Bernanke Speaks at 8:15AM Friday

Watch out if you are still playing in the stock market. He may well talk about QE2, which may tank the market or may send it to a parabolic high. Place your bets. (Wouldn't it be wonderful for the TBTF banks if he simply announces QE2 tomorrow morning?)

From Bloomberg Econ Calendar:

10/15/2010 8:15:00 AM

Federal Reserve Chairman Ben Bernanke speech to the Boston Fed's conference on Revisiting Monetary Policy in a Low Inflation Environment.

Tweet

It's Not Just About Foreclosure, Not Just About Mortgage Either

Here's from 'NoVa' at Yahoo Board:

"The foreclosure process triggers negative accounting events, like recognizing what they call Day 1 and Day 2 losses on repurchases and REO's.

"Banks relied on their internal controls to recognize these business events, er,, foreclosures that leads to accounting entries that leads to financial statements. They relied on the CONTROLS surrounding the robo-signers which have obviously failed to detect or prevent false transactions.
"Shouldn't we be hearing in the news soon about financial restatements ? Their books are wrong and have been wrong over many years...

"CFO and CEO's signed accuracy statements for their enterprise with every SEC filing ... Talk about the ultimate leverage card to play against any firm or the entire industry - SEC accusations always KILL a firm."

He's saying it is SOX (Sarbanes-Oxley) violations.

Don't hold your breath for the SEC crooks to do anything, but ...

Here's a good article by Gonzalo Lira titled "Second Leg Down of America's Death Spiral", discussing the implications of what the MSM has been trying to paint as "technical" glitches. (He doesn't mention SOX.)

Tweet

Alex Jones Interviewed Jonathan Irish

and it is just sickening.

Mr. Irish's infant daughter was snatched by the child protection services from Concord Hospital in New Hampshire.

He called in the Alex Jones show tonight.

He said he and his fiancee were finally allowed to visit their baby with the CPS employee present. The baby was non-responsive. They thought, oh maybe she needs a diaper change, and proceeded to change her diaper. What they found was blood. The baby was bleeding from the vagina. Sheriff deputies were called in. They took the baby to a hospital.

The emergency room doctor told them to take the baby to a child abuse specialist doctor.

Tweet

Nymex, Comex To Launch Gold, Crude Oil Volatility Index

just as gold hit all-time high today. As if they need more volatility heaped on top of it.

From Kitco News:

"Beginning Monday, the New York Mercantile Exchange and its Comex division will launch a gold volatility index and crude oil volatility index for trading on the CME Globex electronic trading platorm. Both indexes, using market data from Nymex and Comex, will trade as futures contracts on Globex and the Chicago Board Options Exchange Volatility Index. The gold volatility index will have a 60-day forward looking index and the crude oil index will have a 30-day look-ahead. Both contracts will be listed on Nymex and Comex, which are part of the CME Group."

Gold and oil already have:
Spot trade
Futures
Options on futures
ETF (unleveraged and leveraged; the latter relys on swap contracts)
Options on ETF (including Weeklys)
ETN

Now the volatility index will be added, you can trade futures or options on the index.

Nymex/Comex may or may not have physical gold to back their contracts. So what do they do? Obfuscate (aka smoke and mirror), and hope people won't notice.

Tweet

And New York State Orders Stops on Foreclosures ...

(the link from Karl Denninger's Market Ticker)

Mortgage Servicers Must Suspend Foreclosures In NY, State Says
(Steven Meyerowitz, 10/13/2010 Financial Fraud Law)

"The N.Y. State Banking Department has suspended home foreclosure actions by mortgage loan servicers, requiring that they conduct internal reviews of their foreclosure practices.

"The servicers were also asked to respond to the Banking Department on the following issues: the steps the servicer is taking or has taken to review the foreclosure process in New York; the results of the review, including a description of the process for verifying affidavits; the corrective action, if any, the servicer has taken or intends to take in response to the review; the measures taken to ensure that affidavits filed in New York foreclosure actions are executed in compliance with New York law; and the status of pending foreclosure actions in New York and measures taken to suspend such actions pending review.

"The N.Y. Banking Department joins 47 state attorneys general and 37 banking and mortgage regulators as part of a multi-state group that is investigating the foreclosure practices of mortgages servicers throughout the country."

Obama sending Axelrod on Sunday to discourage the foreclosure moratorium and downplay the so-called Foreclosuregate as merely a minor technical glitch that they hope will swiftly resolved was surely effective (in letting citizens know which side the White House is on, not that it was any surprise).

Tweet

And Silver Above $24...

Tweet

Gold Hits $1,375.30

Tweet

Goldman Raises Gold Target to $1,650 in 12 Months

From Kitco News:

"(Kitco News) - Goldman Sachs has raised its 12-month forecast for gold to $1,650 an ounce, citing expectations for further quantitative easing in the U.S. and prospects for long-term interest rates to continue falling.

"“With U.S. real interest rates pushing lower off the slowdown in the pace of the U.S. economic recovery and the growing prospect of another round of quantitative easing, we expect gold prices to continue to climb,” said the Goldman report, authored by David Greely and Damien Courvalin. “Despite the rebound in net speculative length, it remains well below levels consistent with the current low U.S. real interest rate environment.”

"Goldman said the decline in U.S. real interest rates is likely to persist, and rates could push even lower in the near term should the Federal Reserve undertake quantitative easing measures. Thus, Goldman said it is raising its gold price forecasts to $1,400, $1,525 and $1,650 on a three-, six- and 12-month horizon. Goldman said its updated forecasts point to an average of $1,575 an ounce in 2011, which is $175 higher than it previously expected.

"“The return to quantitative easing will likely be a strong catalyst to drive gold prices higher, and we expect the gold price rally to continue until U.S. monetary policy begins to tighten,” Goldman said.

"The bank’s economics team expects the Fed to return to quantitative easing with purchases of U.S. Treasury securities of $1 trillion, which in turn should keep U.S. bond yields depressed. Furthermore, the bank said it expects the announcement at the Federal Open Market Committee’s Nov. 2-3 meeting.

"Goldman said the rally since August came as the yield on 10-year U.S. Treasury Inflation-Protected Securities plummeted, with the yield now closer to the 0.50% than the 1.0% imbedded in prior forecasts. It also cites stronger demand for the metal for gold exchange-traded funds and from central banks." [The article continues.]


According to Goldman, 10-year TIPS yield is inversely correlated to the increase in speculative long positions in gold futures. In other words, the lower the 10-year TIPS yield, the higher the speculative longs. (For more about Goldman's reasoning, see their August paper here. Their August target of $1,300 was to be for the next 6 months...)

Tweet

Political Tide Coming Fast and Furious at Obama

A quick look at Drudge headline... Good luck Mr. President. You need it.

Soros: I can't stop Republican 'avalanche'

JEWISH PROTESTERS HURL SHOES AT 'OBAMA' IN TEL AVIV...

BOOK THROWN AT PRESIDENT...

HALPERIN: 'White House in over its head, isolated, insular, arrogant and clueless'...

GORE VIDAL: America headed for 'dictatorship'...

GREEN ECONOMY: Congressional Staffers Gain From Trading in Stocks...

GOP Leaders Slam Obama Over Foreign Contributions 'Lie'...

FLASHBACK: Obama Accepting Untraceable Donations...

Rising leaders in Chinese military 'view United States as the enemy'...

Obama hits links for 52nd golf day...

Tweet

More on MERS

from Karl Denninger at Market Ticker:

The MERS Edifice Quavers.... (Karl Denninger, 10/11/2010 Market Ticker)

(h/t willsin)

Tweet

Get to Know MERS, Your Robo-Signer and Signature Forgerer

From Zero Hedge Poster 'Bob', citing the info from another user 'careless whisper':

let's take a look at who owns MERS:

http://www.mersinc.org/about/shareholders.aspx

here's a deposition of an officer of MERS admitting zero employees for the past five years!

http://stopforeclosurefraud.com/2010/08/27/exclusive-mers-deposition-of-secretary-and-treasurer-of-merscorp-42010/

hey, all you wanna be fraudsters, for $95 per month you too can have a virtual office at the same address where MERS has their "global headquarters" with zero employees; 1818 library street, reston virginia 20190

https://www.davincivirtual.com/loc/us/virginia/reston-virtual-offices/facility-848

It looks like MERS is a shell corporation founded and operated by the MBS banks. And, for just a little entertaining summary of the big picture:

http://www.youtube.com/watch?v=9kPCYcBm-C8&feature=player_embedded
------------------------------------------------------

MERS is owned by the nation's largest banks and mortgage companies.
MERS may not have any employee, is located at 1818 Library Street, Suite 300, Reston, VA 20190, in the same building as a virtual office run by Davinci Virtual Office Solutions with a live receptionist to take their call.

Fantastic.

The Obama administration, some analysts, they are trying their best to dismiss the whole thing as just a minor technical mistake here and there.

It's FRAUD.

4closureFraud.org has an excellent article uncovering Obama's mortgage documents clearly robo-signed, and signatures don't match... It's not just over foreclosure documents, but ALL mortgage related documents of the past decade, or two (or three?).

Tweet

Even Barron's Laughs at SEC's Explanation of Flash Crash

Jim McTague of Barron's magazine wrote an article about the absurdity of the SEC blaming a single "mutual fund complex", aka Waddell & Reed, for the flash crash on May 6.

I thought I got the picture of how the flash crash happened and why, from reading knowledgeable blogsites like Zero Hedge, but there are some new pieces of information in Jim McTague's article I didn't know.

Here's one:

"Twenty thousand trades, totaling 5.5 million shares, were executed at a price 60% or more away from pre-Flash-Crash price levels, and thus later were deemed invalid. At least half those were retail orders."

And here's another, about how the retail investors' orders are handled:

"A brokerage firm will try to match one customer's order with that of another customer in-house. If the firm can't make the trade, it sends the order on to an executing broker. The big ones are Knight Capital, Citadel and UBS. The executing broker will generally take the opposite side of the customer order because retail customers tend to buy high and sell low, so it's easy to make money off them.

"In the rare instances when an executing broker demurs, he sends the trade to a dark pool, usually one owned by his firm. (Dark pools are electronic-trading venues where institutional investors trade stocks away from the public stock exchanges.) If the dark pool can't execute the trade, it is sent to one of the stock exchanges. This largely automated process occurs in sub-seconds.

"On May 6 when the market fell out of bed, the report says blandly, some of these players reduced executions of sell orders but continued to execute buy orders. In other words, they'd sell stock to a retail customer but wouldn't buy stock from a retail customer. They wanted to get rid of their own inventories, not accumulate more shares. So they sent the customer sell orders onto the swamped stock exchanges."

Let me recap the process:

1. Your brokerage firm tries to match your order with that of another customer in-house. If the firm can't match it, it sends your order to one of the executing brokers (Citadel, Knight, etc).

2. The executing broker usually takes the other side of the trade and profit handsomely. But if the executing broker refuses to take the other side, the order goes to a dark pool, usually owned by the executing broker's firm.

3. If there is no trade to be made in the dark pool, the order gets sent to the exchanges.

And so the exchanges were swamped with orders on May 6 when market makers, human or HFT bots, stopped making market.

Lastly:

"Retail stop-loss and market orders were converted to limit orders by internalizers prior to routing to the exchanges. A limit order requires the trade to be executed at a specific price, whereas a market order is the best price available. If the limit order wasn't filled because the stock's price had fallen, it was kicked back to the internalizer who, in turn, set a new, lower limit price and resubmitted it. Orders were kicked back multiple times because prices were collapsing so rapidly. They followed the prices down, "eventually reaching unrealistically low bids," as the report puts it."

And the SEC blames Waddell & Reed for all that.

No wonder the retails have been exiting ever since May 6.

Tweet

Gary North: Ellen Brown Is Cheerleader for Hitler's Economics

See for yourselves, Tea Partiers. (Better stick to von Mises, Bastiat, Hayek, and Rothbard.)

Ellen Brown: Hitler's Cheerleader (Gary North, Gary North's Specific Answers)

"Ellen Brown is a lawyer by profession, a Greenbacker by confession, and a fan of Adolph Hitler's economics by consistency.

"She is quite open about her support for National Socialism's economics, as I shall demonstrate. What is depressing is this: she is getting a respectful hearing in Tea Party circles. Her book, The Web of Debt (2006), is widely cited on the World Wide Web. As of early October, 2010, a Google search for "Ellen Brown" and "Web of Debt" generated close to 600,000 hits. This is huge.

"Here is a tactical problem. For two generations, conservatives have been shouted down by the Left with this accusation: "Fascist!" Ellen Brown is now making this accusation plausible. Yet the great irony is this: Ellen Brown is a Leftist. There is nothing even remotely free market or conservative about The Web of Debt. It is a call for a Federally funded welfare state. She praises the New Deal. She praises John Maynard Keynes. She has only one objection to their recommended programs: governments borrowed money to fund them. She wants a welfare state that is funded entirely by paper money printed by Congress. She is about as conservative as Nancy Pelosi.

"How could her ideas be getting a hearing in Tea Party circles? It's a long story. Let me summarize it." [The article continues at the link above.]

I read several of Ellen Brown's articles at her website in the past. In every single one of them something didn't add up, and I kept scratching my head trying to figure out what was wrong with her argument. Now Gary North is taking it apart for me. He even has a section on his website dedicated to this task (it's in the free section):

... Ellen Brown is the latest in a long line of pro-fiat money, anti-gold currency, monetary statists who have infiltrated the conservative movement.

They have accomplished this for over 50 years by the tactic of wrapping themselves in a flag of opposition to the Federal Reserve System. I call them false-flag infiltrators.

... False-flag infiltrators are remnants of a left-wing American political movement of the late 19th century: the Greenbackers, named after the green currency issued by the North during the Civil War.

Gary North seems to be having fun. And apparently Max Keiser challenged him to appear on his show.

Tweet

OT: Music for the Weekend - Brandenburg Concerto No. 3

by Johann Sebastian Bach, played by Freiburg Baroque Orchestra.

(I'm playing No. 4 in the chamber orchestra, but No.3 is my favorite..)

Tweet

Bank of America Halts Foreclosures in All 50 States

from Zero Hedge:

"As we expected when we reported that the Delaware AG got into the foreclosure fray (Delaware not being a judicial state), it was only a matter of time before foreclosures would be halted in all 50 states. Sure enough, Diana Olick has just reported that BofA has just expanded its foreclosure halt from the 23 judicial states, to all 50 states. And so, the pendulum swings from populist anger to adulation. The only question is when will Tarp 2 be enacted now that banks are facing tens of billions in losses."

Here's a bit more info from WSJ:

"The decision by Bank of America to extend its postponement to all 50 states takes effect Saturday. The bank doesn't intend to lift the moratorium until its assessment of all documentation is complete, a spokesman said."

Tweet

HR 3808 - He's Not Signing It

From the White House Blog:

"Today, the White House announced that President Obama will not sign H.R. 3808, the Interstate Recognition of Notarizations Act of 2010, and will return the bill to the House of Representatives. The Interstate Recognition of Notarizations Act of 2010 was designed to remove impediments to interstate commerce. While we share this goal, we believe it is necessary to have further deliberations about the intended and unintended impact of this bill on consumer protections, including those for mortgages, before this bill can be finalized."

Now what?

TARP2 for the banks?

Tweet

As Expected, Fed's Hoenig Says He Opposes QE2

The Kansas City Fed president Thomas Hoenig spoke today, reiterating his steadfast hawkish position that he opposed further easing by the Fed and favored the fed funds rate hike to 1%.

I don't think much of him. He is just as clueless as the rest of the Fed.

As a FOMC member who has consistently voted against the majority within the Fed, Hoenig said:

1. The recovery is proceeding modestly;

2. The Fed should raise benchmark rates to 1 percent and hold them there to see how the recovery proceeds;

3. The Fed must also keep an eye on its mandate to maintain long term price stability. As the economy continues to improve/strengthen, there will be this enormous liquidity and there will be tendencies for inflationary impulses to rise.

I have issues with all three.

1. What "recovery"? Hoenig must be seeing a different set of data than his colleagues, court economists and Wall Street analysts. I do not believe he is seeing the real world; I don't expect him to be, but what data is he seeing?

2. Just as the majority of the Fed pushing for QE2 and ZIRP as far as eyes can see have no clue, neither does Hoenig. He is saying "Let's raise the rate and see what happens. If the economy tanks, oopsy."

3. The Fed's mandate has morphed into something else, in case Hoenig doesn't know. These days, the mandate is not price stability but to boost up inflation to the "desirable" level.

The Dallas Fed's Fisher also spoke today, who sounded like he was sitting on the fence for now regarding QE2.

The Fed's "good banker, bad banker" routine is getting tired. I have to admit I don't know any more which ones are good and which ones are bad. They seem all bad for the real economy, and we can't do anything about it.

Why? The Fed is "independent", remember?

Tweet

HR 3808 - Barry at the White House Wants to Hear from You

From Tyler Durden at Zero Hedge:

"Bill H.R. 3808, the Interstate Recognition of Notarizations Act of 2010, which was discussed yesterday, and which according to both Reuters and the NYT may have a material impact on mitigating the impact of the High Freq Signing scandal, at least on the servicers, is now open for public comments at the white house.

"Those wishing to tell the president how they feel, may do so at the following link:

http://www.whitehouse.gov/webform/comment-legislation?billname=H.R.%203808%20-%20Interstate%20Recognition%20of%20Notarizations%20Act%20of%202010

"We are confident the White House will promptly disclose all the "well-mannered" comments advising the administration on all sorts of anatomically impossible acts it should engage in should Obama sign off on this."

For more on HR 3808, here's the post from yesterday.

If you don't care about privacy, 4th Amendment, and danger of being tracked by the White House that wants to read ALL of your communications, feel free to go to the link and comment.

Tweet

As Expected, They Are Slamming Gold

They are doing "whack-a-mole" on gold. After reaching $1,365.70 before the equity market opened in the US, gold is being slammed back down to $1,338. Oh I'm so scared.

Now it's back to the level of Tuesday, two days ago.

Look at the sell volume on GLD, gold ETF, today. It almost looks like a hedge fund or two blew up over margin calls.

Tweet

It's Almost Midnight on the West Coast. Do You Know Where Your Gold Is At?

$1,357.00.

I'm sure by the time the US market opens tomorrow morning, the bullion banks will slam it back down. At least they can try...

Citigroup and Morgan Stanley had better raise their targets for gold (Citi $1,450, MS $1,512) soon. Goldman Sachs' target was $1,300, while apparently telling their 'select' clients GS was skeptical of further gold upward movement.

(Oh forget it. While I was writing the post, it went up further. Now it is $1,358.70.)

Tweet