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It's going to start getting really weird in this country

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...

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.

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

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.

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.'"