Almost Total Market Control by Goldman Sachs

      Then there is the almost total control by Goldman Sachs of the market and control via the Supplementary Liquidity Provider. All they have to do is cut off liquidity and the market plunges. Thus, there is no question in our minds that Goldman attacked the market and took it down to let House and Senate members know that they can make the market do whatever they please with the full cooperation of the SEC and CFTC, this convinced lawmakers that the Illuminist threat was very real. There would be no breakup of too big to fail banks and no real audit of the Fed. The public would be thrown a bone. This is a good reason why program trading has to end and why derivatives have to be abolished. This is all a reflection of two sets of justice. One for the elitists and one for us. This also shows us that crime pays. It also proves our country is under the financial control of terrorists. This power has to be taken away from these criminals. The legal way to do that is by throwing most all of Congress and the Senate out of office. Then we will have a chance to save our country. Otherwise you will see this all move into the streets.

      This same cabal has arranged for Europe’s $1 trillion bailout, which will not be successful and they know that. As a result the euro has fallen from $1.50 and is approaching $1.20. Could it be that the euro could go to parity? Yes, of course, it could. Then what or who is next? The pound, yen and then the dollar? Then we ask, “Who will save them?” Who will rescue the world from deflationary depression and another planned world war? You say they actually plan wars? Well, of course, they do. How do you think we were able to predict a 9/11, and the wars and occupations of Iraq and Afghanistan? They were profitable diversions for the Illuminists. They kept the potboiling and sidetracked public thinking away from economic and financial problems. The propagandized and mindless public did not know they were being bamboozled again. In the meantime the Trilateralists tell us Israel should be attacking Iran, which in part proves our point. It is now just a question of when. Hasn’t the world public been deceived enough? When are they going to catch on? Do we have to pound it into their heads with a hammer? Of course, in time this is going to affect the dollar, particularly versus gold, which is the world’s ultimate currency. What will the world say when it discovers the US has little or no gold left? Will by that time 25% to 50% unemployed stand still and tolerate this crime? Will they riot and demand changes? Of course, they will and the elitists won’t listen, which will bring about their demise, as masters of the universe. This is why November’s election is so important. It is the last hope of changing our country without resorting to protest in the streets, as we are now seeing in the streets of others. What happens when Americans find out we have no gold left? That it was wasted in an attempt to cover up the seriousness of our collapsing economic and financial system that was being systematically looted.   America is just as bad off as Europe. How can throwing money and credit at the system solve the problem? How can austerity solve the problem? It has all gone to far. The world has to have depression – there is no other solution. These are all legitimate questions, because no one is safe or exempt. Government cannot and does not even want to protect you. We no longer have a sovereign government; we have an ongoing criminal enterprise controlling our country. What we have seen over the past several years, what could never happen, has already happened. What is to come is going to be a nightmare.

      World markets are dysfunctional and stability doesn’t exist. Man set distortions and economic imbalances – a system that functions without regulation, derivatives and unbridled and unfettered speculation, surrounds us. Leveraged speculation dominates the markets, particularly debt instruments. Unfortunately, this speculation is fostered by government and central banks perpetual willingness to bail out everyone in banking and finance just to keep the system afloat.

      This brings us to the dilemma of Greece again. Eurozone policymakers, bankers and governments have been caught again perpetuating imprudent lending to a profligate Greece, whose leadership for years lied to the Greeks, kept two sets of books and were aided and abetted by international elitist bankers, such as Goldman Sachs. Those in authority in the eurozone and the bankers knew exactly what was going on. They deceived everyone in the eurozone including the Greeks. They did this because they knew the public would be called upon to bail them out in a European version of TARP, which was used to bailout the American financial community that was elitist connected. Our markets have been dominated by this cabal of crooks for the past 15 years. They held one interest rate for all to the limits, and the result of that is the deplorable financial condition not only in Greece, but in Ireland, Portugal, Spain and Italy as well. This situation was allowed to flourish. The ECB should get no sympathy, because they did what they did knowingly. They have been monetizing just like the Federal Reserve for the past seven years. The creation of money and credit slowed over the past year, but it will have to resume if Europe and the US expect to survive financially and economically.

      Even with the problems we have seen over the past two years and 10 months, now those in Europe you would think would realize how serious these situations are. Now we have debtors in trouble having to lend to serious debtors in more serious trouble. That surely doesn’t make things better; it makes them worse. Incidentally, these are the people who caused the problems in the first place. They knew and we know, no matter what they say that their policies are unsound, unstable and unsustainable. As a result they are faced with a collapsing market for sovereign debt, which is affecting other debt and stocks worldwide. The fact that the Fed failed to solve the credit crisis and affect a recovery tells us that they are ineffective and the ECB is no more competent as well. Debt contagion is on and will sweep the world. Dead beats are dead beats even if they are sovereign nations.

      Payment networks giants Visa Inc. and MasterCard Inc. were beaten down after the US Senate included limits on debit card fees in the financial overhaul bill and analysts said the House is likely to approve the measure. The proposal would give the Federal Reserve the power to curb debit card “swipe” fees charged to merchants. The limits may crimp revenue at Bank of America, Wells Fargo, and JPMorgan, the biggest US debit card issuers. The measure cleared the Senate because of the industry’s “terrible” attitude toward merchants, said majority whip Richard Durbin, Democrat of Illinois, who pushed the fee curbs. Merchants last year paid $19.7 billion in fees tied to debit transactions processed by the two networks. The firms counter the bill would benefit retailers at the expense of consumers.

      California Gov. Arnold Schwarzenegger proposed a revised spending plan Friday that pegged the state’s budget shortfall at $19.1 billion and called for deep cuts to welfare and health programs–but no tax increases–to close the gap.

      The new shortfall estimate is higher than the previous projection of $18.6 billion partly because the state collected less tax revenue than expected in April for the 2009 tax year. Court decisions challenging some of Mr. Schwarzenegger’s cuts also added to the budget gap.

      This will be the third straight year that Mr. Schwarzenegger has proposed deep spending cuts. Tax revenue in California has plunged because of the collapse of the real estate and financial markets. Legislators closed a $60 billion budget gap last year, but not before state officials had to issue IOUs to creditors to keep the state solvent.

      ’It is very hard to believe that the total US notional derivatives positions of US commercial banks and trusts is $43.9 TRILLION dollars. By comparison, the US GDP, all the goods and services produced and consumed in our entire great nation by every single American each year, was only running $10.1t in the first quarter. The US M3 money supply, the broadest measure of money, was only $7.4t at the time. The 500 best and biggest companies in the United States, the S&P 500, were only worth $10.4t at the end of the first quarter. Clearly, the $43.9t dollars of the notional value of derivatives that a mere 395 commercial banks and trusts control is simply staggering as it far exceeds the entire US GDP, the entire broad US money supply, and the entire value of all the stocks traded in the United States! BIG, BIG, BIG numbers!’

      Global demand for long-term U.S. financial assets strengthened in March to a record as investors from China to the U.K. purchased the most Treasuries since November, a Treasury Department report said.

            Goldman Sachs is ceasing proprietary trading in one type of structured debt. A group of traders who were focused on making bets on collateralized loan obligations with the New York-based firm’s own money are now handling trades for clients.

       Morgan Stanley Chief Executive Officer James Gorman denied allegations the U.S. bank misled investors about mortgage derivatives it sold them.  The firm is being probed by U.S. prosecutors over whether the bank misled clients when it sold them collateralized debt obligations as its own traders bet that the value of the securities would drop. Wall Street firms are facing unprecedented scrutiny from lawmakers and prosecutors over whether they mis-sold CDOs linked to the subprime mortgages that caused the credit crisis.

      The fallout from the European debt crisis raises the risk of a ‘double dip’ recession for the global economy, said Stephen Roach, chairman of Morgan Stanley Asia Ltd.  ‘When you have a vulnerable post-crisis economic recovery and crises reverberating in the aftermath of that, you have some very serious risks to the global business cycle,’ Roach said. This concept of the global double dip which no one wants to talk about is alive and well.

      New Jersey’s Democratic lawmakers plan to introduce legislation to resurrect an income-tax surcharge on residents who earn $1 million a year or more.

      The U.S. posted its largest April budget deficit on record as receipts declined in a month that typically sees an increase in individual income tax payments.  The excess of spending over revenue rose to $82.7 billion last month compared with a $20.9 billion gap in April 2009. April marked a record 19th straight monthly shortfall. Deterioration in the government’s balance sheet in coming years raises the risk of higher interest rates even as an improving economy helps lift tax receipts.  ‘With the recovery in place, we should be seeing higher revenue and lower outlays, not the other way around,’ said Win Thin, senior currency strategist at Brown Brothers Harriman. The government’s April budget deficit compares with a median forecast of $57.9 billion. The last time the U.S. had back-to-back April deficits was 1963-1964. For the fiscal year that began in October, the budget deficit totaled $799.7 billion compared with $802.3 billion during the same period last year.

        “President Obama’s new health-care law could potentially add at least $115 billion more to government health care spending over the next 10 years, if Congress approves all the additional spending called for in the legislation, congressional budget referees said. That would push the 10-year cost of the overhaul above $1 trillion.

       California Governor Arnold Schwarzenegger will seek ‘terrible cuts’ to eliminate an $18.6 billion budget deficit facing the most-populous U.S. state through June 2011. California’s revenue in April, when income-tax payments are due, trailed the governor’s estimates by $3.6 billion, or 26%.

        “California Governor Arnold Schwarzenegger proposed a new round of budget cuts, including eliminating the state’s main welfare program for families, to close a $19.1 billion budget deficit for the year starting July 1.  The $83.4 billion plan calls for $12.4 billion in spending reductions, $3.4 billion in additional federal aid and $3.4 billion in fund shifts, fees and assessments…”

      “In June 2006, a year before the subprime mortgage market collapsed, Morgan Stanley created a cluster of investments doomed to fail even if default rates stayed low — then bet against its concoction.  Known as the Baldwin deals, the $167 million of synthetic collateralized debt obligations had an unusual feature… Rather than curtailing their bets on mortgage bonds as the underlying home loans paid down, the CDOs kept wagering as if the risk hadn’t changed. That left Baldwin investors facing losses on a modest rise in U.S. housing foreclosures, while Morgan Stanley was positioned to gain.  ‘I can’t imagine anybody would take that bet knowingly,’ said Thomas Adams, a former executive at bond insurers Ambac Financial Group Inc. and FGIC Corp… ‘You’re overriding the natural process of risk-mitigation.’”

          David Rosenberg echoes our view: There are classic signs indeed that the recession in the U.S. ended last summer — output, sales, etc. But the depression is ongoing and the reason we say that is because real personal income, excluding handouts from the government, has barely budged. In fact, real organic personal income is nearly $500 billion lower now than it was at the peak 16 months ago and this has never occurred before coming out of any technical recession. It is a depression. The share of U.S. personal income being derived from Uncle Sam’s generosity has risen above 18% for the first time ever.

           Estimates of how much the government’s spending is actually stimulating growth vary wildly — some economists contend it has no net effect at all. But if you believe the economists at Goldman Sachs, who have spent a lot of time poring over the details, the effect is quite significant: about two percentage points of annualized growth in both this quarter and the last. Indeed, if one subtracts that stimulus effect and the boost from changing inventories — also a temporary factor — there’s been no recovery at all. Growth in the first and second quarters of 2010 would be zero.

              In the second half of this year, both those temporary factors will fade. The stimulus could even become a drag as it winds down: Goldman estimates it will shave about half a percentage point from annualized growth in the fourth quarter of this year, moving up to nearly two percentage points in the third quarter of 2011, as the overall amount of spending shrinks.

           You’ve got hundreds of billions of recapitalization’s needed in Europe, says Meredith Whitney, who is speaking on CNBC this afternoon.

      And the fact that Europe is worse than the US is saying something, she says, since she’s definitely still not positive on US banks.

Other than that, her interview appears to be a rehash of her op-ed arguing that financial reform will kill jobs.

      ”It could be very bad.”

      As for specific aspects of financial reform that concern her: pre-emption (rules that would allow banks to move to different states and take advantage of lower interest rates in some markets) and interchange fees regulation.

      Specifically, she expects that interchange regulations will cream smaller banks to the benefit of the larger banks, hampering merchants’ access to capital.

      As for the stock market: The second half will be “bleak.”

      Message traffic Oath Keepers

      At approximately 0715 a convoy of 25-30 camouflaged military, Humvees and armored vehicles with

      UN markings was observed traveling westbound between State College, PA, and Milroy, PA on US. Route 322.

      At approximately 0900 the same member encountered another convoy of UNMARKED military vehicles, refueling at Toms’s Travel Center on U.S. Route 322 at Milroy, PA. The member tried to engage the troops, but was ignored. They were in uniforms without insignia, but the covers did have ranks, from colonel to private. Convoy was a similar size, with Humvees and personnel carriers.

      It is hard to say what the destination is so I am posting on-state sights west and south of Milroy, PA. I am speculating possible routes are 322 W, 99S, 70W, 81 S. 322 is not a major interstate, so it is possible secondary routes are being use. If you see the convoy, please photograph and/ or video tape.

This is not a drill, request verification

      About Dow Theory –  by Richard Russell — First, we saw the recent April highs in the Averages. Then we saw a plunge in both Averages to their May 7 lows — Industrials to 10380.43, Transports to 4298.12, next a short rally. If ahead, the two Averages turn down and violate their May 7 lows, that would be the clincher. Such action would signal the certain resumption of the primary bear market. 

Just as for years I asked, cajoled, insisted, threatened, demanded, that my subscribers buy gold, I am now insisting, demanding, begging my subscribers to get OUT of stocks (including C and BYD, but not including golds) and get into cash or gold (bullion if possible). If the two Averages violate their May 7 lows, I see a major crash as the outcome. Pul – leeze, get out of stocks now, and I don’t give a damn whether you have paper losses or paper profits! 
 

GOLD, SILVER, PLATINUM AND PALLADIUM

      Gold has many things going for it, an official suppression of price since 1980, euro failure, and chaos in sovereign debt in Europe, again the massive creation of money and credit and a safe haven flight to quality. Almost every currency in the world isn’t worth the paper it is written on.

      As you have seen over the past few weeks, particularly in Europe, there has been a massive run on gold and silver as investors flee currencies, particularly the euro. This has caused backwardation. That is when the cash price closes higher than the most active outside contract month. That means physical demand is very high and it’s bullish for future prices. These events allow us to conclude that investors are concerned that, revenues for governments are being far outpaced by deficits that governments have no intention of reducing. Their answer of course is to use more derivatives to obfuscate the real underlying problem just as Greece did. Voters in Europe are sick of socialism and those in the US are sick of corporatist fascism. Fiscal restraint exists in very few places. At the same time banks are again using unprecedented leverage. This brings all debt into question. The dollar will soon hit 88 on the USDX and form a triple top and that should lead to a lower dollar. The dollar currently being the best of the worst, and gold trades up to $1,240. In the past 2-1/2 months gold has gained 25% versus the euro and the dollar and 21% versus the yen. There are presently two major currencies in the world – the US dollar and gold. As you can see gold is winning the battle for top world currency just as we predicted it would in June 2000.

      Last, as we reported, the gold Commitment of Traders report showed commercials increased their net short position by 11,058 to 282,644 contracts, just off the December 1, 2009 high of 308,231 contracts. As a percentage of new contracts the commercials only shorted to 1/3 of them, which is very low. We believe these shorts see higher gold prices and they will try to average their shorts at a higher level. They are currently sitting on major losses on almost all trades. At $1,300 gold these commercials should be terrified.

      In silver, traders covered and reduced their short by 2,870 contracts to 52,518, as open interest fell 779 contracts to 122,669. As silver moved higher shorts covered telling us they like the gold shorts, are intimidated by looming higher prices. These shorts will soon take both gold and silver to new highs.

      Monday was a down pressure day. Gold fell $0.30 to $1,2217, as June fell $4.30 to $1,223.60. Spot silver fell $0.37 to $18.83 and July fell $0.29. There is no question today saw a major effort by the elitists to drive gold and silver down. Early in London we were trading at $1,234, between London’s first fix and the Comex opening. Many new shorts in both metals were added today. It could be that these shorts are headed toward a commercial signal failure. There is as well the possibility that the LBMA, Comex, GLD and SLV will not be able to meet physical demand – what a scandal that will be. Some ask where will the cover come for the shorts? We don’t know but we will guess at $1,380. Today gold open interest fell 12,984 to 586,074, as silver OI fell 402 to 126,644. The HUI fell 10.38 to 477.09 and the XAU lost 3.84 to 179.96.

      On Friday we again saw the FDIC, Friday Night Financial Follies, as four more banks fell to bankruptcy taking failures to 72 this year. It has only been a week since the announcement of the Greek bailout and major German bankers are saying it won’t work. If true, and it probably is, the euro is headed to parity.

      After being off 200 points the Dow miraculously recovered again and rose 6 points, S&P rose 11 and Nasdaq 45 Dow points. The yen fell .0037 to $.9249; the euro rose .0002 to $1.2389; the pound fell .0082 to $1.4476; the Swiss franc fell .0005 to $1.1510; the Canadian dollar fell .0030 to $.9660 and the USDX rose .45 to 86.14.

      Oil fell $1.10 to $70.50; gas fell $0.08 to $2.06 and natural gas rose $0.10 to $4.41. Copper fell $0.17 to $2.96; platinum fell $40.80 to $1,673.90 and palladium fell $21.40 to $506.50. The CRB fell 5.35 to 253.20.

      In a precursor of the future banks and wholesalers in Dubai got caught naked shorting and now face financial ruin. Lenders of course are now pulling in their horns. Wait until LBMA and Comex collapse, along with GLD and SLV.

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