Short term trades in the stock market •$$$$$•

[Groseph]

Ouch.. no weak hands here, but seeing the price free fall below its 200 day moving average does make my stomach turn a little. I believe in the silver bull run, but thats not to say I could not have obtained a HUGE position if I had only waited for the correct dip.

I built a rather large core position in physical at around $37-$45 BEFORE the big dip in May back down to $34. I fully expected it to correct at $50..maybe to $42 or so but it continued to free fall...painful lessen, but I just checked my PMs and they are all still there..whew..

My dry powder is tied up at the moment in a down payment on a home purchase..the remaining is emergency cash.. so I'm really bumming that I cannot take advantage of this dip.

 

[SpasticGramps]

You'll be good. Having the fizzy is what matters in the end. Printing presses have been turned on overdrive here recently.

My main position in silver was acquired around $20. A decent position at ~30. Smaller one at 35. I'd love to see 20 again. I'm getting close to starting to add to my position around these levels.

If the G-20 can't inject confidence back into the market over the weekend it's going to brutal for a while. If the CDS spreads keep getting bigger despite what intervention happens then the mortals will have lost control of the market. We still have a ways to go before equities expectations converge with CDS expectations IMO.

 

[SpasticGramps]

Trouble brewing in China. Their housing bubble has the potential to make everyone else look silly.

A Bunch Of Chinese Manufacturing Bosses Just Defaulted And Fled Their Failing Businesses Business Insider

China's papers are calling it their "own subprime crises."
According to Shanghai Daily, 7 large business owners, mostly manufacturers, fled the city of Wenzhou on September 12th. They left thousands of employees jobless and hundreds of millions in unpaid debt.
This is one of the consequences of China's "black bank," the massive undergound banking system that has been growing at a dizzying pace since the government started tightening credit to curb inflation. Banks favor state-owned businesses when it comes to lending, so when private business owners need to take out a loan, they turn to the alternative, to the underground.

 

[SpasticGramps]

A true financial Maginot line.

Europe hastens to build up debt crisis defenses Reuters

WASHINGTON (Reuters) - European policymakers are quickening their preparations to cope with an escalation of the region's debt crisis as talk of a possible Greek default gained pace on Friday.

Finance chiefs from around the world have turned up the heat on Europe to do more to prevent Greece's debt woes from infecting other euro zone countries and the world economy.
Concern now appeared to be turning toward safeguarding the banking system more than rescuing Greece, as international lenders were increasingly losing patience with Athens consistently missing fiscal and reform targets.

British finance minister George Osborne said the euro zone needed to gain control of the situation by the time leaders of the Group of 20 economies meet in France in November.
"They have six weeks to resolve this crisis," he said on the sidelines of semiannual policy discussions in Washington.

World stock markets, which had plunged to a 14-month low on fears about the scale of the crisis, steadied after European Central Bank officials said they would use more firepower to help the banking system withstand financial strains.

Pressure is growing on European governments for a recapitalization of the region's banks to strengthen them in the event of a Greek default.

At the same time, European policy-makers seemed to be warming to the idea of giving more muscle to their bailout fund, which would be sorely tested if Athens defaulted.

Greek Finance Minister Evangelos Venizelos was quoted by two newspapers as saying an orderly default with a 50 percent haircut for bondholders was one way to resolve the heavily indebted euro zone nation's cash crunch.

Greece is in tense talks with the International Monetary Fund and European authorities, known as the troika, to secure a new 8 billion-euro installment of its rescue package to avoid bankruptcy in October.

In return for aid, Athens pledged austerity measures, but negotiators have expressed frustration at what they say is Greece's slow reform pace. The nation's finance minister is due to meet the head of the IMF on Sunday.

"The troika officials said they were going over again measures they had agreed to months before. They said they had a sense of deja vu," a source close to the talks said on condition of anonymity.

October's loan payment, however, is still widely expected to be made. The next installment is due in December.

ECB President Jean-Claude Trichet urged authorities to take decisive action, saying risks to the financial system had "increased considerably."

Lawrence Summers, a former U.S. treasury secretary, gave a somber assessment of the dangers facing the world economy, including a U.S. recovery that has neared a standstill.

"This is the 20th annual meeting (of the IMF and World Bank) I've been privileged to attend. There has not been a prior meeting at which matters have had more gravity and at which I have been more concerned about the future of the global economy," Summers told a discussion panel.

PUZZLE PIECES

As European policymakers looked to piece together a bolder crisis-fighting strategy, investors took some relief as three officials said the ECB could revive its one-year liquidity lines to shore up banks.

"I think it might be advisable to think about reintroducing this approach," ECB governing council member Ewald Nowotny said.

The IMF, which has been pressing aggressively for a recapitalization of Europe's banks, reckons the debt crisis has increased their risk exposure by 300 billion euros.

In a sign Europe was coming to terms with the idea of a recapitalization, France's top market regulator said 15 to 20 banks needed extra capital.

The growing talk of a Greek default met with stiff opposition from German Chancellor Angela Merkel. She told a meeting of her political party members that default was not an option because it might trigger a domino effect with other struggling economies. "The damage would be impossible to predict," Merkel warned.

Politicians in northern Europe, especially in Germany, have opposed dedicating more money to fight a crisis that they see as caused by the profligacy of other euro zone members. Now, leaders will have to navigate the tricky politics.

"It's not a question of ability for the euro zone," Bank of Canada Governor Mark Carney. "It is a question of political will."

ECB governing council member Klaas Knot told a Dutch daily a Greek default could no longer be ruled out, a warning echoed by the IMF's top official in Europe, Antonio Borges.

"If the Greeks do what they have to do there will be no default," Borges said. "But on the other hand if they hesitate, procrastinate, find it impossible ... then it is very hard to avoid."

G20 finance ministers and central bankers had pledged on Thursday to "take all necessary actions to preserve the stability of the banking system and financial markets as required," a statement that failed to placate investors.

The G20 communique said the 17-nation euro zone would implement actions to "maximize" the impact of the region's bailout fund by mid-October.

G20 participants did not say how the 440 billion-euro European Financial Stability Facility might be altered although French Finance Minister Francois Baroin used the word "leverage" in comments to reporters.

The United States has called on Europe to leverage up the EFSF to give it more firepower.

Markets have priced in a 98% chance of a Greek default. Sorry Merkel default is the only option.

 

[SpasticGramps]

Capitulation by the G-20.

G-20 confirms they are preparing for a Greek default. They say after October. Markets might force their hand quicker than that IMO. The Maginot line is officially under attack.

Lehman Weekend Redux?

More from Sky News correspondent Ed Conway (via Twitter):

- G20 now preparing itself for Greek default after October - Sky sources. Will be on Sky News imminently with more

- G20 sources: all efforts behind the scenes (by G20 members) are now going into recapitalising banks, preparing economies for default.

- G20 sources: default not expected until after Cannes G20 early November. Emergency funding should still keep Greece afloat thru October

- G20 sources: No suggestion Greek default need imply country leaving the euro

- G20 sources: @ Washington summit marked difference in attitude. Confident euro members edging closer to recapitalising banks, expanding EFSF

 

[The iD]

i stopped fukin around & went heavy long dated puts, minimal short term calls to hedge (along w/ my now worthless remaining Bernanke bounce calls). i will roll my puts back until i dont have to. i shouldnt have to. strange, deja vu. feels like ive played this exact position before. gotta check my notes. any intervention that they pull is increasingly temporary and is faded in days if not hours. only sustained pop will be from money printing. ironically, the cure is a slow poison. any real bad news is likely to precipitate the next leg down. im still quite cautious as the correction in AU/AG was due to a margin hike leak and not due to bank liquidation as i originally believed, so not the deflationary indicator i was hoping for. entered @ 1700/1650 & 32/30.20 respectively. still holding ~50% cash. hedged w/ remaining GLL/ZSL and my long term phizz hedge to 1k.

gonna check out the local spot tomorrow. would like for this depressed price to stick for a week or two to drive down the premium. hell, lower would be great too. maybe grab some Maples off of ebay. ive been at it a while so heres a tip, estate sales/garage sales are good hunting for cheap AG if one has a keen eye and a test kit. that and industrial rounds.

im still wary of continued pops and reversions to our current lows off of their can kicking and constant rumours & manipulation. they will continue to rearrange the deck chairs even as they begin to float away. their denial is absolute. sideways and down w/ annoying hopium pops on huge volatility until QE3. revised my upper limits down to 11.6k DJI, 1190 S&P. i still think it pops this week but its all based on the information they divulge or withhold. wouldnt be surprised if we continued trading in this range, or if it broke out slightly lower and tested from the bottom. good potential downside. Bernanke will start to sweat as the indices get close to shedding a digit.

crude broke and closed below 80$/bbl, spread w/ brent is still significant tho. would have liked the indices to have closed below support. Greece is going to default, only variables are when and in what manner. that leads us to the Portugal, Spain, and Italy. potentially much worse. France will get downgraded. creates pressure on Germany and Euro solvency. two feasible options: Germany leaves the Euro and enacts a dual currency while still providing support. D mark would float against depressed Euro. or, Greece defaults orderly, banks are restructured/nationalized, bond holders take haircuts, Greece likely leaves Euro and floats w/ dual currency, potentially w/ PIS joining, as the countries restructure economically and socially.

3rd option, and imo the most likely, is that they keep throwing whatever they think up at it, from EFSF enlargements, rate reductions, ECB purchases to a complicated eurobond system w/ derivatives and straight up money printing and Pegasus blood infusions. this, of course, will end w/ one of the two above options, except no longer orderly. prepare for the worst, work towards the best.

and that brings us to the USA, the de facto "best". gov shutdown next week is probable, unlike the noise last few times, as the Boner continuation was denied by Con. they go on vacation next week, and the deadline is Sep30. good number of bills are being floundered. seems the best move is no move. give no one any ammunition to use in the upcoming elections. unemployment is entering GD era levels of 23%+. disparity between races is significant. Fed curve flattening wiped out the remaining funds for Granny. credit and SS is beginning to run out and home defaults are rising. imo, JPM & GS will eventually absorb the good halves of BAC, WFM, MS after they collapse while the dirty half gets put on the public balance sheet like before. 2 biggest to fail.

egypt is pissed that they overthrew a militaristic dictatorship to replace it w/ a militaristic dictatorship. palestine bidding for statehood. china doing its thing. libya. syria. general malaise. i dont know when but we get closer every day. gotta pack. stay frosty,

-iD

 

[Nondual]

and home defaults are rising. imo

Yeah saw that a few weeks ago and caught my eye. A friend asked if she should buy a house now and I said wait. Lots of washed out real estate. I know quite a few people under water.

 

[Hydrosun]

Yeah saw that a few weeks ago and caught my eye. A friend asked if she should buy a house now and I said wait. Lots of washed out real estate. I know quite a few people under water.

However if you can get a paper ponzi fixed rate and can make the place cash flow positive NO NEED to wait for the bottom, .... no?

 

[SpasticGramps]

im still quite cautious as the correction in AU/AG was due to a margin hike leak and not due to bank liquidation as i originally believed, so not the deflationary indicator i was hoping for.

Must be nice to be privy to such information.

However if you can get a paper ponzi fixed rate and can make the place cash flow positive NO NEED to wait for the bottom, .... no?

As long as rent prices keep you cash flow positive you're good. Rent prices are subject to change (revenue). Liabilities are fixed (mortgage payment).

Housing prices still have a ways to go IMO. Renting will be more popular due to less buying. This is good for renters.

I will probably take a big short term loss on the property I just bought, but everyone is going to take a loss. If the G-20 is saying senior bondholders are finally going to take a haircut on sovereign debt, we're all going to take a haircut.

 

[SpasticGramps]

Just when you thought the bailout bonanza couldn't get any more disgusting and bizzare...... Here comes the IMF saying that they need a bailout.

Christine Lagarde: IMF may need billions in extra funding

The head of the IMF has warned that its $384bn (£248bn) war chest designed as an emergency bail-out fund is inadequate to deliver the scale of the support required by troubled states.

In a document distributed to the IMF steering committee at the weekend, Ms Lagarde said: "The fund's credibility, and hence effectiveness, rests on its perceived capacity to cope with worst-casescenarios. Our lending capacity of almost $400bn looks comfortable today, but pales in comparison with the potential financing needs of vulnerable countries and crisis bystanders."

The suggestion came after European officials revealed they were working on a radical plan to boost their own bail-out fund, the European Financial Stability Facility (EFSF), from €440bn (£384bn) to around €3 trillion.

The plan to increase the EFSF firepower is the crucial part of a three-pronged strategy being designed by German and French authorities to stop the eurozone's debt crisis spiralling out of control. It also includes a large-scale recapitalisation of European banks and a plan for an "orderly" Greek default.

So the organization doing all the bailing out now needs to be bailed out. What surprise! If you keep bailing out a dead beat you eventually become a dead beat yourself.

This is all a moot point. Confidence is eroding very quickly now. S&P announced today that the EFSF bailout fund will affect the credit rating of those doing the bailing out which will in turn nullify the EFSF bailout fund. Another Catch 22.

Like I said. I just hope Zimbabwe can bail everyone out if it gets too bad. This is going to end great.

Oh, and us proles will be paying for this all. Or at least our children will be. It's like watching the western world eat its own young. Now watch all the adults sit around and scratch their heads as to why the youth of the world are revolting and burning shit down. Their futures were squandered and destroyed so we could war monger and bathe in excess today.

 

[Zen Master]

shanghai hiked margins on silver 20%

is there a site I can check out that gives the total margin amounts on PM's right now?

as in how far do we have till we're at 100% cash on the barrelhead?

if and when its 100%, do you think that will drive people out of paper PM's and into phyz really heavy? I was readin some comments about a coin store in LA that had a 3 hr line of all buyers that first day of the fresh hikes.

 

[Hydrosun]

100% cash on the barrel-head and then maintain physical possession is the only true way to own PMs any other method has contra party risk and is playing the ponzi.

 

[SpasticGramps]

is there a site I can check out that gives the total margin amounts on PM's right now?

if and when its 100%, do you think that will drive people out of paper PM's and into phyz really heavy? I was readin some comments about a coin store in LA that had a 3 hr line of all buyers that first day of the fresh hikes.

It's somewhere on the CME site I'll look for it later. Each exchange has their own margin policy.

100% cash on the barrel-head and then maintain physical possession is the only true way to own PMs any other method has contra party risk and is playing the ponzi.

 

[bentom187]

have you guys seen this documenary called "the money masters" i seen short clips on youtube but im about to watch all 3 1/2 hours of it, just thought you guys would be intrested its very reminicent of our current situation.

http://video.google.com/videoplay?docid=-515319560256183936#

 

[SpasticGramps]

Here is a good video. Trader explains how confidence has been lost in the bailouts. I believe we have finally reached the point of bailout half life equaling 0.

BBC Speechless As Trader Tells Truth: "The Collapse Is Coming...And Goldman Rules The World"

In an interview on BBC News this morning that left the hosts gob-smacked (google it... it is the BBC after all), Alessio Rastani outlines in a mere three-and-a-half-minutes what we all know and most ignore. While the whole interview is worth watching, the money shot for us was "This economic crisis is like a cancer, if you just wait and wait hoping it is going to go away, just like a cancer it is going to grow and it will be too late!". While he dreams of recessions, sees Goldman ruling the world, and urges people to prepare, it is hard to disagree with much (or actually anything) of what he says and obviously interventions and machinations means we will have days like this (in Silver for instance), there is only one endgame here and we hope there is less hopeful euphoria (and more preparedness) as we pull back the curtain further an further.

While we do not know who this trader is, one thing we can be 100% certain of is that he will never appear on CNBC.

 

[bentom187]

ill get to that one next ,thanks

 

[SpasticGramps]

"We're Going To Need A Bigger Flowchart": Presenting The Schematic Of Part 1 Of The European Endgame

Still confused by the doomed endgame in the 21st century Greek tragedy? Have no fear: here is the BBC (which today is two out of two for useful information)with a flowchart of Greek endgame. With apologies to the optimists, who think there may be a happy ending here, here are the only 5 possible outcomes: 1) Pyrrhic Victory; 2) Depression; 3) Moral Hazard; 4) Political Turmoil and 5) Global Meltdown. In this context, it becomes all too obvious why stocks are surging...

Big moral hazard rally today. The new rumor is Europe is going to highly leverage the EFSF in order to bail everyone out. Stacking more leveraged toxic debt on top of already highly leveraged toxic debt. Sound familiar?

The Eurozone is now a suicide pact. My personal opinion for the flow chart is option #5.

EU Goes From Monetary Union To Suicide Pact

Via Peter Tchir of TF Market Advisors
As alleged details are leaked about an alleged proposal to leverage the EFSF all I can do is cringe. I'm waiting for some actual details, but as far as I can tell, Europe is attempting go all in. It is going to make leveraged bets on itself. If it doesn't work, the senior debt holders will own Europe if the BRICs buy the senior tranche and will end in a fast and furious death spiral if the senior tranche is owned by the ECB or European banks. We may get a lift on the news. We are trying to rally on the back of the news right now. But if this plan goes ahead, even the slightest cold in the future will turn into the plague. There will be no strong countries left as they will have tied themselves to the PIIGS anchor with a Gordion Knot that will never be untied in time.
Haven't they seen what happens to SIV's? Are the so confident in an economic recovery that will risk it all at this time? If they get it wrong and it doesn't work, there will be no fall back.
All I can hope is they are tired and too happy with the late night "solution" and the markets initial reaction that after the initial euphoria, cooler heads, like Schaeuble, will prevail. This has the makings of an Epic disaster in the making.
The plans to ring fence Greece, to erect support for banks and other countries all made sense. Painful, but made sense. If this even manages to avoid pain, it ensures the next crisis won't be manageable.
I do like the idea that the EFSF is going to become an "investment bank". At least it is consistent with solving every problem with more of the same. The best part will be when they pay up to poach talent from the banks that they are bailing out. With Gardening leave in Europe it should take about 6 months before the first employee can start.
I will take a look at the details but in meantime, for first time in this crisis, am worried that not only are they doing something that won't work, but something that will make the problem intractable and ensure that the crisis ends worse than anything we had post Lehman.

 

[grozzef]

they're just gonna hit the reset button soon, i'm surprised it's dragged on this far.

 

[SpasticGramps]

Here's the headline from Market Watch. Economic data out today was horrible, but this market trades on one thing.

Moral Hazard

U.S. stocks rally on Europe hopes

SAN FRANCISCO (MarketWatch) -- U.S. stocks rallied Monday, ending near session highs, spurred by hopes that European policymakers were coalescing around a new plan to keep the sovereign debt crisis from spreading.

The reason why an EFSF leveraged bailout is suicide is because the European banks are already extremely leveraged. To double down and leverage the system 8+ fold more is insanity because any downturn in the market will make everyone insolvent. The more leveraged you are the more you lose on a downturn. This is so f'ing dangerous. We are taking the problems that caused the collapse in 08 and using them to help solve problems now except we are leveraging countries. This will be total economic suicide for those involved.

 

[Nondual]

A little extra silver on the market soon...

TAMPA, Florida (AP) — Odyssey Marine Exploration Inc. on Monday said it confirmed the identity and location of a World War II-era shipwreck believed to be carrying 7 million ounces of silver.