Ed Zimmer

Initial Jobless Claims: -28K to 452K vs. 470K expected. Continuing claims -127K to 5,076,000. Nov. Durable Goods: +0.2% vs. +0.4% expected, -0.6% prior. Ex-transport +2% vs. -1.3% prior.

We continue to hemmorage jobs at a rate that shows the economy is not healty, on life support from the federal government, and the term recovery should not even be in the speech books for our President. More people are on extended, extended unemployment compensation and we are constantly fed nothing but "green shoots" and unrealistic expectations for numbers that continue to disappoint.

PPI Up 1.8% - Should the Fed Be Worried About Inflation?

While one month does not a trend make, the six month look shows a steady increase in the PPI. Considering the government figures are massaged to appear lower than they actually are (like far too many government reports) when it comes to inflationary indications, we are already experiencing price inflation. By the time the government owns up to a higher rate that would force hikes, it will be too late and the inflation horse will be taking off down the road.

What an FDIC in the Red Means for U.S. Banks

Another stick on the taxpayer (camel's) back. How much longer can the poor beast stand?

“We participated in things that were clearly wrong and have reason to regret. We apologize.” - Goldman Sachs (GS) CEO Lloyd Blankfein, saying the bank is sorry for its role in the financial crisis.

Sorry doesn't feed the average american who is out of work, living off government largess (extended, extended, extended unemployment benefits) and facing the knowledge that the generous benefits will only last into the dead of winter when utility companies can't shut off the lights and heat as long as temperatures stay below a certain level.

Officially, 15 million americans are wondering where the next paycheck is coming from. Unofficially, it's closer to 27 million. Quite the foundation for a rebellion one might think...of course considering they even think about the unemployed masses

Call Buying Surged Before 3Com Takeover Announced

let's just consider every trade on this deal yesterday as an inside trade, triple the amount in fines and go after their pocketbooks. People are getting fed up with all the shenanigans and with nearly 1 in 5 out of work (dependent upon which figures you believe), winter coming and prospects bleak, thoughts will not be turning towards peace on earth, goodwill to man.

Isn't the Fed Monetizing Housing Debt?

Let us not forget the latest plan, the GSE will take over the mortgage and you become the renter for 12 months, then we'll see about renegotiation. That's another can of worms that will get reguritated a year down the road (let's just keep pushing it off, until we can't push no more). Eventually this all has to come home to roost.

Congress Takes Up 'Too Big to Fail': Where Will They Draw the Line?

The obvious solution was not bailing them out in the first place. We don't need more lawyers, just some common sense about responsibility. Ban all lobbyist gifts would make more sense than phonebook sized laws that take 3 months just to read.

Silver Futures Show Markets Are Acting Strangely

Kohalakid ignores the fact that these two banks, hedgers or not, are dominating the silver futures market by shorting more than 80% of all outstanding short contracts while holding just 38 long positions out of 111,000 contracts. That is a more dominant position than what the Hunt Brothers held when they were long silver.

While he is correct that hedgers can get exemptions, such outlandish exemptions (three times what anyone else can have) all to the short end would indicate extremely deep pockets that could sustain any manner of loss while pressuring prices downward for much smaller investors. (The short position would equate to 8 Billion dollars at $17.63, of course the total loss position would be significantly less, more on the order of less than a billion, which such large banks could absorb with impunity while continuing to add to their short position.)

Of course he doesn't mention that the CFTC is looking at setting limits that could force limits in silver to mirror limits in other futures markets (1500 vs current 6,000). Ted Butler has commented on the CFTC moves.

The point Kohalakid doesn't want to address is the point of manipulation in any single market. The silver futures short position is beyound anything else in the market and while he derides my postings as "silly", they are showing what is actually happening in the paper market. COMEX can't settle the contracts that are out, at least not in actual silver. COMEX silver stocks, registered and eligible are falling and world silver production is pretty much spoken for.

The only reason you short a market is because you think the price will fall. The only reason to short a single market this much by this few is to keep the price down.

Taxpayers' costs in the global crisis have been exaggerated, says Goldman Sachs (GS) chief economist Jim O'Neill: “It’s suddenly become very trendy to be the toughest person around, whether you’re in the private sector, or in government, or opposition, as to what we’re going to do about the deficit ... We need to get growth back, and then we can have a more sensible look at what the true fiscal position is.”

Ignore the Yearly Deficit Elephant (1.4 Trillion and counting) in the corner, it will go join the others shortly and another will take it's place. We are building another room onto the house to keep them.

If nearly 12 trillion dollars of debt is not enough to get the attention of anyone, then we ARE playing with monopoly money.

Food, Water, Shelter, Clothing. Nope, FRN's didn't make the basic survival list.

Silver in hand is worth 9 times what is in an ETF

As I stressed, it is an insurance policy for the future, whatever that future brings. SIlver has a variety of benefits from health to wealth. Bartering is already going on (ask how many handymen want to be paid cash, rather than a check) and will only increase in the future as even web sites are offering the bartering of skills (you work on my roof and I'll work on your car) in which value is exchanged, but no money (meaning no taxes). I offered the idea of Silver as an insurance against the unthinkable, I'm sure Germans and Zimbabwean's didn't expect disaster to befall them the way it did with the German Mark and Zimbabwean Dollar. (We won't get into the relative value of the US dollar today compared to 1913)

Silver, like gold, is also something that can be bartered with when the two sides in a transaction can't agree on a service or goods exchange. Having a lower relative value at the moment than gold, Silver can be used for smaller exchanges. Again, there would be no taxes to such an exchange.

The main point is to actually have some metal in your possession, not paper promises or investments that may or may not be available for redemption. Anyone who has more than a couple of ounces of silver already has their share and more if silver were metted out to every individual in just the US. Insurance is for the prudent, to safeguard the future.


On Oct 02 11:08 AM The Goy wrote:

> Ed I have always liked your writing, but now you are giving a bad
> name to anyone who likes silver. Please don't fall into the trap
> that the whole world is going to end, and everyone is going to bartering
> and using gold and silver to buy things. We are not going to end
> civilization as we know it. People will still use dollars, they will
> just be worth less in terms of silver and gold.
>
> This from a person who has a very large position in silver, gold
> and palladium. I like them, I think they are extremely cheap compared
> to what a future dollar will buy. But, I NEVER expect to use them
> to buy food.
>
> Unfortunately, when you sound like a nutcase(for lack of better term)
> spouting about the end of the world, it makes it tough to actually
> take the investment or you, seriously.

Want to Own Silver? Forget About SLV

I think Jeff has a legitimate concern regarding the supposed uptick in inventory, at least according to figures that we have to "bear" with. If inventories surged by 450 million ounces thanks to the ETF's, just where did that increase in inventory come from?

The USGS says total world production and demand has been equal thanks to scrap and government sales (production). Total Net Investment for 2006-2008 only totals 141.5 Moz, a third of what is supposedly in ETF hands. If production and demand are equal, where did the other 300 Moz come from?

And to answer the question about silver in private hands, the US Mint has sold 194 Moz of Eagles since 1986 (then you also have maples, philharmoics, etc) Outside of Coins and Medals, the USGS does not have a category for 1000 oz bars, except perhaps "industrial applications".

The same type of "number" questions affect the COMEX where available silver in storage is outnumbered by total positions by a factor of 8 to 1

Comex Silver - Another Bubble or Desperation?

Part of the problem with classifying Commercial Traders as either Speculators or Hedgers is the fact that the CFTC declines to identify who the Commercial Traders are. It is only through the Bank Particiaption report that we know that two of the massively short positions are held by US banks, which two are again, unidentified by CFTC. Those same two unnamed banks are long just 15 contracts. This massive short position developed in July-August of last year, about the time Bear Sterns imploded. In July of 08, the BPR showed two unnamed banks with a 4.8% short position and 22 long contracts. In August, the BPR showed a short position by 2 banks of 25.4% and zero long positions. (July short was 6,199 contracts, by August, it was 33,805)

CFTC claims that revealing the identities of the few Commercial traders, or just the two US Banks in the BPR would disclose trading strategies and trade secrets.

IMO The Commercial Positions are speculative, they do not produce the item in question, therefore they cannot hedge production as a mine can. COMEX has nowhere near enough metal, whether registered or eligible, to meet the amount of paper it has issued (promised). And no where in the USGS statistics does it reflect COMEX storage as a consumption alongside industrial, photographic, jewelery, silverware and coins and metals.

Federal Judge Rakoff Slams SEC Complicity in the Bank of America Fraud Case

The point that the judge made was that individuals involved in the scheme be named and held accountable, not the investors and not for the pittance that was being proposed. 33 million for 40 billion? And none of it affects our bonus? I'd sign on for that every day. (to put that in real terms, you get 40 dollars and have to pay a fine of 3.3 cents!)
The judge is doing what most of our government is not, asking that those responsible shoulder the responsiblity for this mess, instead of taxpayers and shareholders who so far, have gotten nothing but the sharp, short end of the stick.

A Lot of Caveats to This Recovery Scenario

We seem to have become adept at putting things off until they grow from the molehill into the mountain of toxic waste and then we continue to try and ignore it, rather than roll up our sleeves and do something about it. MSM doesn't want to devote the airtime to looking deeper into the numbers that are being rolled out showing "improving" conditions, they just take the press release and find people that will verbalize it for them. Where is 60 minutes when you need them? A minute-thirty package doesn't begin to scratch the surface of what for contributors on SA is a massive exploratory effort. I agree that there are a lot more clouds in the forecast and a pretty good chance of severe storms ahead.

Sept. Reuters/UofMich Consumer Sentiment Index: 70.2 vs. consensus of 67.3, up from 65.7 in August. 12-month outlook jumps to 79 from 69 in August, the highest since Sept. 2007. "Confidence rebounded in early September as consumers increasingly expected the economy to improve despite their reluctant conclusion that their own financial situation would remain quite problematic for some time."

The more reports come out painting a "rosy" picture, the more you have to question the basis of the reports. Seasonal adjustments, core rates, etc are all ways to twist the numbers. What did Mark Twain say there are three kinds of liars: liars, damned liars and statisticians. The only reason people think it's going to improve is that they are being fed a diet of BS that says things are "less bad" than before and "better than consensus". We always think things will get better, look how many took a hosing last fall because they couldn't believe things were going to get that bad