"End of Wall Street Boom" - Must-read history

[2012 Countdown]

EU rescue costs start to threaten Germany itself
The escalating debt crisis on the eurozone periphery is starting to contaminate the creditworthiness of Germany and the core states of monetary union.
By Ambrose Evans-Pritchard 6:00AM GMT 26 Nov 2010

Credit default swaps (CDS) measuring risk on German, French and Dutch bonds have surged over recent days, rising significantly above the levels of non-EMU states in Scandinavia.
"Germany cannot keep paying for bail-outs without going bankrupt itself," said Professor Wilhelm Hankel, of Frankfurt University. "This is frightening people. You cannot find a bank safe deposit box in Germany because every single one has already been taken and stuffed with gold and silver. It is like an underground Switzerland within our borders. People have terrible memories of 1948 and 1923 when they lost their savings." The refrain was picked up this week by German finance minister Wolfgang Schäuble. "We're not swimming in money, we're drowning in debts," he told the Bundestag.

While Germany's public and private debt is not extreme, it is very high for a country on the cusp of an acute ageing crisis. Adjusted for demographics, Germany is already one of the most indebted nations in the world.
Reports that EU officials are hatching plans to double the size of EU's €440bn (£373bn) rescue mechanism have inevitably caused outrage in Germany. Brussels has denied the claims, but the story has refused to die precisely because markets know the European Financial Stability Facility (EFSF) cannot cope with the all too possible event of a triple bail-out for Ireland, Portugal and Spain.
EU leaders hoped this moment would never come when they launched their "shock and awe" fund last May. The pledge alone was supposed to be enough. But EU proposals in late October for creditor "haircuts" have set off capital flight, or a "buyers' strike" in the words of Klaus Regling, head of the EFSF.
Those at the coal-face of the bond markets are certain Portugal will need a rescue. Spain is in danger as yields on 10-year bonds punch to a post-EMU record of 5.2pc.
Axel Weber, Bundesbank chief, seemed to concede this week that Portugal and Spain would need bail-outs when he said that EMU governments may have to put up more money to bolster the fund. "€750bn should be enough. If not, we could increase it. The governments will do what is necessary," he said.
Whether governments will, in fact, write a fresh cheque is open to question. Chancellor Angela Merkel would risk popular fury if she had to raise fresh funds for eurozone debtors at a time of welfare cuts in Germany. She faces a string of regional elections where her Christian Democrats are struggling.
Mr Weber rowed back on Thursday saying that a "worst-case scenario" of triple bail-outs would require a €140bn top-up for the fund. This assurance is unlikely to soothe investors already wondering how Italy could avoid contagion in such circumstances.
"Italy is in a lot of pain," said Stefano di Domizio, from Lombard Street Research. "Bond yields have been going up 10 basis points a day and spreads are now the highest since the launch of EMU. We're talking about €2 trillion of debt so Rome has to tap the market often, and that is the problem."
The great question is at what point Germany concludes that it cannot bear the mounting burden any longer. "I am worried that Germany's authorities are slowly losing sight of the European common good," said Jean-Claude Juncker, chair of Eurogroup finance ministers.
Europe's fate may be decided soon by the German constitutional court as it rules on a clutch of cases challenging the legality of the Greek bail-out, the EFSF machinery, and ECB bond purchases.
"There has been a clear violation of the law and no judge can ignore that," said Prof Hankel, a co-author of one of the complaints. "I am convinced the court will forbid future payments."
If he is right – we may learn in February – the EU debt crisis will take a dramatic new turn.

http://www.telegraph.co.uk/finance/fina ... tself.html

[JackRiddler]

viewtopic.php?f=8&t=30355

"Many on Wall Street have argued that there was no criminality in this financial crisis, merely a collective delirium brought about by soaring profits and mistaken assumptions about risks. I and others have disagreed, but

so far have waited in vain for the sort of prosecutions that we predicted would come.

We have seen very little in the way of senior officer or boardroom level prosecutions of the people on Wall Street who brought this country to the brink of financial ruin. Why is that?"

This was the question that Senator Ted Kaufman from the highly pro-business state of Delaware, America's own on-shore tax haven, asked US prosecutors and regulators in September.

That same question is being asked today in Ireland as it awaits the price for a 90 billion euro bailout. It has continued to be asked in Britain, Iceland, Greece and around the world - especially as bankers cheerfully return to bonanza bonus business as usual.

More than three years after the financial crisis began, none of those responsible has been personally punished, only the taxpayer. The bankers most responsible, even while in some cases no longer occupying their plush executive suites, still enjoy the enviable country club life of Reilly, if bankrupt or unemployable.

Sean Fitzpatrick, former chairman of the taxpayer-rescued Anglo Irish bank, was arrested in March, but not charged, over "financial irregularities" - such as, perhaps, his 122m in concealed loans of which 70m cannot now be repaid. The only other banker arrested over the Kamikaze property-lending policies of Anglo and Allied Irish Banks is former Anglo finance director William McAteer. Former chief executive David Drumm would probably be arrested if he returned from the US, where he has filed for bankruptcy owing Anglo 8m.

None of the "golden circle" of ten unnamed "long-term clients", mostly property developers (who else), who participated in the secret 2008 Anglo share support operation has been arrested for their role - financed with 451m in Anglo loans secured 75% on the now worthless 10% stake. Quite right too, as they will probably not be charged over this particular public and stock market deception, perhaps because regulators knew some if not all of the details. And those in the "golden circle" were known to government ministers, and everyone wanted Anglo to survive.

That same patriotic excuse may also save the directors of Irish Life& Permanent for helping to inflate Anglo's balance sheet with 7bn of "window dressing" deposits more virtual than real.

Irish company law may also create problems with a prosecution over the Fitzpatrick loans, as they may not have had to be disclosed to shareholders - as it was a bank and so normal business! Also there appears to be some evidence that they were not kept secret from Anglo's auditors Ernst & Young. Although who knew what there may also be an issue.

Whether Fitzpatrick or anyone else will be charged and convicted for breaking the Irish banking system remains to be seen. Despite the public rage, the political elite have appeared to want to limit the damage to their former friends. But after the humiliation of surrendering financial policy to the IMF and EU some scapegoats may now be politically unavoidable.

ETA: that's all from the latest Private Eye.

[JackRiddler]

.

I remembered this interesting exchange from May 2010 at
viewtopic.php?f=8&t=28269

Copying here especially for nathan28's part.

Questions about the stock market

What does it mean when some yahoo says, "key support levels?" The market is often breaking or testing those levels. I have the vague idea that this has something to do with 'technical analysis' which is derived from augury, but do these 'support levels' have any logic behind them? Do they represent something real? Those 'technical analysts' like to draw neat looking things on charts of the stock market but I suspect they're insane.

What is a handle? The same yahoo will say, "the S&P is down five handles today!" Is it like a klick? Is the S&P five klicks up shit creek?

"Key support levels" and all the different math models of the market that look only at how the numbers developed and behaved in the past without regard to empirical factors are examples of group think reflecting on itself.

nathan 28: Fundamental vs. Technical Analysis

Don't listen to all those doomers. The S&P has key support levels in the high zeros. Buy now.

"Support" is a price level a stock has repeatedly fallen to then risen from, so that you could draw a line at that price level and it would look like the chart bounces off it. "Resistance"--which you never hear mentioned on BuyNowSPAN--is the opposite, a price-point a stock can't seem to get above. These levels can be a little fuzzy. In theory, the longer or older the support/resistance level is, the more dramatic the movement should be once it is broken. In theory. Like right now Dow 10,000 or so is both major support and also going to be called "psychological" support, too.

"Five handles" means the dude has been drinking with Larry Kudlow again.

What this means in the real world is that a lot of people are buying and selling at those points--IOW, a lot of people are getting their money chewed up by churning prices, and the brokers are rolling in commissions. There's a saying somewhere that a stock only moves past support or resistance when all the short-term dumb money--i.e., retail players, small funds, investing clubs, other people w/out bloomberg machines--has been spent. There's a corollary (?) that follows from that, that a market or stock will only turn around when all the dumb money is fully invested in the wrong positions and that the actual market makers will create historic highs or lows to ensure this happens.

Support is a term from "technical" analysis, which is basically a bunch of horseshit--but oddly enough, so is the only other form of stock analysis, "fundamental" analysis. Technical analysis looks at price charts and volume, IOW, it's staring at numbers and charts with your autism glasses on. There's some specious stuff about fibonacci numbers and "waves" etc. that claim to be tied into the natural mathematical patterns of social behavior or whatever but hey, sometimes I like to take stimulants with my weed, too. Fundamentals look to "fundamentals," shit (that's what it is) like price (of the shares taken in gross)-to-earnings, profit levels, demand, future availability, social trends etc. Technical analysis doesn't pay attention to anything but numbers.

An example of fundamental analysis would be, say, assuming that a BP well was going to blow the fuck up tomorrow and then shorting ("borrowing" the shares to earn money from the price decline when you "return" them) the stock. Or looking at BP's balance sheet, determining that they're still profitable and that the price will eventually return to higher levels, and buying it to sell later. Technical analysis would be waiting for BP's price to hit a short-term low, shorting it, then selling it when it hit a lower intermediate term low, regardless of whether they clean up the spill tomorrow and suddenly get a no-bid contract on all the remaining oil on the globe.

Most of the CNBC "approach" you hear on that channel is a nonsense mix of sentiment, Pollyana-ism, guessing and flag-waving horseshit. Jim Kramer is the poster boy for this idiocy, which has been termed "specuvesting" because it can't figure out if it's a speculative play or a long-term investment.

I tend to think technical analysis "works" because it allows you to determine a viable entry point, a stop-loss level and an exit point before hand. IOW, it's systematic, it's a plan, a strategizing tool. You can use it to pursue large, longer-term moves ("trend following") or you can use it to profit from short-term choppiness ("swing trading") (but probably not both at the same time). I think the chart patterns are largely full of shit, because like WR says, they're not units of measurement, and there's so many "patterns" it's like seeing faces in clouds.

Don't, however, assume I think that fundamental analysis works. Warren Buffet isn't a fundamental analyst. He buys controlling shares in companies and takes over them. Not the same thing, dawg, not by a long shot. You're fucking retarded if you think that you, a spreadsheet and some guesses you have about the future can figure out how much a company's shares will sell for when you don't work at Goldman Sachs.

It's about resolution. Us plebs see the market as unbroken lines, but it's not. When people are watching the market second to second, those unbroken lines break into something else: the "Candlestick" chart.

http://en.wikipedia.org/wiki/Candlestick_chart

You're right that support is voodoo to a certain extent. But it's also based on actual math, and it's right often enough to be useful.

The Candlestick Chart is designed that way because pricing is never uniform in these markets - you will have hundreds of trades in the same instrument/stock/commodity, all at different prices. So the chart is structured to reflect that. Moment to moment, there's a distribution of values.

"Support" is the assumed "real value" bottom boundary. Even if things go to shit and the speculation goes horribly wrong, the "Support" is where the nerds assume the index (Dow Jones, S&P, NYSE) will return to.

"Resistance" is the assumed top boundary. In my limited experience, I see a lot more daily, hands-on reality application and vindication of "Resistance" than I do for "Support". I suspect that's because of what Nordic ID'd in the post above: the "Resistance" numbers are a reflection of psychology -- aka, nobody is willing to buy stock at that price because it just looks insane.

On the other hand, "Support" is supposed to be based on fundamentals, the actual value and productivity of the market...and that's more of a holographic projection from WSJ + CNBC than anything else. There IS no bottom, no safe boundary, no support, because the market is pumped up exponentially far above anything resembling actual value.

This is why "Fundamental Analysis" specialists are so frustrated these days.

"Fundamental Analysis is about what the market should do. Technical Analysis is about what the market is actually doing."

Oh, and yes, if someone is talking about multiple handles, they're full of shit and mouthing empty jargon. It's a chart movement, not a unit of measurement.

Fibonacci Retracement is not spurious -- or rather, I don't think it is. I find it to be pretty remarkable, in fact.

The markets are irrational and rigged by design, so technical analysis is the closest thing to a roadmap we have.

Edit - wow, I should have just posted this and not typed anything...

That may show only that players are paying attention and self-fulfilling the price support. No one wants to get killed trying to break it when everyone knows it's supposed to be there and expecting the rest to act like a herd. As I said, it's group think reflecting on itself. Fascinating.

("i'm betting you don't know yet that I know that you know that I know that you know")

cup and handle

http://jessescrossroadscafe.blogspot.co ... andle.html

the best you can do in the markets currently is to bet against whatever goldman recommends,
that play has been infallible ever since goldman predicted $200 oil and the oil price folded about 3 days later

So true, it reminds me of what Nathan Rothschild did during the battle of Waterloo. Make a show of moving one way, then move the other and turn a huge profit. And just like Nathan they have plenty of intelligence gathering/rigging methods to put them ahead of the crowd. So much of capitalism is about copying what other people are doing, mainly because it's been proven to turn a profit and you don't have to go through the hassle and risk of innovation. The downside is the major players that everyone follows can lead you off a cliff.

Since school is open this is called a "contrarian indicator" like the magazine cover indicator. The most famous is The Economist magazine--if they print something on their cover, immediately buy/short the opposite of what would be recommended. They did the famous "Drowning in Oil" when oil was at $15/bbl about fifteen years ago, just before oil started to blast off. Whoops. This is another case where the "psychology" of the game is that media are the last to get whiff of something so by the time they get the story out the trend is dead--once it becomes conventional wisdom, the market has reached actual efficiency and is going to turn around as new attempts to exploit that particular market occur.

No economist in his right mind uses the term "support." Economists' jobs are not to predict stock prices. If an economist is talking about support levels on a stock, he's speaking outside his expertise. Additionally, whenever anyone talks about a support level, they're guessing. That's all. They're telling you it will profitable to by at a certain price and sell at a higher price. They could be very wrong.

Second, the Economist isn't a psy-op and it's not contrarian. It's following the classic efficient market rules: by the time everyone knows that something has happened, it's been factored into the price. If Goldman bets on a big hurricane season, and makes those plays on Friday, by the time you hear about it on Monday when the press publishes the memo, Goldman already bought all that stuff and raised the price. You missed it.

Also, Martin Armstrong is not a hero. Yes, his being held coercively, rather than punitively, for five years, is a really big as far a precedents go. Arguably he should be released for that alone. But he is not a political prisoner. He is a Ponzi-scheming charlatan. He has not discovered some market secret; his is not a market wizard. He is a fraud. By his own admission his Ponzi scheme was an effort to correct for losses he made. In ONE INSTANCE he successfully called a stock market drop (not turn, drop) to the date. ONE. He was wrong on EVERY OTHER supposed "turn" he called. I hate to break this to anyone, but if your trading strategy counts "close" calls as winning moves, then you may as well start mailing cash to the nearest Goldman office. If you think you have enough liquidity to start picking market tops and bottoms and believe you can afford to be wrong by a margin of six months--which I've seen some Armstrongtards claim as his margin of success--you're either loaded enough that it doesn't matter or completely, utterly full of shit. A near miss costs just as much money as a far miss. If the gov't locked people up for figure out how to make a bunch of close but wrong calls, there'd be a lot more retail traders in jail. The fan club Armstrong has on the internet only shows his persistent ability to bilk the unwitting.

This is exactly the sort of crap you see with Moon Landing Hoax theory. The real psy-op isn't a fake landing on the moon, it's that you missed the simple fact that the rocket industry--you know, ballistic missles, MIRVs, star wars contractors, aka, the MILITARY INDUSTRIAL COMPLEX--got massive free press from it and no one even noticed. It was that subtle that they actually put a human on the moon and still people failed to notice that it was part of, gee, the Cold War, WHICH FOR FORTY YEARS THREATENED TO DESTROY HUMANITY.

Same shit here. Oooooh, the mystical, magical powers of Armstrong and the technical analysts. The secrets of "support" (how secret can it be if you can draw a straight line?). Psy-ops at the Economist and every other magazine to misdirect the reading public about the actual movements of the markets. No. The actual psy-op at the Economist is that supposedly intelligent people in the US read a neoliberal propaganda rag every issue and don't realize that's what they're doing. The actual psy-op is that the entire fucking economy is virtualized and no one notices. It's that Goldman & Friends have made a fucking killing off neoliberal reform while actually contributing nothing--nothing, beside showing how profitable it is to underwrite speculative ventures and if you underwrite enough you get taxpayer money when the bubble bursts--which has supposedly "lifted all boats"--bullshit. There is no "Market Oracle." It's fucking controlled. Some people make money at the margins, and they do that with what they call "discipline," which means nothing more or less than planning their position sizes, their entry points, their exit points and their risk tolerance ahead of time. That's all. They aren't magicians. There is no magic.

It was that subtle that they actually put a human on the moon and still people failed to notice that it was part of, gee, the Cold War, WHICH FOR FORTY YEARS THREATENED TO DESTROY HUMANITY.

I will note as well RE: other ongoing threads of utmost importance and depth, that Carl Sagan was essentially the first dude to call this shit. It was the first time I'd ever heard it back in the heady pre-Internet days of 1994. But he said it. America went to the moon to ONLY show off it's missiles. The science piggy backed.

Don't know if any of that shows up in this Google books clip or not, but it's a good read.

http://books.google.com/books?id=9hzqn9 ... &q&f=false

.

[2012 Countdown]

Irish bank bailouts
Max Keiser giving his expert analysis on the financial attack on ireland



===========


Spanish Banks Are So Desperate For Funding They're Offering 5% Interest On Deposits
Gregory White | Nov. 27, 2010, 6:46 PM
Spain is the presumed final domino in the eurozone, with its fall potentially spelling doom for the currency. The problem with Spain is its size, especially the funding needs of its banking sector.
This chart from Societe Generale shows just how tiny they problem of Ireland is in comparison Spain. Its largest banks, Santander and BBVA, dwarf Ireland's. Now banks in Spain are offering as much as 5% interest on deposits, in an effort to backstop their positions.
2011 and 2012 look to be particularly difficult years in terms of funding needs for these banks. If they come calling for support from Spain, the eurozone bailout fund, as it stands, will likely not have enough funds to provide help.
From Societe Generale:


Read more: http://www.businessinsider.com/spanish- ... z16bc6GMkH


=====


Here's the complete guide to the Spanish debt crisis everyone is terrified of
http://www.businessinsider.com/spain-de ... is-2010-11


Read more: http://www.businessinsider.com/spanish- ... z16bc0VC7R

[JackRiddler]

hmmmmmm....

http://www.smh.com.au/business/millions ... 18akf.html

Millions cashless in bank glitch
Jacob Saulwick
November 27, 2010

ONE of Australia's biggest banks is scrambling to process payments to millions of customers, who potentially face days of uncertainty about when they will be able to access their money.

A corrupted file in the National Australia Bank's computers on Wednesday jammed its payment system, hitting customers from a range of banks who rely on the NAB to process payments.

The bank, which last night was considering opening extra branches during the weekend, could not say when the problem would be fixed. It had hoped to resolve the problem on Thursday.

The Herald has been inundated by anxious NAB customers, some of whom had checked online to find their past month's transactions rubbed out and their accounts credited with nothing.

Property deals were being put on hold, car sales suspended, wages not transferred, and direct debit payments for mortgages and bills stopped.

The glitch is a humiliation for the chief executive, Cameron Clyne, who this week said customers were beginning to appreciate the bank's efforts to differentiate itself from its rivals.

A spokeswoman said any charges incurred because of the computer failure would be covered by the bank. But customers would have to make their own arrangements to contact the NAB.

The smaller banks Citibank and HSBC confirmed that their payments had also stalled because they use the NAB to process transactions.

The executive director of the Australian Retailers' Association, Russell Zimmerman, lamented the possible impact on the weekend's trade. ''It is a huge disappointment for the retail industry, and for those people who have been relying on their funds to come in from their wages and can't access them.

''People have to be aware that if they are going to use taxis, or load up their supermarket trolleys, they could get to the counter and find they can't process their sales,'' he said.

NAB customers expressed anger, grief and disbelief that such a crippling problem could hit one of the big four banks.

Peter Bogdanoff, a car salesman at Central Coast Eurocars Gosford, said not only had his pay not gone in, but a whole month's worth of transactions appeared to have been wiped from his online account.

Mr Bogdanoff also had clients with no money to finalise their car purchases this weekend.

Derek Sequeira, a manager at Charles Sturt University in Albury, said he would try to organise a class action against the NAB.

Emma Jane, a 34-year-old administrator from Townsville, said she had just returned from holidays and was relying on her pay packet to last the weekend.

The NAB spokeswoman said the bank had put on additional call centre staff. Some customers would also have difficulty taking money out from ATMs.

On Thursday Mr Clyne issued a rallying call to the banking industry to acknowledge why it was so unpopular with the public.

''The industry needs to stop being as arrogant as it has been. It needs to be less defensive, less dismissive. It needs to be more open, it has to do more listening, it has to display more empathy, it has to display more action,'' he said.

[JackRiddler]

http://www.huffingtonpost.com/simon-joh ... view=print

The Huffington Post
November 29, 2010

Simon Johnson
MIT Professor and co-author of 13 Bankers
Posted: November 29, 2010 09:01 AM

The Economics and Politics of Elizabeth Warren


Congressional Republicans are apparently intent on a big showdown with Elizabeth Warren, who is currently building up the new Consumer Financial Protection Bureau (CFPB).

This is very good news for the White House, if they use this opportunity wisely.

Some Republicans seem to think that Ms. Warren is about "big government" or "intrusive regulation". But this is not the case - Elizabeth Warren's approach is much more appealing and already popular with almost everyone on right and left: Transparency.

Look carefully at Ms. Warren's September speech to the Financial Services Roundtable and think about how this plays as a broader political message.

Her political principle is clear and completely compelling:

...the best way, in my view, to strengthen those middle class families is to find solutions that are deep and lasting, that strengthen the markets, and that will create a robust, competitive consumer credit industry that works for families, not against them.

Her economic approach is also right on target - the market should work for the consumer:

I come to Washington as a genuine believer in markets and a genuine believer that the purpose of regulating the consumer credit market is to make that market work for buyers and sellers alike: a level playing field where the best products at the best prices win. When it works, the market is an ally to consumers. And, when it works, the market rewards those lenders who offer the best value to their customers."

...

When I talk about functioning markets, I'm not using the word "market" as coded
language for a return to the Wild West where companies use deception to pick off every consumer they can get in their sites. A free market is one where consumers have the ability to make well‐ informed choices, where the choices are visible and the terms are clear, and where there are cops on the beat to make sure that everyone plays by the same rules.

In other words: stop already with the cheating of people. This is not good for our economy, not good for business as a whole, and definitely not good for American families.

But credit agreements have gotten long and complicated. In fact, there's a new epithet: fine print. I understand that some of you call it "mice type."Where I come from, nobody calls fine print, hidden fees and surprise penalties "negotiated contract terms" or "innovations." On a polite day, my brothers in Oklahoma call that kind of stuff "garbage."

This is the specific deliverable: Get rid of the fine print.

An AARP poll earlier this year showed that 96 percent of Americans over 50 surveyed want to put an end to the fine print in their credit agreements. Just in case you missed the point, 91 percent felt strongly about that. 96 percent? These are your customers.

And they vote. This is exactly the terrain onto which the White House should seek to shift the political debate.

Don't play the Republicans' game by agreeing to debate "big" vs. "small" government. This is a complete illusion - just watch the favors that businesses will seek from Republicans on the Hill; not all of these appear "on the government's balance sheet", to be sure, but you can talk to the anguished people of Ireland about how exactly supposedly "pro-business" (and definitely pro-big bank) policies end up costing the taxpayer a lot of money. (Or just look at how the financial disaster of 2008-09 ended up costing us 40 percentage points of GDP, measured in terms of the increase in our national debt - directly because of how the financial sector ran its customers and itself into the ground.)

The political debate should begin with documenting business practices that are misleading and duplicitous, wherever they occur.

We need transparency and accountability in the financial sector - and in all other parts of our economy. Elizabeth Warren is exactly the right person to lead this charge, in the first instance from the CFPB.

She should be nominated by President Obama to head the agency. The fight for her confirmation would make her ideas clear to millions. Let's see which senators exactly are willing to argue against greater transparency.

This post originally appeared at The Baseline Scenario.

[vanlose kid]

*



*

[vanlose kid]

.

I remembered this interesting exchange from May 2010 at
http://rigorousintuition.ca/board2/view ... =8&t=28269

Copying here especially for nathan28's part.

Questions about the stock market

What does it mean when some yahoo says, "key support levels?" The market is often breaking or testing those levels. I have the vague idea that this has something to do with 'technical analysis' which is derived from augury, but do these 'support levels' have any logic behind them? Do they represent something real? Those 'technical analysts' like to draw neat looking things on charts of the stock market but I suspect they're insane.

What is a handle? The same yahoo will say, "the S&P is down five handles today!" Is it like a klick? Is the S&P five klicks up shit creek?

"Key support levels" and all the different math models of the market that look only at how the numbers developed and behaved in the past without regard to empirical factors are examples of group think reflecting on itself.

nathan 28: Fundamental vs. Technical Analysis

Don't listen to all those doomers. The S&P has key support levels in the high zeros. Buy now.

"Support" is a price level a stock has repeatedly fallen to then risen from, so that you could draw a line at that price level and it would look like the chart bounces off it. "Resistance"--which you never hear mentioned on BuyNowSPAN--is the opposite, a price-point a stock can't seem to get above. These levels can be a little fuzzy. In theory, the longer or older the support/resistance level is, the more dramatic the movement should be once it is broken. In theory. Like right now Dow 10,000 or so is both major support and also going to be called "psychological" support, too.

"Five handles" means the dude has been drinking with Larry Kudlow again.

What this means in the real world is that a lot of people are buying and selling at those points--IOW, a lot of people are getting their money chewed up by churning prices, and the brokers are rolling in commissions. There's a saying somewhere that a stock only moves past support or resistance when all the short-term dumb money--i.e., retail players, small funds, investing clubs, other people w/out bloomberg machines--has been spent. There's a corollary (?) that follows from that, that a market or stock will only turn around when all the dumb money is fully invested in the wrong positions and that the actual market makers will create historic highs or lows to ensure this happens.

Support is a term from "technical" analysis, which is basically a bunch of horseshit--but oddly enough, so is the only other form of stock analysis, "fundamental" analysis. Technical analysis looks at price charts and volume, IOW, it's staring at numbers and charts with your autism glasses on. There's some specious stuff about fibonacci numbers and "waves" etc. that claim to be tied into the natural mathematical patterns of social behavior or whatever but hey, sometimes I like to take stimulants with my weed, too. Fundamentals look to "fundamentals," shit (that's what it is) like price (of the shares taken in gross)-to-earnings, profit levels, demand, future availability, social trends etc. Technical analysis doesn't pay attention to anything but numbers.

An example of fundamental analysis would be, say, assuming that a BP well was going to blow the fuck up tomorrow and then shorting ("borrowing" the shares to earn money from the price decline when you "return" them) the stock. Or looking at BP's balance sheet, determining that they're still profitable and that the price will eventually return to higher levels, and buying it to sell later. Technical analysis would be waiting for BP's price to hit a short-term low, shorting it, then selling it when it hit a lower intermediate term low, regardless of whether they clean up the spill tomorrow and suddenly get a no-bid contract on all the remaining oil on the globe.

Most of the CNBC "approach" you hear on that channel is a nonsense mix of sentiment, Pollyana-ism, guessing and flag-waving horseshit. Jim Kramer is the poster boy for this idiocy, which has been termed "specuvesting" because it can't figure out if it's a speculative play or a long-term investment.

I tend to think technical analysis "works" because it allows you to determine a viable entry point, a stop-loss level and an exit point before hand. IOW, it's systematic, it's a plan, a strategizing tool. You can use it to pursue large, longer-term moves ("trend following") or you can use it to profit from short-term choppiness ("swing trading") (but probably not both at the same time). I think the chart patterns are largely full of shit, because like WR says, they're not units of measurement, and there's so many "patterns" it's like seeing faces in clouds.

Don't, however, assume I think that fundamental analysis works. Warren Buffet isn't a fundamental analyst. He buys controlling shares in companies and takes over them. Not the same thing, dawg, not by a long shot. You're fucking retarded if you think that you, a spreadsheet and some guesses you have about the future can figure out how much a company's shares will sell for when you don't work at Goldman Sachs.

It's about resolution. Us plebs see the market as unbroken lines, but it's not. When people are watching the market second to second, those unbroken lines break into something else: the "Candlestick" chart.

http://en.wikipedia.org/wiki/Candlestick_chart

You're right that support is voodoo to a certain extent. But it's also based on actual math, and it's right often enough to be useful.

The Candlestick Chart is designed that way because pricing is never uniform in these markets - you will have hundreds of trades in the same instrument/stock/commodity, all at different prices. So the chart is structured to reflect that. Moment to moment, there's a distribution of values.

"Support" is the assumed "real value" bottom boundary. Even if things go to shit and the speculation goes horribly wrong, the "Support" is where the nerds assume the index (Dow Jones, S&P, NYSE) will return to.

"Resistance" is the assumed top boundary. In my limited experience, I see a lot more daily, hands-on reality application and vindication of "Resistance" than I do for "Support". I suspect that's because of what Nordic ID'd in the post above: the "Resistance" numbers are a reflection of psychology -- aka, nobody is willing to buy stock at that price because it just looks insane.

On the other hand, "Support" is supposed to be based on fundamentals, the actual value and productivity of the market...and that's more of a holographic projection from WSJ + CNBC than anything else. There IS no bottom, no safe boundary, no support, because the market is pumped up exponentially far above anything resembling actual value.

This is why "Fundamental Analysis" specialists are so frustrated these days.

"Fundamental Analysis is about what the market should do. Technical Analysis is about what the market is actually doing."

Oh, and yes, if someone is talking about multiple handles, they're full of shit and mouthing empty jargon. It's a chart movement, not a unit of measurement.

Fibonacci Retracement is not spurious -- or rather, I don't think it is. I find it to be pretty remarkable, in fact.

The markets are irrational and rigged by design, so technical analysis is the closest thing to a roadmap we have.

Edit - wow, I should have just posted this and not typed anything...

That may show only that players are paying attention and self-fulfilling the price support. No one wants to get killed trying to break it when everyone knows it's supposed to be there and expecting the rest to act like a herd. As I said, it's group think reflecting on itself. Fascinating.

("i'm betting you don't know yet that I know that you know that I know that you know")

cup and handle

http://jessescrossroadscafe.blogspot.co ... andle.html

the best you can do in the markets currently is to bet against whatever goldman recommends,
that play has been infallible ever since goldman predicted $200 oil and the oil price folded about 3 days later

So true, it reminds me of what Nathan Rothschild did during the battle of Waterloo. Make a show of moving one way, then move the other and turn a huge profit. And just like Nathan they have plenty of intelligence gathering/rigging methods to put them ahead of the crowd. So much of capitalism is about copying what other people are doing, mainly because it's been proven to turn a profit and you don't have to go through the hassle and risk of innovation. The downside is the major players that everyone follows can lead you off a cliff.

Since school is open this is called a "contrarian indicator" like the magazine cover indicator. The most famous is The Economist magazine--if they print something on their cover, immediately buy/short the opposite of what would be recommended. They did the famous "Drowning in Oil" when oil was at $15/bbl about fifteen years ago, just before oil started to blast off. Whoops. This is another case where the "psychology" of the game is that media are the last to get whiff of something so by the time they get the story out the trend is dead--once it becomes conventional wisdom, the market has reached actual efficiency and is going to turn around as new attempts to exploit that particular market occur.

No economist in his right mind uses the term "support." Economists' jobs are not to predict stock prices. If an economist is talking about support levels on a stock, he's speaking outside his expertise. Additionally, whenever anyone talks about a support level, they're guessing. That's all. They're telling you it will profitable to by at a certain price and sell at a higher price. They could be very wrong.

Second, the Economist isn't a psy-op and it's not contrarian. It's following the classic efficient market rules: by the time everyone knows that something has happened, it's been factored into the price. If Goldman bets on a big hurricane season, and makes those plays on Friday, by the time you hear about it on Monday when the press publishes the memo, Goldman already bought all that stuff and raised the price. You missed it.

Also, Martin Armstrong is not a hero. Yes, his being held coercively, rather than punitively, for five years, is a really big as far a precedents go. Arguably he should be released for that alone. But he is not a political prisoner. He is a Ponzi-scheming charlatan. He has not discovered some market secret; his is not a market wizard. He is a fraud. By his own admission his Ponzi scheme was an effort to correct for losses he made. In ONE INSTANCE he successfully called a stock market drop (not turn, drop) to the date. ONE. He was wrong on EVERY OTHER supposed "turn" he called. I hate to break this to anyone, but if your trading strategy counts "close" calls as winning moves, then you may as well start mailing cash to the nearest Goldman office. If you think you have enough liquidity to start picking market tops and bottoms and believe you can afford to be wrong by a margin of six months--which I've seen some Armstrongtards claim as his margin of success--you're either loaded enough that it doesn't matter or completely, utterly full of shit. A near miss costs just as much money as a far miss. If the gov't locked people up for figure out how to make a bunch of close but wrong calls, there'd be a lot more retail traders in jail. The fan club Armstrong has on the internet only shows his persistent ability to bilk the unwitting.

This is exactly the sort of crap you see with Moon Landing Hoax theory. The real psy-op isn't a fake landing on the moon, it's that you missed the simple fact that the rocket industry--you know, ballistic missles, MIRVs, star wars contractors, aka, the MILITARY INDUSTRIAL COMPLEX--got massive free press from it and no one even noticed. It was that subtle that they actually put a human on the moon and still people failed to notice that it was part of, gee, the Cold War, WHICH FOR FORTY YEARS THREATENED TO DESTROY HUMANITY.

Same shit here. Oooooh, the mystical, magical powers of Armstrong and the technical analysts. The secrets of "support" (how secret can it be if you can draw a straight line?). Psy-ops at the Economist and every other magazine to misdirect the reading public about the actual movements of the markets. No. The actual psy-op at the Economist is that supposedly intelligent people in the US read a neoliberal propaganda rag every issue and don't realize that's what they're doing. The actual psy-op is that the entire fucking economy is virtualized and no one notices. It's that Goldman & Friends have made a fucking killing off neoliberal reform while actually contributing nothing--nothing, beside showing how profitable it is to underwrite speculative ventures and if you underwrite enough you get taxpayer money when the bubble bursts--which has supposedly "lifted all boats"--bullshit. There is no "Market Oracle." It's fucking controlled. Some people make money at the margins, and they do that with what they call "discipline," which means nothing more or less than planning their position sizes, their entry points, their exit points and their risk tolerance ahead of time. That's all. They aren't magicians. There is no magic.

It was that subtle that they actually put a human on the moon and still people failed to notice that it was part of, gee, the Cold War, WHICH FOR FORTY YEARS THREATENED TO DESTROY HUMANITY.

I will note as well RE: other ongoing threads of utmost importance and depth, that Carl Sagan was essentially the first dude to call this shit. It was the first time I'd ever heard it back in the heady pre-Internet days of 1994. But he said it. America went to the moon to ONLY show off it's missiles. The science piggy backed.

Don't know if any of that shows up in this Google books clip or not, but it's a good read.

http://books.google.com/books?id=9hzqn9 ... &q&f=false

.

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[semper occultus]

Ex-RBS chiefs to escape FSA sanctions
By Brooke Masters

www.ft.com

Published: December 2 2010 10:21

Sir Fred Goodwin and other former top directors of Royal Bank of Scotland are to escape regulatory punishment for leading one of the UK’s biggest banks to the brink of collapse after the FSA said there were no grounds for action.

The Financial Services Authority said on Thursday that it was closing its 17 month probe of the events leading up to RBS’s government rescue without bringing formal charges.

The regulator and outside investigators from PwC concluded that while bad decisions were made, there were no grounds to take regulatory action.

< >

They have said that would be hard to prove malfeasance when so many banks apparently made the same kinds of wrong choices.

...seems like you can't commit rape at an orgy...

Investors 'outraged' by FSA's refusal to release RBS report
Two major investors in Royal Bank of Scotland have called the decision to suppress the report into the bank's near collapse "outrageous".

www.telegraph.co.uk 04 Dec 2010

Shareholders voiced their dismay at the Financial Service Authority's (FSA) decision not to publish the report, which exonerated senior RBS executives of any wrongdoing.

In a one-page statement, the FSA said that RBS's failure was the result of "bad decisions", but added it had not found any instances of "fraud or dishonest activity by RBS senior individuals or a failure of corporate governance on the part of the board".

"Given their conclusions this seems to me to be a hugely undistinguished piece of work. I don't understand how you can investigate a bank that almost caused the collapse of the entire British financial system and conclude that there was no major failure of corporate governance," said one banking industry source.

The FSA is arguing that it is prevented from making its investigation into RBS public by the Financial Services and Markets Act of 2000.

[2012 Countdown]

Jobs Report Awaited; Greenspan Comments Compelling
03 December 2010, 8:11 a.m.
By Jim Wyckoff
Of Kitco News
http://www.kitco.com/


Sovereign debt problems in the European Union remain on the front burner for investors and traders. That situation has been bullish for the gold market for most of 2010, and those problems are not likely to go away any time soon. In an interesting and compelling interview with former Federal Reserve Chairman Alan Greenspan on CNBC Friday morning, he was asked about the sustainability of the Euro currency amid the recent sovereign debt turmoil. Greenspan replied that he knew the grand experiment of a common currency "was over" when the EU's two strongest countries, France and Germany, could not comply with their own debt ratio agreements that were established with the formation of the Euro currency. Greenspan also said the "culture clash" between the European countries is too great to have a lasting single currency. Greenspan is very likely correct in his assumptions, and if he is correct, the Euro currency has seen its best days and could now see an extended period of decline until its demise. Such a scenario would be longer-term gold market bullish as investors would look to buy gold with their weakening Euros.

http://www.kitco.com/reports/KitcoNews2 ... JW_am.html

[JackRiddler]

Thanks to Montag for finding this and posting on other thread...

http://www.huffingtonpost.com/rep-berni ... 91091.html

A Real Jaw Dropper at the Fed
by Sen. Bernie Sanders

December 2, 2010


At a Senate Budget Committee hearing in 2009, I asked Fed Chairman Ben Bernanke to tell the American people the names of the financial institutions that received an unprecedented backdoor bailout from the Federal Reserve, how much they received, and the exact terms of this assistance. He refused. A year and a half later, as a result of an amendment that I was able to include in the Wall Street reform bill, we have begun to lift the veil of secrecy at the Fed, and the American people now have this information.

It is unfortunate that it took this long, and it is a shame that the biggest banks in America and Mr. Bernanke fought to keep this secret from the American public every step of the way. But, the details on this bailout are now on the Federal Reserve's website, and this is a major victory for the American taxpayer and for transparency in government.

Importantly, my amendment also required the Government Accountability Office to conduct a top-to-bottom audit of all of the emergency lending the Fed provided during the financial crisis to be completed on July 21, 2011, which will take a hard look at all of the potential conflicts of interest that took place with respect to this bailout. So, in many respects, details that the Fed was forced to divulge on Wednesday about the $3.3 trillion in emergency loans that until now were totally kept from public scrutiny, marked the beginning, not the end, of lifting the veil of secrecy at the Fed.

After years of stonewalling by the Fed, the American people are finally learning the incredible and jaw-dropping details of the Fed's multi-trillion-dollar bailout of Wall Street and corporate America. As a result of this disclosure, other members of Congress and I will be taking a very extensive look at all aspects of how the Federal Reserve functions and how we can make our financial institutions more responsive to the needs of ordinary Americans and small businesses.

What have we learned so far from the disclosure of more than 21,000 transactions? We have learned that the $700 billion Wall Street bailout signed into law by President George W. Bush turned out to be pocket change compared to the trillions and trillions of dollars in near-zero interest loans and other financial arrangements the Federal Reserve doled out to every major financial institution in this country. Among those are Goldman Sachs, which received nearly $600 billion; Morgan Stanley, which received nearly $2 trillion; Citigroup, which received $1.8 trillion; Bear Stearns, which received nearly $1 trillion, and Merrill Lynch, which received some $1.5 trillion in short term loans from the Fed.

We also learned that the Fed's multi-trillion bailout was not limited to Wall Street and big banks, but that some of the largest corporations in this country also received a very substantial bailout. Among those are General Electric, McDonald's, Caterpillar, Harley Davidson, Toyota and Verizon.

Perhaps most surprising is the huge sum that went to bail out foreign private banks and corporations including two European megabanks -- Deutsche Bank and Credit Suisse -- which were the largest beneficiaries of the Fed's purchase of mortgage-backed securities.

Deutsche Bank, a German lender, sold the Fed more than $290 billion worth of mortgage securities. Credit Suisse, a Swiss bank, sold the Fed more than $287 billion in mortgage bonds.

Has the Federal Reserve of the United States become the central bank of the world?

The Fed said that this bailout was necessary to prevent the world economy from going over a cliff. But three years after the start of the recession, millions of Americans remain unemployed and have lost their homes, life savings and ability to send their kids to college. Meanwhile, big banks and corporations have returned to making huge profits and paying their executives record-breaking compensation packages as if the financial crisis they started never happened.

What this disclosure tells us, among many other things, is that despite this huge taxpayer bailout, the Fed did not make the appropriate demands on these institutions necessary to rebuild our economy and protect the needs of ordinary Americans.

For example, at a time when big banks have nearly a trillion dollars in excess reserves parked at the Fed, the Fed did not require these institutions to increase lending to small- and medium-sized businesses as a condition of the bailout.

At a time when large corporations are more profitable than ever, the Fed did not demand that corporations that received this backdoor bailout create jobs and expand the economy once they returned to profitability.

I intend to investigate whether these secret Fed loans, in some cases, turned out to be direct corporate welfare to big banks that used these loans not to reinvest in the economy but rather to lend back to the federal government at a higher rate of interest by purchasing Treasury Securities. Instead of using this money to reinvest in the productive economy, I suspect a large portion of these near-zero interest loans were used to buy Treasury Securities at a higher interest rate providing free money to some of the largest financial institutions in this country. That is something that we have got to closely examine.

At a time when Wall Street executives are now making more money than before the financial crisis, how many big banks that paid back TARP funds in 2009 to avoid limits on executive compensation received no-strings-attached loans from the Federal Reserve?

At a time when millions of Americans are paying outrageously high credit card interest rates, why didn't the Fed require credit card issuers to lower interest rates as a condition of the bailout?

The four largest banks in this country (Bank of America, JP Morgan Chase, Wells Fargo, and Citigroup) issue half of all mortgages in this country. We now know that these banks received hundreds of billions from the Fed. How many Americans could have remained in their homes, if the Fed required these bailed-out banks to reduce mortgage payments as a condition of receiving these secret loans?

We have begun to lift the veil of secrecy at one of most important agencies in our government. What we are seeing is the incredible power of a small number of people who have incredible conflicts of interest getting incredible help from the taxpayers of this country while ignoring the needs of the people.

Imagine again, if the Zombies had been not saved but liquidated when they went under in 2008, what injections on this scale could have done to eliminate public debt -- specifically state and municipal, a fraction of what the banks have -- allowing states and municipalities to establish their own banks and credit unions to flourish in replacing the big banks altogether. Imagine how the debt burden on citizens could have been lifted using the same means.

.

[vanlose kid]

Copper: Part I The new currency.
Submitted by Jack H Barnes on 12/05/2010 01:50 -0500


I don’t know if you have noticed what I have, but lately it appears that people are using Copper as a poor mans currency. I started to notice during the crash of 2008, that copper was being sold in a .999 pure bullion. The photo attached is for a single troy oz of “Fine Copper”. The list price for this copper, as is, was 12 dollars. Think about that for a moment.

Copper sells for about $4 per pound in the futures market. The contract size is for 25,000 pounds, and it costs $250 dollars per penny when quoting copper, the December forward month is currently quoted at 400.60 pennies, for a total cash cost of $100,150 per contract.

I dont know about you, but I would love to have a business where my future cost of inventory was 27 cents per oz, and after some remarketing costs, I am able to charge $10 to $12 per oz.

Check out this google link to Copper Bullion for sale. It’s not just the 1 oz bars, people are now selling copper bullion in kilo bars, coins, rounds and pretty much anything else they can make it look like a legitimate currency.

The ironic aspect to this, is that if the rumored one world currency is deployed, and it has in it, physical commodities like copper, you can expect an increase in crime to break out. If people started to look up at power-lines and instead of seeing a few pennies per pound in realized value at a junk shop, instead becomes thousands of future World Dollars, we will have problems.

Utilities, which are already heading underground will have to be moved there even quicker, and the deployment of new communications like WiMax will be necessary. The era of cell phones, and 4G internet, will end the need for copper to be installed in homes going forward. The Net will always be there, and why leave your phone at home wired to the desk?

In simple terms, we are close to turning a point in the technology curve, where the value of the copper in the old POTS (plain old telephone system) is more valuable torn out of the walls, than left in them. Consider that for a moment. Now, think about how easily accessible to anyone this stuff is. Savaging will greatly outweight the cost of trying to find job’s for our chronically unemployed.

The streets are currently lined with money hanging from wood poles. When you think about buried fiber optics, WiMax and Cell phones, the question becomes why do we have all of this copper in the walls, buried under the yard, etc.

Ironically, copper is already one of the most owned metals, due to its usage in home building. It could be argued that it is already distributed to the masses, and as such could be considered a currency already.

A buyer of an abandoned house in today’s economy *already* has to make sure that it still has its copper in the walls. It takes very little effort in the big picture, to strip out hundreds or thousands of pounds of copper from an abandoned home or factory.

If Copper becomes part of the next global currency, the world will have a new crime wave. The only difference, is that it will be based on a physical commodity changing hands, or at least represented in the exchange. While there is not enough Gold in the world, or Silver in the world to act as the physical basis of a currency, there is enough Copper.

Is that enough of a reason to develop it into an international currency? What say you?

Disclosure: Jack Barnes has no exposure to Copper, or any companies listed in this article. This disclosure and others are available at JackHBarnes.com

http://www.zerohedge.com/article/copper ... w-currency

JPM Corners Copper Market, LME Says Not To Worry, All Is Good
Submitted by Tyler Durden on 12/04/2010 14:23 -0500

Not content with holding the biggest paper short position in silver, JP Morgan is now intent on cornering the copper market, as the monopolist firm stretches its FRBNY-facilitated muscles in an attempt to stem the massive losses incurred via its silver short. As the Telegraph reports, following up on a story of a "rogue" purchaser who bought up $1.5 billion in copper on the LME, "the American investment bank JP Morgan is the mystery trader that grabbed more than half the copper on the London Metal Exchange." This is a huge copper purchase, and represents between 50% and 80% of the 350,000 tonnes in reserves, confirming that JPM is now the dominant manipulator in yet another commodity market. The purchase also pushed the price for immediate delivery to $8,700, the highest since October 2008. It is unclear how China, which is the biggest non-speculative end user, will react to this development, nor whether the CFTC will (ever) take any action against such blatant market manipulation. One thing is certain: the LME will do absolutely nothing: "Diarmuid O'Hegarty, head of compliance, said: "The LME has noted recent comments about the current circumstances in the copper market. Such circumstances are not unusual and the exchange is exercising its well established procedures for maintaining an orderly market." He added that large trades were not a cause for concern because the market's rules dictate that holders have to lend out a proportion of their stock to ensure a smooth supply of the metal." And who would possibly assume that JPM may not follow the rules...

As to the reason why JPM is manipulating this latest market: simple -ETF frontrunning:

Traders said JP Morgan's name had been circulating the market all day as the most likely buyer, especially since it is about to launch a physically-backed "exchange-traded fund" (ETF) in copper imminently.

One metals broker dealing on the LME said: "The story is that they're positioning themselves in front of the ETF. There's been a lot of speculation it's them."

Traders noted that there was no physical shortage of copper in the markets but that fears of a squeeze have persisted ever since a raft of investment banks announced their intention to launch ETFs this autumn.

Last month metal traders wrote to the Financial Services Authority (FSA) claiming that licensing the funds, which are also likely to be launched by BlackRock, Goldman Sachs and Deutsche Bank, may amount to "approving the next financial bubble".

It is estimated that if the copper funds are fully subscribed they would be looking to buy more than half the total stocks in LME warehouses.

Traders' concerns are based on the ETF model that will require the investments to be backed by physical metals, such as copper, lead, aluminium and nickel, rather than paper assets offered by futures contracts.

Daniel Major, a metals analyst at RBS, said: "There isn't a huge buffer available for the market. The supply situation can quite easily tighten in copper."

It's all good, though: the LME is on top of it: "The LME moved to quash claims that a rogue speculator was attempting to corner the copper market." See, it's not rogue. It's just JPM. Ergo all is good.

As for the CFTC, we now know why they are so intent on delaying the size limit discussion: after all, any regulation will be forward looking - better let JPM accumulate all commodities it can and distribute these via hidden channels to affiliated subs before the ever so busy Gary Gensler corrupt cronies decide to raise their finger on what is increasingly an ever more blatant market manipulation scheme. At least in this case, JPM will push the price higher unlike what it is doing courtesy of its gold and silver manipulation. However, the PM market (especially Asian accounts) will soon make sure Blythe Masters is looking for a job within 3 months as we predicted a few weeks ago.

http://www.zerohedge.com/article/jpm-co ... y-all-good

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[JackRiddler]

http://www.reuters.com/article/idUSLDE6B70XD20101208

TREASURIES-Sell off in Europe on tax cut worries

Wed Dec 8, 2010 7:21am EST

* Treasuries fall as tax cuts boost U.S. growth outlook
* Ten-year yield 200-dma hits resistance at 3.10 pct
* Bond vigilantes also wary of rising deficit
* Traders look to 10-year auction later on Wednesday
(Changes byline, dateline, adds quote, Bund auction info,
updates prices)
By Emily Flitter and Hideyuki Sano
LONDON/TOKYO, Dec 8 (Reuters) - U.S. Treasury prices fell
sharply on Wednesday, pushing yields higher, as a proposed
extension of tax cuts stoked fears over the U.S. government's
control of the budget deficit.
A poorly received sale of German Bunds added to the exodus
from government securities.
"The market is suffering still in the aftermath of the
compromise on the tax agreement between Obama and the
Republicans," said Nick Stamenkovic, bond strategist at RIA
Capital Markets Edinburgh.
U.S. President Barack Obama reached a deal with Republican
members of Congress to extend for a further two years a series
of tax cuts first introduced by President George W. Bush.
Economists have estimated that extending the tax cuts could
boost U.S. GDP next year by between half and one full percentage
point.
However, some analysts say that as the cuts would be paid
for by further borrowing they raise concerns over fiscal
sustainability.
The 10-year U.S. Treasury yield rose to 3.20 percent during
European trading hours. During trading in Asia, it reached 3.25
percent US10YT=RR, a level not seen since late June and beyond
Tuesday's high of 3.18 percent.
The yield has risen more than 40 basis points so far this
month.
The 200-day moving average on the 10-year yield was at a key
resistance point -- 3.10 percent. It was the first meaningful
break of the 200-day moving average since November 2009,
according to CRT Capital Group in Stanford, Connecticut.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For graphic of U.S. and Europe government debt, deficits and
bond yields see r.reuters.com/gyb29q
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
A 4 billion euro sale of two-year German Bunds became the
third German debt auction in a row to attract weak demand as
investors favoured riskier assets.
Investors were beginning to set up for a $21 billion sale of
10-year notes, set for 1800 GMT.
RIA's Stamenkovic said the 3.25 percent 10-year level was
still significant, though it was possible that 10-years would
not reach that yield before the auction. He added that selling
appeared to be coming from asset managers and short-term
momentum players.
"We've come of the (price) lows but there are a lot of
nerves about the 10-year auction today," he said.
The market is at a critical juncture, as a 10-year yield of
3.17 percent represents a 50 percent retracement of the
April-October fall to 2.33 percent from 4.01 percent.
If the 50 percent retracement is clearly broken, some market
players may look to 3.37 percent, a 61.8 percent retracement, as
the next target.
A rise to that level would hardly be out of sync with the
economic outlook, given that many economists expect the U.S.
economy to grow more than 3.0 percent next year, traders said.
The tax cut extension prompted investors to move from bonds
into stocks, commodities and other risky assets on the view that
the tax deal would stimulate the economy.
The deal, which also calls for a 2 percent employee payroll
tax cut and a 13-month extension of unemployment benefits, was
larger than many market players had expected.
But the tax move is expected to have a hefty price tag. The
non-partisan Congressional Budget Office estimated the plan
would cost the government about $500 billion in lost tax
receipts at a time when Obama is under pressure to cut the $1.3
trillion budget deficit.
(Additional reporting by Masayuki Kitano in Singapore and
Saikat Chatterjee in Hong Kong, graphic by Scott Barber)

[vanlose kid]

An Irishman Speaks His Mind




http://www.zerohedge.com/article/irishm ... s-his-mind

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[vanlose kid]

see this and pass it on.

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Record Social Inequality And Its Violent Aftermath, Explained By A Three Minute Cartoon
Submitted by Tyler Durden on 12/10/2010 18:14 -0500


With the new medium of mass communication in all matters financial and economic having been recently discovered to be cartoons (as the penetration of written text discussing such arcane topics as the Fed, debt and addition ends up being trapped within a very narrow echo chamber), we present the latest and greatest 3 minute summary, which even a third grader will understand, of what is gradually becoming accepted as the most troubling social, economic and political development in America - record social, income and wealth inequality... and its very disturbing consequences, which at last check have resulted in some form of social upheaval in almost every situation.



Courtesy of John Lohman

And some demographic commentary from Harry Dent...

http://www.zerohedge.com/article/record ... te-cartoon

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more at link.

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