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Jim Cramer Needs To Be Shut Down And Investigated For Illegal Stock Promotion
“No! No! No! Bear Stearns is not in trouble. If anything, they’re more likely to be taken over. Don’t move your money from Bear.” – Jim Cramer on CNBC’s “Mad Money” on March 11, 2008.
Three days later, on March 14, Bear Stearns stock plunged 92% after it was taken “under” by JP Morgan.
Today Cramer has made the claim on CNBC that “a lot of the bear markets have ended since February 10.” According to Cramer, apparel, restaurants, iron ore and machinery groups are now in bull markets. “C’mon in retail stock trading minnows, the water is nice and warm.”
This assertion is just ludicrous. For starters, we know from hard industry data released a little over a week ago – LINK – that the service sector – i.e. restaurants and retail-oriented businesses – are now shedding employees. If a new bull market in consumption were born, service businesses that rely on middle class disposable income expenditures would be hiring, not firing.
Clearly Cramer completely neglects the fiduciary duty to conduct appropriate due diligence before issuing investment advice. Because if he actually rolled up his sleave and did some work, he would have found the middle class is sinking in a sea of debt. Sorry Jim, imminent personal bankruptcy is not conducive to disposable income-based consumption.
Currently a proposed rule issued by the Department of Labor would raise the bar on the investment advisory industry’s standards of fiduciary duty. “Fiduciary duty” is a legal duty to act solely in another parties’ interests. Naturally Congress, funded by CNBC and Suze Orman, Inc are working overtime to oppose this rule.
Using the Bear Stearns case as an example, Cramer was advising his viewers to hold their Bear Stearns stock. But was he acting in the viewers’ interests? More likely, Cramer’s hedge fund cronies were busy unloading their positions in Bear Stearns as quickly as possible before that Titanic hit the iceberg.
I did an analysis of Bear Stearns in January 2008 and concluded that Bear was technically insolvent. I shorted the stock in the low $80’s and managed to cover in the $30’s. Cramer is a complete idiot if he truly thought Bear Stearns was a viable going concern. In the absence of a willingness to believe that Cramer is a moron given his educational background, the obvious conclusion is that Cramer is exceedingly corrupt.
What will it take for the Justice Department to investigate Cramer and all of his off-CNBC dealings? My colleagues and I have known for well over a decade that Cramer is little more than a front for the hedge fund community. Cramer is the Wall Street version of Hillary Clinton. He’s gotten away with committing egregious crimes for so long that he likely is unable to differentiate between legal and illegal. Rule of Law, what’s that? Cramer should not be on CNBC issuing pump and dump recommendations, many of which end up badly impaling retail stock investors. Instead, Cramer should be busy defending himself from a bona fide SEC/Dept of Justice inquiry into his operations.
Cramer also pumped up the infamous “FANGS” today. He singled out AMZN just because Piper Jaffray and Wells Fargo both said AMZN was “doing much better than people think?” Based on what, Jim? “Fiduciary duty” is not defined as parroting comments issued by retail brokerage firms who’s business is predicated on selling overvalued stocks to retail pigeons.
AMZN stock has been up as much as $9 today because of Cramer’s pump and dump call plus the fact that AMZN debuted its online streaming fashion show to promote its new clothing line. Hey there’s an original idea, use the broadcast media to stage a mock fashion show in order to sell clothing. Why didn’t QVC and Home Shopping Network think of that?
If AMZN’s clothing line business is like nearly every other business line of AMZN’s, it will sell it’s clothing for less than the cost of producing and delivering the product to the end-user. QVC trades at a 13 p/e. If AMZN does not make money on its clothing business, at what multiple of zero should AMZN’s clothing business be worth? Currently AMZN’s $9 Cramer spike has melted into a loss of 23 cents. Did you get some of your buddies out on that, Jim?
For original analysis and long term and short term short-sell trading ideas, check out the Short Seller’s Journal. Last week several subscribers made between 50-200% on a “quick hit” short sell trade idea on Big Five (BGFV) that I emailed out them on Monday mid-day. (click on image to subscribe)
SoT – Craig Hemke: Demand For Physical Gold/Silver Will Break The System
The 50 day moving average in gold has turned up and it has bullishly crossed through the 100 dma – it has also bullishly crossed through the 200 dma…It’s almost like the HFT hedge fund programs have been flipped from “sell every rally” to now “buy every dip” because the technical picture is so good. – Craig “Turd Ferguson” Hemke on the Shadow of Truth
The debate raging in the precious metals community is if and when the a big raid on the precious metals market will commence. Today, for instance, gold had drifted higher in overnight trading only to be smacked pretty hard when the Comex opened. That’s nothing new. But what’s new, given the way in which the precious metals market is set up right now, is that after being taken down $12 by the criminal traders on the Comex, gold grinded higher until it was only down a couple bucks by the time the stock market closed. Even more interesting is that fact that the mining stocks (HUI Amex Gold Bugs Index) rejected repeated attempts to take them into negative territory and they finished up over 6 points – 3.6% – on the day.
The trading pattern of the precious metals sector – at least for now – has defied all expectations of the market given that the technical factors currently in place have historically ushered in a vicious takedown of the sector.
This data that I refer to when I talk about the bank picture, whether its the Commitment of Traders report or the Bank Participation report, it’s all dubious crap anyway because it’s generated by the criminals at the CFTC…when they crank out these reports, we’re supposed to take them seriously in the first place? The CFTC is a criminal co-conspirator [in the precious metals manipulation scheme] – Craig “Turd Ferguson” Hemke, SoT
A big variable in the expectation of a big sell-off in gold and silver is the COT “structure.” As of last Tuesday, the “Commercial Sector,” which is primarily the bullion banks, is net short 171,000 gold future contracts. The hedge funds segment of the COT is net long 104k gold future contracts. The “other reportables” and “non-reportable (retail trader) segments make up the rest of the long side of the bullion bank short position.
The net short of the bullion banks is 17.1 million ounces. Currently, the Comex vaults are showing 377k ounces of gold in the “deliverable” account and 6.8 million total ounces. This ratio of short interest to the amount of physical underlying is absurd. Technically it’s illegal because, as Craig discusses in the interview (see below), the CFTC continuously defies the laws in place and enables the banks to skirt mandated position limits on the Comex.
What will happen if one of these days the hedge funds decide to stand for delivery? If just 50% of the hedge funds stand for delivery? While it’s true that in any given delivery period that, at most, 1% of the long open interest stands for delivery, the laws of probability suggest that one of these days a significant portion of the longs will decide to take delivery. This will bust the Comex.
In the interview session below, we discuss this issue with Craig and several other factors right now that are affecting both the markets and the Central Banks ability to manipulate the markets. At some point the demand for physical gold/silver will break the system:
Someday something will change and the confidence scheme will fail. Every uptick [of gold] increases the pressure on that confidence scheme which is why the banks are fighting it so hard…in the end they are just not going to be able to…Craig “Turd Ferguson” Hemke on SoT
The Bulls Are Loose As The Mining Stocks Are Ripping Higher
To the surprise of most, mining stocks continued their stunning upward move that began around January 20. Toward the end of last week, financial media goons, chart readers and analysts who rely on the CFTC’s Commitment of Traders report for “insight” into market direction were all calling for a sharp pullback in the precious metals sector. Most market “oracles” were calling for a sharp retreat in the price of gold below $1100 and silver below $14.
Perhaps most amusing about the plethora of “correction time” and “overbought” commentary on the metals sector is: 1) because of the overt and continuous official intervention in the precious metals sector since 2011, it could be argued that the entire sector has been “artificially” oversold for the better part of five years; we don’t know where the true “oversold/overbought” statistical levels should be because natural price discovery in the sector has been completely suffocated; 2) the current stock market, adjusted for bona fide GAAP numbers, is the most overvalued in history; the stock market, by the same intervention/manipulative forces holding down the metals, has been artificially “overbought for at least 3-4 years now; yet, no one writes commentary on the need for a big price correction in the stock market.
Too be sure, whenever the COT report shows an extreme level in the bullion bank short position in gold and futures, offset by an extreme long position held by the hedge funds, the criminal banks implement a “COT stop-loss hedge fund long liquidation” algorithm which sets off the stop-losses set by the hedge funds and causes the now-familiar “waterfall” chart patterns that result from heavy bank manipulation of Comex trading.
So far every attempt to trigger forced liquidation of gold/silver futures has failed. That’s not to say that it won’t happen. But what makes this current rally even more interesting is the fact that it is occurring while the stock market continues to squeeze higher despite the continued deterioration in economic data.
Typically the precious metals sector will, in general, move inversely to the stock market. The fact that it has moved in correlation with the S&P 500 over the last three weeks suggests that either the precious metals “market” sees the recent move in the stock market as a “faux” rally or the smart money is selling stocks into this rally and moving capital into the precious metals sector, or both.
(click on image to enlarge) The graph to the left shows the last two years of trading in GDX. As you can see, the current move up in the mining stocks has not yet “corrected” the sell-off that occurred in early 2015. You can see that the manipulated sell-off from Jan 2015 to July 2015 was accompanied by a steady decline in volume. Over the next six months, the mining stocks formed what appears to be a very powerful base which was supported with heavy volume. THAT is the unmistakable sign of smart money accumulating highly oversold and extraordinarily cheap mining shares.
I also believe that the current move up in the miners from mid-January reflects the absurd amount of short-selling and naked short-selling that has infested the mining shares since April 2011. Naked shorting has become a big problem but we only heard about it when the S&P 500/Dow were plunging back in 2008-2009. Once the Fed had stabilized the “problem” and began pushing stocks higher with QE, suddenly the naked-short selling was no longer an issue. What happened to the Congressional inquiries and threats of legislative action?
While impossible to prove, it is 99.9% probable the naked short selling in the mining stock sector has been unimaginably immense – historically unprecedented. But once the hedge funds and bullion banks are through fixing their problematic short positions in the miners, they will follow-through with enormous buying.
I am expecting a correction to begin sometime soon. But when that correction has run its course, make sure you are ready to add or initiate positions in high quality junior mining shares, because I believe the next extended bull move in the mining shares will offer the to 
potential to make a life-style changing amount of money.
I just rolled a Mining Stock Journal that will help you navigate the precious metals sector and invest in junior (and some large cap) mining stocks. You can access the MSJ using this link: Mining Stock Journal or by clicking on the image to the right.
Precious Metals Are Ripping Higher As The Government Jobs Report Loses All Credibility
The Government’s non-farm payroll report announced the creation of 242,000 news jobs in February. When the numbers hit the newswires, the Fed trading algos triggered a 12 point spike up in the S&P 500 futures and a $14 cliff dive in Comex gold futures.
The Government’s propagandized economic reporting has deteriorated into nothing more than an epic insult to anyone with two brain cells to rub together. Beyond that, the reports are nothing more than a source of embarrassment for the “experts” who gather on the financial networks to dissect and analyze the numbers for the purpose of “baptizing” the report.
But once the momentum from the Fed’s intervention had subsided, the SPX futures quickly retreated into a loss for the day and gold spiked up as much as $20. The response to the Fed’s “invisible hand” in the market reflects the fact that these blatantly rigged Government-produced economic reports have lost all credibility with the market’s smart money:
Gold and silver this week have traded in complete defiance of Wall Street’s “siren call” for a big price correction. The Goldman Sachs analyst, Jeff Currie, incessantly insists on embarrassing himself with a forecast of $800 for Wall Street’s Pet Rock. Contacts at Goldman told me he was instructed under no uncertain terms wipe some of the rotten egg off his face and get on CNBC to raise his target to $1000.
The behavior of gold this past week reflects an increasing loss of credibility in not just Government economic reports, but also a deteriorating faith in the fiat nature of the U.S. dollar. How can anyone place any faith in a Government which is comprised of nothing but thieves have any “credit” to back its currency? As it stands now, the U.S. dollar is backed by a technically bankrupt Government run by corrupt politicians who serve as well-paid human puppets for the banking and corporate interests who control them.
On an interesting note, it was reported today that is suspending issuance of new shares in its physical gold ETF (ticker: IAU) due to a shortage of registered shares: LINK. This is highly misleading because market makers can borrow shares and short them to buyers. Currently there’s only 2.4 million shares short in IAU out of 635 million shares issued. That’s only .3% of the float, which means there’s 10’s of millions of shares available to borrow and short in order to satiate buyer demand. Compare this to GLD, which has 4.5% of the float shorted right now.
The real reason Blackrock had to suspend issuance of shares is because it is seeing something in the physical market that is stopping the firm from creating new share “baskets” which require the procurement of physical gold to back those “baskets.” The best bet is that Blackrock knows it will ultimately be unable to buy enough physical gold on a timely basis to back the registration of new shares if called upon to do so. In other words, there is a short of Pet Rocks.
Gold and silver are moving higher because all signs indicate that the markets are broken and the Government is beginning to lose control over the system. The flow of capital out of paper assets and in to physical gold and silver is further evidence that the Government, Wall Street and the financial markets are both quickly losing credibility.
Gold And Silver: Governments And Central Banks Are Losing Control
Below is a highly engaging interview with James Turk in which he discusses the key indicators to watch in order to anticipate the next big leg of the precious metals bull market. “To me the real bull market in gold began in 1913 with the creation of the Federal Reserve.”
By law the U.S. Mint is supposed to produce enough silver eagles to meet demand. Originally the law stated that the silver used in U.S. minted coins had come from U.S. mines. The U.S. produces roughly 40 million ounces of silver per year. About five years ago the demand for silver eagles began to outstrip the amount of silver sourced from U.S. mines that could be made available for silver eagle production. The law was amended to enable the mint to use silver imported from Mexico.
From time to time since the summer of 2008, the U.S. mint has had to halt its silver eagle sales because of a shortage of silver. This occurred once again in the middle of 2015 and the production halt lasted about 3-4 weeks. Since that time, the mint has limited the amount of silver eagles to one million coins per week. In 2015 the mint sold 47 million silver eagles, an amount which was stunted by the production halt. It is likely that the mint would be able to sell in excess of 60 million silver eagles in 2016 in the absence of production limits.
Make no mistake, curtailing production like this is nothing more than a form of price control. If the demand for silver eagles outstrips the supply, then the price should rise. “Price” is the ultimate mechanism by which supply and demand is equalized. That is a law of economics. If the demand for silver eagles is greater than supply because the mint can’t secure enough silver to meet demand for its product, then let the price of silver rise to the point at which supply and demand equalize. That’s how free markets are supposed to function.
They can force a market into a certain price level but that has to be met with metal if people are asking for metal to be delivered at those low prices and metal is getting scarce. – James Turk
The fact that the U.S. Government has had to impose production controls on the production of silver eagles is one of the many indicators which reflect the fact that the Government is losing control over the financial and economic system.
The relative price of gold and silver is a thermometer that measures the degree of systemic health at any given point in time. Since gold and silver hit interim bull market highs in 2011, the western Governments and Central Banks have colluded to suppress the price of gold and silver. This was imperative to their ability to continue the massive transfer of wealth from the middle class to the ruling elite through the use of Wall Street’s financial Ponzi schemes and the Fed’s ongoing debasement of fiat currency.
The Shadow of Truth hosted Bitgold’s and Goldmoney’s James Turk for a highly engaging discussion about the current move in the precious metals market. Mr. Turk sees it as yet another signal to the markets that Governments are losing control:
Both gold and silver are so cheap relative to historical norms and historical valuations that it doesn’t matter if it’s overbought, it can stay overbought on a short term basis for a long time – longer than we can possibly expect. What’s important is not short term overbought or oversold indicators but what the trend is. And to me the trend is higher in both gold and silver. I’m measuring this by saying that gold is above all of its short term moving averages. – James Turk
Insanity Engulfs The Stock Market
I have no idea who is throwing cash into this highly overvalued stock market to push it higher right now. Any registered financial advisors or pension managers who are buying into this stock market right now are in serious breach of their legal fiduciary duty. While there’s likely a modicum of retail daytraders and momentum-chasing “hedge” funds chasing the upward velocity, I have a an educated hunch that the Fed and the Treasury’s Working Group on Financial Markets – headquartered in the same building as the NY Fed – are behind this insane thrust higher in the S&P 500 and the Dow.
But as Shakespeare once said (in Macbeth) “nothing is but what is not.” Beneath the facade of the S&P 500 index spike up over the past 2 weeks, smart money appears to be unloading long positions before this “Titanic” hits the iceberg (click to enlarge):
With good reason, too. If GAAP earnings were calculated the way they were calculated 20 or even 10 years ago, the p/e ratio for the S&P 500 would be at its highest in history. Furthermore, “smart” investors would not be chasing stocks higher while earnings and revenues are declining, as they have been for several quarters.
The on-balance volume and positive volume indicator signals in the graph above show an extreme divergence from the direction of stock market. This indicates that – away from the key stocks used to push the S&P 500 and Dow higher – big money is unloading stocks while the SPX/Dow appear to show strength. It’s brings to mind the “Rome burns while Nero fiddles” metaphor.
In the graph above, you can see that the S&P 500 appears to be carving out a pattern similar to the path it took from last August through early November, before it dropped off a 12.5% cliff. No one knows if this same pattern will repeat, but there’s always the chance that the Fed is trying to push the S&P 500 back up to its 200 dma (red line). We’ll know if this gets accomplished soon enough.
Meanwhile, it’s still possible to make a lot money shorting the stock market as long as you are “nimble.” On Monday mid-day, I emailed my subscribers with what I call a “quick hit” trade set-up that had developed in Big Five Sporting Goods ((BGFV) – click to enlarge:
The suggested trade was to buy puts or short BGFV before the close on Tuesday and cover it or sell the puts right after the open on Wednesday (today). I had some additional analysis to support the trade idea. BGFV actually “beat” its earnings number but it required some hard-core GAAP engineering to accomplish this. Revenues were in-line but the stock was hit for over 18% at the open today.
Several subscribers emailed me today with their success on this trade: “Good call on BGFV. Scalped it twice…Thanks for this trade, 117% return in less than 24hrs, not too shabby, lol…Got small position in the $12.50 puts just before the close. Sold this a.m. as instructed for 112%…We did this trade-our first with your service–and got a little better than a triple!!
You can subscribe to the Short Seller’s Journal here: LINK or by clicking on the image to the right. It’s been a difficult stretch for shorting this market but most of my emphasis and 
ideas are focused on longer term trade ideas (12-18 month). I always include ideas for using options with specific examples.
The intra-week email “alert” was not originally part of the service but I tried it out several weeks ago and had a great response. I only send them out when I come across an idea that merits doing so. Finally, SSJ subscribers will be able to subscribe to the coming-soon Mining Stock Journal (hopefully Friday) for half-price.
How Much Silver Is Really Sitting In Comex Vaults?
Can anyone answer the question with any modicum of certainty? All published analysis on the Comex and the Commitment of Traders reports is based on the data reports compiled and issued by the Comex bullion banks – primarily JP Morgan, HSBC, Scotia. All three of these banks have been embroiled in lawsuits and regulatory action in other areas of their business involving fraud and corruption. The COT reports originate from these banks, who operate and control the trade clearing process at the Comex.
If the big banks who operate the Comex are reporting Comex Commitment of Trader and vault inventory reports accurately and honestly, it would be the only segment of their business operations for which they publish information and data that is not fraudulent to some degree, including their SEC-filed financials. I believe that bona fide Comex data reports are a highly improbable propostion. I would not bet on it. Et tu?
All publicly available data used by analysts to write commentary is based on reports that are created for public consumption by the Comex bullion banks. See a problem here? Anyone? Bueller?
Currently nearly every market “analyst” and chartist is calling for a big correction in the price of gold/silver based on two catalysts: 1) the big move in the metals since mid-January and 2) the massive bullion net short position in gold and silver vs. the massive net long position of the hedge funds on the Comex per the weekly COT report.
Historically, a position “set-up” like this has predictably led to what I call a “Commitment of Traders stop-loss long liquidation operation” implemented by the bullion banks. The bullion banks know where the hedge funds have stop-losses set against their positions because the bullion banks are the entities that clear these trades on the Comex.
Typically the banks will set off stop-loss limit triggers on days when they are able to dump enough paper on the Comex to cause a “waterfall” drop in the price of gold/silver. This occurred on Monday morning, shortly after the p.m. price “fix” in London. The “waterfall”
drop on the chart is created when a significant number of stops are triggered, which forces the automatic selling of hedge fund positions. (click on image to enlarge)
When a stop-loss long liquidation operation begins, it typically lasts several days, with large “shock and awe” price drops occurring over that period. Most chart and technical analysts were issuing $14 price targets for silver last Friday. As of Monday mid-day, it looked like those forecasts were almost certain.
But the current attempt by the banks to force-liquidate the long positions on the COT seems to have been stalled – at least for now. After the hit on Monday, the metals bounced back to unchanged from Friday. Yesterday, on a day when the SPX squeezed up over 2% – and the metals typically move inversely to stock market moves like that (“risk off”) – gold and silver jumped back up their pre-hit COT smash levels of early Monday morning. Another take-down attempt followed and today the metals are once again in rally mode. One wonders if Dennis Gartman and Clive Maund are scratching their heads at this point.
Everyone reading this is aware that the Comex inventory of gold and silver has been declining over the past several months, especially the metal that is declared to be “registered” (available for delivery). Even more stunning has been the absurd spike in the ratio of paper gold/silver contracts vs. the amount of underlying physical metal declared as “registered.”
The fact that the corrupt bullion banks on the Comex are having trouble implementing their standard procedural COT stop-loss long liquidation operation has lead me to question whether or not the Comex vaults truly have the amount of metal as reported. Yet to be noticed or commented on, the deliveries for the March silver contract so far have been unusually small. This is because the “issuers” have not yet issued very many delivery notices. Typically in a relatively large delivery month, like March, a lot of notices are issued in the first few days of the delivery period, which started Friday afternoon. Why aren’t issuers sending out delivery notices in volume right now?
Currently there’s 3,440 open silver contracts representing 17.2 million ozs of silver. In the first two days of the delivery period, only 32 notices have been issued. JP Morgan and Scotia – no surprise there – have been the primary issuers and stoppers. As of yesterday, the Comex vaults were reporting 24.7 million ozs in the registered account.
But are there really 24.7 million ounces of silver sitting in the registered account section of the vaults? Yesterday over 1.7 million ounces of silver was removed from the eligible accounts. None of it was moved into the registered accounts. My guess is that there might be some “Charles De Gaulles” out there who are starting to wonder the same thing as me about the amount of silver actually sitting in Comex vaults.
With the Comex registered, “deliverable” inventory at a historic low, a run on the Comex gold and silver “bank” would make things really interesting in the markets…
U.S. Economy Is Collapsing Underneath Flood Of New Debt
Debt creation behaves like printed money until the time at which the creditor demands to be repaid in full rather than extended through refinancing. The continuous expansion of debt is therefore no different than continuous money printing up to the point at which the credit markets will no longer tolerate more debt.
The U.S. economic system is riddled with more debt now than in 2008 when a de facto financial collapse the Great Financial Crisis occurred. Debt behaves like printed money until the time at which the debt has to be repaid. The Federal Government never repays the debt is issues. It rolls over maturities while at the same time it issues more debt. This happens every two weeks. There’s now $19 trillion in Treasury debt outstanding. That number was about $10 trillion when Obama took office in 2008.
Perpetual debt refunding and increased issuance is NO DIFFERENT THAN OUTRIGHT MONEY PRINTING. Until of course, the creditors will no longer tolerate the refinancing of existing debt. That’s what happened in 2008. The market forced the issue and the financial system was collapsing until the Treasury facilitated an eventual $4.4 trillion in outright money printing.
The difference between then and now is that the amount of debt issued is significantly greater today than it was in 2008. While everyone was watching the Fed’s printing press to monitor the creation of money, no one was keeping track of the spending “power” being created by the fractional banking system’s credit market funding mechanism.
This illusion of economic “wealth creation” is perhaps best represented by the auto market, in which sales have soared to record levels over the past few years. The problem is that the amount of auto loans issued to drive this level of sales is, by far, at an all-time 
high. At least one-third to half of this debt issued since 2010 can be considered sub-prime, even though the bankers may not have labelled it as such. While the headlines today might herald “strong” auto sales in February, bear in mind that it is primarily funded by artificially low interest rates and non-income verification 100%+ loan to value debt. Private market credit companies that are now offering “equity” loans to people who own cars with little or no debt.
The level of debt issuance currently in many respects is even more insane than it seemed during the period leading up to the 2008 credit market collapse. The same is true for mortgage debt. The Government has begun guaranteeing, via Fannie Mae, Freddie Mac, the FHA, the VHA and the USDA (yes, the U.S. Dept of Agriculture), this issuance of 0-3% down payment mortgages down to scores as low as 500. Even more absurd, the .01 – 3% portion of the down payment does not have to be in the form of cash contributed by the buyer. That “down payment” can take the form of seller concessions or loans to the buyer. Home equity loans are back in full force just as prices in most areas are starting fall rather quickly. While not quite as crazy as the non-doc 125 LTV option-ARMs underwritten during the big housing bubble, the destructive force that will occur when these mortgages go into default will be even greater than the first time around.
I get irritated by all of the financial analysts out there who point to the rest of the world – especially China – as being the source of global economic weakness. A global economy sinks or swims together and the U.S. economy is one of the biggest “swing” factors in the global economy. Make no mistake, the U.S. economy is likely already technically in recession despite small pockets which are still showing some pulse. Moreover, United States’ contribution to global economic growth over the past six years has been nothing more than the illusion of economic activity which was fueled by both the outright money printing from the Fed’s printing press and the de facto money printing of the Fed’s electronic credit creation mechanisms.
The time-tested economic law of diminishing returns is starting to engulf the U.S. economic system. The credit markets are starting resist additional credit issuance and the U.S. economy, notwithstanding the phony Government economic reports, is starting to head south quickly – click on image to enlarge:
Formal headline activity continues to run well above economic reality as signaled by a number of business indicators, such as corporate revenues, domestic freight activity and a variety of better-quality economic series, such as industrial production, new orders for durable goods and real retail sales. Even housing starts and construction spending are signaling a fourth-quarter contraction. – John Williams, Shadowstats.com
The stock market is spiking higher on the expectations that western Central Banks will start printing more money again. That may juice the markets for a bit longer than expected but the graphs above show that more printed money will not stimulate real economic activity. The credit markets started to collapse in the fourth quarter, led by defaulting energy debt and lower quality junk bonds. Those were just warning tremors of the massive credit market heart attack coming through the arteries of the U.S. financial system.
I sent out a mid-day notice to the subscribers of my Short Seller’s Journal mid-day yesterday alerting them to an opportunity to make money today. Despite the 1.8% spike up in the SPX today, the stock I recommended as a “quick hit” short is down over 5% right now. If it misses its earnings when it reports after the market closes, this stock will drop at least 25% tomorrow.
Silver Eagle Sales Set A February Record
Betting against gold is the same as betting on governments. He who bets on governments and government money [fiat currency like the U.S. dollar] bets against 6,000 years of recorded human history. – Charles De Gaulle
Silver, for 6,000 years of human recorded history, has been “poor man’s gold.” In fact, based on everything I can find on the topic, silver was used as currency before gold. Buying silver with the gold/silver ratio at 80 is like buying gold on steroids.
Charles De Gaulle is the person who is credited with forcing Nixon to “close the gold window” in 1971. De Gaulle had figured out the U.S. had issued far more debt to foreigners than it had in gold to back that debt, per the requirement of the Bretton Woods Agreement. De Gaulle had been quietly exchanging Treasury debt purchased by the French Government for gold, per the terms of Bretton Woods. Before De Gaulle had a chance to clean out the Treasury’s gold, Nixon unilaterally and illegally terminated that portion of Bretton Woods. To this day I have not read a reasonable analysis which explains why the rest of the world enabled the U.S. to get away with this.
The massive issuance of paper claims on the stock of physical gold and silver supposedly available to deliver into those claims should they be exercised has risen to proportions which would make the Johnson and Nixon Governments blush. Meanwhile the visible inventories of gold and silver continue to diminish (see this, for instance: Deliverable Silver Stocks At The Comex Reach Historic Low).
it seems a small portion of the U.S. public understands the reasoning behind De Gaulle’s assertion above and has been converting fiat dollars in poor man’s gold, as U.S. minted silver eagle sales hit an all-time high for the month of February: Sales Of Silver Eagles Smash February Record.
If the percentage of the public – currently estimated at maybe 1% – that is buying gold and silver were to increase by just a few percentage points, the monstrous paper gold/silver short position underwritten by the bullion banks and the entities standing behind the bullion banks will go from potentially unmanageable to catastrophic.
Many of us think silver will be the ultimate “Achilles Heel” of these entities who have been aggressively manipulating the price of gold and silver since 2011. While the impending move by Governments to a “cashless” banking system will likely cause a run on cash at the banks by the public, I believe that the run on cash will be followed by a run on gold and silver.
Paper money eventually returns to its intrinsic value – zero. – Voltaire
Something feels “different” about the way the precious metals are trading. This is reinforced by trading action in the mining stocks. The silver junior stock I recommended in
the Jan 10th issue of the Short Seller’s Journal is now up 50%. It could easily be a 5-10 bagger from here. I recommended another silver stock, an emerging producer, in the current issue. I also featured a short idea this week that could quickly shed 50% once this latest short-squeeze bear market rally subsides. Today might have been the start of that. You can subscribe to the Short Seller’s Journal by clicking HERE or on the image to the right.
R.I.P. Vox Populi: Democracy Is Dead In The U.S. – Your Vote Is Worthless
Mind-blowing simply can not describe the realization that this country’s populace is willing to accept Hillary Clinton as a bona fide Presidential candidate. The fact that anyone is willing to support her candidacy is beyond imaginable. Notwithstanding her known illegal activities in her career as an attorney while her husband was Governor of Arkansas and then when he was running for President; notwithstanding all the scandals to which she was connected while her husband was in the Oval office; the fact that Hillary is now the Democratic front-runner in the Presidential race is the direct manifestation of just how far into the abyss toward collapse that the United States has fallen.
Based on all the evidence, there is no question that Hillary has been completely “captured” by Wall Street’s siren call of riches. Both she and her husband have been paid millions by the Too Big To Fail banks for speech-making appearances. Hillary’s public financial disclosures show she earned $2,935,000 from 12 speeches to Wall Street banks alone from 2013 – 2015; Deutsche Bank paid her $485,000, Goldman Sachs an astonishing $675,000 for a single speech. Wall Street banks are her leading campaign contributors.
What could either Bill or Hillary possibly teach these bankers other than how to break the law and get away with it? This speaks nothing to the fact that Hillary has been exposed for selling National policy initiatives to the highest bidder abroad per her emails which were hacked and exposed. The entire spectacle of Hillary’s campaign is a nightmare beyond imigination turned into reality.
On the other side of the “aisle” is Donald Trump, who’s improbable run for the Presidency has turned into a cult of personality parade that gains more popular support by the day. And for good reason. Trump’s support base is comprised of everyone in the U.S. who is fed up with the openly flaunted corruption and fraud conducted daily by the DC and Wall Street elite. His message and the manner in which it is delivered appeals to a growing majority of Americans who, up until now, have felt powerless to do anything about the criminals who have overtaken our system.
Make no mistake, I’m not in support of Trump as President anymore than I am of Clinton. I’m just pointing out that Trump represents a voice in this country that has been snuffed out by a political process which has been overrun by the big money that has completely enslaved DC in its entirety.
The DC and Wall Street establishment are terrified by Trump. He can self-fund his campaign and therefore is not dependent on the flood of money thrown at politicians by Wall Street, Big Pharma, Big Oil, Big Defense, Unions, Soros, Buffet and Walmart. Perhaps emblematic of this is Fox News, which is Rupert Murdoch’s personal neocon propaganda generator. Fox News has thrown overt support behind every pathetic Republican contender except Trump. I was quite entertained watching the network do it’s best to revive Jeb Bush from a political coma. The network will probably still promote his candidacy even though it’s now buried along side Jimmy Hoffa.
After Super Tuesday establishes Trump as the outright leading candidate from either Party to be the next President, I expect that the inside elite will go to work implementing some kind of plan to sabotage Trump. The Washington Post featured an article about 10 days ago which explained that the Republican “elite” are terrified of Trump: GOP elites just became even more nervous about a Trump nomination – LINK.
At this point in time if the Presidential election held today, I would bet big that Trump would be elected. Because of this, the establishment DC and corporate/banking insiders are going to do what it takes to defy the voice of the public and do everything within their means to dispose of Trump. It’s going to get weird, no doubt.
Make no mistake, democracy is dead in the United States. Any last remnants were shattered with the Supreme Court’s Citizens United decision. If you don’t know about this case and its significance, your “right” to vote should be revoked.
Beyond the fact that big money is completely in control of the Government, the election process in this country has been reduced to nothing more than the political reality tv version of The Jerry Springer show. Casting a vote is nothing more than a time-wasting affirmation of one’s support for a system that has failed. I’m sorry, Virginia, there is no Santa Claus and your vote does not matter.