longer Rant-The ramifications of the manipulation in US financial markets are growing, as is the continued interference itself. The US stock market was trounced yesterday, as you all know. Then Intel came out with a negative bomb after the close. This was followed by another bomb by Ambac and a JP Morgan earnings disappointment. Remember what happened on Monday after IBM’s positive earnings hit the tape?…
JPMorgan Fourth-Quarter Earnings Fall, Miss Analyst Estimates
Jan. 16 (Bloomberg) -- JPMorgan Chase & Co., the third- biggest U.S. bank, said profit fell 34 percent, more than analysts estimated, after $1.3 billion of writedowns for subprime-mortgage investments.
Fourth-quarter net income declined to $2.97 billion, or 86 cents a share, from $4.53 billion, or $1.26, a year earlier, the New York-based company said today in a statement. Seventeen analysts surveyed by Bloomberg estimated profit of 92 cents…
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Ambac sees Q4 net loss as much as $32.83-share - MarketWatch
21 minutes ago Ambac estimates Q4 derivatives mark-to-market loss $3.5B - MarketWatch
22 minutes ago Ambac names Michael A. Callen chairman, interim CEO - MarketWatch
22 minutes ago Ambac expects to retain Fitch AAA rating - MarketWatch
23 minutes ago Ambac cuts quarterly dividend to 7c from 21c - MarketWatch
23 minutes ago Ambac CEO Genader to retire - MarketWatch
24 minutes ago Ambac to raise at least $1B capital - MarketWatch
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After the Intel news, the S&P was nailed for 18 points last night, the DOW down about 150 points. Then more bad news hits, including an Asian stock market trouncing. So now we are 10 minutes into the NYSE trading period, and the DOW is UP 10, without not even a major sell off early. This is vintage PPT interference in an attempt to set the tone for the day and force the shorts to cover.
AGAIN, after EVERY daily market debacle, the PPT props up the market the next day in order to prevent the public from jumping in on the sell side in any kind of dumping panic. "See Dick, See Jane, Everything is fine. Look how the US financial market’s health barometer, the DOW, responds to horrendous news."
How the day will end up, after this nonsense, might be a different matter. We shall see.
Now for the other barometer, gold. The farce intensifies there too. You saw how The Gold Cartel operates yesterday as they pounded gold down after an all-time PM Fix, taking it down from $914 to right above $900, setting the tone for today. Then they bombed gold in the lightly traded Access Market for $10 to $14, even though THE DOW only closed 35 lower than where it was trading when gold was through on the Comex.
The gold takedown spooked other spec longs, a number of which pitched their positions to protect profits. This sort of action tends to feed on itself in the short term and influences the cash market too as buyers step back, waiting to see what sort of carnage develops.
Gold first fell all the way to $878. This action influenced the AM Fix, which came in at $881, or around $20 lower than the prior Comex close. Often The Gold Cartel types cover part of their shorts put on above $905 on the plunge, thereby reducing their short position losses. Most of the time they let the market come to them, as they hope the market will continue to plunge to cover losses already on the books. Lately waiting for a huge price drop has been futile, as buyers waiting in the wings compete for physical gold on the sharp price drop.
After last night’s plunge, gold rallied back close to $900, then was bombed again. Following a $16 lower call this morning, it rallied again to go only down $5. However, when the market began to lose ground after that rally, gold was drilled, as the euro began to get battered. For some reason (INTERVENTION), each time the US stock market really begins to get into trouble, the dollar goes up, which makes NO SENSE. This sort of market action occurs time and time again.
Perhaps it's because the Treasury yields collapse when the DOW tanks, which of course, is truly ludicrous.
What a farce this is. Turns out the euro was bombed due to these remarks:
REUTERS EURO ZONE INTEREST RATE FUTURES SURGE AS ECB'S MERSCH HIGHLIGHTS GROWTH RISKS
REUTERS EURO FALLS VS DOLLAR AFTER MERSCH TELLS BLOOMBERG ECB MAY REVISE DOWN 2008 GROWTH FORECAST
OK, why should gold collapse if European rates are suddenly going to drop? The lower rates, with higher inflation, should be gold friendly. Gold might correct a bit maybe, but not like this.
It gets nuttier when it comes to the US FINANCIAL MARKET MANAGEMENT. The Planet Wall Street bulls have been counting on global growth to counteract the weakening US economy. That is one of their last lynchpins. But now we find out the European economies are worsening at a rapid rate too. Then WHY does the US stock market not really go into the tank after all this horrendous news? Why does it stabilize, and go up, while gold is trounced?
Adrian has an answer (you can add PPT to this too):
Cartel in PANIC!!
Bill,
Here are the headlines from Marketwatch.com this morning:
QUOTE
Intel meltdown slams stocks
Wall Street on a downer thanks to Intel's weak outlook raises tech-implosion fears. J.P. Morgan Chase results come in for scrutiny.
• Boeing confirms 787 delay
J.P. Morgan offers some relief -Shares rise after the bank posted smaller than expected write-downs (you have to be kidding!!!)
• Wells Fargo profit falls 38%, sees challenging 2008
• Citigroup overreaction? (you mean massive losses are not a reason to sell?)
U.S. ECONOMY - Odds looking long for a surprise rate cut
CPI up 0.3%, opening door for Fed
Benign core retail-level inflation gives Fed leeway to cut rates (I checked to see if it was April 1st, but no it is only Jan 16!!)
Intel takes 12% pounding - Chipmaker slammed by weak outlook
• ASML shares down 10% on murky view
• Sony Ericsson market share up, profit hit
U.S. stocks strike negative tone as Intel disappoints
END
Does this look like the market scenario where the dollar would suddenly rise like it had intravenous Viagra injections and gold get taken to the wood-shed? Just when you think the manipulation can not get any more blatant …it does!
The severity of this attack on gold smacks of severe desperation. This is likely because the Open Interest on COMEX has started to rise exponentially. This must be frightening the hell out of the Cartel because this is certainly not being matched by their access to physical gold. They have failed for the last six months to shake out the longs. Is this because the longs can NOT be shaken because a large number of them want delivery? It is difficult to know but what is certain is the longs have been more tenacious than I have ever seen before. Time is running out for the shorts. Another factor is the shockingly bad financial results of Citigroup and JP Morgan. The cartel must be getting worried that a Northern Rock situation is going to be precipitated shortly. When will Americans start to panic and go to withdraw their money from these banks? The Cartel is desperate to prevent anyone from withdrawing funds to buy precious metals!
It looks like the red panic button has been pushed.
Time to baton the hatches. We have laid out for 10 years why the cartel will come unglued. It looks like it is happening now. With the economy falling apart and the FED promising large rate cuts that will trash the dollar, gold will not be held hostage for very long. The weak speculators are going to have their pockets picked yet again but my view is that the Cartel will not achieve the liquidation they are looking for….and if they don’t watch out above because the Indians will be back with a vengeance.
Cheers
Adrian
The US financial markets these days just don’t act the way they used to. Black is white. White is black. The market movements are constantly trading in counterintuitive fashion. By holding the stock market up and gold down, they are just making matters worse down the road, as both are not allowed to let off steam in different directions. That is what this Moral Hazard talk is all about.
Re our STALKER source in yesterday’s MIDAS:
"His very conservative, veteran gold dealer in London called this morning and is looking for a pullback to the $870 to $882 levels, then a run to $985 in March. We shall see."
Today’s low: $874.20. If it holds the next few days on a closing basis, it ought to be off to the races for $985.
I like Dennis Gartman personally, but he has become a jinx with his new CNBC Fast Money show fame. The other day he told the viewers he got out of half of his gold position. Gold then rallied sharply on its way to $914 and he bought in again to be fully loaded. Gold then collapses. The Gold Cartel did him in AGAIN.
While stating gold would be much higher in 6 months, Dennis went on to say that gold was being sold (it was down sharply in the Access Market) due to liquidity pressures. Investors were selling whatever they could. HUH? Then why does gold get pounded today when the DOW goes UP?
You said it Mom: "Sheesh Pinilli."
Aggravation of the THIRD KIND:
REUTERS US TREASURY PRICES SLIP BACK TOWARD SESSION LOWS AS STOCKS CUT LOSSES, CURBING SAFE HAVEN BID
Excuse me? Two days ago gold was a SAVE HAVEN with all the lousy news out there. But today it is not. Newer Café members … get the drift on all this nonsense? The GATA camp has documented it for YEARS, which is why US financial markets are in the mess that they are today.
It is important to keep in mind, this is not cry baby talk. Free markets get overbought and correct. Great bull markets are filled with crushing corrections. What is different here is the price level from which the corrections kick in. Right now gold is about $1400 per ounce under its all-time high inflation adjusted price. The reason: THE GOLD CARTEL! … which is why so many of us on Planet GATA are so ticked off so often.
The gold open interest made an all-time high yesterday at 593,953, up 1708 contracts. So did silver, up 4121 contracts to 177,544. We should see some substantial washouts of both open interests tomorrow.
Crude oil fell $1.06 per barrel to $90.84, after falling around $2.50 in the early going.
The dollar gained .62 to 76.32 and the euro fell 1.54 to 146.48.
The yield on the 10 yr T note was last at 3.72%.
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