Steve Keen On Parasitic Bankers, Deluded Economists, and Why “We Are Already In The Second Great Depression”

Everything that 'deluded' orthodox economists have done so far has been designed to aid the creditors (who remain the problem) while Steve Keen, the most familiar face of the non-orthodox economists, sees the only solution to this crisis as aiding the debtors. His interview with BBC’s HardTalk this week covers a great deal of ground from modern debt jubilees (and how they should be structured), the Tea-Party and Occupy movements (and his growing fear of historically repeating the endgames of previous economic and social disenfranchisements), and the parasitic nature of our existing financial sector.

He is unequivocal on the outcome of the status quo, as he has been for many years, citing politicians as reactors not leaders with the view that the youth movements we are seeing will force change of leadership to enable non-orthodox solutions to our simple problem – too much private debt. “Write off the private debts, nationalize the banking system, and start all over again” is his starting point but his ideas on implementation warrant some attention as he attempts to promote creative instability and reduce the destructive instabilities of capitalism – recognizing that our world is not in equilibrium as every Keynesian economist would believe but inherently cyclical and unstable.

best show on TV

futures are live folks!

tonight's moves are: flippin gold on the come up, smackin euros & auzzies down on jumps.

take that to bloomberg!!

MF Global

From their website: "MF Global is a leader in delivering comprehensive access to the global markets for commodities, equities, fixed income, foreign exchange and listed futures and options. We connect clients to more than 70 financial exchanges around the world – in fact, we’re a leading trader by volume on most of the largest derivatives exchanges as well as an active broker-dealer in the over-the-counter markets"

Oh they're a leader alright.. leader to the bottom!

Like liberty, gold never stays where it is undervalued

'Like liberty, gold never stays where it is undervalued.'
Speech to the US Senate - 1/28/1878(J.S Morrill, US Representative and Senator 1810-1898)

Time for a break: you be the judge

Today's News: Europe Wakes Up and Eats Metals for Breakfast

Around 3:45 AM you'll see the bollinger bands just take off. Welcome to the wonderful world of futures.

The European Financial Crisis In One Graphic: The Dominoes Of Debt

The dominoes of debt are toppling in Europe, and there is no way to stop the forces of financial gravity.

After 19 months of denial, propaganda and phony fixes, the political and finance leaders of the European Union are claiming a "comprehensive solution" will be presented by Wednesday, October 26-- or maybe by the G20 meeting on November 3, or maybe on Christmas, when Santa Claus delivers the gift global markets are demanding: a "solution" that actually pencils out and that forces monumental writeoffs of debt and thus equally monumental losses on European banks and bondholders.

Cooperman ‘Wouldn’t Be Caught Dead’ Owning U.S. Treasuries

“I wouldn’t be caught dead owning a U.S. government bond,” he said today during a presentation at the Value Investing Congress in New York. “Not because I have a problem with the credit. I have a problem with paying 35 percent on the 2 percent to Uncle Sam, and then have a 2 to 3 percent rate of inflation,” he said. “It’s confiscation of my capital. I think I’m too smart to play that game.”

http://www.businessweek.com/news/2011-10-18/cooperman-wouldn-t-be-caught-dead-owning-u-s-treasuries.html

JP Morgan Silver Short Rumors

fast forward 5:25 into the video for the truth!

US to Experience Stagflation Worse Than 1970s: Jim Rogers

Now that we already had one notorious bond bear in the house with a late afternoon appearance by Bill Gross, who in a very polite way, apologized and said that while he may have been wrong in the short-term, he will be proven correct eventually, it is now time for the second uber-bond bear to make himself heard. In a CNBC interview with Jim Rogers, the former Quantum Fund co-founder, who back in July said he was had shorted US Treasurys, exhibited absolutely no remorse, instead reiterated a 100% conviction in his "bond short" call: "Rogers said when there is a bubble, such as the one being experienced in U.S. Treasurys, prices could go up for long periods of time. Bill Gross of Pimco, who also had a bearish view on Treasurys, threw in the towel earlier this year. But Rogers is sticking to his opinion that Treasurys will eventually fall. "Bernanke is obviously backing the market again and the Federal Reserve has more money than most of us - so they can drive interest rates down again. As I say they are making the bubble worse." The reality is that while Bill Gross has to satisfy LPs with monthly and quarterly performance statements (preferably showing a + sign instead of a -), the retired and independently wealthy Rogers has the luxury of time. And hence the core paradox at the heart of modern capital market trading: most traders who trade with other people's money end up following the crowd no matter how wrong the crowd is, as any substantial deviation from the benchmark will lead to a loss of capital (see Michael Burry) even if in the longer-term the thesis is proven not only right, but massively right. Alas, this means most have ultra-short term horizons, which works perfectly to Bernanke's advantage as he keeps on making event horizons shorter and shorter, in the process killing off any bond bears which unlike Rogers can afford to wait, and wait, and wait.
On whether the US is becoming a deflationary Japanese-style basket case:

"A difference is when Japan did that they were the largest creditor nation in the world, America is the largest debtor nation - not just in the world - but in the history of the world and the U.S. dollar has been - and is the world's reserve currency. So there are some factors that might not keep the interest rate down in the U.S.

Ok, so no deflation. What then?

The U.S. economy is likely to experience a period of stagflation worse than the 1970s, which would cause bond yields to spike, commodity bull Jim Rogers told CNBC on Friday in Singapore. Rogers said governments were lying about the inflation problem and the recent rally in Treasurys was a bubble.

"As the inflation numbers get worse and as governments print more money and as governments have to issue many, many more bonds - somewhere along the line we get to the point when (bond prices) go down."

Between 1974 and 1978 average inflation in the U.S. was at 8 percent, while unemployment hit a peak of 9 percent in May 1975. Currently, unemployment is at 9.1 percent while CPI is at 3.8 percent.

"This time is never different" and why the mother of all stagflations is coming soon:

Rogers believes inflation will get much worse this time because, he
said, in the 1970s only the Fed was printing money, whereas now many
global central banks have been easing monetary policy.

So yes: he will be right eventually... But what about in the interim?

"Bernanke is obviously backing the market again and the Federal Reserve has more money than most of us - so they can drive interest rates down again. As I say they are making the bubble worse."

For now though Rogers is playing it safe and avoiding bonds. Instead, he's betting on stagflation by being long commodities and currencies (such as the Chinese yuan) and shorting stocks.

Rogers even has some career advice for up and coming bond mavens:

"I wouldn't advise anybody to buy bonds, I would advise you to sell bonds," he said. "If I were a bond portfolio manager, I would get another job."

Ok, well, make that anti advice.
As to where the money will be made...

"In the 70s you didn't make much money in stocks, you made fortunes owning commodities," Rogers added.

http://www.cnbc.com/id/44900450

Americans have some of the quickest commutes in the developed world

http://www.washingtonpost.com/blogs/ezra-klein/post/americans-have-some-of-the-quickest-commutes-in-the-developed-world/2011/10/14/gIQANVzRmL_blog.html

"We didn't cause this crisis"

Watching BBC News interview a Greek protester. Here's what he's got to say:

"We didn't cause this crisis. Why are they punishing us with these austerity measures? Now we have to live with less and pay more taxes. Why? The financial institutions in Greece caused this crisis. Not the people"

Volatility on Gold & Silver at 30 year highs

I would advise extreme caution to anyone trading Gold/Silver right now. Volatility has peaked in recent weeks at records not seen since the 80's. Silver has been trading in a $5 range (5000 ticks) since last night. Gold's been trading in a $130 range (1300 ticks). I'M not even messing with futures right now. I was tempted to sell a Gold contract when it dropped to $1700 last week but because there's so much damn volatility and uncertainty in the marketplace, Gold could've easily risen back to the $1800's today.

For the long-term investors, you should be buying these dips. Investors sitting on the sidelines a month ago were dreaming of a sell off. Well now it's here; take advantage by buying the physical bullion and not just paper contracts.

So here's my take on the recent selloff. I don't think this was a correction, I don't think there was a manipulation, I don't think that metals were overbought, and I don't think the metals are now in an intermediate bear market. I've been thinking of the absolute worst case scenario for every human being on the planet but I didn't want to believe it until now, and that's a liquidity crisis like the one we had 3 years ago. During the last liquidity crisis everything tanked. It was a race to 0. No financial firm wants to deal with counter party risk at all and that includes futures contracts on Gold/Silver, not physical bullion but the paper contracts that determine their everyday spot prices. You have to remember that everyone trading futures are trading on margin. So in the event of a liquidity crisis, in essence a run on all assets, the major players will all want to liquidate. Example: GS and UBS are both traders in the Gold pit. Everyday they play against each other on the trading floor. GS is short one day and UBS is long another, vice-versa vice-versa. They've been doing business with each other for years. All of a sudden the news (rumors) comes out that UBS is insolvent; GS happens to be holding paper contracts from UBS at the time. GS doesn't want to wait or risk to see if UBS really has the cash to settle up on their contracts, therefore GS simply liquidates (sells) all of the Gold positions they've been holding. THAT'S how you see a $400 correction in Gold in a matter of 2 weeks. I believe this is taking place now amongst firms all over the world. Numbers released from Greece/Europe keep getting worse, week after week. They are prepping for a freeze/default in the marketplace but have no idea when/where the breakdown will occur but they speculate it will happen soon. I wish these clowns in Europe would just figure out a way to tell the market what they plan to do already. The sooner they restore confidence to the marketplace, the sooner Gold will start treading back to $2000/oz.

New Study – Traders are worse than Psychopaths

I only turn into a psychopath when someone steps on my shoes.

The University in St. Gallen, Switzerland (how appropriate) has come out with a study that compares traders with psychopaths. The surprising result was that not only do traders act like psychos, they’re worse. I’m not surprised at this at all. From NZZ:

The study reviewed the direct comparison of results with an existing study of 24 psychopaths in German high-security hospitals and a control group of 27 "normal" people.

The “normal people” that is referred to are 27 traders. Stock guys, FX/commodities traders and derivative types were the “normal' people that were stacked up against the actual crazies in the German nut house.

Even the experts were surprised by the result. They attest to the stock market professionals with a penchant for immense destruction.

The performance of the 27 dealers is even worse than the psychopaths.

"It's like beating one of the neighbor’s expensive cars with a baseball bat with the sole objective of owning the most beautiful car in the neighborhood."

The Federal Reserve Plans To Identify “Key Bloggers” And Monitor Billions Of Conversations About The Fed On Facebook, Twitter, Forums and Blogs

One word, unfu**ingbelievable!

The Federal Reserve wants to know what you are saying about it.  In fact, the Federal Reserve has announced plans to identify "key bloggers" and to monitor "billions of conversations" about the Fed on Facebook, Twitter, forums and blogs.  This is yet another sign that the alternative media is having a dramatic impact.  As first reported on Zero Hedge, the Federal Reserve Bank of New York has issued a "Request for Proposal" to suppliers who may be interested in participating in the development of a "Sentiment Analysis And Social Media Monitoring Solution".  In other words, the Federal Reserve wants to develop a highly sophisticated system that will gather everything that you and I say about the Federal Reserve on the Internet and that will analyze what our feelings about the Fed are.  Obviously, any "positive" feelings about the Fed would not be a problem.  What they really want to do is to gather information on everyone that views the Federal Reserve negatively.  It is unclear how they plan to use this information once they have it, but considering how many alternative media sources have been shut down lately, this is obviously a very troubling sign.

http://theeconomiccollapseblog.com/archives/the-federal-reserve-plans-to-identify-key-bloggers-and-monitor-billions-of-conversations-about-the-fed-on-facebook-twitter-forums-and-blogs

KEY VS BAC

Anyone ever heard of KeyCorp? Well neither have I but Bank of America is 25 cents away from KeyCorp's stock price ($5.79).

KeyCorp has a market cap of 5.5 billion. Bank of America? 62 billion.

A freshman year business student can look at BAC's financials and point out how this company along with its stock price is just toast. I honestly think the only reason it's not at $2 a share yet is because BAC insiders along with other big institutions are buying at these levels. Just look at the daily volume for BAC. Almost half a billion shares are traded everyday and the stock's range somedays is only 10-20 cents. What does that mean? There's a huge war between investors who are short BAC and long BAC.

For the record, I started shorting BAC when it was slightly under $10 a share. I sold it all the way down to $7.50 and then I covered. Then I shorted it again when it popped above $8 and covered around the low $7s. I'm waiting for another pathetic positive PR report so I can short it again. Hopefully this trade will keep paying for my lunches every month.

Recognize Change And React Accordingly

Those who can not adjust to change will be swept aside by it. Those who recognize change and react accordingly will benefit.

They're not saving the stock market this time..

Markets closed bloody today. The "academics" are running out of ideas. Bush stimulus, fail. Obama stimulus, fail. QE1, fail. QE2, epic fail (9 months of gains lost in <1 month). The new scheme by the FED will fail miserably as well. Who actually believe investors will let the US borrow at 3% 30 years from now? lol

http://www.bloomberg.com/news/2011-09-21/fed-to-shift-treasury-holdings-to-longer-term-securities-in-stimulus-step.html

Bullion Vaults Run Out of Space on Gold Rally

“Gold is simply a mirror of economic and political failure, of all the uncertainties that make people worry,” said Gerry Schubert, the head of precious metals at Emirates NBD in Dubai, who has traded the metal since 1979. “If you have $50 million, what would you do with that money? You buy gold. Hedge funds, central banks, sovereign funds: all are buying gold.”

http://www.bloomberg.com/news/2011-09-21/bullion-vaults-running-out-of-space-as-gold-rally-accelerates-commodities.html

EURUSD Opens 100 Pips Lower On Latest Round Of Greek Default Fears

Same Sunday, Different Day. As the FX market opens, the accrued rumors from this weekend, once again focusing squarely on Greece have come to a fore. The immediate result: a EURUSD which is down 100 pips from the Friday close.

Rogue trader suspected in UBS $2 billion loss

I'm willing to bet he was trading Greek bonds. 

http://www.bloomberg.com/news/2011-09-15/ubs-asked-police-to-arrest-adoboli-before-contacting-u-k-fsa-prosecutors.html

Europe on Sale

The debt crisis has one silver lining: Falling prices for vacation homes in Greece, Spain, Portugal and even Italy. 

http://online.wsj.com/article/SB10001424053111904836104576556741178121816.html?mod=googlenews_wsj

10 years later, and the best performing asset is...

For all those late to the game and to those that will continue to be late to the game, I present you...

Musharraf vows return to Pakistan

http://www.bbc.co.uk/news/world-south-asia-14857454

Gold is not a bubble, the cash in your wallet is

Gold is currently in a bull market. Adjusted for inflation, the price of gold should be around $2500/oz, and those are the government's numbers. The debt ceiling legislation that Congress recently signed off on priced gold at $2200/oz (at $15 trillion)

Anyone who tells you that gold is a bubble is simply not invested in gold and/or doesn't have a clue about markets & financial history. Those who have invested in gold since 1999 have enjoyed a 25% annual compound return that beats any asset class in the world, including:

• US Equities (Dow, S&P, Nasdaq)
• Chinese Equities
• Emerging Market Equities
• US Bonds
• Global Bonds
• Municipal Bonds
• US & Global Real Estate
• Currencies

Gold is just common sense. It's main competitor is the Federal Reserve who even its Chairman has stated publicly that the goal is to devalue/debase dollars. When you put all your cash in bank accounts you're essentially positioning yourself as being: Long US Treasuries and Shorting Gold (in addition your bank cuts your deposit by 90% as they're allowed to get away with this using current Fractional Reserve laws).

At the end of the day the market will determine which holds more purchasing power and gold has won the debate. Critics of gold will continue to cast doubt and jealousy as the price of gold soars to new historic highs this decade.

ETFs that short financials

US Futures are trading heavily down right now. Tomorrow's a great day to short financials in particular. HSBC and Barclays are getting nailed right now due to their exposure to Greek debt. Expect the bloodbath to continue in US Markets tomorrow.

SKF - Leveraged 2:1

FAZ - Leveraged 3:1

The most important thing to remember when trading these is to NOT hold them long-term. These are to be traded short-term. Unless you think the global financial system is on the virge of collapse, I do not recommend holding these in your portfolio for more than a few days to a week at the most.

Again the idea with these leveraged ETFs are to get in, get out.

September's the month to short Europe

It's not too late to get short in Europe. Next week is gearing up to a week of horrible bad news for the Euro, hence the 928 pip decline in /6E beginning August 30.

The chart plots a pretty ugly trend that's about to occur which I speculated back in May when the Euro topped out at 1.49

Definition of a commodity

A physical substance, such as food, grains, and metals, which is interchangeable with another product of the same type, and which investors buy or sell, usually through futures contracts. The price of the commodity is subject to supply and demand. Risk is actually the reason exchange trading of the basic agricultural products began. For example, a miner risks the cost of producing a product ready for market at sometime in the future because he doesn't know what the selling price will be.

More generally, a product which trades on a commodity exchange; this would also include foreign currencies and financial instruments and indexes.