Wednesday, September 11, 2013

It's Getting Interesting Out "There"

War was always here. Before man was, war waited for him. The ultimate trade awaiting its ultimate practitioner.  - Cormac McCarthy, "Blood Meridian:  Or The Evening Redness In The West"
It's funny, I bought a few of Cormac McCarthy's novels for a friend several years ago and I ended up reading them before she did.  As an English major in college, I can say definitely say that his works should be taught at the college level.  The problem is, the college would have to decide if they should be taught as part of the English, Government or Philosophy curriculum.

It looks like Obama finally put the finishing touches on his fade from attacking Syria without justified provocation.  Hell even AP has ripped to shreds any of the "evidence" that Obama has offered up as proof Syria even used chemical weapons at all:  LINK  What's most stunning about this whole ordeal to is the ineptness with which Obama and John Kerry handled the entire situation.   This whole stunt the Obama regime tried to pull off was pathetic from start to finish.

Again, as an English major, to me the worst adjective that anyone can label anything is "pathetic."  What's hilarious about the whole ordeal is that the Democrats and CNN are now assuming the role of the neocons and the Republicans in Congress are now largely the pacifists.  It pretty much leaves one speechless.  Certainly anyone who originally supported and loves Obama unequivocally CAN NOT support this tragically pathetic neocon now...

At any rate, I am starting to conclude that gold and silver are marking time for a big move to the upside.  My latest indicator?  Pan American Silver (PAAS) announced out of the blue yesterday that just THREE weeks after it announced that it had implemented hedges for a significant amount of its gold and silver production, it had decided to remove them.  This was a stunning and rapid reversal of a big financial decision and it must have cost them a lot of money to remove the hedges.  I'll know if the cost was big enough that have to disclose the details in their next 10-Q (it will be pigeon-holed in the footnotes for sure).

I have never cared for PAAS as an investment because I have found the management to be incompetent and full of crap.  More important, they have always been a hedger.  But probably the biggest red flag for me with regard to PAAS is that Bill Fleckenstein was on the board of directors until the end of 2011.   Fleckenstein is probably one of the most disingenuous and incompetent market analysts out there.  For some reason he gets air-time on CNBC, but probably because he represents the "contrarian" investor viewpoint and CNBC has also figured out the he's an idiot.  We certainly know that CNBC features nothing but idiots.

At any rate, one of the primary Wall Street firms that "advises" PAAS is JP Morgan.  JP Morgan has spent the better part of the last 9 months eliminating its massive, manipulating short position in Comex gold and silver contracts and has actually amassed a considerably large long position in gold contracts.  My bet is that JP Morgan told PAAS that, based on what it knows as an insider to the precious metals market worldwide, putting on those hedges was not a good idea.

There are plenty of other signals being flashed loud and clear for anyone who is paying attention, but this latest move by PAAS further confirms my view that the metals are marking some time here - ostensibly until after the next FOMC meeting next Tues/Wed - before they being to make a move to the upside that will take everyone except the hardiest of precious metals investors by surprise.


  1. False flag... anyone with half a brain could see what they were trying to pull.

  2. I think he was a director but has removed himself.

    Don't want you to lose credibility.

    1. Thanks. I thought I had remembered he split, but I was too lazy to look it up lol

  3. Henry A. Giroux | Intellectuals as Subjects and Objects of Violence

    What the anti-public intellectuals never include in their screeds are any mention of a government corrupted by the titans of finance, banks and the mega rich, or the scope and extent of the military-industrial-academic-surveillance state and its threat to the most basic principles of democracy.[4] What does arouse their anger to fever pitch are those public intellectuals who dare to question authority, expose the crimes of corrupt politicians, and call into question the carcinogenic nature of a corporate state that has hijacked American democracy. This is most evident in the insults and patriotic gore heaped recently on Manning and Snowden, who are the latest in a group of young people whose only "crime" has been to expose the abusive powers of the national security state. Rather than being held up as exemplary public intellectuals and true patriots of democracy, they are disparaged as traitors, un-American or worse.

    The role of the anti-public intellectuals in this instance is part of a much larger practice of self-deceit, self-promotion, and the shutting down of those formative cultures that give rise to intellectuals willing to take risks and fight for matters of freedom, justice, transparency and equality. For too many intellectuals, both liberal and conservative, the flight from responsibility turns into a Faustian pact with a corrupt and commodified culture whose only allegiance is to accumulating capital and consolidating control over all aspects of the lives of the American public. Liberal anti-public intellectuals are more nuanced in their support for the status quo.

  4. "putting on those hedges was not a good idea."

    or perhaps not. Witness the "casualty" of Semgroup Holdings in 2009
    Got a peek at books on due diligence and then shanked them right into bankruptcy. Totally there fault for getting into bed with them but...

  5. Why all the fuss !? All that has to occur is for someone capable to drop a billion down for physical silver. The result would bring these thieving bastards to their knees. Master the possibilities !

  6. I am hardy, I am hardy, I am hardy, I am hardy. Thanks Dave!

    1 Kg Lunar Dragon.

  7. Dave, I think you are too optimistic. The consensus right now is that the Fed is gonna taper by a token amount. Since Bernanke does not have a predilection to surprise the markets, in my opinion, he is gonna do some tapering. Besides that, the Chinese market will remain closed between Sep 19 to Sep 22 and gold lease rates are slowly climbing up. This is a perfect window to hammer PMs.

  8. Dave,

    i generally agree with much of what you say and appreciate your hard work producing this blog but you need to produce some more color about why you're so down on fleck. the guy who wrote the first book about what a disaster Greenspan and the Fed have been. the guy who started a short fund to capture the insanity of the nasdaq bubble. the guy who joined the board of Paas before silver moved in 2001. i've been a shareholder of PAAS and think he was pretty good. in fact, i wouldn't be surprised if his public rebuke of Pass management for hedging helped pursuade them to take off the hedge. he said, "if i was still a director this wouldn't have happened."

    so, where's the beef?

    1. I don't have to provide anything since I'm not getting paid to write this and I don't work for you. Let's just say I've had personal dealings with him in the past he's an empty-headed, plagiaristic moron. I'm talking about "past" as more than decade. That guy doesn't have an original thought or unique line of analysis to save his life. Anything he's written is nothing but a re-hash of someone else's work.

      If you like him, that's great. You probably also like CNBC

  9. Breaking: CIA Has Started Delivering Weapons to Syrian Rebels

    WaPo is reporting that the CIA has begun delivering weapons to rebels in Syria, ending months of delay in lethal aid that had been promised by the Obama administration, according to U.S. officials and Syrian figures. The shipments began streaming into the country over the past two weeks, along with separate deliveries by the State Department of vehicles and other gear — a flow of material that marks a major escalation of the U.S. role in Syria’s civil war.


    WaPo further reports:

    The CIA shipments are to flow through a network of clandestine bases in Turkey and Jordan that were expanded over the past year as the agency sought to help Middle Eastern allies, including Saudi Arabia and Qatar, direct weapons to moderate Syrian rebel forces.

    UPDATE 2

    The arms shipments are limited to light weapons and other munitions that can be tracked, says WaPo.

  10. This is funny. When I try to leave a comment at Harvey Organ's blog, it sends me to "truth in gold" blog! Close, but no cigar! I guess gold is gold.

    The comment I was going to leave was this. Both Grant Williams, and John Hathaway stated that they'd heard that it was difficult or impossible for individuals to exchange baskets of GLD shares for bullion, as is the right of shareholders, as stated in the prospectus, but there were no details. Can anyone tell me more, or tell me where to look for more details?

    1. Until we get something that confirms those reports from people who were actually denied their gold, it's hear-say evidence.

      As I much as I suspect the reports are true, I'm not promoting it as fact until get some kind of definitive confirmation.

  11. Bill Black: SEC Flacks Paint Lehman’s Looters as the Victims of a “Political” SEC

    Yves here. With the fifth anniversary of the Lehman collapse nearly upon us, the financial media is awash in crisis-related retrospectives. That’s including more than a little revisionist history. Here, Bill Black corrects the record on some SEC propaganda that the New York Times saw fit to run. The idea that the SEC deemed Lehman’s Repo 105 transaction (which allowed it to hide $50 billion of liabilities, when its total balance sheet was $660 billion) to be not material is such a preposterous notion that, if anything, Black’s treatment is restrained.

    By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posed from New Economic Perspectives

    This is the second installment in a three-part series correcting the NYT propaganda that seeks to transmute the SEC’s refusal to hold any of Lehman’s looters accountable for their myriad frauds. For the purposes of this article I assume that the reporters have accurately represented the SEC officials’ positions. I discuss the journalists’ analytical flaws. In my next column I’ll address critical facts excluded by the SEC and the reporters. Those facts demonstrate that Lehman was an “accounting control fraud.” The NYT article ends with this morality play about the SEC’s anti-enforcement “team”: