Wednesday, April 2, 2008

April Fool's Market Rally



As so aptly demonstrated by his suggestion that we turn all regulation of our financial institutions over to the Fed, Hanky Panky Paulson has once again shown that he is the penultimate model for the typical Wall Street miscreant of the shameless variety. The gall of these people is both boundless and astounding! The arrogance of these reprobates and sociopaths surpasses even that of Satan, who has nothing on these woe begotten pirates, buccaneers, scalawags and scum-bag traitors who have destroyed our nation, and also themselves, with their profligate brand of Ponzi-scheming, shell-game-breeding greed and their insatiable lust for power. These people are nothing but financial vampires out to suck us all dry. It's time to break out the crucifixes and drive a stake through the heart of the head vampire, the Fed, and kill it off once and for all! Where is Van Helsing when you need him?
-Bob Chapman, The International Forecaster
http://news.goldseek.com/InternationalForecaster/1207202700.php


It is only fitting that the Dow should rise 391 points on April 1st...April Fool's Day. A fool and his money are soon parted...and so be it! Yes, the case can be made that a large percentage of the market's move higher on Tuesday was the result of the weak handed Shorts running for cover. My goodness, what would scare a short in the general equities more than two of the largest banks in the world looking for cash. That they found any is scary enough for any market participant, but the fact that they had to go looking for it should have emboldened the shorts. Those that recognize that general equities are "in a bear market" most likely faded this feeble rally, and sold more stock short. Foolish investors believed the media's "market bottom" calls and bought from insiders across the banking industry selling them their toxic shares in a classic fleecing of the sheep. Sorry folks, bad bets made by individual investors will not be bailed out by the Fed...you are a patsy.

On the other hand, Tuesday's thrashing of the Precious Metals appeared to be a final flushing of the weak handed Bulls selling out and running for the hills never to be seen again. Those that recognize that Precious Metals are "in a bull market" smelled the blood in the streets and pounced on one more "opportunity of a lifetime" to load the boat with Silver and Gold. The Bull Market in Commodities and Real Money are far from over. The inflation we will be forced to endure as the months, and years, ahead come and go, will make us yearn for today's "tame" inflation figures. The magicians at the Fed and the Treasury are using every tick, old and new, in an attempt to distract general equities shorts and Precious Metals bulls from the obvious: Inflation is with us today, and is not only going to be with us for many tomorrows to come, but it is going to be absolutely crushing for EVERY American. Investing in Precious Metals is a marathon. It is NOT a sprint. Stay focused, ignore the distractions, the noise, and the spin of the Wizards on Wall Street. They are NOT interested in making you money, they are 100% focused on taking your money.


Judging from the way the stock market has responded to the Fed’s massive PR campaign to convince the world that all is right with the world, we are among the few doubters left. It’s all well and good to pretend that confidence has been restored to the banking system, and we wouldn’t begrudge investors a week or two of comic relief such as we have seen on Wall Street in recent days. But if all of the hubris and spin control have substantively changed things, we lack the imagination to see how those changes will help beat back the toxic debt deflation that continues to gather strength each day in the real estate and financial sectors.
-Rick Ackerman

Mortgage Application Volume Tumbles
Mortgage Application Volume Falls 28.7 Percent As Refinance and Purchase Volumes Both Decline
WASHINGTON (AP) -- Mortgage application volume tumbled 28.7 percent during the week ending March 28, according to the Mortgage Bankers Association's weekly survey.



Factory Orders Drop
WASHINGTON (AP) — Orders to U.S. factories fell for a second straight month, a worse-than-expected performance that reinforced worries that the risk of recession is rising.
The Commerce Department reported Wednesday that factory orders dropped by 1.3 percent in February, about double the downturn that economists had been expecting. Orders had fallen an even bigger 2.3 percent in January, the largest decline in five months.


U.S. jobs expected to fall, despite ADP rise
The latest U.S. ADP Employment Report showed that 8,000 jobs were created in March, with weakness concentrated among larger businesses in the goods-producing sector.

But Joshua Shapiro, chief U.S. economist at MFR in New York said this Friday’s official non-farm payrolls numbers should be much weaker than the ADP report suggests.

“There is no guarantee that today’s number will bear a close resemblance to Friday’s reported figure,” he said. “Given all other evidence concerning the labor market, combined with ADP’s underestimation of recent softness in reported payrolls, we are not going to change our minus 75,000 forecast for Friday’s payroll number.”
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"The ADP report doesn't change my view that the situation in the U.S. labor markets continues to deteriorate," said Kurt Karl, chief U.S. economist at Swiss Re in New York. "The problem with ADP also is that this report is extremely volatile and usually misaligned with the government report. I would take it with a grain of salt."



Oil Rises, Gasoline Surges to Record on U.S. Fuel-Supply Drop
(Bloomberg) -- Crude oil rose more than $3 a barrel and gasoline surged to a record after an Energy Department report showed that U.S. supplies of the motor fuel fell a third week.

Gasoline stockpiles declined 4.53 million barrels to 224.7 million barrels last week, the biggest drop since August, the report showed. The dollar fell against the euro for the first time in three days, bolstering the appeal of commodities as an inflation hedge.

``The robust supply cushion for gasoline appears to be vanishing before our eyes,'' said John Kilduff, vice president of risk management at MF Global Ltd. in New York.



Text of Bernanke's Remarks on Hill


Given the Fed's previous insistence that the housing mess was contained, Bernanke's latest bit of hedging drew a predictable hail of brickbats. "Fed Chairman Ben Bernanke became the last human in America to acknowledge the possibility of a recession this morning," disgraced former securities analyst Henry Blodget wrote Wednesday on the Silicon Alley Insider website. "He didn't say the word 'recession,' of course, but he did say the risks to this forecast are still on the downside."
http://money.cnn.com/2008/04/02/news/bernanke_muddle.fortune/


What Bernanke Didn't Say

In his first congressional appearance since intervening to prop up Bear Stearns, the Fed chief refused to call it a bailout—nor would he say there's a recession

As for the Fed's financing to help JPMorgan Chase's takeover of Bear Stearns, Bernanke said "Sudden failure of Bear Stearns likely would have led to a chaotic unwinding of positions in those markets and could have severely shaken confidence." But he didn't call it a bailout.

In response to a question from the committee chairman, Senator Charles Schumer (D-N.Y.), Bernanke said, "A recession is possible. But a recession is a technical term defined by the National Bureau of Economic Research depending on data which will be available quite a while from now, so I'm not yet ready to say whether or not the U.S. economy will face such a situation."

...in response to a question by Senator Sam Brownback (R-Kan.) about why Bernanke intervened to stop Bear from failing. Brownback asked whether other failing firms might get similar treatment. Bernanke said he "thought long and hard" before intervening, and called it an extraordinary action. He said he hoped he would never have to do it again.


And so the story goes. As each new chapter unfolds, a top in the Precious Metals and Commodities appears nowhere in sight. Falling factory orders, weak jobs creation, continued demand for energy despite rising prices, a limp mortgage market, and a bumbling Fed Chairman. The truth rests with Gold. The ONLY real barometer of economic health. Profit taking, correction, market manipulation...call it what you will. I call it a buying opportunity and boldly predict new highs in both Gold and Silver by Memorial Day













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