Monday, September 26, 2011

Draconian IMF cuts call under fire

From: RussiaToday  | Sep 26, 2011 
Eurozone leaders are preparing a rescue plan to prevent the escalation of the financial turmoil threatening to send the global economy back into recession. It comes as the IMF has warned it may not be able to help out bigger European economies struggling to tackle their debt. With a Greek default now widely considered a matter of time, the priority is to prevent bigger states such as Italy and Spain being dragged down. Greece has been hit by another wave of public protests against government austerity measures. But as RT's Gayane Chichakyan reports, the IMF is accused of being too tough on some countries while being too soft on others, like the U.S., where the 2008 crisis began.

Quant trading: How mathematicians rule the markets

From BBC News:

Trading floors were once the preserve of adrenalin-fuelled dealers aggressively executing the orders of brokers who relied on research, experience and gut instinct to decide where best to invest.

Long ago computers made dealers redundant, yet brokers and their ilk have remained the masters of the investment universe, free to buy and sell wherever they see fit.

But the last bastion of the old order is now under threat.

Investment decisions are no longer being made by financiers, but increasingly by PhD mathematicians and the immensely complex computer programs they devise.

Fundamental research and intuition are being usurped by algorithmic formulae. Quant trading is taking over the world's financial capitals.
New paradigm

Mathematicians have long played a vital role in risk management at financial institutions, but their skill set is increasingly being used to make money, not just to stop losing it.

Ian Ellis, director at Ride Arcade Limited, explains how electronic trading works

Firms are now employing gifted academic statisticians to track patterns or trends in trading behaviour and create formulae to predict future market movements. These formulae are then fed into powerful computers that buy and sell automatically according to triggers generated by the algorithms.

These so-called quantitative trading programs underpin all quickfire trades - known as high-frequency trading (HFT) - in which stocks can be held for just a matter of on

EU given six weeks to protect itself against 'inevitable Greek default'

From The Guardian:

European Union governments will spend the next six weeks building a financial firewall to protect their fragile banking systems against what is now seen as an inevitable Greek default.

G20 sources said that up to 50% was likely to be wiped from the face value of Greece's €350bn debt – but not until Europe had put into place a war chest to prevent the contagion spreading.

More money will be disbursed by the International Monetary Fund and the EU next month to keep the Greek government afloat, but this is seen as a short-term fix while Europe's leaders beef up the eurozone bailout fund, the European Financial Stability Facility.

Europe came under ferocious pressure at this weekend's IMF meeting in Washington to contain the spiralling crisis, which is blamed for dragging the global economy to the brink of a double-dip recession. The IMF is reportedly willing to continue bailing out Greece in the short-term, provided that Europe uses the time to tackle the issue of debt once and for all. The Washington-based lender believes the 18-month delay since Greece was first bailed out last spring has exacerbated the crisis.

Tim Geithner, the US treasury secretary, said: "The threat of cascading default, bank runs and catastrophic risk must be taken off the table, otherwise it will undermine all other efforts, both within Europe and globally.

"Decisions as to how to conclusively address the region's problems cannot wait until the crisis gets more severe." on

Can Chinese buying halt the slide?

Just watching the market action in Gold and Silver, it seems that someone has taken a large long position (buying) in Gold and Silver (or maybe in just one market, causing similar price movements in the other, thinking silver not gold as the market is tiny and easier to move).

It this the China Put finally kicking in? Only time will tell. Although in silver the US$26 level was an extremely sweet price compared the $40+ levels of only last week. That $26 level was approx. a 40% decline from the $43 level hit at the start of September. It was so sweet that it briefly knocked the price of my favourite silver bar, the 1kg PAMP, to below AUD$1,000 (damn it I should be buying not blogging!).

Now lets see how the 'players' in London and New York react to this counter move, will they roll over and play dead or hit it with their spandex gold and silver shorts :-)

Keiser Report: Cultural Fragging

  From on Sep 25, 2011

This week Max Keiser and co-host, Stacy Herbert, discuss cultural fragging and financial flashbacks. They also discuss Papandreou's high frequency austerity measures for Greece. In the second half of the show Max talks to Ned Naylor-Leyland of Cheviot Asset Management about the latest developments in the silver manipulation case against JP Morgan.

WTF? - 'Gold is backed by nothing unlike the US Dollar'

This video is pure gold.

I wet myself laughing when I heard the air-head say the following:

"Some investors aren't confident with what gold is backed by- or if its backed by anything at all, as compared to something like the US dollar. Investors are comfortable that the US dollar is backed by the American government, so that no matter what is happening to the US economy, something like the US dollar is backed by the Federal Reserve, that's going to be around a year from now.  That's a much more comfortable investment for them."

How about the fact that Gold is backed by:
  • The Earth and its finite supply of Gold
  • The three major monotheistic religion's holy book stating that Gold is Money
  • 5,000 years of the free market choosing Gold over ALL other forms of money (except silver).
Whereas the Fiat US Dollar is backed by:
  • Infinite supply from the Fed and its member banks
  • Being outlawed as Money in the US constitution
  • Having lost 96% of its value since the Fed has been "backing" it - source

I think the Todd Hirsch mentioned is this guy

Whilst very funny and sad, it is typical of mainstream media. The first time I was interviewed on national Australian TV the only vaguely intelligent question I received was from the weather girl.

Eurozone leaders bring monetary union to the brink

From the UK Telegraph:

By Ed Conway

There’s a thin line between tragedy and comedy, and this weekend the finance ministers of the euro area blundered over it. They gathered in Washington in the shadow of the darkest economic clouds since the collapse of Lehman Brothers, with the world’s eyes upon them.

Truth About Markets

This weeks' show maybe the best ever recorded. Max & Stacy discuss this weeks moves in equities, commodities, Gold & Silver and the political machinations behind those moves.  As well as the ever present danger facing the silver investor - Bullion Back. Listen:  Streaming  /  MP3 file

Gerald Celente - 'I am in the Gold market for long term security'

Gerald Celente discusses gold, silver and the fascist state with Eric King of King World News......listen here