Anonymous Blogger Speculates Spanish GDP Is Inflated By €40 Billion, Goldman Gets Involved

Yesterday we received a report submitted from a Spanish blogger who wishes to remain anonymous, in which the author, in 7 brief pages, describes why in his view Spain's GDP is massively overrepresented (and coming just before Moody's downgrade of Spain earlier today). The report (attached below) provides extensive validation for this hypothesis using employment data, information from the service sector, construction output, industry data and foreign sector data. The various data lead the author to observe that: "ΔNational Income= ΔDemand of goods + ΔDemand of services = -56,392 – 11,115 = -67,507 million €, which means a fall of GDP by 24.6% for the biennium 2008-2009." As for where this gets really interesting, is the fact that none other than Goldman has immediately issued a rebuttal of the report. Permabull Erik Nielsen has just released a statement in which he says the report is not to be believed at all, as it "makes little sense." Why is Goldman protesting so much, and focusing on an anonymous report if it has so little credibility?

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Spanish_GDP_report.pdf

$35 Billion 5 Year Auction Prices At Fresh New Record Low Yield Of 1.26%, 2.96 Bid To Cover

The demand for Tim Geithner paper continues to be insatiable, as today's 5 Year auction prices at an all time low yield of 1.26%, a drop from the previous record of 1.374% from last month. The Bid To Cover continues to demonstrate just how schizophrenic the market has become, where all normal investors buy bonds to front run the Fed, while the Fed-PD complex itself is buying stocks. Make sense yet? Either way, at 2.96, the BTC was the second highest ever, only lower than July's 3.06. And, just like in the previous auction, the Indirects continue to creep ever to the right, taking down the majority of the auction, or 50.1%, leaving 8.7% to the Directs, and a healthy 41.2% to the Primary Dealers, which of course are merely warehousing the paper for a few weeks/months until they flip it back to the Fed for a tidy profit, and use the proceeds for some more 100 P/E stock purchases. Thank you POMO!

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Former Military Officers Affirm UFO Activity Near Nuclear Missile Sites

Recently, we pointed out that the daily New Highs on the New York Stock exchange were not behaving in a fashion that suggested a healthy rise in the market.

We commented that healthy rallies had buyers chasing stocks and bidding them up higher ... which in turn pushed the number of stocks reaching New Highs up higher in a trending fashion.

Take a look at the New Highs below. There is NO up trend going on, which is a red flag to be concerned about.

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The second indication we've already begun another recession: M3 money supply.

M3 is the broadest possible measure of money in the system including cash, savings accounts, money market funds, etc. The Federal Reserve stopped tracking M3 in 2006 because they say they no longer find it useful.

John Williams of Shadowstats.com, however, has stayed on top of it, easily collecting the data needed to make this prognostication:

“M3 rising to the upside does not necessarily signal and economic upturn," says Williams, explaining the lines on the graph above. "Yet whenever annual growth in M3 has turned negative, a recession always has followed, usually within six-nine months."

Real M3 generated a signal in December 2009 for a downturn. How much time has elapsed? Oh, about nine months.

“The current weakness," says John, "will eventually gain official recognition as the second down leg of a double-dip recession."

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Alex Jones Predicts Staged Terror Attack in October-November 2010

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'9/11 was an inside job': Full speech by Mahmoud Ahmadinejad at UN

Falkenrath Says Stuxnet Virus May Have Origin in Israel

Flow of Fund, But for How Long

We raise this point again because the recently released 'Fed Flow of Funds' report makes it startlingly clear that global equity markets rely exclusively on debt creation in the US for their sustenance.

--To be more precise, they rely on debt creation by the US Federal Government. Take a look at the accompanying table from the Fed Flow of Funds report. It shows the growth of domestic non-financial debt since 2000 and was recently updated for the second quarter of 2010.

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M2 Update: 10th Consecutive Increase, And Some Troubling Trends

In the week ended September 13, M2 rose to a fresh all time record, just above $8.7 trillion, representing the 10th consecutive increase in the broadest monetary aggregate tracked by the Federal Reserve, during which time $115 billion in new liquidity has been injected in the US economy. Additionally, since the 2010 M2 lows recorded oddly enough on April 19, around the time when the S&P peaked for 2010, there has been $235 billion of money injected into M2.

Yet a peculiar observation arises when one looks at the components of the M2 - the bulk of the individual pieces of M2 (and M1 by definition) declined: there were W/W drops in Demand Deposits, Other Checkable Deposits, Savings Deposits at Thrifts, and especially Small Denomination Time Deposits, offset only by Savings Deposits at Commercial Banks. Now that is rather troubling, because the former list represents products used by the "less than wealthiest" to park their money. It appears that in the prior week (and throughout 2010), what's left of the middle class continues to actively withdraw its saved up money, but the net effect was offset by increased deposits into Commercial Bank savings deposits: traditionally capital storage reserved for the richer (due to the relative immobility of the capital: the vast majority of Americans for whom money does not grow on trees, prefer to have instant access to their deposits). This makes us wonder: is the trend seen in the stock market being replicated in the bank deposit realm? Are the lower and middle classes actively withdrawing money from banks, even as the wealthiest 1% continues to deposit? No wonder then that Huffington's campaign to punish the TBTF's by extracting their deposits is not working.

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Rusty Gold Coins Recall Follies of Past Empires

Here are the first up close HD pictures of the rusty Russian gold St George coins. Mike Maloney speaks with Ivan Zhivneskiy, a precious metals dealer from Russia, about the huge controversy surrounding these investment coins. As you are aware, gold does not rust or Corrode!

$10 Oil? Mike Maloney Schools Bankers on Deflation, Gold and Silver

Sarkozy: Tax the banks!

The United Nations General Assembly kicks off with a summit on the millennium development goals with the aim to cut world poverty in half by 2015. The three day summit on the millennium development goals begins with the sobering fact that the organization is $20 billion dollars short on the 2010 commitment. Webster Tarpley says he agrees with French President Nicolas Sarkozy, who says in order to make some progress the obvious solution is tax the banks, the people who caused the economic failure.

S&P Head & Shoulders or Trading Range?

That's a common debate right now. Some think we have an Inverted Head & Shoulder pattern on the S&P 500, and some think it is a trading range.

Some time ago, we had displayed 1148.24 as an important resistance level as seen below. That resistance level was established by the tick of May 18th. of this year.

Well, yesterday was the "testing day" for that resistance level. As you can probably guess, the S&P went up to an intra-day high of 1148.24 yesterday and then pulled back. It was an exact resistance test of the 1148.24 level.

So, the key question today is: "Will the S&P make it above the 1148.24 resistance level of fail to the downside?

If it makes it past the 1148.24 level, then that would be an indication that the S&P did have a valid, inverted Head & Shoulder pattern.

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Baltic Dry Index moving down too.

Did Bill Gross Just Confirm On Live TV He Has An "Advance Look" At Non-Public Fed Data?

NYSE McClellan Index turning Down

$NYMO - Daily Candlesticks: "

via StockCharts.com

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NYSE Short Interest Surges To Second Highest In A Year In Advance Of September Short-Covering Rally

Still wondering what caused the nearly 10% spike in the market? It sure as hell wasn't flows into funds and/or ETFs: both were negative for August, and we know that at least mutual funds have seen outflows for all of September. The reason is far simpler and it is no different from what caused the blind rally back in March 2009 when State Street commenced forced stock buy-ins after it gave an order to repo desks to recall all financial shorts: the NYSE short interest as of August 31 was 14.4 billion shares. This was the second highest gross short interest on the NYSE in over a year, and the highest since mid-June, when the market dropped from over 1,100 to the year lows just over 1,000. This time however, shorts were caught flat footed, as the spike in shorts by over 600 million NYSE shares, has seen a straight line market ramp beginning on August 31, and forcing blind covering without regard for what offers are lifted: a perfect environment for those who wish to set price on the offer side to execute their plan. At this point the short covering rally appears to have fizzled - we will update you on the mid-September SI data when it is released in a few days time.

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Gold Surges To Fresh All Time High As Stocks Priced In Gold Are Now Down Only 12.65% YTD

As stocks continue surging higher on absolutely no news (let along good ones), the one and only natural offset to the demented and deranged actions now undertaken by all central banks continues to be gold, which just moments ago touched on new all time spot highs at $1283.80. And while the president is touting Brian Sack and Ben Bernanke's fantastic handling of the stock market year to date, perhaps he or one of the other members of his shrinking economic team can explain why the S&P in terms of gold is down 12.65% Year to Date!

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Calendar

Moneybird, Fly!

US poverty: From bad to worse?

Foreclosures Hit Record High

Shadow Bank Liabilities Plunge By $700 Billion In Q2, $2.1 Trillion Year To Date

we next focus on recent developments in the shadow banking system. And it's a bloodbath: total shadow bank liabilities dropped by $680 billion in Q2, and a massive $2.1 trillion YTD. If one wonders why Ben Bernanke (yes, it's technically TurboTim) continues to print trillions and trillions of debt, and it is still doing nothing (yet) to stimulate the system, here is your answer.

As credit will only exist if i) it is needed and ii) there are cash paying assets (or at least the myth thereof) to support its existence, the latest plunge in the shadow banking system is merely the most recent confirmation that the deleveraging in America is only just beginning.

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Record Level Of Poverty In U.S.

Philly Fed Comes At -0.7, Misses Expectations Of 0.5, Prior At -7.7, Stock Trading Computers Momentarily Stunned

The Philly Fed has just reconfirmed a contraction, following last month's -7.7 plunge, now coming at -0.7 on expectations of 0.5. Let the spin begin. In the meantime, here are the facts: The New Orders index at the lowest level since June 2009, Prices Paid lowest since August 2009, and from the report "For the second consecutive month, firms reported a decline in both new orders and shipments. Employment levels remained steady this month, but firms reported declines in average work hours. The survey’s broad indicators of future activity continue to suggest that the region’s manufacturing executives expect growth in business over the next six months, but optimism remains below levels earlier in the year."

Among the index components:
•New Orders: -8.1 vs. Prev. -7.1
•Prices Paid: 9.8 vs. Prev. 11.8
•Employment: 1.8 vs. Prev. -2.7

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A red flag?

It is kind of a natural phenomena, isn't it?

That is ... when the market moves higher and higher, stocks make new highs, and more new highs, and then ... more new highs.

What if that wasn't happening?

Well, new highs continue on up higher because investors are chasing particular stocks. If investors aren't chasing stocks, then that says there is a reluctance about the perceived future of the stock(s) being considered.


So, if New Highs weren't moving higher and higher, then that would be a "red flag" that something wasn't quite right.

Today's New Highs chart is below, and it is showing some pretty poor action. Normally, the blue bars continue up, higher and higher in an up trend signifying that stocks are being chased by investors ... and that is a good sign.

However, the current action (seen inside the black box) shows a stalling action which is a reluctance for investors to blindly pay a higher premium. The only reason you would NOT pay a higher premium than the most recent price, is that you don't believe the stock is going higher, or that it won't go high enough to make the risk of purchasing worthwhile.

So, the action on the New Highs is saying that investors are hesitant in believing that stocks will continue to move higher. Until, and unless this changes, this will remain a red flag.


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Arch Crawford on Goldseek radio Sep. 10, 2010

John Williams Sees The Onset Of Hyperinflation In As Little As 6 To 9 Months As Fed "Tap Dances On A Land Mine"

John Williams, arguably one of the best trackers of real, unmanipulated government data via his Shadow Stats blog, has just released a note to clients in which he warns that hyperinflation may hit as soon as 6 to 9 months from today. With so many established economists and pundits seeing nothing but deflation as far as the eye can see, and the Fed doing all in its power to halt the deleveraging cycle, both in the open and shadow economies, what is Williams' argument? Read on. Incidentally, even if some fellow bloggers disagree with Mr. Williams' assesment, we believe it is in our readers' best interest to have them make up their own mind on this most critical economic development.

Hyperinflation Special Report

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“Greece as a viable economy is finished” – Max Keiser/Helen Skopis

Overdose: The Next Financial Crisis

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Freedom Watch - Freedom Fighters

二次探底"，你为何感觉不到？

Is this where the Bond Market gets into trouble?

Bonds prices up, bond yields down. Bonds prices down, bond yields up.

This is an important day for watching bond yields, because the odds are now starting to increase for an upside move on bond yields ... and that would mean down movement on bond prices.

At the close yesterday, 30 year bond yields had closed at 38.45 which was a level that was testing an April/September resistance line.

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Mort Zuckerman Discusses Economic Performance of Obama

GOLD is weaken down

GVZ chart show strong support at 17 and GDM show turning down too. I expect the Gold price will weaken soon.

Why the VIX May Not Be Best Market Indicator Right Now

The following headline appeared this morning:

"Why the VIX May Not Be Best Market Indicator Right Now"

The article made the following comments:
1. The CBOE Volatility Index is often used to predict where markets are headed in coming weeks, but now may not be a good time to rely on Wall Street's so-called fear gauge for direction.
2. The open interest put-to-call ratio and average implied volatility gap between puts and calls on the VIX are showing opposing views.
3. These two numbers are usually in agreement but they are completely the opposite now, which is very unusual to see.

So ... how on earth can that "unusual, opposite relationship" mean that the VIX "May Not Be the Best Market Indicator Right Now"???

Why would anyone want you to ignore the VIX and accept that it may suddenly be meaningless?

Below is a 60 minute VIX chart that goes back to June of this year. I do NOT see anything unusual, other than the fact that the VIX has been in a trading range since July.

What is significant, is that the VIX closed at the bottom of its trading range last Friday, while our Oscillator was in overbought territory, and the RSI was sitting on a June/September support line.

* A normal move now would be for the VIX to move higher this morning and engage in a bounce off the current trading range's support.

So in our analysis, the short term VIX view is acting as a good indicator right now.

The confusion for other analyst may be coming from an opposite, longer term VIX possibility.

On a longer term chart (2+ year chart), the VIX has three possible downside support possibilities. It is entirely possible that the VIX could reverse and break the short term support line in the coming days and then move down to 19.83. (The VIX was at 21.31 on Friday's close.)

* 19.83 is the first caution point to watch if you are a VIX watcher. That is an older "double bottom" resistance area, and a "current double support line intersection".

If the VIX were to fall below 19.83, then 17.53 and 16.71 would be the next two resistance areas and both of these are where "gaps" would be closed. If reached, these resistance points are a places where you should tread very cautiously as the markets would be very vulnerable at these points. The odds for moving lower than these levels are very low.

So ... for now, on a shorter term basis, the VIX should bounce of its support and move higher.

From:http://www.stocktiming.com/Tuesday-DailyMarketUpdate.htm

News Update: Japan confirms first case of superbug

Americas Failing Infrastructure Isnt Getting Fixed

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Agri-Food Thoughts

Above, is plotted the days of consumption held in global reserves for the Big Four, corn, soybeans, wheat, and rice. They all fall into a range of 60-95 days. If no production of these grains occurred, in less than 60 days no corn would be available. In the case of rice, in less than 80 days none would be found.

Numbers in that chart do not portray a picture of overwhelming bounty. Such is the reason that global grain markets responded to the Russian announcement. At the same time, the world has really not yet come to know the impact of the floods on Pakistani rice production. That country is the number three exporter of rice.

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Obama Must Create 230,000 Jobs A Month Until The End Of His Second Term For Return To Breakeven - Charting The New "7 Year Itch" Normal

Under the weaker growth trajectory we are now penciling in:

•Private payrolls manage tepid monthly gains of just 25,000 through the end of 2010. As the growth recession fades in the second half of 2011, gains in private payroll employment should accelerate. We expect average monthly gains of 125,000 in the fourth quarter of 2011.
•Therefore, for most of 2010 and 2011, employment growth is not expected to keep up with the rise in the labor force, which means the unemployment rate heads north. We expect a steady increase to 10.1% by the second quarter with a slow fall slightly below 10.0% by the end of 2011.

So let's adjusted the chart using Bank of America's projections, which assumesa gradual increase in the unemployment rate to 10% by Q3 2010 and a decline since then. We chart these projections on the chart below. According to this adjusted case, the payroll number will never return to the December 2007 baseline for the duration of Obama's term, even if one assumes 200K job pick ups beginning in January 2012 and continuing every month thereafter (as we have done). In November 2016 we forecast an unemployment rate of 5.7% using these assumptions. They are presented visually below:


And just to demonstrate what the recession will look like assuming even this quite optimstic assumption, here is the famous post WW2 recession comparison chart adjusted for an expansion of the depression (let's not split hairs here) labor force, that started in December 2007: it is shaping up to be 7 years before the jobs lost finally are put back into the system. And that's for those optimistically inclined.


So before everyone gets all political on who has done a more bang up job of destroying the economy, perhaps both sides can explain how they each got the US to a point where even wildly optimstic projections assume that the length of the most recent economic slowdown will take 85 months to resolve (and, in all reality, far, far longer).


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Webbot predictions predictions about the economy, and U.S. and world events for the summer of 2010 and beyond . Here are some of the highlights of what they see coming:

* No warfare between Israel and Iran, at least not until November.
* Six very large earthquakes are yet to come during the rest of 2010.
* A major tipping point will occur between November 8th – 11th, 2010, followed by a 2-3 month release period. This tipping point appears to be US-centric, and could be a dramatic world-changing event like 9-11 that will have rippling after-effects. The collapse of the dollar might occur in November.
* From July 8th, 2010 onward, civil unrest will take place, possibly driven by food prices skyrocketing, and the devaluation of the dollar.
* A second depression, triggered by mass layoffs, bankruptcies, and the popping of the "derivatives bubble," will see people moving out of cities.
* After March 2011, the revolution wave will settle down into a period of reformation.
* A "data gap" has been found between early 2012 running through May 2013. One explanation is that "our civilization gets knocked back to a pre-electronic state," such as brought about by devastating solar activity.
* A new benign form of capitalism will emerge during 2017-2020.