Exchange operator CME Group Inc. will raise the collateral requirements for trading in gold, copper and silver futures after a volatile week.
Gold margins will be raised by 21%, silver margins by 16%, and copper margins by 18%, effective at the close of trading Monday, CME said in an email after trading closed Friday.
via CME Raises Gold, Silver, Copper Margin Requirements – WSJ.com.
Forty three months after the recession began in January 2008, almost 5% of the labor force remains unemployed. In 7 of the eleven recessions since World War II, all the jobs lost during the recession were filled within 24 months. What’s happening in this ‘recovery’ is simply unprecedented.
Big Picture surveyed readers, asking who were their most influential managers, thinkers, traders and strategists. This is the list they came up with:
Asset Managers | Researcher/Strategists | Media/Blogs
1. Jeremy Grantham | James Grant | Naked Capitalism
2. Jim Rogers | Robert Shiller | John Mauldin
3. John Hussman | Lakshman Achuthan | Paul Krugman
4. George Soros | Marc Faber | ZeroHedge.com
more ……
via TBP’s 30 Most Influential Finance Sources | The Big Picture.
[Barry Ritholz and his excellent TBP blog were excluded from the survey.]
The crucial talks between the European Union-European Central Bank-International Monetary Fund “Troika” with the Greek government remain on hold as Greece pulls together another six billion euros in cuts and taxes to hit its promised 2011 target. At stake is the next eight-billion-euro bailout payment, without which Greece goes broke within weeks.
via European Crisis Primer: Where Things Stand – Real Time Economics – WSJ.
Copper has in the past proved a reliable indicator of the state of the global economy. Now it has gapped through primary support at 8500 and below its trend channel (drawn at 2 standard deviations around a linear regression line) on the weekly chart — warning of a global recession. The 63-day Momentum peak below zero also signals a bear market.
* Target calculation: 8500 – ( 10000 – 8500 ) = 7000
The Consumer Sentiment Survey of Americans, created by George Katona at the University of Michigan in the early 1950’s, and known today as the Thomson-Reuters University of Michigan Surveys of Consumers, has included a remarkable question about the reasonably long-term future, five years hence, and asks about visceral fears concerning that period:
“Looking ahead, which would you say is more likely – that in the country as a whole we’ll have continuous good times during the next five years or so, or that we will have periods of widespread unemployment or depression, or what?”
That question is usually not singled out for attention, but it appears spot-on for what we really want to know: what deep anxieties and fears do people have that might inhibit their willingness to spend for a long time. The answers to that question might well help us forecast the future outlook much more accurately.
Those answers plunged into depression territory between July and August, and the index of optimism based on answers to this question is at its lowest level since the oil-crisis-induced “great recession” of the early 1980’s…..
This is a much bigger downswing than was recorded in the overall consumer-confidence indices. The decline occurred over the better part of a decade, as we began to see the end of debt-driven overexpansion, and accelerated with the latest debt crisis.
The timing and substance of these consumer-survey results suggest that our fundamental outlook about the economy, at the level of the average person, is closely bound up with stories of excessive borrowing, loss of governmental and personal responsibility, and a sense that matters are beyond control. That kind of loss of confidence may well last for years.
via The Great Debt Scare – Robert J. Shiller – Project Syndicate.
Spot gold broke support at $1700/ounce, falling hard to $1650. The calculated target is $1600* or $1500 depending on whether you take the base of the double top as $1750 or $1700.
* Target calculation: 1750 – ( 1900 – 1750 ) = 1600
When you look at the trend channel on the weekly chart, however, it is likely that the sharp correction will overshoot the trend channel on the lower side. Possibly as low as $1300*.
* Target calculation: 1500 – ( 1900 – 1700 ) = 1300
I have to eat my words from September 11: “With Europe awash with stories of the imminent default of Greece, and German banks told to prepare for a 50% haircut on Greek bonds, this would be a good time to buy gold.” Sure I qualified by warning that below $1800 all bets were off, but should have placed more emphasis on the overbought situation on the weekly chart and less on the approaching European tsunami.
Amex Gold Bugs Index gapped through the rising trendline and support at 600, warning of a bull trap. The Gold Bugs Index represents unhedged gold miners. Spot gold support at $1700/ounce is now likely to fail.
The euro-zone PMI for September slid 1.5 points to 49.2, according to data provider Markit, signaling contraction by falling below the 50 mark for the first time since July 2009. The new-orders component of the survey also declined, suggesting further weakness ahead.
HSBC’s preliminary China Manufacturing Purchasing Managers’ Index, or “flash” PMI, fell to a two-month low in September, indicating a broadening slowdown in the Chinese economy, with industrial output swinging from a modest expansion to a deterioration.
via China manufacturing data paint weak picture – Economic Report – MarketWatch.
