On Friday, 24 February 2012 I will be speaking for the Fayette County (Tennessee) Tea Party, probably at the county courthouse in Somerville. I'll send y'all more details about time & exact place as soon as I get them. This is your chance to see a natural born fool from Tennessee in the flesh before they become extinct. One thing y'all can always bet on: whenever the banks make a deal, it's to their advantage & the borrowers' disadvantage. Take today's much applauded deal between big banks & 25 state attorneys general over bank wrongdoing in foreclosures. At the end of the day, it costs the banks nothing & secures their otherwise unsecured loans. Here's how: banks have no clear title to mortgages because when they securitized them & sold them, they were in too big a hurry to preserve a chain of clear title. Thus they sue to foreclose, & can't prove any mortgage, foreclosure thrown out. So how does the deal help banks? Oh, they put up a paltry $1.5 billion for 750,000 illegally foreclosed homeowners to split amongst themselves, about $2,000 a head, peanuts. Next the banks agreed to re-finance or "modify" $20 bn or so in existing mortgages "to prevent foreclosure." Now, let's see. #1, the banks create the whole $25 billion out of thin air. Cost to banks? Nothing. #2, banks now hold bad paper that offers no legal basis or claim for a mortgage, but banks generously -- be still, my beating heart! -- re-finance said mortgages, creating new paperwork that PERFECTS their bad title. Yeah, buddy, that sounds like the banks gave up a truckload of goodies, swapping unclear title for perfect title they can now foreclose on legally, and all under the cover of a government-sanctioned deal. "Oh, puh-leez, B'rer Gummint, don't t'row me in dat old mortgage refinancing briarpatch! Puh-leez!" I'm not even going to talk about the Great Greek Debt Deal. My Stupid Meter just blew a fuse & my Hogwash Detector is SMOKING. I can't take any more. Whole investing world's been waiting on that Greek Debt Deal, but what happens when it arrives? Anticlimax. Stocks sputtered, euro spluttered, & silver & gold rose. Mmmmm. Welcome to the world of investor irrationality! Five day stock charts offer neither charm nor enthusiasm. Dow is stuck, blocked, stymied by 12,900. Oh, it rose a MASSIVE 6.51 points (0.05%) today to close at 12,890.46, but I will be tactless & tacky enough to ask the sore question: "With the Greek debt-threat removed, why didn't stocks soar?" Maybe because their wings have been clipped? S&P acquitted itself a little better, closing 1,351.95, up 1.99 points or 0.15%. If they do this in the green tree, what will they do in the dry? They won't bud & blossom, I can promise you that. The US dollar index moved very little, dropping 5.4 basis points (0.07%) to 78.587, still hovering above that deathful 78.50 support. Don't get the idea it was a manic day, either with a high at 78.78 & a low at 78.36, it was a bore-fest. With a 0.07% trading range from high to low, the euro wasn't where the action was today, either. Closed up 0.2% at 1.3285. You would have thought the scared shorts running away would have driven it up, but not at all. That implies -- if I were a guessing man -- that there weren't many shorts in the euro & that all the positions were longs expecting the Greek Deal. Now that they've shot that round, who's left to buy euros? Meanwhile the yen gapped down again today, following through on yesterday's close below the 20 day moving average, & for good measure plunging clean through its 50 DMA as well. Closed near the bottom of the 3- month range. Close was 128.77c/Y100 (Y77.66/US$1), a hefty 0.82% fall. Yen is on the run. My, oh, my! Today was chock full of riddles, conundrums, & antinomies. With the pressure off the euro, silver & gold rose when one might expect that, fears removed, they would fall. They didn't. Gold rose 9.70 to $1,739.00 & silver rose 21.1c to 3388.4c. Although gold reached up and touched $1,750.96, it couldn't even hold on above $1,740. Oddly, too, in the aftermarket it slipped back to $1,730.80, & yesterday's aftermarket (when I checked it) was $1,730.60. For gold that score is "$1750 - two, Gold - zero." Two failures at the same level points to lower prices. To gainsay that gold must trade thru $1,750 tomorrow & close above that mark. Yet if gold cannot beat the top of its range, the bottom of the range cannot beat gold, either. Once again today gold's low came at nearly the self-same spot in the $1,725.80s. If that level gives way, gold will seek $1,680, perhaps $1,650. Silver rose to 3388.4c -- good, but still range-bound, so no questions answered. Strong, yes, but not strong enough to break through 3450c resistance & make good its escape from the range. All I can see on the 5-day chart is a lower high today than yesterday's & a trap door at 3360 that silver had better not step through. What makes all this so riddlesome is that silver & gold keep falling off without following through on the downside, but at the same time refuse to push on upwards. All this has the feel of burning up gas, spinning wheels, & lost momentum. Oh, the long term outlook hasn't changed. Silver & gold remain in a bull market fueled by monetary demand, thanks to their best friends, the inflating central banks & deficit-spawning governments of the world. But for right now metals can't decide whether to swim or go boating. Be patient. On 9 February 1861 the Confederate States congress elected Jefferson Davis first president of the CSA & Alexander Stephens first vice-president. On 9 February 1871 the United States CON-gress authorized the Federal Fish Protection Office. Until they did that, millions of orphan fish all over America were just out there, exposed to the elements and unprotected, but since then the FFPO has, well, it has, uhh, well, I'm almost positive it has provided numerous jobs to worthy political supporters from both parties. And here's a question for y'all, because y'all know where to find everything. I need an 8x8 or 8x10 walk-in freezer. Will be under roof but not in climate-controlled environment. Y'all know where to find such a thing?
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger
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