Beiträge von Schwabenpfeil

The Fannie Mae troubles continue to linger:

Fannie says regulator finds new accounting issues

WASHINGTON, Feb 23 (Reuters) - Fannie Mae on Wednesday said its federal regulator has identified several accounting and internal control issues and raised new questions about the mortgage funder's accounting in an ongoing probe.

Fannie said its regulator has identified policies that appear inconsistent with generally accepted accounting principles and internal control deficiencies that the agency believes may raise safety and soundness concerns.

The accounting issues raised by the regulator include securities accounting, loan accounting consolidations and practices to smooth certain income and expense amounts.

The regulator, the Office of Federal Housing Enterprise Oversight, also identified new developments related to FAS-91 -- an accounting standard for nonrefundable fees and costs associated with originating or acquiring loans.,,

-END-

CARTEL CAPITULATION WATCH

More on the CPI and other US economic news:

WASHINGTON (Reuters) - Consumer prices inched up just 0.1 percent in January as energy prices tumbled sharply for the second straight month, according to a report on Wednesday that may help quell recent anxiety on inflation.

Excluding volatile food and energy costs, the Consumer Price Index, a widely used inflation gauge, rose 0.2 percent for a fourth straight month in January, the Labor Department said.

Wall Street economists had expected a 0.2 percent rise in the CPI, both overall and excluding food and energy, but traders had been bracing for the possibility of larger gains after a report on Friday showed a big pickup in core producer prices.

-END-

07:50 UBS chain store sales (0.1%) in 2/19 week vs. +0.1% in prior week
* * * * *

14:00 FOMC minutes for Feb 1-2 meeting indicate policy makers still felt funds rate target was too low
* * * * *
14:04 Follow-up: FOMC minutes
At the Feb 1-2 meeting, policy makers continued to believe that the funds rate was too low to sustain stable prices; here is the operative passage: "A higher nominal federal funds rate was seen as needed to contain risks of increased cost and price pressures, but even with this action, the real federal funds rate was generally seen as remaining below levels that might reasonably be associated with maintaining a stable inflation rate over the medium run. The pace of policy moves at upcoming meetings, however, would depend on incoming data."
* * * * *

09:07 PPG announces price increases
The company announced that it is raising prices effective 3/15 for all liquid, electrode position and powder products in North America for the general industrial, coil-and-extrusion and wood segments.
* * * * *

The John Brimelow Report

Enter the Funds?

Tuesday, February 23, 2005

Indian ex-duty premiums: AM $$5.99, PM $5.86, with world gold at $433.50 and $433.25. Adequate for legal imports. Quite a respectable performance, considering that world gold was $6 above yesterday on the opening – also at the highest this year.

Yen gold in Japan also saw the year’s high today, and the Japanese response was apparently to sell. Volume jumped 97% to the equivalent of 31,748 Comex lots, and open interest dropped the equivalent of 4,055 Comex – 12.6 tonnes. The active contract closed up 17 yen, but world gold slipped 35c. (NY yesterday traded 72,321 contracts, a telling 31% above the estimate. Open interest rose 4,351 contracts – 13.5 tonnes.)

Tuesday was an unusual day in that gold rose smoothly from the opening in Asia to the NY close. Resistance was encountered from the usual quarter – ScotiaMocatta:

"Gold opened in New York around the 433.00 level and found good two way business with dealers on the sell side and funds generally buying. At one point dealers forced gold as low as 431.20/431.70 but further dollar weakness eventually brought about more gold buying.", but the shock of the dollar slump and the surge in so many other commodities no doubt shook the sellers’ nerve.

Given the sizable $7.40 rise in April gold, the open interest increase might be thought modest: doubtless it masked considerable short covering. The fact that the liquidation in Japan was so large means that the speculative community in aggregate has burned off little ammunition. Comex, based on last year’s experience, could add over 400 tonnes of buying.

The heavy ACCESS volume on Monday night as well as last night (6,840 lots) strongly suggests the entry of US Funds on the long side, which is what one deduced from The Gartman Letter’s enthusiasm yesterday too. Gartman himself very unusually turned up in the Bloomberg final comments on gold:

"The announcement from South Korea will ``give cover to other central banks that wish to follow,'' said Dennis Gartman, an economist and editor of the Suffolk, Virginia-based Gartman Letter, a financial newsletter. ``It adds confusion and disconcertion for the dollar, and that breeds support for gold.'' ." doubtless the result of a whisper from a client/friend.

TGL is in fact commendably calm in the face of the well-orchestrated rubbishing of yesterday’s FX Reserve reallocation story by a procession of Central Banks today:

"…gold has settled back toward $434/oz, and it may chose to consolidate just below those highs for a day or two…Given the massive gaps to the upside enjoyed by Newmont, Barrick and others yesterday, we'd not be surprised to see those shares trade very quietly lower today…Those who did not add to their gold positions yesterday should do

so this morning on this very modest correction."

In fact he has reverted to the interpretation of the Gold/Oil spread he had last November, having interpreted it as Oil-negative more recently:

"Gold now seems inordinately "cheap" relative to crude, and were we a Middle

Eastern potentate, we'd be "swapping" our reserve of crude for reserves of gold rather aggressively at these level!.

JB

*DJ US Snow: US 4Q GDP May Be Revised Up On Strong Exports

OK Charlie, sure.

Oh yes, this is a gold column. One big predicable snore for gold right out of the gate. I can barely recall a day when gold was limit up ($6 Rule) and was allowed to follow through in any meaningful way the following trading session. Thus, the early trading today was like a broken record, or chipped disk.

Around mid-day gold and silver caught some solid bids. Morgan Stanley was an aggressive and lonely buyer of gold and silver after the initial/traditional battering. MS found some company when:

*The gold open interest came out revealing an increase of ONLY 4,351 contacts to 267,860. It could easily have been a 12,000 increase. This leaves room for many more specs to enter the buying fray.

*The dollar began to weaken.

*The CRB, after yesterday’s surge to 23-year highs, failed to back off and went on to make new highs, closing at 299.16, up 1.50. Soaring coffe, up 6.5 cents, led the way.

The silver slaughter today was a classic. After all we have an option expiry. The house shorts were not about to allow a bunch of honest speculators to take too much of their money from them; the silver price has really soared the past couple of weeks. At least they would minimize their recent drubbing on the day which counts the most as far as options are concerned. The $7.50 strike price had the largest open spec option position.

The silver open interest was more dramatic as it increased to 102,103, up 3,898 contacts. The in the know friends of the cabal were smacking their lips waiting for today’s orchestrated early stuff job by piling into the short side of silver as gold was rallying. This is why the silver action yesterday was so dismal. What a lousy state of affairs.

This is where I differ a bit from many other market pundits. Most say the price of gold is directly related to dollar weakness. My market watching experience has revealed somewhat of a different fact of life. The Gold Cartel uses the dollar action to keep the upward action of the price of gold as managed as possible. They cap gold on dollar weakness and the attack it on dollar strength. If this were not the case, we would not have the $6 Rule. Yes, gold might correct on dollar strength, however, it would come after a $14 rally, not a $6 or $7 one. This is how gold has traded for years. It could not be more obvious.

If the Korean clarification and bogus CPI news were not phony enough, the Orwellians even trotted out Charlie McCarthy Snow to chime in. A Dow Jones blurb just out:

Abracadabra, it was benign. The dollar then took off in recovery mode after yesterday’s drubbing. Good to know energy prices are giving the US consumer relief. No sense going here too much more. Been there, done that often enough. You have to wonder though how much of what we receive out of Washington and New York isn’t mere propaganda these days? More appropriately, it is hard to believe almost anything emanating out of their camp.

The gold price action? Like clockwork! Yesterday, there was reasoned enthusiasm in most quarters because of the extent of the move. I was rather disgusted based on what I saw. Same drill. The market was capped in the most aggressive manner by the crooks. The one surprise was the after-market when gold rallied as much as $1.50. I pondered how long that would last, as The Gold Cartel NEVER allows gold to rally in the evening following a substantial "limit-up" move the day before.

Didn’t have to wait long for the answer. Soon after Asia opened, gold was 20 cents lower and it was downhill from there on in. The farce goes on.

Soon as the dollar took off, the cabal forces let into gold as planned. The joke of it is that the commodity inflation news of the day before was thrown out the window in today’s early going. It became irrelevant in this rigged market. This is a perfect example of how The Gold Cartel USES THE DOLLAR ACTION to manipulate the price of gold and also keep it in check re other currencies and to minimize any sort of world-wide investment enthusiasm.

05:15 Follow-up: Japan's Ministry of Finance says has no plans to reduce U.S. dollar holdings
Korea and Japan have all announced they do not plan to reduce U.S. currency holdings, while Taiwan said it has not been selling U.S. dollars.
* * * * *

The comments out of Asia arrested the dollar’s fall and it rose slightly. All eyes were to be on the CPI number this morning. After such stunning inflation events of the past week, a surge in the consumer inflation number could be a nail in the coffin for the low interest rate picture in the US for some time. Orwellians to the rescue again and right on cue:

08:30 Jan. CPI reported 0.1% vs. consensus 0.2%; ex-Food & Energy reported 0.2% vs. consensus 0.2%
Prior total CPI revised to 0.0%; ex-Food & Energy unrevised at 0.2%.

A fellow Café member had it nailed last evening:

Is this double speak or what? What the heck does the word "diversify" mean then? They may not be selling dollars outright, but they sure as hell are not going to be buying as many. If that is not what this means, then the entire announcement is totally meaningless.

Someone sure as hell got to these guys in a hurry. I wonder what we have over them? Maybe the threat was that we would pull out completely from S. Korea militarily and leave them to the tender mercies of N. Korea.

The more I see this kind of stuff, the more disgusted and cynical I become.
Dan

As the evening wore on the exculpatory comments from Asia grew more shrill:

S.Korea BOK: Reserves plan not meant to sell dlr
SEOUL, Feb 23 (Reuters) - South Korea's plan to diversify its foreign exchange reserves does not mean that the Bank of Korea would convert dollars into other currencies, the central bank said on Wednesday.

The central bank also said in a brief statement it would not change its foreign exchange reserve ratios based on short-term market factors…

-END-

S. Korea plan on FX diversification not new-c.bank

SEOUL, Feb 23 (Reuters) - South Korea's plan to diversify its foreign exchange reserves, Asia's fourth largest, is not a new idea and the central bank may hold a press conference on the issue, BOK Assistant Governor Rhee Yeung-kyun said on Wednesday.,,

"The central bank is considering holding a press conference during the morning to clarify its stance on forex reserves after volatile moves in the overseas markets," he added.

-END-

February 23 – Gold $434.60 up 40 cents – Silver $7.41 down 8 10 cents

Former Fed Chairman Paul Volcker, "as dangerous and intractable circumstances as I can remember."

"I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said."
- Alan Greenspan, Federal Reserve Chairman; During Congressional Testimony

Or, was the above quote from the Koreans?

An early MIDAS, as I am off to San Diego to watch my niece play for her college tennis team. After yesterday’s debacle, the US went into damage control mode and must have raised Cain with the South Koreans. When the Koreans woke up and saw (or were berated for) the carnage, they began to backtrack on their remarks about the dollar. The fact that their first comments most likely reflected the truth has become irrelevant for the day. Placating the Orwellians in the US became the name of the game for the moment.

Zitat

Original von Ulfur

Im Grunde ist die 6-Dollar-Regel im Zusammenhang mit Goldpreismanipulationen auch völlig unnötig und irrelevant. Das Eingeständnis, daß sie mehrfach durchbrochen wurde, ändert an der Frage der Goldpreismanipulationen keinen Deut. Murphy´s Leugnung der mehrfachen Verletzung seiner Regel zeigt mir, daß er gewaltige Scheuklappen trägt. Sorry.

Wie sieht Du das, mit der 6-Dollar-Regel und deren angeblicher Unüberwindbarkeit

Hallo Ulfur,

zunächst mal ist es wichtig, dass wir übereinstimmend der Meinung sind, dass der Goldmarkt mit Sicherheit nicht nur dem freien Spiel der Marktkräfte überlassen ist

Dann sind wir uns wohl auch einig, dass es keine offizielle 6 $ Regel gibt. Es handelt sich also um eine These von Murphy, die er aus seinen jahrelangen Beobachtungen ableitet ...

Ich habe daher diese "Regel" für mich persönlich daher immer mehr als eine Art "Zielsetzung" des Gold Cartels aufgefasst. Wahrscheinlich ist es keine starre Grenze, sondern eine Art Orientierungsgröße für das Gold Kartell.

Mir persönlich gefällt Murphy ziemlich gut, da "verzeihe" ich Ihm einfach den einen oder anderen "Ausrutscher" oder einzelne "Unpräzessionen". Ob er deshalb "Scheuklappen" trägt ??? Nun, wenn einer einerseits einen engagierten jahrelangen Kampf austrägt, wird er andererseits mit Sicherheit nicht immer völlig "objektiv" sein können ...

Gruß
Schwabenpfeil

Zitat

Original von Ulfur
Zu erwarten: Goldpreis steigt um 7,20 Dollar
und Bill Murphy: Yet $6 Rule Still Reigns

Der schöne Anstieg ohne größere Rücksetzer war kein Zeichen dafür, daß die Goldkabale nicht in das Geschehen eingegriffen hätte; denn eigentlich hätte der Goldpreis ja um 10 bis 20 Dollar steigen müssen

Hallo Ulfur,

was ist denn Deine Meinung zum Goldmarkt ? Ist er manipuliert oder nicht ?

Gruß
Schwabenpfeil

Zitat

Original von LordExcalibur

Das muss nicht unbedingt so sein.
Um das genau zu berechnen wäre bräuchte man die Volatilitäten und die Korrelation.

@ All: Risiko und Chancen gehen aber immer Hand in Hand. Wise hat die bekannten Argumente für Silber noch einmal sehr schön zusammengefasst. Ich mache deshalb meine Anlageentscheidung über die Aufteilung sehr bewusst nicht von irgendwelchen Berechnungen abhängig

Gruß
Schwabenpfeil

Appendix

PS

God forbid a financial tsunami hits with little warning. However, if it does, gold could shoot up $25 in a day, silver $2 in a single Comex trading session. In a tsunami The Gold Cartel will have too many bouncing balls to keep in the air. They will be overwhelmed by demand for physical gold from all over a frightened world. Their monstrous derivatives related short positions could easily become a nightmare for them.

Very quickly here we have a development which MIDAS has been yapping about for the last couple weeks: the perfect storm which has been looming on the horizon looks a great deal more ominous. Rising commodity prices and inflation are bad for the consumer. Not good for corporate profits either. A sinking dollar is also not good for the inflation front. Hard to imagine long-term US interest rates not going a good deal higher in this environment to boot, barring a market collapse.

The Fed is in a pickle, ironically, so soon after Chairman Greenspan stated the following before the House and Senate Banking Committees last Wednesday and Thursday:

``The economy seems to have entered 2005 expanding at a reasonably good pace, with inflation and inflation expectations well anchored,'' the Fed chairman said in the text of testimony to the Senate Banking Committee. ``The evidence broadly supports the view that economic fundamentals have steadied.''

Inflation and inflation expectations have taken a dramatic turn for the worse in only days. The odds are they will intensify in the weeks ahead. Should the Fed raise rates to combat these developments (are they really new developments, or hidden ones which can no longer be ignored?), they risk the economy going into a tailspin should interest rates go up too much too fast. They risk letting inflation get out of control and a dollar collapse should they lay back too much.

Any way we look at it, the day for gold to be KING investment is fast approaching. Most of the gold world pundits are still neutral to bearish. The general public still cannot spell gold yet. When they learn how to, gold, silver and the PM shares will go ZOOM.

They remain THE historic investment opportunity of a lifetime.

GATA BE IN IT TO WIN IT!

MIDAS

From yesterday’s Presidents' Days MIDAS special:

Technically, please note how important 210/212 HUI and $430 gold is.

April Gold
http://futures.tradingcharts.com/chart/GD/45

HUI
http://bigcharts.marketwatch.c…&o_symb=hui&freq=1&time=8

There is powerful resistance for both at those levels. Once they are taken out, which I expect to occur this week, both gold and the HUI should take off.

***

And that is what is happening so far. The XAU rose 3.64 to 99.93, while the HUI gained 7.85 to 217.74 and is only a stone’s throw from taking out key resistance at 220. Gold should leave $430 in the dust. Will wonders ever cease? The HUI closed on its high for a change, not selling off late as has been the usual case for some time.

Chuck checks in:

Long time, no write. It is during these times of little happening or inspiration that I so deeply admire Bill and his Quixote cause. It is his unflagging perseverance and confidence that his cause is not only noble but right that he can put out a daily diary that keeps our eyes fixed on the financial truth. It is easy to write when the tides of the markets flow out positively. The words and confidence can ooze easily and you know that your readers enjoy your insights. It is a happy time for everyone.

But we know that markets ebb and flow in cycles--in advances and in sometimes painful corrections, as many of us have had to endure over the past year plus. As I have tried to point out, that unlike the stock market, the precious metals always seem to be on the defensive with gaps and sharp drops the norm not the exception. Those who are invested in the stock market never seem to share our problems. The volatility now rests at an all time low. There are no sudden downside lurches nor dramatic gaps, just a giggly upswing devoid of any concern whatsoever. And this occurring among the frightening deficits and debt that threatens to topple the whole international system. As the great Mad philosopher, Alfred E. Newman says, "what me worry?" It has been frustrating and very, very annoying to all of us.

But, I believe that the tide has finally turned. The markets held up by the schemes and rigging of a corrupt financial empire have now reached their saturation point, and we are now confronted with either a loss of control by those "evildoers" or a gravitational drop as the last buyer is sated or in the case of gold, the last seller and capper.

Remember that until now we have not had the wind at our back, i.e. a real bear market in stocks such as we had in 1973-74 and carrying with it a real fear of what might lie ahead. As this phase unfolds we shall witness enormous flows of paper transferring into gold. And joining in to this shift will be the collapse in the biggest Ponzi scheme of them all, the levitating and eerie real estate market. The stock market affects many people. The real estate market affects much more since it has been the driving engine of the economy for the past 5 years or so.

Our times are not dissimilar although on a different front to one of the great episodes in the history of Israel --the challenge by the prophet Elijah to the false prophets of Baal. In the midst of a tremendous declension in the spiritual condition of Israel, Elijah challenged the corrupt religious system. The question then was who was truly God or if we might apply here, who held the real power. While the false prophets could do nothing more that huff and puff and cut themselves in a frantic attempt to have their false God send down the fire, the God of Israel responded with fire. The false prophets were excised and the course of Israel was changed.

We are heading into this kind of period both in the spiritual realm and in the financial or material plane. We have advocated patience and perserverance in this amazing time. The question again is, "Who has the power?" We shall soon find out the answer. Stay tuned!. Chuck ikiecohen@msn.com

Alan, as mentioned above, the $6 Rule was never more enforced than today. Gold has often closed $6.90 higher or $7.20 up. The price should have doubled those levels today without the same boorish drill by the crooks.

On the South African gold shares and the rand:

Bill,
The South African Rand is up 2.86% today as I write — by far the biggest gain of any currency that Kitco follows. I notice because the strong rand affects the performance of Gold Fields, Harmony and Randgold, which make up 1/5 of the HUI and are weighing the index down these days. I also recently read about a new "use it or lose it" regulation in the country that pressures mining companies to develop or lose their properties. Between currency and regulatory pressures, is it conceivable that the government and central bank down there are trying to force a change of ownership of South Africa's natural resources?
Just a thought but, if true, that would certainly be something for investors to consider.
Best wishes,
Peter R.

It is Swiss input day – another one:

Bill
I am looking forward to your blockbuster Midas tomorrow, with the long awaited alert for the stretcher bearers.

My observation on the currency front is that the Swiss Franc is leading the pack in the flight to safety, now up 2 % at the time of writing, (after copying below at 1.5%) as is gold, and the CHF even moving slightly against the Euro, which is an unusual sign of currency market stress.
This is a signal , reminding us of the 70's when a similar currency panic set in, and eventually the Swiss were forced to introduce temporary measures of negative interest rates for foreign deposits for a few weeks.
Not that I am saying this will happen again, just that I observe the currency markets are under an extraordinary stress this evening.
Maybe this is another sign that Gold is about to break free of the us$ 6 / day maximum rule you have so often commented on and which was also breached today for the first time in how many years?
All JMHO
Best
Alan

On President Bush’s trip to Europe from a Swiss Café member:

hi bill-
don't know how much you are hearing about gwb's "fence-mending" trip to
europe. but, i would say, after watching the eoropean news last night, he isn't doing to well. some of the news shows out of DE and CH showed gwb making his speech and then juxtaposed rummy's, now notorious, remarks about the old and new europe along with shots of the protestors. you probably didn't hear king george, in his news conference with Pres. Chirac, tell the news media that "i can use a another cowboy on my ranch" meaning Mr. Chirac. this was not funny. Mr. Chirac didn't think it was funny. only gwb. or "europe must stand together w/ the u.s. and confront the danger of russia, iran and syria." he must be loony. he doesn't have a clue about european politics, let alone about tact. someone should keep this guy at home. maybe teach him about mending fences on his ranch. he is a laughing stock.
Rwh