Thursday, July 1, 2010
Gold Below $1,200 As Asset Liquidations Spread Like Wildfire
Tuesday, June 29, 2010
Monday, June 28, 2010
S&P 500: Be Prepared!
June 25, 2010 Analysis from Chris Kimble
The third and final revision of Q1 GDP was released this morning. Unfortunately the revision was downward from 3.0 to 2.7, which is less than half the GPD of 2009 Q4. In the wake of this disappointing pattern Chris Kimble updates his view of the S&P 500, where he has previously alerted us to the formation of a head-and-shoulders pattern (June 11 and June 16). They're definitely flashing caution, and in the time-honored tradition of the Boy Scouts, investors should Be Prepared!
Chris comments: When support gives way, often times it pays to have a plan of action before the event that can be taken with reason and promptly.
The S&P 500 index finds itself at a multiple support price point, should support not hold, investors might want to have a plan of action and not stick around TOO LONG!
For feedback or more information, email Chris at KimbleChartingSolutions@gmail.com."
Precious Metals Update and Fibonacci Over Time
June 26, 2010 Analysis from Chris Kimble
First Chris Kimble updates us on gold and silver, following up on his June 18 charts:
- Fibonacci, wedge resistance and the crayon test are still in play.
- Gold closed at $1,255.80; down $1.20 on the week ($1,250 is fib resistance).
- Silver closed at $19.17; down 7 cents on the week ($20 is Fib resistance).
- GDX was off a third of a percent for the week (See Lucky Charms).
Chris comments: Fibonacci patterns abound in nature, and they are used as key indicators for stock market advancements and retracement levels. Fibonacci is less frequently used as a time gauge.
144 is a number in the Fibonacci sequence (0, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144 ...).
Look how 144 could fit into the timeline for movements of gold. Curious coincidence? Or is a pullback at hand?
For feedback or more information, email Chris at KimbleChartingSolutions@gmail.com."
Paul Krugman Throws In The Towel, Says We're Headed For Another Depression
Aaron and I discussed the stimulus v austerity question on TechTicker this morning. It basically boils down to pain now or pain later. (Or, if those who actually think we have less control than Krugman does, pain now AND pain later...)
For the last several months, Princeton professor Paul Krugman has become increasingly agitated about what he feels is a disastrous mistake in the making -- a sudden global obsession with 'austerity' that will lead to spending cuts in many nations in Europe and, possibly, the United States.
Krugman believes that this is exactly the same mistake we made in 1937, when the country was beginning to emerge from the Great Depression. A sudden focus on austerity in 1937, it is widely believed, halted four years of strong growth and plunged the country back into recession, sending the unemployment rate soaring again.
In Krugman's view, the world should keep spending now, to offset the pain of the recession and high unemployment--and then start cutting back as soon as the economy is robustly healthy again.
Those concerned about the world's massive debt and deficits, however, have seized control of the public debate, and are scaring the world's governments into cutting back.
Which fate is worse? It depends on your time frame.
Cutting back on spending now would almost certainly make the economy worse, at least for the short run. Not cutting back on spending later, meanwhile (and Congress has shown no ability to curtail spending), will almost certainly keep us on a road to hell in a handbasket.
The White House's own budget projections show the deficit improving as a percent of GDP to about -4% by 2013. After that, however, even the White House doesn't think things will get much better. After a few years of bumping along at about -4%, the deficit will begin to soar at the end of the decade. And thanks to the ballooning costs of Medicare, Medicaid, and Social Security--along with inflating interest payments from all the debt we're accumulating--the White House expects the deficit to soar to a staggering -62% of GDP by 2085.
What Krugman and his foes agree on is that that's no way to run a country. And it's time we finally faced up to that.
In the meantime, we'll continue to fight about what to do in the near-term. And Krugman thinks he has lost that war and we're headed for another Depression.
See why Krugman's nemesis, Niall Ferguson, thinks the U.S. is screwed >d
Join the conversation about this story »
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Oil Spill Might Be Making Natural Seeps Larger
The deep sea subs have found other leaks a couple of miles from BP's
gushing blowout preventer and riser.
For example, the Houston
Chronicle noted
on June 21st:
A report from the National Oceanic
and Atmospheric Administration on Monday noted research vessels found
natural gas seeping from the sea floor several miles away from the well.
While
many might be quick to take this as confirmation of Matt Simmons' claims
that there is another leak directly caused by the sinking of the
drilling rig, the Chronicle goes on to explain:
Those
appear to be pre-existing seeps that occur naturally, a NOAA
spokeswoman said, and unrelated to the spill.
But
the Washington Post made a very important
point yesterday:
Bruce Bullock, director
of the Maguire Energy Institute at Southern Methodist University, said
additional leaks are a possible source of deep-sea plumes of oil
detected by research vessels. But this part of the gulf is pocked with
natural seeps, he noted. Conceivably
the drilling of the well, and/or the subsequent blowout, could have
affected the seeps, he said.
'Once you started disturbing the underground geology, you may have made
one of those seeps even worse,' he said.
Remember
that geologists have said that if the well casing is substantially
breached, the oil and methane gas will find a way through fractures in
the surrounding geology and make it into the ocean. For example, the
Houston Chronicle notes:
If the well
casing burst it could send oil and gas streaming through the strata to
appear elsewhere on the sea floor ....
Obviously,
if there are natural oil or gas seeps nearby, there are already
pre-existing channels up to the seafloor ... so that may very well be
the path of least resistance for the subterranean oil to flow up to the
seafloor.
Therefore, if there were a substantial breach in the
well bore, nearby natural oil and gas seeps could very well increase in
volume.
Because BP would like to minimize
leak estimates to minimize the damages it has to pay under the Clean
Water Act, BP would undoubtedly try to pretend that the nearby
natural seeps always had the same volume. In other words, the owner
of the oil drilling prospect where the spill is occuring - BP - may be
the only party to have mapped out the nearby seeps (Anadarko and Mitsui
were partners
with BP in the oil prospect; but - as passive partners - they probably
didn't take a hands-on approach to such details).
So don't be
surprised if - when formerly tiny seeps become gushers - BP tries to
pretend that they were always that large.
Indeed - given BP's
track record of prevarication - don't be shocked if BP pretends that
brand new gushers are ancient, natural seeps.
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USS Carrier Harry Truman Now Officially Just Off Iran, As Israel Allegedly Plotting An Imminent Tehran Raid
As we first reported last week, in an article that was met with much original skepticism, the Pentagon has now confirmed that a fleet of 12 warships has passed the Suez Canal, and is now likely awaiting orders to support the escalation in the Persian Gulf. The attached image from Stratfor shows the latest positioning of US aircraft carrier groups as of June 23: the USS Harry Truman (CVN-75) is now right next to USS Eisenhower (CVN 69), both of which are waiting patiently just off Iran.
As for the catalyst the two carriers may be anticipating, we provide the following update from the Gulf Daily News where we read that Israel may be on the verge of an attack of Iran, with an incursion originating from military bases in Azerbaijan and Georgia.
Israel is massing warplanes in the Caucasus for an attack on Iran, it was revealed yesterday.
Preparations are underway to launch the military attack from Azerbaijan and Georgia, reports our sister paper Akhbar Al Khaleej, quoting military sources.
Israel was, in fact, training pilots in Turkey to launch the strike and was smuggling planes into Georgia using Turkish airspace, they said.
However, Turkey was unaware of Israel's intention of transferring the planes to Georgia, the sources said.
The unexpected crisis between Israel and Turkey following an Israeli commando raid on an aid flotilla bound for Gaza Strip hit Israeli calculations.
Azerbaijan-based intelligence units, working under the cover of technicians, trainers and consultants, have helped with the preparations, the sources said.
Military equipment, mostly supplied by the US, was transported to a Georgian port via the Black Sea.
Georgian coastguard and Israeli controllers are co-operating to hide the operations from Russian vessels, said the sources.
They point out that according to Israel, it will not be in a position to launch a strike on Iran without using bases in Georgia and Azerbaijan due to the limited capabilities of its nuclear submarines stationed near the Iranian coast.
Meanwhile, Iran's Press TV reported that a very large contingent of US ground forces had massed in Azerbaijan, near the Iranian border. The independent Azerbaijani news website Trend confirmed the report.
Those reports came just days after the Pentagon confirmed that an unusually large fleet of US warships had indeed passed through Egypt's Suez Canal en route to the Gulf. At least one Israeli warship reportedly joined the American armada.
Press TV also quoted Iranian Revolultionary Guard Brigadier General Mehdi Moini as saying that the country's forces are mobilised and ready to face Israelli and American 'misadventures' near its borders.
* Iran last night said it has cancelled plans to send an aid ship to the Gaza Strip as Israel 'had sent a letter to the UN saying that the presence of Iranian and Lebanese ships in the Gaza area will be considered a declaration of war on that regime and it will confront it,' Irna said.
We caution readers to take this news with a grain of salt as the Gulf Daily News' sister publication, Akhbar Al Khaleej, has a slightly less than stellar credibility rating. Then again, this is what some, Breaking News Online most notably, said about last week's carrier news, urging readers to ignore it.
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