9/7/12

1:45 pm edit: beware the potential for margin hikes via the CME-COMEX due to the big move in gold.

U.S. employers added 96,000 jobs last month, missing expectations. Unemployment rate falls to 8.1%. Underemployment (U6) slipped as well to 14.7%.  [REACTION] http://cnb.cx/P1tY0A.

As usual, a bunch of weak numbers, especially when consideration is given that another 368,000  people gave up finding work and dropped out of the workforce in August. However, this makes Wall Street happy. While stocks may be over bought short term after yesterday’s rally, futures are nominally positive this morning.  There could be a bit of tug o war near the unchanged level during today’s festivities, but the conventional thought remains that Bernanke is ready to pump the system further.  So even if some nervous Nelly’s sell, there will be underlying support to stocks.  I had better be sooner rather than later for Bernanke to make his move for the sake of various markets, including the gold market.  QE will eventually arrive, but much of the market move in recent weeks is based on QE coming in the near term.  I had thought December, but the market experts by and large are insisting another dose of QE is coming perhaps as early as next week. Gold’s expected long term rise is not wholly dependent on QE. There are many other factors at work to boost gold, from traditional demand to changes in banking that may make gold a Tier  One asset to its increasing use as collateral in large open transactions.  

To reiterate: QE needs to go from hope to reality, OR the markets will grow impatient and those that have risen will SELL off.  Jawboning QE has brought about a rally in stocks and gold. The stock rise part of the equation came in handy for convention time this week, but the jawboning shall blow up in Bernanke’s face if he continues to do what the Fed has been doing: Sitting on its hands and making promises.  Yes, I see a level of growing risk for stocks and gold if Bernanke waits. For we who see December Fed action ,the markets will be an unhappy place this fall which is why I don’t rule out possible QE earlier than I expect. One cannot be blind to the  political reality of the Fed, while certainly not liking the gold rise, is pre occupied with extending the illusion that rising stock indexes bring. It does and does not suprise me that Obama has not spoken more of the stock market’s more than doubling since the 2009 nadir, but I suspsect Mr. Obama sees the vast market rise has benefiting too much of those ‘evil’ rich people (isn’t that how Michelle characterized the rich while wearing her $4,000 convention dress?).  

Gold or wheelbarrows full of euros? Read James Mackintosh’s blog on FT Long Short http://on.ft.com/P7sfJ0/

Ever ask yourself this question? Why is Putin stockpiling gold? – MarketWatch http://on.mktw.net/RmbJB1 via @MarketWatch

The $80 mln coins that are not worth $80 mln. From my expert source: “They’re not worth even close to $80m. One coin is worth $8m but if all 10 were legal to own, they would be similar to the 27-D- probably $2m per coin. Not to mention, another 10-15 would come out of the woodwork making them similar to the 30-s and about worth only $200k per coin.” But read on keeping the real coin values in mind:  Judge upholds government’s claim to $80M in rare gold coins found in safe deposit box | Fox News http://fxn.ws/P7ZHPn via @foxnews. Poectic justice that the previous holders of these National Gems are without them?  From the two bit comments I’ve seen on the web by people condemning the judge’s ruling, it’s quite easy to see that few have an appreciation (reallly a clue) about what was going on during that time in American History and why gold got caught up in the cross hairs of the Oval Office.  In the case of these coins, their acquisition came through illegal means during an era when the government sought to end the hoarding of gold - yes, a time when their was still a partial gold standard in place, or really a 180 degree difference from our fiat ponzi paper currency system. 

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Intel shares fall 2% in premarket on revenue-forecast reduction http://on.mktw.net/Qr3I15 . This has more to do with waiting for Windows 8 than a sharp demand reduction due to worldwide economic factors, or so the analysts say.