|
-- Posted Sunday, 29 October 2006 | Digg This Article
The following are some snippets from the most recent issue of the International Forecaster. For the full 21 page issue, please see subscription information below. SATURDAY OCTOBER 28, 2006THE INTERNATIONAL FORECASTEROCTOBER 2006 (#4) Vol. 10 No. 10-4 P. O. Box 510518, Punta Gorda, FL 33951-0518 An international financial, economic, political and social commentary. Published and Edited by: Bob Chapman E-mail Address International_forecaster@yahoo.com CHECK OUT OUR WEBSITE www.theinternationalforecaster.com SUBSCRIPTION and RENEWAL INFORMATION: 1-YEAR $129.95 U.S. Funds. Make check payable to Robert Chapman (NOT International Forecaster), and mail to P.O. Box 510518, Punta Gorda, FL 33951-0518. Please include name, address, telephone number and e-mail address. We accept Visa and MasterCard charges. Provide us with your card number and expiration date. We will charge your card US$129.95 for a one-year subscription. Foreigners please use foreign U.S. dollar denominated checks or Money Orders. Note: We publish twice a month by surface mail or twice a week by E-mail. international_forecaster@yahoo.com ***** RADIO APPEARANCES: To check out all of our radio appearances click on this link below: http://www.theinternationalforecaster.com/radio.php US MARKETS The elitists, rich, powerful, politically connected never really get pursued by the SEC. If it’s an individual case there isn’t enough evidence. If it is firms like JP Morgan Chase, Goldman Sachs, Citicorp or Bank of America, etc., they pay a fine and it all goes away. Seldom do insiders like Ken Lay get pursued criminally. They are only pursued when there is no other choice. Yes, the SEC engages in selective enforcement. Now two Senate Committees are investigating whether the commission staff, rather then pursuing possible insider trading by the hedge fund, Pequot Capital Mgt., held back when it came to taking the testimony of John Mack, who had briefly worked at Pequot, about his dealings with Pequot’s founder, Arthur Samberg. We covered all this some time ago due to the testimony of former SEC Attorney, Gary Aguirre, who was fired for wanting to pursue the matter. Mr. Mack is an insider elitist, with major juice and political clout. Thus, Aguirre was fired for doing what he was paid to do. The SEC is totally corrupt and has been since its inception in 1934. They are used as political exterminators against those who government wants out of the way or destroyed. Neither Mr. Mack nor Mr. Samberg will see enforcement action against them because they are insiders. Fortunately, the Senate Finance & Judiciary Committees are pursing their investigations of the matter. Unfortunately, we believe they will go nowhere. Our bought-off and compromised Congress will do nothing because the elitists control our government. ... The Fed can try to fool us, but they are not going to get away with it. We now publish their estimated M3, that they refuse to publish, and it may interest you to know that MZM is up 7.4% and M2 is up 6.9% over the past two months. It’s no wonder the real estate market is taking a swan dive. We are already in a recession, unemployment is about to rise and the manufacturing job situation is bleak as free trade and globalization spin out of control. As we have said over and over again the Fed is in a box and they cannot get out. If they lower interest rates, as Pimco believes they will, they will slow the collapse of the housing market but the dollar will collapse. If they do not drop or raise rates, they will get it from both sides. ... As we predicted, economic growth slowed sharply in the third quarter to 1.6% from 2.6% in the second quarter. The experts expected 2%. As we said recession began in January. In order to keep growth rising again the Fed is going to have to accelerate the issuance of money and credit and that will further exacerbate inflation. Aggravating the decline was a 17.4% drop in residential investment better known as house flipping. That is the largest decline since the first quarter of 1991. Housing subtracted 1.1% from third quarter growth. Officially three quarters of growth below 2% constitutes a full-blown recession. Third quarter consumer spending rose 3.1%, up from 2.6% in the second quarter. Consumer spending contributed 2.13% to growth. If consumer spending were to flatten out, which it has too, you can image what an affect it will have on the economy. If it went into minus territory, which it could easily do, it would be devastating. Like at the end of every bull market that we can remember business investment increased by 8.6% versus 4.4% in the second quarter. Equipment and software rose 6.4% versus -1.4% in the second quarter. Inventory fell slightly, cutting 0.1% from growth. Millennium Pharmaceuticals will cut 14% of its workforce, reducing staff to less than 1,000. One thing is consistent about politicians is that they never hesitate to lie. Last month the Senate Committee on Banking, Housing and Urban affairs said, ”In regard to ‘The Housing Bubble & its Implications for the Economy’ that, the sector is just returning to normal and is not poised to crash.” We all know that is a lie. Encouraged by the Fed and our politicians some five years ago the housing industry set forth on one of the wildest building and borrowing rampages in history. As a result of unsustainable real estate prices, builders and lenders as well as borrowers are in serious trouble. Over the next 14 months $1.5 to $2.0 trillion in exotic mortgages, adjustable rate mortgages, interest-only mortgages and option ARMS have to be reset. We predict one-third won’t make it, leading to the greatest real estate wipeout since the Great Depression. This whole fiasco was engineered by the Fed via lower interest rates and a relaxation of lending guidelines. The committee believes homeowners will whether the storm of higher monthly mortgage payments – even if a higher rate of defaults develops. Such a conclusion exemplifies true economic ignorance or bold-faced lies. If payments are higher and consumers have no savings and consumers make up 70% of GDP via spending and they have less money to spend the economy has to slow. You don’t need a doctorate to figure that out. For five years we have witnessed a combination of a Ponzi scheme and pyramid scheme. All that has transpired is that the elitists have bought another five years, which we will all pay dearly for as the recession sweeps the slate clean. Owners and speculators are about to find out that houses are not ATM machines or piggybanks. If these lessons were not enough lenders are still making mortgage loans incredibly easy to come by even for the most unqualified buyers. They must have a death wish – both lenders and borrowers – to continue such madness. No matter which way you cut it we have a debt bubble and the one responsible is the privately owned Federal Reserve. If ever there was a first order of business it is to disband the Fed. They are responsible for the consumer having no savings and heavy debt. You are about to enter an historic financial epoch. Over the past six years the dollar has lost 30% of its value. This past week former Fed Chairman Sir Alan Greenspan informed us that both private banks and central banks were shifting away from the US dollar and toward the euro. Is Sir Alan losing it? He is the one who oversaw the demise of the dollar. He also tells us most of the negative housing news is probably behind us. Our new Goldman Sachs Treasury Secretary Mr. Paulson and a congressional committee have expressed similar conclusions. Sir Alan says there are early signs of stabilization and he sees evidence that buyers are beginning to dig into the inventories of unsold homes. We see absolutely no indication that is so. People have given up after 15 months and pulled some homes off the market. Sir Alan is a liar. As cited before, there is increasing use of exotic loans by those who are dumber than dumb. The credit keeps on flowing and the loans and indebtedness keep growing. Returns keeps falling, so the leverage increases, regulators deliberately keep looking the other way and the risks keep escalating in a falling market. Didn’t you know our real estate market is perpetual motion madness? In the third quarter the average advertised rent reached $978, up 3.9% YOY. We repeat, the Secure Fence Act of 2006 says no fencing on grades of over 10%. Virtually the whole border is over 10%. This is a fraud and holding action so the elitists can pass amnesty. We are being deceived again. NBC and CW Television Network refuse to air ads for a documentary on freedom of speech. They claim they cannot accept these ads because they are damaging to the president. “Shut Up & Sing” opens in NY and LA this week and nationwide 11/10. This is a sad commentary about the level of fear in our society that a movie about a group of courageous entertainers who are blacklisted for exercising their right of free speech is now itself being blacklisted by corporate America. The idea that anyone should be penalized for criticizing the president is sad and profoundly un-American. The Index of Personal Consumption Expenditures has increased 2.5% in the third quarter, substantially below 4% in the previous quarter. The University of Michigan’s October full month consumer sentiment index rose to 93.6 from 85.4 in September. The current conditions index rose to 107.3 from 106.1 and 96.6 in September. Consumer expectations rose to 84.8 from 83.4. The one-year expectation of inflation was 3.1%, unchanged. ... GOLD, SILVER, PLATINUM, PALLADIUM AND DIAMONDS On Wednesday, gold was off $4.00 but came back strongly all day to close up $3.90 to $588.70. Silver was up $0.04 to $11.79. The December contracts were, gold up $3.20 to $590.80, silver up $0.04 to $11.89 and copper down $0.01 to $3.40. The gold access aftermarket was up $4.30 and silver was up another $0.14. Again we believe we’ve already seen the bottom. The HUI was a market leader all day, attaining new recent highs, gaining 9.14 to 316.13, and the XAU rose 3.74 to 134.59. Technically, just like gold and silver, the HUI and XAU look ready for powerful moves after the election. Gold open interest fell 2,860 contracts to 331,598 and silver contracts rose 538 to 109,500. On Tuesday on the CBOT and Comex net contracts on gold fell 1,395. The big Tocom shorts on Tuesday reduced shorts by 135 contracts to 100,225. Goldman covered 1,493 to net out 28,220, the lowest short position this year. We believe GS is getting ready for after the election to go long and we believe they have been buying HUI stocks. Silver shorts rose 30 contracts to 1,998. Wednesday was dull. The Dow rose 7 to 12,135, S&P rose 48 Dow points and Nasdaq rose 60 Dow points. Oil was big, up $2.05 to $61.40, gas $1.59 +.05 and natural gas up $0.60 to $7.59. The euro was $1.2607 +.0050, the pound $1.8782, up .0058 and the Canadian dollar up to 88.83. The 2-year rose decreasing the yield to 4.85%, down 4 bps and the 10’s at 4.72%, off 5 bps. On Thursday, the cartel did its best all day to bash the quality gold stocks trying to stop the gold and silver rally. We are sure they will return tomorrow. What is incredible is that everyone in Congress knows the market is being manipulated, but absolutely nothing is done about it. It’s the markets, Wall Street, the banks, corporate America, our government and even our courts and our Justice Department. Nobody wants to know. Worse yet, are the market professionals and in the case of gold and silver, the company management refuses to speak out. Gold and silver were strong all day. Gold finished at $596.60, up $9.40 and silver rose $0.35 to $12.14. The December contracts were $599.80, up $9.00, silver $12.24, up $0.35 and copper unchanged at $3.40. The access aftermarket was off $1.80 as a prelude to the cartel’s attempt to take gold back down on Friday. Gold open interest rose 928 contracts to 332,526, while silver OI gained 574 contracts to 109,694. On Wednesday, the major Tocom shorts increased their shorts by 6,723 contracts to 106,948. Goldman increased their shorts by 139 contracts to 28,359. The shorts also increased their silver shorts by 139 contracts to 28,359. The gold cartel attacked the producers again hoping to drive gold down and it didn’t work. The HUI fell 1.67 to 314.46 and the XAU slipped .69 to 133.91. It looks like all we have to deal with from the US Treasury is their not good delivery melt gold, which they have to swap with Germany, England or France. They are at the bottom of the barrel. Gold buying from India, China and the Middle East by women had crippled their plans to destroy the gold price and gold as an investment. The gold market is sensing this and gold is perched to make a major move. A political earthquake is in the making from the fallout of the defeat of Congressional Republicans and incumbents and the purge that is about to come our way. The elitist and neocon manipulators are about to have their heads handed to them. It could also be that things could spin out of control and the distorted economy and markets could come unglued. The Dow rose 29 to 12,164, S&P rose 63 Dow points and the Nasdaq rose 132 Dow points. Oil fell $1.10 to $60.36, gasoline rose $0.03 to $1.56 and natural gas fell $0.20 to $7.50. The euro rose $.0078 to $1.2688, the pound was $1.8904, up $.0117, the Canadian dollar rose .23 to 89.06 and the dollar index fell .47 to 85.71. The 2-year Treasury ended at 4.81% and the 10’s at 4.72%. Ian Cockerill, CEO of Gold Fields, sees gold production worldwide falling 1% to 1.5% annually. Friday on the heels of a dreadful 3rd quarter GDP growth number, 1.6%, the market took gas and bonds rallied as investors fled stocks. With these numbers there is no way the Dow can stay over 12,000. Gold had a good day, up $1.40 to $598.00 and silver slid a little to $12.00, down $0.14. Interesting silver in the December contract was unchanged at $12.08. December gold rose $1.20 to $601.00. Gold in the access aftermarket was up $1.20. The burden on the Dow and the lack of gold could be derailing the elitists’ plan for a continued Republican Congress and a return of incumbents. We saw Paulson on CNBC today and he was dreadful. He cannot speak and we were surprised he appeared dumb. Gold open interest fell 10,743 contracts to 321,783 and silver OI rose a sizable 2,424 contracts to 112,098. Gold shorts covered and the silver shorts got more ambitious. The COT report showed large specs reducing longs by 3,894 contracts and increasing shorts by 1,315. The commercials increased longs by 1,213 and reduced shorts by 1,416 contracts. Again we see the pros-pros getting ready for the long side of the market. We are going to have a very strong rally. The small specs increased longs by 1,874 and decreased shorts by 706 contracts. During Thursday’s Tocom session the big shorts increased their net short position by 2,054 contracts to 109,002. Total open interest for all members hit a new low of 248,793 contracts. Goldman increased their gold short position by 2,721 contracts to total 31,164. The silver shorts reduced their shorts by 144 contracts to 2,405. Total open interest also hit a low of 9,056 contracts. The cartel hit the HUI again trying to spook the bullion market and it isn’t working with gold and only slightly with silver. HUI down 3.96 to 310.51. ... ***** SUBSCRIPTION and RENEWAL INFORMATION: 1-YEAR $129.95 U.S. Funds. Make check payable to Robert Chapman (NOT International Forecaster), and mail to P.O. Box 510518, Punta Gorda, FL 33951-0518. Please include name, address, telephone number and e-mail address. We accept Visa and MasterCard charges. Provide us with your card number and expiration date. We will charge your card US$129.95 for a one-year subscription. Foreigners please use foreign U.S. dollar denominated checks or Money Orders. Note: We publish twice a month by surface mail or twice a week by E-mail. international_forecaster@yahoo.com
-- Posted Sunday, 29 October 2006 | Digg This Article
Previous Articles by Bob Chapman
Special Offer:
CGI Central - custom CGI and PHP scripts
** Receive an Introductory Copy of the IF -- Please Use the Form Below**
Please allow 24 hours for a response to your request.
|
