Search This Blog


Search Tool

Aug 16, 2012

GATA | THE GATA DISPATCH: Chris Waltzek: Gold and silver have long way to go before reaching 'mania' stage.

Chris Waltzek: Gold and silver have long way to go before reaching 'mania' stage

9:25p ET Thursday, August 16, 2012

GoldSeek Radio's Chris Waltzek today revisits the "Fear Index" concept of GoldMoney founder and GATA consultant James Turk and calculates that both gold and silver have a long way upward to go before entering the "mania" stage. Waltzek's commentary is headlined "Current Gold Fear Index" and it's posted at GoldSeek Radio here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Financial and Forex Info | The Australian Capital Circle: I didn't beg for the job: Abbott

I didn't beg for the job: Abbott
TONY Abbott has denied he begged key independent Tony Windsor to support him for the role of prime minister following the 2010 election, accusing the rural MP of "changing his story".

The Opposition Leader this morning hit back at Mr Windsor who yesterday launched a blistering attack on Mr Abbott in parliament. Mr Windsor said during the negotiations following the last federal election Mr Abbott told him he would do anything but "sell my arse" to secure the keys to The Lodge, including supporting a carbon tax  (Oz), (West Australian), (ABC), ( Canberra Times), (Age).

Mr Abbott this morning said Mr Windsor's account could not be trusted because he had changed his story several times. "Back in 2010 he said that I didn’t want it enough, now he says that I wanted it too much," Mr Abbott told the Nine Network. "I think Tony Windsor is just embarrassed that along with Bob Brown he is responsible for putting in place the worst government in this country's history."

The political deadlock over offshore processing was broken last night with laws to enable the reopening of processing centres on Nauru and Papua New Guinea's Manus Island passed through the Senate ( Oz), (Daily Tele), (Fin Review). The drama surrounding 67 asylum-seekers who threatened self-harm in order to get a merchant vessel that had rescued them to turn around and take them to Christmas Island continued. AFP are investigating the incident and have spoken to th
Peter Brent
Peter Brent
Too close to call?
When it comes to elections, they do things differently in the Northern Territory.Or do they?
More Peter Brent

The search for yield (just not in stocks): Reuters - Counterparties

Where's a yield-hungry investor to go at a time when the cult of equity is dying (again)? As Peter Lattman points out, junk bonds are the asset class du jour, with JPMorgan's high-yield index returning 10.2 percent since the beginning of the year. Even as new issuance has surged – Lattman says $25 billion in deals have occurred this month, the most for August, and that the market is on pace to catch up to the record $264 billion raised in 2010 – demand has surged even faster:
The average yields on these bonds have dropped to 6.6 percent, hovering near a record low, according to the Barclays high-yield index. Historically, the interest rate paid on high-yield bonds has been 10 percent or higher. And over the last weeks, several companies have issued speculative-grade debt at yields hardly ever seen in the junk bond market.
"You're now seeing 4 to 5 percent yields for weaker companies,” said Adam B. Cohen, founder of Covenant Review, a credit research firm. “These are the type of yields that you used to see for blue chips like Exxon and Pepsi.”
According to Lattman, individual investors, mutual funds and state pension funds are all piling in, with $20 billion flowing into junk-bond mutual funds and ETFs so far in 2012. He doesn't offer any similar figures for pension funds, but increased inflows into junk bonds from that segment would be in line with Sam Forgione's report on how pension funds are exiting the stock market in favor of alternative investments. As Forgione says, "[p]ublic plans with more than $1 billion had a median of 15 percent in alternatives as of June 2012, the highest ever and up from 9.2 percent in June 2011."
That said, diversification, not return, seems to be what the pension fund managers Forgione spoke to are after. That's what motivated their investments in, among other things, hedge funds specializing in cat bonds and Polish HVAC companies:
Pennsylvania Public School Employees' Retirement System spokeswoman Evelyn Tatkovski said investments in catastrophe reinsurance – a type of alternative investment – through firms like Aeolus Capital Management Ltd and Nephila Capital Ltd are attractive because they are "uncorrelated" to traditional stock and bond markets.
The California State Teachers' Retirement System, which has $155.5 billion in assets, invested $500 million in Industry Funds Management in February, which has a 40 percent stake in energy services provider Dalkia Polska – a Polish heating network.
"People need heat, so from a pension fund's perspective, it's highly valuable because there's a continuous sort of cash-yield," said Christian Seymour, head of European infrastructure for Industry Funds Management. "You're certainly going to see an excess return, if you like, over government bonds" while avoiding the volatility associated with stocks, he said.
Ultimately, it's interesting to see that while risky assets of all stripes are enjoying a boom, stocks are still being shunned. Equity funds saw outflows of $4 billion last week, and average daily trading volume this month at the NYSE sits at 3.32 billion shares, the lowest monthly figure since December 2007. – Peter Rudegeair
And on to today's links:
The well-known story of muni bond defaults – Self-Evident
The rich vs. the superrich, in two charts – The Atlantic 
EU Mess
Delaying a euro breakup would mean wasting trillions – Nouriel Roubini
How JPMorgan helped decide Knight Capital's fate – WSJ
New Normal
Welcome to the global "economic twilight zone" – FT Alphaville
Even in Silicon Valley, median household income fell last year – WSJ
Wall Street money has flooded into the "giddy" junk bond market – NYT
A Morgan Stanley trader somehow amassed a $1.3 billion position with a $116 million trading limit – Bloomberg
Pension funds are piling into alternative investments – Reuters
The Romney campaign says you don't do stimulus in a Reinhart/Rogoff recession. Someone should tell Reinhart and Rogoff – Ezra Klein
MF Doom
Jon Corzine may be starting a hedge fund – NYT
There is no manslaughter charge in financial firm incompetence – The Awl
Long Reads
"As a political issue, especially during this presidential campaign season, poverty has receded almost to silence" – NYT
Financial Arcana
$600 million in hot money flowed out of China last month – WSJ
A rousing defense of Jonah Lehrer: He's not as bad as Dick Fuld! – HBR
The NYT could soon have enough cash to make going private attractive – Bloomberg Businessweek

NYT Global Update | Business News - August 16, 2012 -: In Peugeot's Troubles, a Test of Contradictory Campaign Promises for Hollande

The New York Times International Herald Tribune
August 16, 2012
Compiled 20:45 GMT

Global Update


Ecuador Grants Asylum to Assange, Defying Britain

Britain has made it clear that it will not allow Julian Assange, the WikiLeaks founder, to go to Ecuador, so he is likely to stay in the country's London embassy.

11 Killed in American Copter Crash in South Afghanistan

Seven American and three Afghan soldiers were killed on Thursday when their Black Hawk helicopter crashed in Kandahar Province.
The Caucus

Romney on His Tax Rate for Last Decade: 'At Least 13%'

Mitt Romney's statement on Thursday was the first direct response to attacks from the Obama campaign and Democrats who have suggested he paid little or no tax in years before 2010.

Video: Moments of Terror, Without Sound

William Saint Eloi, a deaf community leader in Leveque, Haiti, shares his memories of the earthquake of 2010.


The Disunion of Myanmar

Rather than quell communal violence, the government of Myanmar is further stigmatizing the Rohingya Muslim minority to ingratiate itself with the majority.

Mine Strike Mayhem Stuns South Africa as Police Open Fire

The police fired on workers engaged in a strike at a platinum mine. The news agency SAPA reported that 18 people had been killed.
The Lede Blog

Video Shows South African Police Shooting Miners

A video shows South African police opening fire on striking miners, killing at least a dozen people.

In Lebanon, Sunnis Threaten Shiites Over Kidnapping of Syrians

The expanded kidnapping wave occurred as the war in Syria staggered on, with battles in Aleppo and dozens of bodies found in a landfill outside Damascus.

In Peugeot's Troubles, a Test of Contradictory Campaign Promises for Hollande

Vows made by President François Hollande to spur economic growth and shrink a budget deficit in France have clashed as an iconic carmaker prepares to lay off thousands of workers.

Facebook Shares Hit New Low as a Lockup Period Ends

Shares fell sharply amid fears that early investors eligible to offload their stocks would create a surplus on the market.

Seoul Judge Surprises Tycoon With Prison Term

Kim Seung-youn was convicted of embezzlement in a case that drew new attention to public mistrust in South Korea of the judiciary.
Media Decoder Blog

Justice Dept. Approves, With Changes, Verizon Wireless Spectrum Purchase

The deal to pay $3.6 billion for wireless airwaves owned by Time Warner Cable, Comcast, Cox Communications and Bright House Networks still needs F.C.C. approval.

Big Retailers Plan Effort for Mobile Purchases

A group of big retailers, including 7-Eleven, Best Buy, CVS and Wal-Mart, are forming a company that will offer a way for customers to buy things with their smartphones.

Germans Reopen Investigation on Facebook Privacy

The data protection commissioner in Hamburg, Johannes Caspar, said the company was illegally compiling a photo database of users without their consent.

The NBC Sports Network Hopes Ratings Will Rise

With the Olympics gone, the channel is making changes to get more traction in the ratings.

Home Team Comes Through in London

Britain won 65 medals at the London Games, continuing a resurgence that began after its poor performance in 1996, when it placed 36th in the medal table in Atlanta and won one gold.

The Good, the Bad and the Unforgettable

The 2012 Olympic Games had moments to remember and some to regret.

Colorado Shooting Haunts an E.R. Staff

Workers at one of the emergency rooms where many victims of a mass shooting arrived look back with pride at their performance and horror at the event.

Illegal Immigrants Line Up by Thousands for Deportation Deferrals

People who arrived in the United States as children and wish to stay lined up for blocks in several cities on the first day to apply for deportation deferrals and work permits.

2 Deputies Killed and 2 Wounded in Louisiana Shootings

The two shootings were separate but related in what the authorities described as an "ambush" in a rural town northwest of New Orleans.
Op-Ed Columnist

Israel's Iran Itch

The drumbeat for an attack resumes: Israel should resist it. In patience lies strength.

Finding George Orwell in Venezuela

Venezuela is almost free of illiteracy? True. That's thanks to a drive by the Chávez government? False.
Op-Ed Contributors

Stopping Extremist Settlers

Israel needs to designate radical settlers who carry out acts of violence in the West Bank as terrorists and halt their activities.

NFA Press Release: NFA's Board of Directors approves rule to enhance the customer segregated funds protection regime

DealBook | DealB%K Afternoon: Shine Is Off Wall Street's Big Bet on Internet Start-Ups

Thursday, August 16, 2012
Shine Is Off Wall Street's Big Bet on Internet Start-Ups Though the jury is out on how companies like Facebook and Groupon will ultimately fare and whether the investments of 2011 will turn to busts, Wall Street's biggest investors still have plenty of skin in the game. On Thursday, Facebook's first lockup expired, and its stock fell 6 percent.
    In Debt: After MF Global, a Need to Find New Ways to Protect Customers Stephen J. Lubben says that in theory, customer property at a brokerage firm should be even more secure than money deposited in a bank. Somehow, it never quite seems to work out that way.
    Former College Football Coach Accused of Running a Ponzi Scheme Jim Donnan, a head coach of both Marshall University and the University of Georgia during the 1990s who later became a broadcaster on ESPN, is accused of teaming up with an Ohio businessman to cheat investors out of $80 million.
    Best Buy Founder Presses Case for Takeover Talks Best Buy's founder, Richard Schulze, sent a letter to the struggling retailer's board, reaffirming his commitment to buying the company for as much as $8.8 billion.
    Economic Reports The data released on Friday will include the Thomson Reuters/University of Michigan consumer sentiment index for August and leading economic indicators for July.
    DealBook Video
    Business Day Live: Jay-Z Rewrites Celebrity Investors' Playbook MF Global investigation could end without criminal charges. | Paul Ryan's budget and the economy. | Jay-Z rewrites investor playbook with Nets arena in Brooklyn.

CBS NEWS | Political Hotsheet Top Stories: Ryan denies requesting stimulus funds

The CBS News Political Hotsheet newsletter

Documents contradict VP candidate on requests
Read full story
Ryan denies requesting stimulus funds

White House: Obama administration not paying heed to GOP suggestion that they boot Biden from the presidential ticket, says WH

Romney: I never paid less than 13 percent in taxes Mitt Romney calls Harry Reid's charges that he paid no taxes "totally false"

Ryan: China treating Obama like a 'doormat' President's campaign highlights rival's 2010 opposition to currency manipulation bill

Report: Ryan amended financial disclosure reports The new GOP vice presidential pick recently reported a trust worth at least $1 million that he failed to report earlier

Stocks and Markets in the News | Wall Street at Close Analysis - Thursday, 16 201: U.S. stocks close higher on tech, Cisco

By Wallace Witkowski and Laura Mandaro, MarketWatch 

SAN FRANCISCO (MarketWatch)U.S. stocks posted their best day in two weeks Thursday as gains in the tech sector and reassuring comments from German Chancellor Angela Merkel countered disappointing regional manufacturing data. 

Shares of Cisco Systems Inc. CSCO +9.63% led the Dow Jones Industrial Average DJIA +0.65% higher. The index rose 85.33 points, or 0.7%, to 13,250.11 in recent activity, after touching an intraday high of 13,269.35. 

Cisco shares closed up 9.6% as the stand-out leader on the Dow. The network-equipment maker late Wednesday reported better-than-expected first-quarter results and unveiled a plan to raise its quarterly dividend by 75%. Read more on Cisco. 

Investors use Facebook options to bet on weakness Some 271 million Facebook shares were eligible to hit the market Thursday. Photo: Bloomber.

Other blue-chip tech advancers included Microsoft Corp. MSFT +1.92% , Intel Corp. INTC +1.22% , IBM IBM +1.23%  , and Hewlett-Packard Co. HPQ +1.19%     

Shares of Electronic Arts Inc. EA +5.50%  closed 5.5% higher on buyout rumors, and heavy hitters such as Apple Inc. AAPL +0.87%  and Oracle Corp. also finished higher. Read more about Tech Stocks on MarketWatch. 
The tech-heavy Nasdaq Composite Index COMP +1.04% was up 31.46 points, or 1%, to close at 3,062.39. 

On the other side of the tech coin, it appeared as if more Facebook Inc. FB -0.25% employees were trading online than updating their Facebook pages. The stock price dropped to a record low of $19.69 Thursday as the post-IPO lock-up on some 271 million insider shares expired. Shares closed down 6.3% at $19.87. Read more on Facebook shares on MarketWatch. 
The S&P 500 SPX +0.71% rose 9.98 points, or 0.7%, to 1,415.51, with the tech sector closing up 1.5%. At current levels, both the Dow and the S&P 500 are on track to post six consecutive weeks of gains, and the Nasdaq is looking at five weeks of gains in a row. 

Stocks got an added boost as Germany’s Merkel said during a trip to Canada that Europe’s largest economy was committed to maintaining the euro. Read more on Merkel comments. 
But the gains can be deceiving seeing that equity markets are also mired in one of the longest low-volume stretches of the year.

By the close, just under 3 billion NYSE-listed shares had exchanged hands, the fifth-day in a row of sub-3 billion-share daily volume. August daily trading volume has averaged 3.31 billion shares for NYSE-listed shares, according to Barclays. 

In contrast, Nasdaq volume was slightly above average with 1.9 billion Nasdaq-listed shares trading, compared with an August average of 1.67 billion shares. Read more on August's super-light trading volumes.
“Clearly, markets had a bit of a bid, but I’m not looking for much follow-through,” said Scott Wren, senior equity strategist at Wells Fargo Advisors. “This looks like the calm before the storm.” 

With an S&P 500 target of 1,400 to 1,450 by the end of the year, Wren is looking for another 5% to 10% pullback in stocks this year before he starts talking to his retail investors about buying opportunities. He did not place much faith in today’s market moves being connected to economic data given the light volume. 

But don’t discount the data altogether. Building permits in July rose to their highest rate since August 2008, even though housing starts retreated. Read more on housing data. 
“Building permits are important,” said Russ Koesterich, global head of investment strategy for iShares at Blackrock. “They’re helpful because they’re a leading indicator and suggest that housing is mending, mitigating the risk of a further slip in the economy.” 

But, it’s mainly a “dearth of headline risk” this month that’s taking some of the pressure off the equity market, Koesterich said. The real challenge to markets will come in September, which has a statistically significant negative market bias, he said. In mid-September, the Federal Reserve holds its next Federal Open Market Committee and a German court decides whether the European Stability Mechanism is constitutional under German law. 

Earlier in the session, stocks retreated to intraday lows after the Philadelphia Federal Reserve said its manufacturing index was negative for the fourth straight month, with a reading that fell short of forecasts. Read more on Philly Fed. 
Also, U.S. jobless claims came out slightly higher from last week. Read more on weekly jobless claims.
Providing some market support, a Chinese government website published Chinese leader Wen Jiabao’s comments that subsiding inflation pressures leave the government scope to further ease monetary policy. Read: China FDI data signal flagging confidence. 
Advancing stocks outnumbered decliners by a little over 2 to 1 on the NYSE and the Nasdaq. Advancing volume made up 75% of NYSE volume, and 71% of the Nasdaq’s. 

Shares of Wal-Mart Stores Inc. WMT -3.09% , the world’s largest retailer, closed down 3.1%, as the Dow’s worst performer Thursday, after the company said it could fall slightly short of Wall Street estimates for the third quarter. The company said second-quarter profit rose by 5.7% and raised its forecast for fiscal-year 2012 earnings. Read Wal-Mart raises full-year view; profit up 5.7%. 
Wallace Witkowski is a MarketWatch news editor in San Francisco. Laura Mandaro is a MarketWatch editor, based in San Francisco.

Money Show Investors Daily Alert: Gold Buyers Looking For More Easing

Investors Daily Alert

The Daily Guru
3 Glowing Uranium Stocks, John Manfreda

No-Nonsense Investing

Jim Jubak on

Today's Top Pros' Top Picks

Today's Gurus' Views & Strategies Exclusive Interviews
Election Year Investing, Mark Hulbert

Ideas from Around the World

Today's Featured Videos & Exclusive Interviews
4 Criteria for Stock Selection, Eric Vermulm, CFA

Money Show Traders Daily Alert: The Right Way to Use Oscillators for Profit

Traders Daily Alert

Tips for Traders

Options Idea

Currency Corner

Trading Idea of the Day

Today's Featured Videos & Exclusive Interviews
Election-Year Trading, Jeff Hirsch