Use the above link
to subscribe to the paid research reports, which include coverage of several
smallcap companies positioned to rise during the ongoing panicky attempt to
sustain an unsustainable system burdened by numerous imbalances aggravated by
global village forces. An historically unprecedented mess has been created by
compromised central bankers and inept economic advisors, whose interference
has irreversibly altered and damaged the world financial system, urgently
pushed after the removed anchor of money to gold. Analysis features Gold,
Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US
Economy and US Federal Reserve monetary policy.
The marquee line
best describing the past two to three months has been that the Dollar Death Dance
has been fueled by failure of US banks & corporations, along with
sponsored assaults against speculative hedge funds. The climate has changed
from liquidation and bankruptcies, obviously steered and exploited by the
Powerz, toward more legitimate attempts to have a recovery initiative take
root across the landscape, It is fast approaching a wasteland. The most vivid
signal of market manipulation, intended to benefit the USGovt borrowing
costs, and designed to promote the totally false notion of a Flight to
Safety, has been the USTreasury bubble. It is not the last bubble. Next will
be the gold & silver bubble in the next few years, as investors wake up
to the reality that hyper-inflation is to take root in 2009. We have ridden
the gold wave from the start. The precious metals will zoom in the middle
months of 2009, as 2008 prices will be seen as the best bargains in a decade.
The deflationists will be silent by the yearend. A few key charts reveal some
important reversals in trend. Details are in the upcoming January Hat Trick
Letter reports.
Tide is turning in
an important political manner. Loan modification in the form of home loan
balance reduction is finally being discussed by the USCongress. Payola
takes time to set up. Foreclosures are not improving, nor are home inventory
levels. Generosity is so broad in the corrupt dens in WashingtonDC that even
redemption for Madoff victims is being discussed by the SIPC. Some will
double their money from fraud twice committed, in a wonderful made-in-America
hybrid scam. Move the entire account over there, reinstate that
‘lost’ account over here, pretty simple. A closer look might
reveal that some ‘victims’ are ringleaders. As the Watergate Deep
Throat said in 1973, follow the money, but this time look where it is hiding,
with full protection from an extradition-free zone. What few seem to expect,
never a surprise to the Hat Trick jackass wannabees, is the next step down
for the big banks. Meredith Whitney once again is beating the drums for the
Bataan Death March, not yet wrong, hardly revered, but surely respected. What
a relief to gaze upon Meredith, rather than Abby Jo!
LONG-TERM USTREASURY
BUBBLE BURSTING
Don’t look
now, but the USTreasury bubble has begun to burst. This should be an ongoing
story throughout 2009. The entire sold story of a Flight to Safety is about
as moronic and baseless as regarding the US stock and bond markets are
regulated. The initial stage was clearly a flight out of non-guaranteed bonds
like mortgages and corporates and junk and emerging nations. All but govt
bonds were found to be junk! The second stage involves the hangover felt
during the morning after, upon realization that the USGovt will fund the $8.5
trillion in pledged programs, bailouts, rescues, and other hidden fraud that
are painfully apparent. If they cannot fund via USTreasury issuance, auction,
and sale, they will print money and purchase in a process called
monetization. Already, repurchases are messed up by low yields. The Untied
States will not inflate its debts away, not at all! The US will inflate everything in sight in order to avert a collapse, with greater debts than
ever before, so great that by the summer and autumn months, when more
rational reckoning usually occurs, the enlightened discussion will center on
potential USTreasury defaults. They are assured, but the framework intended
to deceive its inevitability will be cleverly or brutally applied. The main
issue right now is that the entire world has begun to spend their USTreasurys,
starting with China, and soon enough the US Federal Reserve will reduce its
own bloated inventory. Translation: the USTreasury Bond bubble will give off
endless gas as 2009 proceeds, since the new primary directive is to produce
inflation immediately, at all costs, and to toss aside all moral hazard
concerns. The artificially high USDollar harms USTBond sales.
GOLD RECOVERY WELL
UNDERWAY
Gold smells inflation,
and does so much more accurately than fickle analysts, even those in the gold
community itself. No sign of deflation exists in monetary measures, when the
financial sector data is incorporated. Money velocity is at light speed in
the corrupted failed financial sector, as desperation has set in thoroughly. Credit
derivatives lift the speed way past any reasonably agreed upon speed limit. That
financial kinetic energy will find its way to the main street roadways as a
result of sheer political forces and utter needs. The gold price has begun to
price in mammoth global stimulus. All major currencies are at risk of
debauchery. This current week has been telling. The truly huge USTreasury
security auctions demanded a rally of sorts in either the USTBond complex or
the USDollar. The Powerz thought they could engineer one in the US$, since the guard had dropped. Not so! Notice the bullish hammer this week, as gold
refused to go down or stay down. It smells bigtime monetary inflation from
monetization relief for everything under the sun. As the entire globe embarks
on substantial stimulus, the USDollar might stay afloat for a surprisingly
long time. Watch for gold to de-couple from the USDollar, its alter ego. The
MACD signaled a bullish crossover a few weeks ago. Next comes the technically
significant bullish crossover in the moving averages. See the 20-week MA (in
blue) soon to rise above the 50-wk MA (in red). Technicians react to
such signals.
USDOLLAR FILLS GAP
Two major messages
come to mind when viewing the USDollar chart. The first is that the rally has
been based upon corporate failure with associated Credit Default Swap payouts
denominated in US$. That effect is global in nature. The second is that the
powerful decline in December, when reality entire the brain stems to FOREX
traders, produced a very big gap that finally has filled from a technical
standpoint. They sold at high valuation in a gift opportunity. Some more
backing & filling from fluctuating price action might result in the 82-83
range, but it should not be the onset of any recovery for another leg up. The
rally on weakness has run its course. Meaningful efforts to prevent a
USEconomic and US Financial System collapse will assure degradation,
devaluation, and a semblance of destruction for the beleaguered USDollar. It
is on its last legs after 37 years since its removed tether from gold.
SILVER RECOVERY
FINALLY
A nice sequence of
bullish daily hammers has occurred during this week. There were three in
succession, which confirm the uptrendline that is new in formation. This
recovery is a long time in coming. The phony bottom has been set. The Powerz
were more vulnerable on their silver contracts than with gold, on a
per-contract basis. So they slammed the paper silver price.
CRUDE OIL CONTRACT
LIQUIDATION ENDS
This is NOT demand
destruction. The puny few percentage decline in demand is temporary, and
surely grossly insufficient to explain the 60% to 70% price drop. The
wreckage in the oil price is more from calculated, orchestrated, sanctioned
genocide of hedge funds by Wall Street elite, with regulatory blessing and
full motive to harm firms whose investment positions were in opposition to
those of Wall Street firms. A hidden motive is strong: render great harm to
both the Saudis and Russians, who are planning to launch new gold-backed
currencies within 12 months time. By the way, the Chinese are ordering
grandiose increases to their crude oil stockpiles. Call them smart. Call
those on the US side corrupt. Also, oil traders are busily attempting to
secure tankers to store crude oil bought for speculative purposes. A rising
crude oil price usually renders harm to the USDollar.
BANK INDEX READY TO
DECLINE AGAIN
Just when you might
think the bank sector in the Untied States has rooted in stability, prepare
for yet another leg down. Meredith Whitney today spoke of another $40 billion
needed in bank capital. Debt downgrades dictate higher assets held on their
books, so as to comply with ratio rules. They are so dead, that the word
insolvent does not apply anymore. The BKX stock index shows an imminent
bearish stochastix crossover, another important technical signal. The
trendline shows some powerful resistance. If history is any guide, the BKX
stock decline will come before the next stream of bank losses. My forecast is
that bank losses will come from the next round of adjustable and Option ARM
mortgage losses as well as basic consumer loans like for cars and credit
cars, in addition to a new ugly wrinkle of failed commercial mortgages. The bank woes are
nowhere near an end.
HOME INVENTORIES NOT
IMPROVING
The primary impetus
force behind the national wreckage is the powerful rise in bloated home
inventories. The new and existing home inventory levels have each breached
the 11-month supply levels. No signs of meaningful reduction for either. The
flimsy federal programs to aid homeowners have resulted in revolving doors
for the people and huge graft payoffs to Wall Street firms, in typical
American style. Unless and until the inventories reduce materially and
significantly, the destruction of banks and households will continue, in a
remarkably simple analytic conclusion. Job losses are huge in recent weeks
and months, which worsens matters.
HOMEOWNER
DELINQUENCIES
Homeowner mortgage
delinquencies are not improving, not a bit. They are growing worse by the
month, mainly because the USEconomy has entered a disintegration phase, and
because no mortgage relief program has any substance whatsoever. The policy
to make home loan reduction voluntary to banks is empty and vacant and vapid,
when lenders suspect a grandiose nationwide federal mortgage reduction
program as near. They wait. The delinquency process will continue until home
loan relief has real meaning. The delinquencies assure high levels of unsold
property inventory, in plain view. The home foreclosure data shows no sign of
improvement either.
SHOCKING VACANCIES
Contrary Investor
provides market observations, with great work. A recent survey showed a
shocking vacancy rate near 3% that is stubborn holding. Empty homes dot the
landscape. Sure, rents will come down, but only because $trillions in home equity
are lost. What a tragedy! What a pox on the nation! What a grotesque
inefficiency! What a nasty epitaph to the misguided housing construction
boom! What a clear signal of failure by the financial sector conmen!
THE HAT TRICK
LETTER PROFITS IN THE CURRENT CRISIS.
From subscribers and
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At least 30 recently
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deals such as for Fannie Mae and the grand Mortgage Rescue.
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Jim Willie CB
Home : Golden
Jackass website
Subscribe: Hat Trick
Letter
Jim Willie CB is the editor of
the “HAT TRICK LETTER”
Use the above link to
subscribe to the paid research reports, which include coverage of several
smallcap companies positioned to rise during the ongoing panicky attempt to
sustain an unsustainable system burdened by numerous imbalances aggravated by
global village forces. An historically unprecedented mess has been created by
compromised central bankers and inept economic advisors, whose interference
has irreversibly altered and damaged the world financial system, urgently
pushed after the removed anchor of money to gold. Analysis features Gold,
Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.
Jim Willie CB is a
statistical analyst in marketing research and retail forecasting.
He holds a PhD in Statistics. His career has stretched over 24 years. He
aspires to thrive in the financial editor world, unencumbered by the
limitations of economic credentials. Visit his free website to find articles
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