ROSENBERG: A Crucial Economic Indicator Just Sank To A Level That Coincides With Recession 100% Of The Time

"Economists often note that durable goods orders is one of the more volatile economic indicators that we get every month.

However, there wasn't much sugar-coating anyone could do to the Thursday's report that showed durable goods orders plunged 13 percent in August. Economists were looking for a 5.0 percent decline.
In his latest Breakfast with Dave note, David Rosenberg points to one sub-component of the durable goods report that sent a particularly scary signal.
The three-month moving average of core capex orders (i.e. nondefense capital goods excluding aircraft) was -4.1 percent in August.
"History shows when the trend weakened to the level we see today, the economy was in recession 100% of the time," wrote Rosenberg. "So stick that in you pipe and smoke it!"
This is also bad news for jobs. According to Rosenberg's data, this measure has an 83 percent correlation with private employment.

Rosenberg also notes that durable goods orders has an 86% correlation to the stock market."

at http://www.businessinsider.com/rosenberg-core-capex-orders-recession-2012-9#ixzz27yx3iJck

Greyerz - High Net Worth Investors Pouring Money Into Gold

"Today Egon von Greyerz spoke with King World News about high net worth investors who are continuing to invest in gold and move their existing gold outside of the banking system. Greyerz, who is founder and managing partner at Matterhorn Asset Management out of Switzerland, also said the correction in the metals is over.

Here is what Greyerz had to say: “Gold is at a weekly highly for 2012. In my view we have probably seen the correction. The action in gold and silver is very bullish. They go up to higher levels, they consolidate at the higher levels, with a very small pullback, and then they move higher. I see the next big move as being up.”

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/9/28_Greyerz_-_High_Net_Worth_Investors_Pouring_Money_Into_Gold.html

Continued Destruction Of Money & Its Impact On Key Markets

"On the heels of Spain announcing plans to borrow $266.5 billion next year, today Michael Pento writes about how the massive money printing is impacting key markets, and what to expect going forward. Pento has been incredibly accurate regarding his predictions of central bank moves. He now warns, “... investors should never fight a central bank that has pledged to do everything in their power to prop up asset prices.”

Michael Pento writes exclusively for King World News to let readers know what to expect from central planners, and how it will impact the economy and key markets. Here is Pento’s piece: “Stock markets around the world continue to levitate, despite the fact that the fundamentals behind the global economy continue to deteriorate.”

 

Michael Pento continues:

“U.S. second quarter GDP was revised significantly downward last week, from the previously reported 1.7%, to just 1.3%. The paltry 1.3% reading on GDP followed a first quarter print that was already an anemic 2%. Also reported last week was the worsening state of consumer’s income.

Their take home pay (after taxes) dropped 0.3% in August, as their savings rate fell to just 3.7%, from 4.1% during the prior month. Another worrisome report showed that in the month of September, manufacturing activity in the Chicago region contracted for the first time in three years according to the MNI Chicago Report (released on Friday).

But that weak and worsening economic data didn’t stop investors from sending stocks higher. The Dow Jones Industrial Average climbed 4.3% and the S&P advanced 5.7% in the third quarter...."

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/9/29_Continued_Destruction_Of_Money_%26_Its_Impact_On_Key_Markets.html

Fitch Warns UK Likelihood It Loses AAA Rating Has Increased

"One-by-one, the highest quality collateral in the world (according to ratings that is) is disappearing. To wit, Fitch warns that a downgrade of the UK's AAA rating is increasingly likely: "weaker than expected growth and fiscal outturns in 2012 have increased pressure on the UK's 'AAA' rating, which has been on Negative Outlook since March 2012." The Negative Outlook on the UK rating reflects the very limited fiscal space, at the 'AAA' level, to absorb further adverse economic shocks in light of the UK's elevated debt levels and uncertain growth outlook. Global economic headwinds, including those emanating from the on-going eurozone crisis, have compounded the drag on UK growth from private sector deleveraging and fiscal consolidation as well as from depressed business and consumer confidence, weak investment, and constrained credit growth. But no mention of unlimited QE?..."

at http://www.zerohedge.com/news/2012-09-28/fitch-warns-uk-likelihood-it-loses-aaa-rating-has-increased

Tom Cloud: Silver is the Hot Thing Now

"...
DC: Has the attitude of your customers changed since the announcement of QE3?
TC: The phone’s been ringing off the hook. People get it; they know that the money supply will keep growing and that with a bank account yielding 1%, you’ve got a guaranteed annual loss of 6% – 10% on your purchasing power. Eventually, people will stop worrying about recession/depression and start worrying about getting rid of worthless paper, and the velocity of money will pick up. That’s when precious metals will soar.
DC: How can buyers avoid those tungsten-filled bars that are showing up?
TC: It started with the 400 ounce bars the Chinese and Germans found last year with tungsten in them. No one trades those bars except governments. You’ll notice that right after that the Chinese started a massive sell-off of US treasury bonds. Then everything got real quiet and we haven’t seen any more of those bars..."

Mainland China Treasury Holdings ($ billion)

at http://dollarcollapse.com/precious-metals/tom-cloud-silver-is-the-hot-thing-now/

CrossTalk: BiBi's Bomb

"Sep 28, 2012 by RussiaToday

Is there a fog of war? After years of threat, will Israel attack Iran? And is Iran really a danger to Israel? What role will the US play in this? Is Netanyahu terrified of Obama? And how will the US-Israeli relations evolve? CrossTalking with Miko Peled and Gideon Levy..."

at http://ausbullion.blogspot.com/2012/09/crosstalk-bibis-bomb.html

Bryan (at Gabelli) - Gold Could Easily Double From These Levels

"Today 25 year veteran Caesar Bryan surprised King World News when he spoke about gold moving up another $1,900. He said, “Gold could easily double from here.” Bryan, from Gabelli & Company, also stated, “... there is no question that gold is undervalued today.” 

Here is what Caesar had to say: “The balance sheets of the major central banks, over the last several years, have gone from just over $2 trillion, to almost $10 trillion. We’re talking here about the Fed, ECB, BoE, and the BOJ.”

Caesar Bryan continues:

“Most of that increase has been in the last few years, since the financial crisis. We are clearly not at the end of this, and you could argue that the rate of increase is actually accelerating. I don’t believe that has been properly reflected in the gold market yet.

The gold market breached $1,000 in the beginning of 2008, fell toward the $700 level after the Lehman crisis, and then went back over $1,000 in 2009. Since that time we have had a dramatic increase, a more than doubling of the balance sheets of just those four central banks....

“The underlying price of gold hasn’t even kept up with the increase in the balance sheets of the central banks. So there is no question that gold is undervalued today. As these central banks continue to expand their balance sheets, the upside for gold is very significant.

It’s not as if investors are overweight in gold. On the contrary, central banks and private investors have a very tiny exposure to gold. So should there be a discussion about changes to the financial architecture, with a role for gold being part of that new architecture, then gold would go much higher. Gold could easily double from here..."

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/9/28_Bryan_%28at_Gabelli%29_-_Gold_Could_Easily_Double_From_These_Levels.html

'Perception Is Reality' As Mystical Rally 'Shows' Spanish Budget A 'Success'

"As the words were spewing from the mouths of Saenz, Montoro, and Guindos - with little to no substance at all, so EURUSD started to push higher - in a hurry. In today's quiet market, the correlated-monkeys took over and US equities - thanks to weakness in the USD - and Gold and Oil spurted higher. AAPL - as the high beta proxy for all things market - surged 2% (we assume as the Spaniards will need to buy more AAPL stock to fund the shortfalls in their pension funds). The bottom-line is we have fallen for a few days and so a bounce is not unlikely but the timing and size smells very fishy and the front-running of quarter-end front-running wind-dressing front-runners remains a quagmire of circular logic to us. The bottom-line is that the media can now say the words "the market seemed to 'like' what Spain was saying - is the bottom in?" despite there being no news at all..."

at http://www.zerohedge.com/news/2012-09-27/perception-reality-mystical-rally-shows-spanish-budget-success

Spain: a Bank Run Combined with a Sovereign Debt Crisis

"Regarding the recent coordinated central bank moves, the key take-away point is that the ECB and US Federal Reserve attempted “shock and awe” tactics with their latest announcements by throwing out words such as “unlimited” and “open-ended.”

The implication here was that the Central Banks would do everything they could to prop up the financial markets. However, as has been the case with every Central Bank intervention, there are unintended consequences.

The first unintended consequence concerns the fact that both programs are essentially a form of “intervention to infinite.” The problem with this is that the primary driver of stock prices over the last three years has been the anticipation of more monetary stimulus from Central Banks.

Indeed, the New York Fed itself has openly admitted that were it to remove the market moves that occurred around Fed FOMC meetings (the times when the Fed announced new programs or hinted at doing so), the S&P 500 would be at 600 today.

So, by announcing programs that will be on going in nature, both the ECB and the Fed have removed the anticipation of future Central Bank intervention from investors’ psychologies. This could become highly problematic, especially if these latest announcements turn out to be duds.

Speaking of which…

Spain’s ten-year bond yield has broken back above 6%. To see Spain’s sovereign bond yields rising like this after the ECB announced it would essentially provide “unlimited” buying as support is simply stunning. Why would Spain be imploding like this when the ECB announced it would do everything possible to keep Spanish bond yields low?..."

at http://www.zerohedge.com/contributed/2012-09-27/spain-bank-run-combined-sovereign-debt-crisis

Stimulus Money Does not Flow into Economic Activity it Flows into Asset Prices

"Marc Faber : there is not much global growth at the present time that's the problem , because money does not flow into economic activity it flows into asset prices , into speculation and yes we have diverging move between equities and other asset prices and economic activity with economic activity worldwide being depressed..."

at  http://marcfaberchannel.blogspot.com/2012/09/stimulus-money-does-not-flow-into.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MarcFaberBlog+%28Marc+Faber+Blog%29

The 'World-Straddling Engine of Theft, Degradation, Manipulation and Social Control We Call the Welfare State'

"John Kay is tired of hearing the same old same rants about the unaffordable welfare state that he's been hearing for decades:

The economy depends on the welfare state, by John Kay: It is more than 30 years since I first attended a conference on the global welfare crisis. Rarely have a few months passed without an invitation to another. Last week, Tom Palmer, the American libertarian, came to London to denounce the “world-straddling engine of theft, degradation, manipulation and social control we call the welfare state”..."
 

at  http://economistsview.typepad.com/economistsview/2012/09/the-world-straddling-engine-of-theft-degradation-manipulation-and-social-control-we-call-the-welfare.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+EconomistsView+%28Economist%27s+View%29

Quantitative Easing Did Not Work For The Weimar Republic Either

"Did printing vast quantities of money work for the Weimar Republic? Nope. And it won't work for us either. If printing money was the secret to economic success, we could just print up a trillion dollars for every American and be done with it. The truth is that making everyone in America a trillionaire would not mean that we would all suddenly be wealthy. There would be the same amount of "real wealth" in our economy as before. But what it would do is render our currency meaningless and totally destroy faith in our financial system. Sadly, we have not learned the lessons that history has tried to teach us. Back in April 1919, it took 12 German marks to get 1 U.S. dollar. By December 1923, it took approximately 4 trillion German marks to get 1 U.S. dollar. So was the Weimar Republic better off after all of the "quantitative easing" that they did or worse off? Of course they were worse off. They destroyed their currency and wrecked all confidence in their financial system. There was an old joke that if you left a wheelbarrow full of money sitting around in the Weimar Republic that thieves would take the wheelbarrow and they would leave the money behind. Will things eventually get that bad in the United States someday?
Of course we are not going to see hyperinflation in the U.S. this week or this month.

But don't think that it will never happen.

The people of Germany never thought that it would happen to them, but it did..."

at http://theeconomiccollapseblog.com/archives/quantitative-easing-did-not-work-for-the-weimar-republic-either

It’s in Your Own Best Interest to Learn Just How Bad America’s Debt Problem Is – So Read On!

"Mathematically, the debt problem of the U.S. can not be solved, regardless of economic policies. That, unfortunately, is written. For it to be serviceable would be to violate the laws of mathematics and that cannot happen. [As such, America is quickly approaching a catastrophic economic collapse. As repelling as that sounds, it’s in your own best interest to learn just how bad the situation is..."

at http://www.munknee.com/2012/09/its-in-your-own-best-interest-to-learn-just-how-bad-americas-debt-problem-is-so-read-on/

Gold is a Currency

"We have long been told that gold is a commodity–that it is no different than a bushel of corn or a barrel of oil. In many newspapers, it is listed under the commodity section. With the advent of the Federal Reserve’s recent announcement of “unlimited” Quantitative Easing (QE) or money printing, that has changed. The view of gold as a commodity has circled back to what banker JP Morgan proclaimed to Congress in 1913, “Gold is money and nothing else.” Many folks in the blogosphere have long agreed with the original JP Morgan. It was the rest of the fiat world that wanted us all to believe the enormous lie that gold was only a commodity and not money. Never mind that every central bank on the planet holds gold (and have been buying gold hand over fist for the past few years).
Now, a modern day version of JP Morgan is telling the world, “Gold is a currency.” That’s what $120 billion hedge fund manager Ray Dalio said recently about the yellow metal. Dalio, founder of Bridgewater Associates, doesn’t give many interviews. So, I find it very telling that when he does speak, he says, “It’s not sensible not to own gold.” When asked if he owned gold, he quickly replies, “Oh yeah, I do,” and said people should have “10%” in their portfolios. (Click here to see the complete Ray Dalio interview.) This is what Mr. Dalio said the day before the Fed announced its now infamous “unlimited” QE.
Just last week, Dalio was riding the gold band wagon again and told CNBC the yellow metal “should be a part of everybody’s portfolio to some degree, because it diversifies the portfolio. It is the alternative money.” (Click here for the complete CNBC story.) I find it interesting the man Time Magazine included in its 2012 “100 most influential people in the world” is sounding this warning. I can only speculate, but I wonder what he sees. Is it a banking holiday? Is it a Treasury bond bust as holders of U.S. debt sell in a panic? Does he see inflation or hyperinflation down the road? I wonder if he is anticipating a new currency, or a global derivatives meltdown that leads to a worldwide depression. Maybe it’s all of the above. I don’t really know what he sees, but he sees something, and gold is his choice to counter a black horizon..."

at  http://usawatchdog.com/gold-is-a-currency/

Jim Rickards on Currency Wars

"James Rickards, “Currency Wars” author, on the Fed’s monetary policy and why he believes we are in a currency war today. Jim discusses the strong Australian Dollar and that those holding Aussie Dollars should be buying gold whilst the AUD remains strong. Video link..."

at http://ausbullion.blogspot.com/2012/09/jim-rickards-on-currency-wars.html

Audacious Oligarchy: The Double Flash Crash In Gold - Sept 13, 2012

"The 'Dr. Evil' strategy in two pictures.

From Nanex Research:

Trading was so furious in Gold, that the CME circuit breakers triggered and halted the futures contract for 5 seconds. First on the downside, then on the upside. This is the same circuit breaker that triggered only once in the eMini during market hours: that time was at the bottom of the flash crash on May 6, 2010.

The first halt in the December 2012 Gold Futures contract (GC.Z12) was at 12:14:44: you can see the gap in volume in the lower panel of Chart 1. One second before the halt, 2,000 contracts traded the price down $10, from $1,730 to $1,720. The CME halt logic triggers a 5 second market pause whenever orders appear that would remove all available liquidity and move the price by a certain amount.

For this event, this basically means that if this order represented a true intent to sell, then we should expect additional selling (from the balance of the order that triggered the halt) when trading resumes.

However, in this case, the additional selling did not materialize, which leads us to believe the large sell order was meant to disturb any market based on the price of gold. And disturb the markets, it did.

1. December Gold Futures (GC.Z12) ~ 1 second interval trades with depth of book color coded by how much size is at each level.

Note the gap showing the halt after the drop. The depth of book shows orders continue to be added/removed from the book during the halt."

 

at http://jessescrossroadscafe.blogspot.com/2012/09/the-double-flash-crash-in-gold-sept-13.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+JessesCafeAmericain+%28Jesse%27s+Caf%C3%A9+Am%C3%A9ricain%29

Misinformation & Manufactured Myths

"Your Sunday deep dive:

“The widespread prevalence and persistence of misinformation in contemporary societies, such as the false belief that there is a link between childhood vaccinations and autism, is a matter of public concern. For example, the myths surrounding vaccinations, which prompted some parents to withhold immunization from their children, have led to a marked increase in vaccine-preventable disease, as well as unnecessary public expenditure on research and public-information campaigns aimed at rectifying the situation”

Never underestimate those who have a vested interest in hiding the Truth from the public . . ."

Source:
Misinformation and Its Correction, Continued Influence and Successful Debiasing
Stephan Lewandowsky, Ullrich K. H. Ecker, Colleen M. Seifert, Norbert Schwarz and John Cook
http://psi.sagepub.com/content/13/3/106.full

at http://www.ritholtz.com/blog/2012/09/misinformation-manufactured-myths/

Head Of Iran's Revolutionary Guards: "A War With Israel Will Occur"

"Even as the popular ADHD affliction is preoccupied with who paid what taxes, and whether this poll shows that guy on top or this one, until tomorrow when they flip providing even more meaningless chitchat opportunities, everyone appears to have once again lost sight of the big picture, which is that two US ships continue full steam ahead toward Iran, namely the CVN-74 Stennis aircraft carrier which has crossed the Pacific ocean and is now a week away from its target, and the LHA 5 Peleliu big deck amphibious warfare ship, where they will join two other aircraft carriers and the LHD 7 Iwo Jima as summarized by the graphic below. Why is US naval presence in the Gulf soaring to a concentration not seen since the last Gulf war? The head of the Iran revolutionary guard may have an idea. From Reuters: Israel will eventually go beyond threats and will attack Iran, the commander of Iran's Revolutionary Guards was quoted as saying on Saturday.

As speculation mounts that Israel could launch air strikes on Iran before U.S. elections in November, Mohammad Ali Jafari told a news conference that the Jewish state would be destroyed if it took such a step. "Their threats only prove that their enmity with Islam and the revolution is serious, and eventually this enmity will lead to physical conflict," Jafari said when asked about Israeli threats to strike Iran's nuclear facilities, the Iranian Students' News Agency (ISNA) reported.

"We are making all efforts to increase our defensive capabilities so that if there is an attack ... we could defend ourselves and other countries that need our help with high defensive capabilities."

And just to be clear:

"A war will occur, but it's not clear where or when it will be," Jafari was quoted as saying on Saturday. "Israel seeks war with us, but it's not clear when the war will occur."
"Right now they see war as the only method of confrontation," he said.

And when a war does break out, the only question is what China, Russia and India will do. Iran's stance is clear: "If they (Israel) start something, they will be destroyed and it will be the end of the story for them," Jafari said, according to ISNA.

One thing is guarranteed: in one-two weeks US naval presence in the 5th Fleet will be unprecedented, consisting of at least 3 US aircraft carriers, and 2 amphibious warfare groups, excluding any other naval support the rest of the developed world will throw in..."

at  http://www.zerohedge.com/news/2012-09-22/head-irans-revolutionary-guards-war-israel-will-occur

"What's Next?": Simon Johnson Explains The Doomsday Cycle

"Via Simon Johnson and Peter Boone - Originally posted at VoxEU, (Via CentrePiece magazine)

There is a common problem underlying the economic troubles of Europe, Japan, and the US: the symbiotic relationship between politicians who heed narrow interests and the growth of a financial sector that has become increasingly opaque (Igan and Mishra 2011). Bailouts have encouraged reckless behaviour in the financial sector, which builds up further risks – and will lead to another round of shocks, collapses, and bailouts.

This is what we have called the ‘doomsday cycle’ (Boone and Johnson 2010). The cycle turned in 2007-8 and was most dramatically manifest in the weeks and months that followed the fall of Lehman Brothers, the collapse of Iceland’s banks and the botched ‘rescue’ of the big three Irish financial institutions.





The consequences have included sovereign debt restructuring by Greece, as well as continuing problems – and lending programmes by the IMF and the EU – for Greece, Ireland, and Portugal. Italy, Spain and other parts of the Eurozone remain under intense pressure.

Yet in some circles, there is a sense that the countries of the Eurozone have put the worst of their problems behind them. Following a string of summits, it is argued, Europe is now more decisively on the path to a unified financial system backed by what will become the substance of a fiscal union.

The doomsday cycle is indeed turning – and problems are undoubtedly heading towards Japan and the US: the current level of complacency among policymakers in those countries is alarming. But the next turn of the global cycle looks likely to hit Europe again and probably harder than before.
The continental European financial system is in big trouble: budgets are unsustainable and growth is nowhere on the horizon. The costs of bailouts are rising – and the coming scale of the problem is likely to undermine political support for the Eurozone itself.

The structure of the doomsday cycle

In the 1980s and 1990s, deep economic crises occurred primarily in middle- and low-income countries that were too small to have direct global effects. The crises we should fear today are in relatively rich countries that are big enough to reduce growth around the world.

The problem is that the modern financial infrastructure makes it possible to borrow a great deal relative to the size of an economy – and far more than is sustainable relative to growth prospects. The expectation of bailouts has become built into the system, in terms of government and central bank support. But this expectation is also faulty because, at times, the claims on the system are more than can ultimately be paid.

• For politicians, this is a great opportunity.

It enables them to buy favour and win re-election. The problems will become apparent, they calculate, on someone else’s watch. So repeated bailouts have become the expectation not the exception.

• For bankers and financiers of all kinds, this is easy money and great fortune – literally.

The complexity and scale of modern finance make it easy to hide what is going on. The regulated financial sector has little interest in speaking truth to authority; that would just undercut their business. Banks that are ‘too big to fail’ benefit from giant, hidden and very dangerous government subsidies. Yet despite repeated failures, many top officials pretend that ‘the market’ or ‘smart regulators’ can take care of this problem.

• For the broader public, none of this is clear – until it is too late.

The issues are abstract and lack the personal drama that grabs headlines. The policy community does not understand the issues or becomes complicit in the schemes of politicians and big banks. The true costs of bailouts are disguised and not broadly understood. Millions of jobs are lost, lives ruined, fiscal balance sheets damaged – and for what, exactly?

Over the past four centuries, financial development has strongly supported economic development. The market-based creation of new institutions and products encouraged savings by a broad cross-section of society, allowing capital to flow into more productive uses. But in recent decades, parts of our financial development have gone badly off-track – becoming much more a ‘rent-seeking’ mechanism that draws support from politicians because it facilitates irresponsible public policy.

• The question is: Who will be hurt next by this structure?

There are three prominent candidates: Japan, the US, and the Eurozone..."

at http://www.zerohedge.com/news/2012-09-22/whats-next-simon-johnson-explains-doomsday-cycle

China Officially Warns Japan Not To Infringe Its Territorial Sovereignty; Japan Reciprocates

"If yesterday it was the Middle East's turn to escalate, today it is the Far East, aka Pacific Rim, where China and Japan both remind the world nothing has been fixed in the diplomatic snafu between the two countries over a barren rock in the East China Sea.

First, it was China, which on the front page of the biggest daily Xinhua, over the weekend, demanded that Japan immediately stop infringing upon its "territorial sovereignty. To wit: "China asked Japan to immediately stop all acts that harm China's territorial sovereignty, Foreign Ministry spokesman Hong Lei said late Saturday, after some Japanese landed on the Diaoyu Islands. Hong said the Japanese landed on the Diaoyu Islands Friday evening with the excuse of preventing Taiwanese activists from landing on the islets. "It is a severe infringement upon China's territorial sovereignty, and the Chinese government has lodged solemn representations and strong protests to the Japanese side," Hong said in a statement."

Other concurrent headlines make it quite clear that it is in China's interest to stir populist anger at Japan instead of seeking an amicable resolution. Observe: "Japan urged to "repent" over Diaoyu Islands", "Japan's Noda needs to reset his China policy", "China announces names of geographic entities on Diaoyu Islands", "Safeguarding Diaoyu Islands sovereignty a long-term struggle: official" and the funniest one: "Reception to mark 40th anniversary of normalization of China-Japan ties adjusted".

Which brings us to the second - Japan - which, not known for backing down once it has staked its geopolitical ambitions, has likewise warned China to tone down its response to what, at least so far, has been a clearly provocative move by Japan..."

at http://www.zerohedge.com/news/2012-09-23/china-officially-warns-japan-not-infringe-its-territorial-sovereignty-japan-reciproc