal deceit, telling the truth will be a revolutionary act  - George Orwell...The government will make use of these powers only insofar as they are essential for carrying out vitally necessary measures  - Adolph Hitler
I'm guessing that most of you did not see this article from the NY Times last week about latest move toward implementing a Totalitarian police state via the TSA.  This is CLEARLY, UNEQUIVOCALLY, well beyond the TSA mandate.  I am presenting the entire article here without comment, because if this needs any commentary, our country is doomed (P.S.  How do you all you intransigent Obama supporters feel about the man now?) :

T.S.A. Expands Duties Beyond Airport Security

By RON NIXON   Article Link

WASHINGTON — As hundreds of commuters emerged from Amtrak and commuter trains at Union Station on a recent morning, an armed squad of men and women dressed in bulletproof vests made their way through the crowds.

The squad was not with the Washington police department or Amtrak’s police force, but was one of the Transportation Security Administration’s Visible Intermodal Prevention and Response squads — VIPR teams for short — assigned to perform random security sweeps to prevent terrorist attacks at transportation hubs across the United States.

“The T.S.A., huh,” said Donald Neubauer of Greenville, Ohio, as he walked past the squad. “I thought they were just at the airports.”

With little fanfare, the agency best known for airport screenings has vastly expanded its reach to sporting events, music festivals, rodeos, highway weigh stations and train terminals. Not everyone is happy.

T.S.A. and local law enforcement officials say the teams are a critical component of the nation’s counterterrorism efforts, but some members of Congress, auditors at the Department of Homeland Security and civil liberties groups are sounding alarms. The teams are also raising hackles among passengers who call them unnecessary and intrusive.

“Our mandate is to provide security and counterterrorism operations for all high-risk transportation targets, not just airports and aviation,” said John S. Pistole, the administrator of the agency. “The VIPR teams are a big part of that.”

Some in Congress, however, say the T.S.A. has not demonstrated that the teams are effective. Auditors at the Department of Homeland Security are asking questions about whether the teams are properly trained and deployed based on actual security threats.

Civil liberties groups say that the VIPR teams have little to do with the agency’s original mission to provide security screenings at airports and that in some cases their actions amount to warrantless searches in violation of constitutional protections.

“The problem with T.S.A. stopping and searching people in public places outside the airport is that there are no real legal standards, or probable cause,” said Khaliah Barnes, administrative law counsel at the Electronic Privacy Information Center in Washington. “It’s something that is easily abused because the reason that they are conducting the stops is shrouded in secrecy.”

T.S.A. officials respond that the random searches are “special needs” or “administrative searches” that are exempt from probable cause because they further the government’s need to prevent terrorist attacks.

Created in the aftermath of the Sept. 11, 2001, attacks, the T.S.A. has grown to an agency of 56,000 people at 450 American airports. The VIPR teams were started in 2005, in part as a reaction to the Madrid train bombing in 2004 that killed 191 people.

The program now has a $100 million annual budget and is growing rapidly, increasing to several hundred people and 37 teams last year, up from 10 teams in 2008. T.S.A. records show that the teams ran more than 8,800 unannounced checkpoints and search operations with local law enforcement outside of airports last year, including those at the Indianapolis 500 and the Democratic and Republican national political conventions.

The teams, which are typically composed of federal air marshals, explosives experts and baggage inspectors, move through crowds with bomb-sniffing dogs, randomly stop passengers and ask security questions. There is usually a specially trained undercover plainclothes member who monitors crowds for suspicious behavior, said Kimberly F. Thompson, a T.S.A. spokeswoman. Some team members are former members of the military and police forces.

T.S.A. officials would not say if the VIPR teams had ever foiled a terrorist plot or thwarted any major threat to public safety, saying the information is classified. But they argue that the random searches and presence of armed officers serve as a deterrent that bolsters the public confidence.
Security experts give the agency high marks for creating the VIPR teams. “They introduce an unexpected element into situations where a terrorist might be planning an attack,” said Rafi Ron, the former chief of security for Ben-Gurion International Airport in Israel, who is now a transportation security consultant.

Local law enforcement officials also welcome the teams.

“We’ve found a lot of value in having these high-visibility security details,” said John Siqveland, a spokesman for Metro Transit, which operates buses and trains Minneapolis-St. Paul. He said that local transit police have worked with VIPR teams on security patrols on the Metro rail line, which serves the Minnesota Vikings stadium, the Mall of America and the airport.

Kimberly Woods, a spokeswoman for Amtrak, said the railroad has had good experiences with VIPR team members who work with the Amtrak police on random bag inspections during high-travel times. “They supplement our security measures,” she said.

But elsewhere, experiences with the teams have not been as positive.

In 2011, the VIPR teams were criticized for screening and patting down people after they got off an Amtrak train in Savannah, Ga. As a result, the Amtrak police chief briefly banned the teams from the railroad’s property, saying the searches were illegal.

In April 2012, during a joint operation with the Houston police and the local transit police, people boarding and leaving city buses complained that T.S.A. officers were stopping them and searching their bags. (Local law enforcement denied that the bags were searched.)
The operation resulted in several arrests by the local transit police, mostly for passengers with warrants for prostitution and minor drug possession. Afterward, dozens of angry residents packed a public meeting with Houston transit officials to object to what they saw as an unnecessary intrusion by the T.S.A.

“It was an incredible waste of taxpayers’ money,” said Robert Fickman, a local defense lawyer who attended the meeting. “Did we need to have T.S.A. in here for a couple of minor busts?”
Representative Bennie Thompson, Democrat of Mississippi and ranking member on the House Homeland Security Committee, which has oversight of the T.S.A., said he generally supports the VIPR teams but remains concerned about the warrantless searches and the use of behavior detection officers to profile individuals in crowds.

“This is a gray area,” he said. “I haven’t seen any good science that says that is what a terrorist looks like. Profiling can easily be abused.”

Mr. Thompson said he also had questions about the effectiveness of the program because of issues like those raised in Houston and Savannah.

“It’s hard to quantify the usefulness of these teams based on what we have seen so far,” he said.
An August 2012 report by the inspector general of the Department of Homeland Security raised similar questions.

Some T.S.A. officials told auditors that they had concerns that deploying VIPR teams to train stations or other events was not always based on credible intelligence.

The auditors also said that VIPR teams might not have “the skills and information to perform successfully in the mass transit environment.”

Mr. Pistole said the agency is now retraining VIPR teams based on recommendations in the report and is working to increase the public’s knowledge about them.

Wednesday, August 7, 2013

Smart Money Is Telling Us The Housing Market Is About Crash Again

Here's an interesting observation:   The Dow Jones U.S. Home Construction stock index is now down over 25% from its peak on May 14 - so how come the financial media is not broadcasting that housing stocks are now in a bear market?  Every time gold drops 20%, which has occurred several times during the precious metals bull market that started in 2001, all we hear on CNBC and Bloomberg is that gold is now "in a bear market."  LOL

As I have been discussing recently, most of what appears to be a housing market recovery has been driven in price and volume by the big private money funds who were sitting on loads of uninvested cash and decided to try their hand in the real estate rental management business.   This has lasted all of 18 months, as now several of these funds are looking to dump their equity into the hands of the public.

I wrote an article published on Seeking Alpha that discusses topic:
This is an investment trend that has only been in place for roughly the last 18 months but, incredibly, many of these "smart money" investment funds are already trying to cash out by selling equity in their rental portfolios. One can only conclude that this investment trend is coming to an abrupt halt as the "smart money" is trying to unload its investments on the greater investing public. In fact, it really reminds me of this same dynamic that occurred at the peak of the Internet bubble in 2000. In other words, the "smart money" is telling us that the housing market is going lower.
You can read the entire article here:  Smart Money Is Dumping Its Housing Investment

I was also interviewed by Kerry Lutz, proprietor of the Financial Survival Network - an internet-based radio program - about the housing market:   LINK

The problems that created the housing market bubble, which led to the de facto collapse of the financial system in 2008, have never been fixed.  In fact, they've been covered up by fraudulent accounting and a massive amount of money printing.  Barring some kind of divine intervention, the next phase of the Great Financial Crisis is going to make 2008 look like an easy day at the beach.

Friday, August 2, 2013

Just Pathetic: Non-Farm Payroll Report

What I find completely ridiculous is that the elitists now have the investment world completely trained  to sit on the edge of their seat and wait with unbridled anticipation for a completely fraudulent economic number to be released that's been promoted by CNBC as "the most important economic report of the year" - week after week.  It's like hungry, obedient baby seals waiting for the trainer to toss them some fish.  -  me in an email to T. Ferguson, TF Metals Report
 And yet another Non-Farm Payroll report farcical Friday.  I was chatting with a long-time gold/silver accumulator earlier today who made the comment that "as rule of thumb it's safe to assume everything the Government reports is a complete lie."

Like baby seals trained to wait for their master to toss them some fish, the market waited anxiously for the employment report.  The Wall Street brain trust consensus was expecting 185,000 new jobs but the number reported missed at 162k.  Every single big Too Big To Fail bank had estimates that were significantly higher than what was reported.  It's down-right embarrassing for the economists at these banks because they missed so badly.

June's farce of a number, made up entirely of part-time jobs, was revised lower.  Another 37k completely disappeared from the labor force, as they decided it was easier to receive Social Security disability benefits than to suffer through a part time job a Taco Bell.  Of the jobs supposedly created, 65% were part-time.  And the average weekly earnings dropped.

If you're interested, you can wade through the report yourself here:  LINK   Zerohedge has done a nice job breaking out the jobs in terms of the quality of jobs created - i.e. bartenders vs. manufacturing, with 10 times more "bartender" type jobs than jobs that contribute to economic prosperity:  LINK

If Obama feels good about that accomplishment as the President, more power to him.  As far as I'm concerned, Obama and his agenda been a complete failure.  Speaking of his Holy Grail, Obamacare, I just saw a news headline scroll by that reported that more than 50% of the States have refused to implement those nefarious "insurance exchanges."   And I know several people who are already braced to pay premiums in excess of 50-75% of what they pay now for reduced coverage.  But, of course, Obamacare has had a self-serving purpose for El Hefe:  Obamacare has created over 900k jobs this year for the Government, of which 731k are, of course, part time LINK

Circling back the gentleman who made the observation about Government-reported economic data, he and I both think that the U.S. is in the final stages of collapse.  As I state in the by-line to my blog title, "I'm not worried how high in price gold is going, I'm worried about what the world around us will look like when it gets there."  I have a bad feeling we are going to find just what that will look sooner than most people realize or are willing to believe.