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Adding insult to taxpayer injury, Goldman Sachs is primed to benefit should AIG ultimately file for bankruptcy and default on its debt, Cohan reports, having invested about $200 million in related credit default swaps.
Maya @ 23:45 pm et all
Maya is a good handle. yes!
Coming out of the egg is a sobering look at reality.
From a Boise hen house trying to climb back in and putting the egg back together would be a good thing.
Thanks for welcome. The egg and I.
ferret @ 17:59 pm
“For their next trick deflationist refuters will prove that black is white.”
Well… the US has a black president now, so that must be true. And we have all seen that Up is Down, especially for you Aussies… so… 
UPP
Where are you from?
Usedpaperpromise
Welcome to the tent.
Hello, usedpaperpromise
Welcome to the tent. I like the handle. 
testing
This must be like breaking out of an egg. Hello world
aurum
I see puptent has posted a link to the Rolling Stones Magazine article about GS.
‘ The Great American Bubble Machine
Matt Taibbi on how Goldman Sachs has engineered every major market manipulation since the Great Depression
MATT TAIBBI
Posted Jul 02, 2009 8:38 AM ‘
www.rollingstone.com/politics/story/28816321/the_great_american_bubble_machine/print#
great american bubble mechine
rolling stones mag
TQ
I am coming around to the idea that many have already said. To some degree the markets are rigged.
i.e. the bellweathers do not work.
aurum (bellweathers)
“Preserve Your Wealth with Precious Metals”
“Preserve your portfolio’s purchasing power
A minimum 10-15 percent allocation is considered adequate in a bull market, but a much larger allocation is suggested for protection in a secular bear market. If you have not already done so, now is the time to rethink your investment strategy. Physical bullion adds an asset class that will keep its value, regardless of where the economic downturn takes us inflation, deflation or hyperinflation.
For the first time in history, the central banks have an unlimited ability to print as much money as they need to avoid a deflationary depression. Precious metals are the only currency that will survive intact, because while governments can print infinite amounts of money, they cannot increase the supply of hard assets with intrinsic value. Investors, institutions and central banks will turn in droves to the historical safe haven of precious metals, as real wealth replaces wishful thinking. This secular bear market is expected to last for many years, eating away at investors’ hopes and dreams and portfolios along the way. Don’t let your portfolio be one of them. Now is the time to make an investment in your future, because the future is precious metals bullion.”
….from financialsense.com/fsu/editorials/bms/2009/0702.html
by Nick Barisheff
Bullion Management Group Inc.
July 2, 2009
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JBI
‘We’re in the Middle of a Crash’: Black Swan
The financial system is crashing and action must be taken by the US government to convert debt into equity to produce a more stable environment, Nassim Taleb, author of “The Black Swan,” told CNBC Thursday.
See the full interview with Nassim Taleb here.
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JBI
How many of these didn’t they try in the thirties? or the 1870’s?
Bernanke’s Deflation Preventing Scorecard
In case no one is keeping track, Bernanke has now fired every bullet from his 2002 “helicopter drop” speech Deflation: Making Sure “It” Doesn’t Happen Here.
Bernanke’s Scorecard
Here is Bernanke’s roadmap, and a “point-by-point” list from that speech.
1. Reduce nominal interest rate to zero. Check. That didn’t work…
2. Increase the number of dollars in circulation, or credibly threaten to do so. Check. That didn’t work…
3. Expand the scale of asset purchases or, possibly, expand the menu of assets it buys. Check & check. That didn’t work…
4. Make low-interest-rate loans to banks. Check. That didn’t work…
5. Cooperate with fiscal authorities to inject more money. Check. That didn’t work…
6. Lower rates further out along the Treasury term structure. Check. That didn’t work…
7. Commit to holding the overnight rate at zero for some specified period. Check. That didn’t work…
8. Begin announcing explicit ceilings for yields on longer-maturity Treasury debt (bonds maturing within the next two years); enforce interest-rate ceilings by committing to make unlimited purchases of securities at prices consistent with the targeted yields. Check, and check. That didn’t work…
9. If that proves insufficient, cap yields of Treasury securities at still longer maturities, say three to six years. Check (they’re buying out to 7 years right now.) That didn’t work…
10. Use its existing authority to operate in the markets for agency debt. Check (in fact, they “own” the agency debt market!) That didn’t work…
11. Influence yields on privately issued securities. (Note: the Fed used to be restricted in doing that, but not anymore.) Check. That didn’t work…
12. Offer fixed-term loans to banks at low or zero interest, with a wide range of private assets deemed eligible as collateral (…Well, I’m still waiting for them to accept bellybutton lint & Beanie Babies, but I’m sure my patience will be rewarded. Besides their “mark-to-maturity” offers will be more than enticing!) Anyway… Check. That didn’t work…
13. Buy foreign government debt (and although Ben didn’t specifically mention it, let’s not forget those dollar swaps with foreign nations.) Check. That didn’t work…
Bernanke has failed. “It” has happened. The proof is irrefutable as detailed in Humpty Dumpty On Inflation and Fiat World Mathematical Model.
What now Ben? More of the same stuff that failed miserably before, only on a grander scale?
Canaccord Adams Junior Mining Update
FGC … some analysis of WTM within.
grin @ 20:01 pm.
I know, bud. I have your posts saved. You didn’t think my mama raised a fool, did ya? 
Cheers!!!!!
JBI
Just_Buy_It @ 19:28 pm
That last chart is what I have been looking at since before the breakout 2 yrs ago,I said at the time that it was the ihs that caused the momentum from 637 to 1033. Actually said 1021 per the chart would be the high as we had no gold stock enthusiasm going into it, what a dissapointment.
Anyways I see 1206ish as the po as since 2 yrs ago. but who knows.
how long before this spreads to the good old USA???
Sweden Cuts Deposit Rate to NEGATIVE .25%
There has been a lot of ludicrous recommendations recently to combat deflation by making deposit rates negative. I did not think any central bank would be dumb enough to try it. I thought wrong.
Today, Riksbank, Sweeden’s central bank cut the deposit rate to -0.25% effectively charging savers interest on deposited money.
DATE 2/07/2009
The weak development of the economy requires a somewhat more expansionary monetary policy. The Executive Board of the Riksbank has therefore decided to cut the repo rate by 0.25 of a percentage point to 0.25 per cent.Deep economic downturn
Economic activity abroad is very weak and this hits Sweden hard. Exports have fallen substantially and the situation on the labour market is continuing to deteriorate rapidly. The information received in recent months points to the economic downturn in 2009 being somewhat deeper than the Riksbank forecast in April.
Deposit Rate
The decision on the repo rate will apply with effect from Wednesday, 8 July. The deposit rate is at the same time cut to -0.25 per cent and the lending rate to 0.75 per cent.
Sweden Attempts To Boost Lending
Please consider Sweden cuts rates to new low, offers banks loans.
Sweden’s Riksbank cut interest rates to a fresh record low on Thursday and offered banks 100 billion crowns ($13.2 billion) to boost lending as it strives to reverse the country’s worst recession since the 1940s.
The central bank lowered its key interest rate by 25 basis points to 0.25 percent in a surprise move, putting official rates at their lowest since records began in 1907, and said it expected rates to remain at that level until late 2010.
“It’s a double whammy, or even a triple whammy,” said Roger Josefsson at Danske Markets.
“The deposit rates are actually negative now. In some sense they are creating a money machine for banks. You can lend all you want, but don’t put that back into the central bank.”
Sweden was plunged into recession late last year as the global financial crisis pulled the plug on market demand, leaving firms such as world number two truck firm Volvo scrambling to cut costs and shed jobs.
The central bank forecast the economy will contract 5.4 percent this year and return to tepid growth of 1.4 percent next year.
Broadening its arsenal of policy measures, the Riksbank said it would offer banks loans at a fixed rate as was done recently by the European Central Bank, although it offered unlimited amounts.
The Riksbank will offer 100 billion crowns of fixed interest loans with a maturity of 12 months. It said supplementary measures would ensure monetary policy had the intended effect.
“This should contribute to lower funding costs for the banks and lower interest rates for companies and households,” it said.
Deputy Central Bank Governor Barbro Wickman-Parak told a news conference that offering loans at fixed rates to the banks was judged more suitable than purchasing government or mortgage-backed bonds, at least for now.
“Sweden has a very bank-based system,” she said.
“Company borrowing, in contrast to the United States, is carried out through the banks and in light of that it is reasonable for us to look first to moving through the banking system when we want to ease credits.”
The ECB ended up pouring 442 billion euros ($622 billion) of funds into money markets in its first such operation with a term as long as one year, pushing some bank-to-bank borrowing costs to new record lows.
Punishing Savers
The global economy is in a mess because of the lack of savings not because of an excess of it. People spent money they did not have, pushing asset prices to ridiculous levels. Banks, in belief that asset prices would keep rising exponentially, increased leverage. Now consumers everywhere are retrenching in the wake of the collapse, a much needed phenomenon.
In light of the above, punishing savers with negative deposit rates is the height of stupidity.
It would be fitting if there was an immediate run on deposits. And if that happens what will Sweden do? Halt deposits? Sweden risks (and deserves) a currency collapse and bank runs for this insane effort. Look for capital flight in Sweden.
We should all be rooting for the demise of Sweden lest Bernanke or some other Central Bank clowns try the same thing. The risk is that Sweden does not immediately suffer for this stupidity and that Bernanke tries to do the same thing.
One thing is certain. This is eventually going to blow sky high. Let’s hope it does before Bernanke gets the same brilliant idea.
By the way, in case you missed it, here is Bernanke’s Deflation Preventing Scorecard.
Mike “Mish” Shedlock
“Next Stop for Gold is $2,100 not $1,300″
“Practically everyone in the gold community has mentioned the inverse head and shoulders pattern on the gold chart and the corresponding $1,300 target. The target is correct but the interpretation of the pattern is not entirely correct. That target comes from the pattern being a reversal pattern but in the current case of Gold it is not a reversal pattern. There is no downtrend it is reversing from. However, the pattern can actually function as a continuation pattern as John Murphy explains in his book, Technical Analysis of the Financial Markets:
* * * “In the previous chapter, we treated the head and shoulders pattern at some length and described it as the best known and most trustworthy of all reversal patterns. The head and shoulders pattern can sometimes appear as a continuation instead of reversal pattern. In the continuation head and shoulders variety, prices trace out a pattern except that the middle trough in an uptrend tends to be lower than either of the two shoulders.” * * *
Below is a picture from the book:
The pattern is a continuation pattern because it ensures the continuation of the prior trend. Continuation patterns themselves don’t produce price targets. In a continuation pattern like a flag or pennant, you usually take the length of the preceding move and add it to the top of the flag/pennant to get a price target. Point being, it’s possible for $1,300 to be a target but it’s not the level that we should be focusing on.
Cup and Handle Pattern
Gold has formed sort of a cup and handle pattern more than a few times. The first example is from 1999 to 2003 and the second example is from 1996 to 2004. Please note the four steps of the pattern that occurred in both cases. The pattern can have a simple target and a logarithmic target. I find that the logarithmic target is achieved in the long-term patterns. The target is calculated by taking the percent distance from the bottom of the cup to the top and then adding it to the top. (Example- 200 to 400 is 100%, so the target is 800).
Far more important than the inverse head and shoulders, is this mega long-term cup and handle pattern. It has completed the three steps and a move above $1,000/oz would confirm that the 4th step (impulsive advance) is underway. Using $730 and a low of $255, I calculate a logarithmic price target of $2,089. In the previous two patterns, which evolved over eight years and four years, it took less than a year in both cases for the target to be reached (following the third step).
At present Gold is struggling between $920 and $940. There is better than a 50-50 chance that the US Dollar rebounds, which would likely send Gold to support at $880.”
by Jordan Roy-Byrne
Trendsman.com
July 2, 2009
Borrowed from financialsense.com/
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Not sure I agree with that last paragraph, but we’ll see, huh?
JBI
prime mortgage delinquency
Delinquencies on prime mortgages soared in the first quarter of this year. Delinquency rates on prime mortgages, the least risky category, were 661,914, a jump from 250,986 a year earlier. Two thirds of all mortgages in the U.S. are prime mortgages, so any percentage increase in delinquencies represents a huge absolute number of delinquent mortgages. Here is more proof that banks are in for a tough few years as they must monitor their loan portfolios even closer and suffer write-offs. If prime mortgages start going south in a big way, look for banks to stiffen lending standards even more. Either way, this will have a negative impact on their bottom line numbers
Dear Mr Norcini, (fg 19:04)
I’m glad you appreciate the commonsense in having money earn 2% (even a bit less, but thrice as much in Oz) for a peaceful night’s sleep. Much better than having to worry about losing 50% on the stock market - or even 3% just today.
Gold Market Commentary From Trader Dan
Posted: Jul 02 2009 By: Dan Norcini
Dear CIGAs,
Were it not for the fact that such serious sums of money are involved, it would be comical watching the happenings in our idiotic markets these days. Here we get the worst unemployment numbers (9.5%) since August 1983 (and that is just the official number, which is bogus), and traders flee stocks but for some odd reason rush into the “safety” of the US Dollar and that of Japan’s Yen, which as we all surely know by now is the strongest economy in the world at the current time! Nothing like the comfort of knowing that you are getting yields of less than 2% on your money to let you sleep well at night. Yeah, sure…
I really do wonder what historians commenting on this period at some point in the future are going to write when they attempt to explain the madness in rational terms. All I know is that we will have lived through this and will be able to say the entire global investment community lost their collective minds for a season.
Suffice it to say for now that once the stinker of a jobs report came out this morning, the deflationist psychology took over once again and the inflationist psychology went out the window – once again. Back and forth, up and down, in and out and around we go over and over and over again. Like I have been writing all week long – why bother even watching this crap any more. It is a waste of constructive time. Monday morning of next week we will probably be sitting here watching the exact opposite of what we saw take place today and remarking how the “green shoots” are thriving and well after having another spray tank full of Round Up applied to them today.
Of course, once the “safety” of the Dollar was the play of the day, and once crude oil got thumped, down went gold after yesterday’s very strong performance and down went the HUI. Yawn – someone wake me up in September.
Open interest in Comex gold continues moribund. That too is characteristic of a market stuck in a rut where there is no clear consensus.
Gold will need to close above $950 to get anything going on the top side.
Other than that there is really not much to say about any of this – deflation is battling inflation and until one side gets a clear advantage and dethrones the thinking in the other camp, we are going to see no trends, no orderly markets, no sanity and nothing but idiotic volatility and casino-like markets.
The markets have been completely taken over by the day trading, one minute bar chart geeks who wouldn’t know a pork belly from a brisket cut or a grain of wheat from a cocoa pod but who are enamored with lots of squiggly lines and dream of coming back from their bathroom break and discovering that they have traded in and out of the same market 15 times during that period and made $100,000 on each turn…
The rest of us normal people who actually have lives to lead and families to raise, etc. are better served keeping a longer term perspective and understanding that the Dollar’s days of supremacy are forever over and that the rise of the BRIC nations means that America is beginning to go the same path as the once mighty and proud British Empire. Its leaders too spent it into oblivion and destroyed its currency in the process.
China is slowly and surely taking steps to make the yuan more readily adaptable to taking a larger role in international trade while Brazil and India also begin to flex their economic muscles and demand a larger role on the international stage.
Quo Vadis America?
Three more banks fail bringing year’s total to 51
MARKET PULSE
Jul 2, 2009, 6:29 p.m. EST
SAN FRANCISCO (MarketWatch) — The Federal Deposit Insurance Corp. added three more failed banks to their tally late Thursday, bringing the day’s total to six, and the year’s total to 51. First National Bank of Danville of Danville, Ill., will have its deposits assumed by First Financial Bank of Terre Haute, Ind., which will also purchase $148 million in assets. As of April 30, First National had about $147 million in deposits. Elizabeth State Bank of Elizabeth, Ill. also closed with total deposits of about $50.4 million. Galena State Bank and Trust of Galena, Ill. will assume all of the deposits and purchase about $52.3 million in assets. The failures bring the total number of Illinois bank failures to 11 for the year. Dallas-based Millennium State Bank of Texas failed, the FDIC said, making it the first Texas bank of the year to fail. State Bank of Texas in Irving, Texas, will assume deposits of about $115 million and buy assets of about $118 million. The failures bring the total number of banks that have failed since the beginning of the recession to 76.
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JBI
