Thursday, December 31, 2009

Uncle Sam/Chicago ISM Play "Hide The Sausage" With The Markets

Once again the media promotes more Government-released garbage as an indication of economic recovery.  The weekly jobless claims statistic dropped "to the lowest level since 2008."  The dopes on CNBC were beside themselves with glee.  Two comments there:  1)  432,000 new jobless benefit claims is still one helluva lot of folks losing their jobs and 2) At some point, the rate of jobs lost will begin to slow down just because our economy won't grind down to zero and some average level employment will be maintained until the next financial disaster (coming this year, in my view).

Now let's look at The Golden Truth behind the numbers. Kudos to for making an issue of this.  While the number of jobless claims declined a bit, the number Extended Unemployment Claims is shooting higher every week.   These are the people who can't find jobs and for whom initial jobless benefits have expired.  Obama recently signed a bill which contained legislation enabling someone to receive jobless benefits for up to two and a half years.  Here's the data from Zerohedge - you'll notice that EUC applications soared to a new record high this past week, climbing by over 191,000:  The Golden Truth.   It's great that the "front-end" of jobless claims might be declining (at least for now) BUT the "back end" is swelling up just like number of Obama's lies.

Even more disgusting was the Chicago Purchasing Manager's Index revision, which was revised significantly downward, just ONE DAY after it was initially released and celebrated by the dopes on CNBC/Bloomberg:
U.S. stocks added to losses in late morning trade Thursday, after the Chicago Institute for Supply Management revised lower its December business activity index to take into account seasonal factors, only a day after issuing its initial assessment. The December index was revised to 58.7 from Wednesday's reported 60.0. Readings from September to November were also revised lower.  Here's the news link:  (Chicago ISM Lies)
The tragedy here is that the initial number released yesterday gave the stock market a boost, but the initial number turns out to be a fraud.  Of course, very few will be around today to take notice of this and those who celebrated the number yesterday still have the impression that the economy is doing better than it really is.  Please note that the readings from September to November were also revised lower.  So, to the extent that investors plowed into stocks based on this data, they invested based on data that was, best case incorrect and, most likely case, intentionally fraudulent (you can not convince me that the highly educated people who publish the Chicago PMI accidentally released an incorrect number that the whole world watches - I can buy into Government employees like Janet Napolitano making stupid mistakes, but not a private organization of well-educated professionals).

Our whole system is now predicated on the Orwellian Doctrine which was successfully propagated by Joseph Goebbels, Hitler's Minister of Propaganda:  “If you tell a lie big enough and keep repeating it, people will eventually come to believe it."

Tuesday, December 29, 2009

A Reader's Appeal To Obama

I had two regular readers independently share letters with me that they submitted to the White House, ostensibly for President Obama to read, but we know he'll never see them.  Both letters carried pretty much the same theme.  One of them, however, essentially accused Obama of being Robert Rubin's Uncle Tom and was written in a manner which isn't suitable for polite society.  The second letter is an articulate, poignant appeal to the President that, I believe, reflects the views and feelings of a large majority of Americans:
I must tell you, not only can we not hold our heads up in any sort of dignified manner globally, your elegant bow to China’s leader, Wen Jiabao, will be a prolonged measure which our country will now be forced to endure. We can no longer look China in the eye, as they are methodically taking ownership of us.

Dear_President_Obama -

Monday, December 28, 2009

Holiday Retail Sales Fantasies

The stock market had an early boost from a report on Bloomberg News issued by an affiliate of Mastercard that holiday retail sales were estimated to be up 3.6% vs. last year.  After adjusting for the extra day between Thanksgiving and Christmas this year, implied sales would be up 1% vs. a year earlier.

To be blunt, I will say that Mastercard's projection is b.s.  But that's just me.  Here's what Howard Davidowitz, a leading expert on the retail industry has to say:  "the consumer is in the tank!" Please watch the interview below of the always lively and engaging Davidowitz from this morning - here are his key points:

- up 3.6% - "if it's real, and of course I don't believe it is" -  is really 1% after you account for the extra day this year

- 60-70% of all same-store sales will be negative, leading Davidowitz to forecast sales to actually be down 1% this holiday season

- online slaes have been very strong this year but are only 4% of retail sales

- mall-based retail/dept store stores lost market share to the discount chains

Not surprisingly, I agree with everything Davidowitz has to say. There is just no way in hell the consumer would be spending more this year, given that unemployment is over 3% higher than last year, the consumer has significantly less access to credit and home equity wealth is trillions lower this year.

Anectdotally, I don't know anyone who did not cut back on gift-giving this year. Furthermore, the huge snowstorm that paralyzed the northeast right before Christmas had to have devastated mall-based sales, even if it had the effect of increasing online sales.

We all know how Wall Street and the Government manipulate and "adjust" numbers. We'll have a much better feel for what really happened between Turkey Day and X-mas on January 7th, when retailers report December sales.  I also expect to see several large retailers file bankruptcy or announce restructurings of some kind, including another round of massive layoffs, during the first quarter of 2010. Zales - the nations largest jewelry retailer - kicked things off over the weekend by announcing that they had hired an finacial advisor to explore restructuring options.

Friday, December 25, 2009

FNM and FRE Hold Shotguns To The Taxpayer's Head

Please re-read my post from Dec 21 and then read below:  Americans Get Desperate

It's a Happy Holiday season for the crooks running our system and paying themselves with YOUR money.  Please remember that FNM and FRE are wards of the U.S. Government, which means every cent going to the people running them comes from YOU:

Big paydays for Fannie and Freddie bosses

Here's the full article:  Let The Taxpayers Eat Cake

Don't forget to think about the Obamas enjoying Christmas in Hawaii on a vacation paid by you while millions suffer.  I heard many horror stories from a family member last night who volunteers at the Jeffco Action Center - a place where those in need can go and get clothing, toys and food for their families.  Moreover, all the Denver-area rescue centers are in desperate need of food and clothing donations, while Obama is stuffing his fat-lipped face with lots of Christmas prosperity.

Merry Christmas and a belated Happy Hanukkah to all.

Thursday, December 24, 2009

The Truth About The Comex

My commentary here combines two thoughts to two separate inquiries in my comments section concerning the state of affairs on the Comex:  whether or not the Comex will ultimately default and whether or not China will be the one to force the issue.

Let's look at JPM as an example. JPM is short silver contracts representing 200 million ounces. The Comex has only 111 million total ounces of silver, of which only 56 million are registered, meaning available to be delivered. So JPM is short nearly 4 times the amount of deliverable silver on the Comex.

Aside from the extreme manipulation that is going unenforced here, if enough silver longs were to stand for delivery, theoretically JPM would blow up - or be forced to cover - driving the price of silver significantly higher.

My fund partner and I were just discussing the idea that ultimately, just like in 1980 when the Hunts tried to corner the silver market from the long side, the Comex will change its rules in order to avoid a default.  This time around the rule change I anticipate will allow JPM to settle those contracts in cash OR, as they've already done in terms of changing the rules, allow JPM to settle those contracts using the SLV ETF.  The Comex may even go as far as allowing JPM to "force settle" its silver shorts using SLV.  Remember, there is precedence for the Comex's changing the rules in order to protect itself.

IF/When this occurs, it will send a big signal to the global market about the true condition of the growing scarcity of physical gold/silver. But in the meantime, as JPM has shown with its ever-increasing weekly silver short position, JPM can just keep selling as many contracts as it wants to try and keep a lid on the price of silver knowing that it ultimately will never have to deliver the underlying amount of silver.

We have already seen the Comex bailed out of a gold squeeze last May when Deutsche Bank, a large gold futures short seller, suddenly transferred 800,000 ounces of gold from London to the Comex, alleviating a potential blow up delivery short squeeze.

So, the short answer to the issue is that I don't believe the Comex will "blow up" any time soon because the CFTC refuses to enforce market manipulation standards on the gold/silver market. And I don't believe it ever will enforce those standards, contrary to Ted Butler's dreams, and I think the Comex will continue being an illegal short-selling operation of gold and silver until there's a "de facto" default, which will occur when JPM has to force-settle its silver shorts with either a huge cash premium offer or several 10's of millions of shares of SLV.

Eventually Comex will be rendered useless. I don't know if this will occur from a physical squeeze, or if the cause will be the Comex changing the rules - as they've done in past - to allow for cash settlements, or if global players will just ignore the Comex altogether.

The 9 million ounces of gold and 111 million ounces of silver supposedly sitting in Comex depositories, even if all were made available for delivery (which would require private investors using the Comex as a safekeeping depository to register and make available their metal), and notwithstanding the fact that the total Comex inventory would fall far short of satisfying delivery demands if all the longs decided to stand for delivery, wouldn't put even a small dent in the global demand for physical gold/silver

My best guess is that China is leaving the Comex alone for now, letting the manipulating bullion banks keep a lid on the price - thereby allowing big buyers like China to accumulate metal at artificially low prices. When it becomes impossible for big chunks of gold (i.e. like the IMF gold for sale) to be acquired in the context of the current trading range, my best guess is that China will force the paper price up to the point at which a seller would be willing to offer a big chunk of metal. The price right now is transitioning into a dynamic in which the price at which big sellers are willing to sell is really where the real market clearing price will be established.  And since the IMF hasn't yet sold its remaining chunk of gold (I'm assuming they are waiting for higher prices, since they would be shooting themselves in the foot hoping for a lower price, right?), I would surmise that the market clearing price for a big chunk of gold is much higher than the current price.

I don't know if the big buyers will blow up the Comex in 2010 because, for now anyway, the Comex is a big buyer's best friend.

I will say with 100% conviction that silver at current prices is the investment opportunity of a lifetime.  Happy Holidays.

Tuesday, December 22, 2009

Is The Gold Bull Over? If Not, How High Can Gold Go?

The simple answer to the first part of the question is categorically "NO."  Spend seven minutes and watch the video below of Egon von Greyerz of Switzerland's Matterhorn Asset Management to understand why gold will ultimately go a lot higher than even most gold bulls would be willing to forecast.

One topic he covers is the ongoing debate about deflation vs. inflation.  Mr. Greyerz addresses this by explaining that the "deflation" we are experiencing now is setting up the inflation coming soon.  It is the rapid, catastrophic deflation in value of financial assets which is leading to the massive printing of currencies by Central Banks globally, which ultimately will lead to inflation/hyperinflation.  Bernank himself said in an infamous 2002 speech that he could print an infinite supply of money at virtually no cost in order to offset deflation.

Some other excellent comments include:  "Gold isn't going up, paper money is going down.  Paper money is doing what it's always done - it's being destroyed by Governments who are printing endless amounts of paper...and will continue at an accelerated pace."

Please note that gold has quadrupled in value against the U.S. dollar this decade without the benefit of any perceived inflation.  Given all the fears associated with the amount of money being printed by Banana Ben and other Central Banks, all it will take is for the market to get a small whiff of inflation and gold will jerk higher so quickly it will make your neck sore if you're watching.   Please make no mistake, and I'll cover this point in another blog soon, contrary to his blatant lies in front of Congress, it will be impossible for Bernanke to pull out the trillions he's injected into the system.
To answer the second part of the title question, I'll quote Mr. Greyerz:   "several thousand dollars without hyperinflation - with hyperinflation it could go a lot higher."

Monday, December 21, 2009

Desperation Is Setting In...

While you're reading this, think about all of the billions in taxpayer funding that Obama/Geithner/Bernanke have handed over to the banks to keep them from collapsing and to make sure the employees get paid record bonuses this year. 

Serious poverty is spilling into the middle class. 

My significant other - who teaches high school in a  lower-middle income area - and her sister - who teaches 1st grade at an upper-middle income elementary school - are both seeing the severe strains of poverty in the faces and body language of many of their students.  Last Friday, a mother of three elementary school students showed up at the school begging for help, as she had just fed her kids the last can of green beans in the cupboard.  The mother had finally capitulated after losing her job and had been too proud with the false-hope of finding a new job to apply for welfare.  The man she had voted for to be President had failed her.  And now she was desperate for any kind of help to keep her family alive, while she watched Obama hand out multi-billion dollar Christmas gifts to the big bankers who purportedly were doing "God's work," yet  who in reality provide no value to our system and who function as giant leeches sucking the last of the life-blood from the economy before the final collapse.

Christmas was not going to be celebrated by that family.   Luckily, the school helped the woman get set up with a welfare application and my sig-other's sister took her Christmas tree over to the family.  We all chipped in and purchased clothing and some Christmas gifts for the mother to give to her children this Friday. There are several other families who are facing the same abyss just at this one elementary school.  If it's this bad in Denver, I can only imagine how apocalyptic life must be for the millions struggling in other big cities with much worse economies. 

With the disasterous fiscal and financial policies that have been implemented by our Government over the past couple of decades, eventually the system was bound to collapse.  What really makes my blood boil is the fact that Obama, contrary to the platform on which he was elected, has decided to redistribute the wealth, even more than his immediate predecessor, from the middle class taxpayers to the officers and employees of Wall Street's biggest banks (and to Big Pharma and the defense industry).  Obama's blatant disregard for the campaign promises that got him elected is not quite as stunning as is the way in which he has prostrated himself before the Wall Street thieves who paid for his election.

I hope everyone pauses for a moment this holiday season to reflect on the growing millions who will be without joy and festivity over the next 10 days.  And while you're doing that, think about Obama and Lloyd Blankfein and Jamie Dimon stuffing their faces with a feast fit for kings - bought and paid for with your sweat and labor.

"They're buying us with our own money" - Cormac McCarthy, "No Country For Old Men"

"Change Nobody Believes In" - WSJ on the Health Care Bill

I am posting an editorial from today's Wall Street Journal Online on the horror show Harry Reid conducted in order to get a pure partisan agreement on health care jammed through the Senate this past weekend.  At the last minute, Nebraska Democrat Ben Nelson reversed course and cast his vote in support of the Bill.  According to "The Weekly Standard," the White House (i.e. Rahm Emanuel) threatened to mothball a big air force base in Nebraska unless the Senator from Nebraska voted for health care.

I hope everyone takes the time to read through this commentary, as it contains a lot of factual information that has been blurred over by the White House and the deep-pocketed, heavy-spending BigPharma lobby, which by far has been the Bill's biggest financial supporter: 
These 60 Democrats are creating a future of epic increases in spending, taxes and command-and-control regulation, in which bureaucracy trumps innovation and transfer payments are more important than private investment and individual decisions. In short, the Obama Democrats have chosen change nobody believes in—outside of themselves—and when it passes America will be paying for it for decades to come.

Here's the link:     CHANGE NOBODY BELIEVES IN

It would appear, now that the dust has settled and we a have clear view of how much "bribe" money Ben Nelson was given by the White House to get his vote, that Nelson literally bent Obama/Reid over for the benefit of Nebraska and the detriment of every other State.  Think about that when you go to the polls in November.

Friday, December 18, 2009

Dollar Death By 1000 Paper Cuts (Or trillions, in this case)

Zhu Min, Deputy Governor of the Chinese Central Bank, issued comments at an economic forum in Beijing yesterday in which he stated that the U.S. dollar is set up to go lower and that foreign buyers will become a lot more reluctant to buy more U.S. Treasury bonds:
“When the U.S. has to fund its deficit through the combination of issuing more Treasuries and printing more dollars, it is inevitable that the dollar will continue to weaken.”
He also said that the U.S. can no longer assume that foreign countries will continue to fund its massive spending deficits.  Here's the Bloomberg news link:  Dollar Set To Weaken

Notwithstanding the current miniscule trading bounce in the dollar, it's probably worth paying attention to statements about the U.S. dollar and U.S. spending deficits which eminate from Chinese officials, as they are the largest holder of U.S. Treasury bonds.   Might also be worth paying attention to the recent disclosure from Pimco, which revealed that its Total Rate of Return Fund unloaded a massive amount of U.S. Treasury and agency debt, the latter clearly helped by the Fed's massive purchases.

Don't assume that a big spike in interest rates in the Treasury market - caused by funds like Pimco dumping and much higher yields required by foreign buyers - means a lower price of gold.  Au contraire, assume that higher interest rates in this context imply much higher inflation expectations from the market, as a result of the weakening of the dollar.

Higher interest rates will also destroy any lingering fantasies of a housing market recovery.  Will the Fed let the market takes it natural course and stop printing money?  Or will Bernanke, with reappointment confirmation safely in hand from the full Senate in January, re-up the Fed's money printing machine (Quantitative Easing) in order to purchase the 100's of billions in Treasuries necessary to keep interests down?  I am betting heavily on the latter and it sounds like the Chinese are as well.

Thursday, December 17, 2009

Commercial Real Estate Jingle Mail

'Tis that time of the season.  As per the linked article from LINK, Morgan Stanley has sent an early Christmas present to lenders who financed five buildings owned by Morgan Stanley in San Francisco.  Morgan Stanley has opted to hand the keys and building titles over to these lucky banks and investors (no doubt there's public and private pension money in the debt structure).

We've seen some bullish declarations about the housing and commercial real estate market lately.  The most recent coming from Bill Ackman, who runs Pershing Square Capital, a hedge fund with a successful track record.  Recently Ackman gave a presentation to investors which made some very bullish projections for commercial real estate.  In that presentation he has some very questionable assumptions about the ongoing "strength" of the current economy and for economic growth in 2010.  He characterizes the current economy as being "recovered from recession"  and makes some incredulous assumptions for growth in the retail industry for next year.

Based on all of the data that I look at, it would appear to me that the current economic "boom" has been fueled exclusively by direct Government stimulus in the auto, housing and defense/military industries.  The first two are unsustainable even with direct Government intervention; the latter only with continued support of skyrocketing Government debt issuance by those financing our Treasury auctions.

My hunch is that after the holiday season is over, we are going to witness an unprecedented amount of bankruptcy filings in both the retail industry and the white collar service businesses that tend to occupy urban commercial buildings.  This will not be bullish in any way for commercial real estate, as vacancy rates at shopping malls and metropolitan office buildings will spike even higher.  This doesn't even begin to address the growing inventory of multi-family housing units (apartments/condos).  I can say for sure that in the Denver area several have completed development and are begging for tenants.

Back to Ackman, he has made a huge bet on the post-bankruptcy success of General Growth Partners by taking a huge position in its unsecured debts, which will make him one of the largest shareholders when it emerges from chapter 11.   In fact, just today GGP announced that:  "General Growth Properties Inc., the mall owner seeking to emerge from bankruptcy next year, will consider all offers for the company and may sell shares to the public to raise capital" (LINK).  My hunch is that Ackman, sensing the possibility of holding something no one wants (i.e. GGP equity), designed his presentation to throw lipstick on a pig, right before the pig puts itself on the market like a NYC 11th Avenue Princess of the Night ("GGP will consider all offers." Translation:  "I need a fix, I'll do anything you like for some money").

My bigger hunch, based on the empirical data I look at - plus observing actions of smart, inside money like Morgan Stanley - is that Ackman may end up holding the bag with his equity in GGP, especially if the economy drops off a cliff in 2010, as I suspect it will.  The moral here is that if your favorite financial advisor from Wachovia, Wells Fargo, RBC or Raymond James calls you up to pitch REIT stocks, or even this "hot new stock issue from GGP," hang up the phone and change your number as soon as possible.  There is no doubt in my mind, if the Morgan Stanley jingle mail event is any indication, that Wall Street and insiders, who have already dumped billions of REIT paper into mutual funds and retail investors since March, will devote a lot of resources in 2010 trying to unloading even more commercial real estate onto the investing public.

Wednesday, December 16, 2009

OPEC's Move To De-Peg From The U.S. Dollar Was Not Just Conspiracy Theory

“The US dollar has failed. We need to delink,” said Nahed Taher, chief executive of Bahrain’s Gulf One Investment Bank.

Hat tip to Jesse of Jesse's Cafe Americain (linked below) for circulating this story.  Despite being smeared as "pure conspiracy theory," it appears that the news report from Britain's "The Independent" in October that Arab Gulf States were discussing a move to eventually end the use of U.S. dollars to price oil was quite accurate.  Here's a link to my post on this:  LINK

The Telegraph UK is reporting today that Arab Gulf States have agreed to launch a single currency which will be modelled on the Euro and would likely be pegged to a global currency basket and ultimately float as its own currency:  "Saudi Arabia, Kuwait, Bahrain, and Qatar are to launch the first phase next year, creating a Gulf Monetary Council that will evolve quickly into a full-fledged central bank." Here is the article link:  Oil For "GULFOs"

The writing is on the wall here for anyone who cares to pull their head out of the sands of denial and look at what's really going on in the world.  China, India, Russia, Viet Nam, and Gulf State central banks are hoovering up gold and silver and are taking steps to remove the U.S. dollar as the world's reserve currency.  At the same time, our Government and Federal Reserve are implementing policies which are accelerating the increase in Government debt and which transfer massive amounts wealth from the middle class to big Wall Street banks and to the defense, oil and pharmaceutical companies.

I wonder if anyone who voted for Obama realized that the "Change" they were voting for was the "Change" in status of the United States into nothing more than a third world banana republic...

Note To Self:

The only thing I can think of that would be more absurd than Obama getting the Nobel Peace Prize is if Banana Ben Bernanke were to be named Time Magazine Man of the Year.  No commentary necessary.

Tuesday, December 15, 2009

Here's Some "Change" From Obama

$38 billion in spare change given to Citigroup, in a unique, unprecedented IRS ruling which, in effect, transfers $38 billion of potential tax revenue from the Taxpayers to Citigroup.  I borrowed this from Jesse's Cafe Americain because Jesse was too kind in his related commentary: 
The federal government quietly agreed to forgo billions of dollars in potential tax payments from Citigroup as part of the deal announced this week to wean the company from the massive taxpayer bailout that helped it survive the financial crisis.

The Internal Revenue Service on Friday issued an exception to long-standing tax rules for the benefit of Citigroup and a few other companies partially owned by the government. As a result, Citigroup will be allowed to retain billions of dollars worth of tax breaks that otherwise would decline in value when the government sells its stake to private investors.
Here's the link to the entire article from the WashPo:  Obama's "change" in action

Just when you thought Obama's charity to the banking industry couldn't get any worse, he goes and hands Citigroup $38 billion.  Oh don't worry, Barack, I'm sure every single public school district in the country, each faced with many millions in tax cuts, won't miss that tax revenue.  We'll just cut more teachers and close more schools so you can make sure the corrupt Vic Pandit and his band of merry bankers at Citigroup can pay themselves huge bonuses.

Barack, I hope you really enjoy your brief four years in the Oval Office.  And just like Clinton, I hope you turn your tenure as President into massive wealth.  But if elections were held today, judging from the polls, I think you would lose even to Sarah Palin.  I can't think of any fate more pathetic than that.

Monday, December 14, 2009

The Lighter Side: Matt Taibbi On The Colbert Report

Colbert had Matt Taibbi from Rolling Stone as his guest the other night, after Taibbi's article detailing how Obama sold out to Wall Street was published.  Here are a couple notable quotes from Matt:

"I don't mind anybody who's successful as long as my tax money isn't paying for it"

"Half of the Government used to either work for or work with Robert Rubin"

The Colbert ReportMon - Thurs 11:30pm / 10:30c
Matt Taibbi
Colbert Report Full EpisodesPolitical HumorU.S. Speedskating

Sunday, December 13, 2009

Adam Hamilton's Sloppy, Inept Commentary On GLD

I was somewhat shocked to read  Adam Hamilton's freebie essay posted on in which he tries to discredit the growing chorus of analysts who are taking a close look at GLD's Prospectus and throwing up a big red flag on the GLD operations.  It is readily apparent that Hamilton has not spent time reading the GLD prospectus.  His critcism is of the fringe element out there hurling obviously unfounded accusations.  Hamilton, in an uncanny display of incompetent analyis, completely avoids the obvious legal loopholes - loopholes large enough to drive a freight train through - and he fails to address the real problems with GLD's legal structure.  If you're interested, please review my 12/2 post on GLD:  LINK

One of the biggest problems with GLD is the lack of any accountability from the Custodian, HSBC, for the location and physical inventory of the actual gold bars.  Hamilton tries to address the issue of the lack of a bona fide audit of GLD by throwing up that he's an ex-auditor ("I eat breakfast every morning 300 yards from 3000 Cubans who are trained to kill me" - Jack Nicholson in "A Few Good Men"), and since GLD links its audit report on its website and he's read that audit report, it's okay.

HOWEVER, if Hamilton had spent time thoroughly reviewing the Prospectus, he would see that a physical audit is not required and that the annual financial audit is nothing more than an inspection of the financial records provided by the Trustee.  As per the Prospectus, there are several ways in which the Custodian can throw roadblocks to an actual, bona fide physical audit. I leave it to the reader to look at my report on GLD and read the Prospectus for themselves.

Hamilton also points to the "Inspectorate Certificate" newly linked on the GLD website.  But this "certificate" is a complete farce.  Again, I admonish Hamilton for sloppy, incompetent work.  The certificate clearly states "As per the records of the Custodian..." LINK.  THE PRIMARY PROBLEM WITH THE VERY LEGAL STRUCTURE OF GLD IS THE WAY IN WHICH THE CUSTODIAN HAS NEARLY ZERO ACCOUNTABILITY.  Do your goddamn homework Adam.  This "inspection of the bullions bars" is nothing more than an inspection of the records - paper records - provided by HSBC.  Anyone see a problem here?  There is still NO bona fide physical audit of the actual bars.  And the legal structure of GLD makes it impossible to force a genuine bar count AND formal assay audit..  We know we need an assay inspection of the bars because of all the "salted" London bullion bars being discovered in depositories across the globe ("salted" = gold plated tungsten).

One more point about Hamilton's defense of the audit firm and audit process of GLD.  I guess he wasn't around when Enron imploded from massive fraud.  I vividly remember Enron because I started shorting it in the $40's and made a lot money when Enron imploded a few months later.  In fact, the Enron Ponzi scheme took down its auditor, the formerly highly regarded Arthur Andersen.  Next time an ex-CPA tries to defend his profession, grab ahold of your wallet and run.  In my GLD report, written 10 months ago, I suggest that GLD has the possibility of being the next Enron.

When I first started exclusively researching/investing/trading the precious metals and mining stock sector eight years ago, I actually subscribed to Hamilton's newsletter for a short period of time.  It didn't take reading too many issues before I understood that Hamilton's research and analysis of mining stocks lacks any real substance and due diligence.  His reports are overly verbose, self-adulating and narcissistic.  They do contain some excellent statistical work in which he meticulously massages empirical trading data in the context of simple technical analysis.  This current commentary on GLD, however, reminds me why I haven't paid attention to his work for over 6 years.

Thursday, December 10, 2009

"Obama's Big Sellout"

As a follow-up to my post earlier today, I am linking the latest Rolling Stone piece from Matt Taibbi, the reporter who lifted the curtain to expose Goldman Sachs:

The president has packed his economic team with Wall Street insiders intent on turning the bailout into an all-out giveaway...

A president elected on a platform of change was announcing, in so many words, that he planned to change nothing fundamental when it came to the economy. Rather than doing what FDR had done during the Great Depression and institute stringent new rules to curb financial abuses, Obama planned to institutionalize the policy, firmly established during the Bush years, of keeping a few megafirms rich at the expense of everyone else.

Here's the link, and it's a must-read:  Obama's Sellout To Wall Street

A Majority Of Americans Are Indeed Pissed About Banker Compensation...

and once again Obama and Congress have failed to respond, proving to us all that democracy is dead.  As per this Bloomberg report (LINK): 
Two-thirds of Americans say they have an unfavorable view of financial executives. More than half say big financial companies are only out to enrich themselves and also say they shouldn’t have received government aid. And most Americans don’t want to see bankers collecting fat checks at the end of the year if their companies were bailed out by taxpayers.
The issue is two-fold:  1) All of the big banks paying outrageous compensation this year would have failed - even Goldman Sachs - if it weren't for the generosity of the ex-bankers in the Bush/Obama Administrations who used Taxpayer money to keep them alive; and 2)  The saved banks haven't generated any real economic profits to justify the cash payouts. "Real economic profits" are defined as profits derived from risk-taking business activities that yield a cash on cash return and NOT the absurd mark-up of bad loans that have been largely monetized with Taxpayer money.

The pathetic argument for bank compensation goes like this, as expressed by this moron from the report: “'If you cut bonuses it will just let people go elsewhere. It will be a talent drain from the U.S.,” said Garson Li, 27, a Houston-based consultant at Deloitte.'"   Hmmm...."talent drain?"  Let's see, if the management committees at these banks told employees, whose base pay is already extremely high, that they weren't getting bonuses this year, where would these employees possibly find new jobs that paid anywhere near their base pay?  Where would they even find jobs?  Garson Li may get thrown into the Moron of the Year candidate pool.

The larger issue here is that Obama was elected by a demographic cross-section of the population that swallowed the bait of his campaign promise to fix the widespread corruption in our financial and political system.  On this, Obama has been a colossal failure.  This would explain the latest Gallup poll showing that Obama has the lowest first-year approval rating of any President in history.  Moreover, both Obama and Congress, despite polls which overwhelmingly support the issues of auditing the Fed, getting rid of Bernanke and letting big banks fail, have completely failed to respond to the voice of the People. 

When Obama was elected, I thought it might take a few years to determine if his Presidency was better or worse than that of the man he replaced.  I started having doubts when he began appointing his Cabinet. At this point I can state with complete confidence that Obama's Presidency has already deteriorated into a bigger failure than that of his predecessor, who left the White House with the lowest approval rating in history.
"My friends, we live in the greatest nation in the history of the world. I hope you'll join with me as we try to change it." -- Barack Obama, 2008

Someone commented to me that Obama's failures are no different than that of Bush's or than McCain's would have been.  To that I replied:  But Bush never promised "change," nor did McCain. Obama got elected for two reasons: he convinced the middle of the country (and southern rednecks) that he was serious about implementing "change." And second, the black voters had a record turnout and voted 97% for Obama. If Obama had not bamboozled the political "center," and if black voters had a typical turnout, he would have lost to McCain despite Palin's presence.  Those are the numbers and facts. Where Obama's failure is greater than Bush's, or McCain's would have been, is that Obama sold a dream and he's now defecating on that dream.

Wednesday, December 9, 2009

Not Sure Where Obama Sees The Economic Improvement He Claims To See

Quite frankly, the U.S. financial economic system is a catastrophe waiting to happen.  Just a few anecdotes in the news from today and yesterday.  First, Meredith Whitney - who for some reason has a loyal following of bubblevision worshippers and brain-dead institutional investors AND who has yet to respond to my open challenge of her "300 bank failures" number (I gave her an extra 10 banks and took the "over" for any amount of money she wants to wager) - was on The Bubblevision stating that there are no more green shoots and the Government is out of bullets.  To that I say:  the Government may be out of bullets but the Fed is not even remotely close to being out of trees with which to print paper money (I know, U.S. fiat currency is made from cotton fiber material, so throw "proverbial" in front of "trees").

Second, the CEO of Southwest Airlines issued this statement this morning:  "Business travel continues to lag, and I'm not comfortable reporting any improvement in that market...I don't think it's gotten worse, but I'm not expecting strong economic growth in 2010 or a rebound in business travel" (Link). Southwest is also going to cut capacity in 2010.  Declining business travel is not the indicator of a rebounding economy.

Third, the credit rating agencies downgraded the status of sovereign Spanish and Greek debt and have threatened to lower their ratings on U.A.E. debt.  These downgrades will trigger hidden OTC credit default swap liabilities, of which many will likely default, wreaking all kinds of downside havoc to our bubbliciously overvalued equity markets.

Speaking of sovereign credit rating credibility, the U.S. Treasury has $2 trillion in short term Treasury debt which has to be refinanced in the next 12 months.  This does not include the net Treasury borrowing that will be required to fund the 2010 spending deficit (note: "spending," not "budget," as "spending" includes off-budget expenses like the Iraq/Afghanistan wars, the costs of running FNM, FRE, AIG, GM, C and many other programs).  As a professional speculator, I would bet - back of the cocktail napkin guesstimate - the U.S. has to borrow an additional $3 trillion next year to fund everything.

We see that Tiny-Brain Tim Geithner has extended the TARP program until October 2010. If Bernanke and Geithner have already saved the world, how come they don't close down TARP and use that money elsewhere?   Is it a coincidence that the expiry of the program was set to coincide with mid-term elections?  This action by Geithner is sending the signal that Government still sees big problems with the Too-Big-To-Fails.

There are many more very visible signs that the economy is still headed south, despite the slowing loss of jobs reported by the Government - a number which was still being defended by CNBC two days ago and which has been thoroughly discredited by many insightful analysts.  The Black Friday weekend sales report was much worse than expected and showed a negligible .5% increase from last year.  It will be interesting to see how much holiday spending was pulled into that weekend. Judging by what I saw at the malls this past weekend - 50% off signs everywhere and very few people spending money - I would be willing to bet that holiday spending, best-case, will be flat to last year.  With the loss of jobs, wages, disposable income, millions of credit card accounts cancelled and ever-shrinking home equity lending, I can easily see holiday sales ending up negative to last year.

And not to throw out a rhetorical question, but what is going on with Government unemployment benefits?  Obama keeps extending the benefit period and the number of people increasingly dependent on those benefits keeps expanding.  Imagine will happen if Obama does not extend the benefit period and those who exhaust them fall off the benefit program.  Given that the economy is still losing jobs, we could end up with millions of people who are dependent on those benefits with no way to house or feed their themselves and their families.  It would appear to me that Obama will have no choice but keep extending the benefits period, thereby in effect converting unemployment insurance into another form of welfare.  This is not the sign of a rebounding economy and it means Government borrowing will increase a lot more than is being planned.

To close, there are several more indications that our economy is going to fall off another cliff in 2010, including declining rail and trucking freight traffic, declining imports and a massive wave of housing foreclosures starting to occur.   The speculators out there who are buying foreclosures and short sales and who do not get their bounty flipped into the extended homebuyer tax credit program will end up sitting on unexpectedly big losses.  To anyone looking at buying a "good deal" home, I would advise you wait for at least a year, because today's "good deal" will be next year's foreclosure offering.

And for those of you who already understand all of this and perceive the catastrophic nature of the fundamentals underlying our financial and economic system, use this pullback in gold, silver and mining stocks to add aggressively to your positions.  I don't know if anyone will be spiritually better off a year from now, but you'll at least be materially better off  if you convert as much of your dollar reserves into gold/silver as you can, leaving room to pay your ongoing expenses with increasingly worthless U.S. fiat confetti.

Tuesday, December 8, 2009

Obama To Banana Ben: Fire Up The Printing Press

Obama in his speech today, in effect, has called for a new stimulus program that could be enititled "The Cash for Everything Program:"
President Barack Obama outlined new multibillion-dollar stimulus and jobs proposals Tuesday, saying the nation must continue to "spend our way out of this recession" until more Americans are back at work...Without giving a price tag, Obama proposed a package of new spending for highway, bridge and other infrastructure projects, deeper tax breaks for small businesses and tax incentives to encourage people to make their homes more energy efficient  Article Link
The message is clear, simple and loud:   The Government will continue debasing the U.S. dollar by printing as much money as it takes to try and create jobs.  The hidden message is that our economy is in deep doo-doo.

That same message from Obama is a message to exchange as much of your cash reserves and retirement investments as possible for physical gold and silver.  As per my commentary earlier, physical gold and silver is getting scarce.

An Obvious Question About The U.S. Government Gold Stock Goes Begging

Given the "robust" inventory of 100 oz. gold bars being reported by the Comex, how on earth is it possible that the U.S. has to keep suspending production of gold eagle and gold buffalo coins due to "a shortage of supply of gold?"   The U.S. Mint announced yesterday that it is suspending production of 1 oz. gold eagles and buffalos for the balance of 2009.  This is, I believe, the third time this year the Mint has suspended production:

"U.S. Mint now suspends all one ounce gold coin sales due to shortage of physical gold"

Here's the article link:  U.S. Supends Gold Eagle/Buffalo Production

As a matter of fact the Gold Bullion Act of 1985 authorizes the U.S. Mint to use U.S. Government gold reserves if necessary:
In the absence of available supplies of such gold at the average world price, the Secretary may use gold from reserves held by the United States to mint the coins issued under section 5112(i) of this title. The Secretary shall issue such regulations as may be necessary to carry out this paragraph”.
It would seem that if the United States has 8100 tons of gold, as reported by the Federal Reserve and U.S. Treasury, then there should NEVER be a shortage of gold with which to mint coins.  What gives?

Here is the complete text of Gold Bullion Act of 1985:  Where's Our Gold Coins?

Again, inquring minds want to know, where is all the gold?  How come the U.S. Mint didn't foresee the same shortage everyone else in the market has been seeing and make sure that it had plenty of production blanks to meet demand?  If the Comex supposedly has 9 million ounces of 100 oz. bullion bars, the Mint should have been able to take delivery of some of that gold in order to meet its legal obligation to produce gold coins in an amount that meets demand.  How come the U.S. Mint is not using U.S. Government gold reserves, as per the law?

Something smells fishy here, and I think we all know what it is:  the physical supply of gold is extremely tight, the paper shorts in gold (Comex, GLD, LME, etc) are in big trouble and the price of gold is now at the mercy of the physical market.  I would suggest this situation is one of the primary reasons that the Federal Reserve and its supporters in Congress are going to any lengths to derail efforts to force an independent audit of the Fed, which would include a physical audit of the gold it supposedly holds.

Monday, December 7, 2009

Worried About A Gold Price Correction?

The story pasted from tonight's Midas report at might help you sleep this week - it's from "Commodity Online."  I'll have more to say about the technical and fundamental condition of the gold market either later tonight or tomorrow, but for now I will say that the big eastern hemisphere central banks are still buying aggressively:

Russia’s central bank eyes more gold

MOSCOW (Commodity Online): Russia’s Central Bank picked up the pace of gold purchases in November, diversifying reserves as a weaker dollar boosts the appeal of bullion. And, it has announced that Russia may buy more gold in the coming days.

Russia’s gold reserve probably rose by $790 million to $23.1 billion in the week ended November 27. The Central Bank increased gold holdings by almost 130 tonnes in the last year. The bank’s holdings equaled $23 billion on December 1, a gain of 13 per cent in the month.

Russia plans to increase gold holdings and diversify the structure of its reserves, seeking alternatives to a weakening dollar.

That development worries some people: Since central banks typically buy US dollars to store their foreign exchange reserves, the growing taste for gold can be seen as the latest sign that the greenback’s status as the world’s sole reserve currency is in jeopardy.

Also, make sure you read this brief and brilliant update on the dollar, euro and gold from James Turk:

The Ascent of Gold/Debasement of the Dollar

Saturday, December 5, 2009

Non-Farm Payroll Fairy Tales

The TrimTabs employment analysis, which uses real-time daily income tax deposits from all U.S. taxpayers to compute employment growth, estimated that the U.S. economy shed 255,000 jobs in November.  This is in extreme contrast with the Government's Bureau of Labor Statistics report which showed a loss of only 11,000 jobs in November.  Here's the article link from  BLS is full of BS

ADP, the global business outsourcing firm which, among other functions, provides payroll services to 400,000 U.S. companies representing 24 million employees, had estimated on Wednesday that 169,000 jobs were lost in November.

I would suggest that, given what we know about the manipulation of Government statistics, that the TrimTabs and ADP estimates of the employment situation are much more reliable than the Government estimates.  TrimTabs and ADP make a living selling accurate, unbiased economic data to the investment management industry.  If their data sucks they don't get paid.  The Obama administration, on the other hand - especially at this point in time - is completely incentivized to produce a fairy tale which shows that the employment situation is improving.

Make no mistake about it, as a professional speculator I would bet a lot of money on the relative accuracy of the TrimTabs/ADP reports over the Goverment report.  Apparently the stock market agrees with my assessment of the situation.  After the initial knee-jerk, idiot-driven spike in the Dow after the market opened, the Dow ended up closing 121 points, or 1.2%, below its initial high of the day.  At one point the Dow was quite negative for the day.

Here's a modest proposal for Obama to reduce the unemployment rate:  why not just stop extending unemployment benefits?  That way, as people fall off the unemployment payroll and stop looking for jobs that don't exist (except in the fantasies of the Government authors of the birth-death model fairy tale), they officially drop out of the labor force headcount and will thereby reduce the computed rate of unemployment.

**NOTE: this is John Williams' (author of assessment of the Government's employment calculations:  
Just in time to boost the confidence of Holiday Season shoppers, the Bureau of Labor Statistics (BLS) announced a 0.2% downturn in the November Unemployment rate, with November payroll employment virtually unchanged. Those results are nonsense, if taken literally...There are serious flaws evident in the payroll employment survey, ranging from the inability of the birth-death model to handle a recession, to the use of a concurrent seasonal factor adjustment, which allows outright gaming of the numbers, should someone choose to do so. The short-term reporting of payroll data is misleading — virtually worthless — at the moment.

Friday, December 4, 2009

The Dubai Debt Crisis Is Not Over

by a stretch of anyone's imagination.  This hit Bloomberg today: 
Bonds of Nakheel PJSC, the property unit of Dubai World that’s seeking to delay payments due this month, dropped to the lowest in four days before a call between creditors scheduled for today.  Nakheel’s securities fell to 54.88 cents on the dollar from 58 yesterday, the lowest price since Dec. 1 (here's the link:  Dubai Debt Crisis)
There are still a lot of unknowns surrounding this situation, not the least of which is to what extent foreign banks (U.S./UK) face billions in losses connected to plunging Dubai real estate values and failed investments. And the loans which are stated on these bank balance sheets can be quantified.  What can't be quantified is the notional amount of credit default swaps that are connected to the Dubai bank loans (ask AIG and Goldman Sachs how this works).  Furthermore, JPM and Citi, the two banks which appear to have the largest exposure, have been somewhat less than transparent with reporting the full extent of their liabilities - on and off balance sheet - and the Dubai crisis has all but disappeared from mainstream financial media.

The moral of the story is that the crisis in Dubai should be seen as a very bright warning flare to all that the global credit crisis is far from over.  Quite frankly, our leaders on Capitol Hill and at the Fed have done absolutely nothing to fix any of the financial or economic problems plaguing our collapsed system.  They have done a marvelous job printing paper to pay themselves and issue even more Treasury debt to pay for rediculously ineffective "stimulus" programs.  One massive simultaneous transfer of banking system debt onto the public (Govt) balance sheet and of public tax revenues into the bank accounts of Wall Street.

I have said all along that a second, more severe crisis is ahead of us and - now that the U.S. media has everyone "dumbed down" again - will originate from a source that very few will anticipate.  Given how the daisy chain of credit default swap counterparty defaults can be triggered, and given that monetizing such defaults globally are outside of Bernanke/Geither's ability to throw U.S. tax dollars at them, we won't know what kind of fuse has been lit by the Dubai default until it's too late to react to it.

Foretold is forewarned.  Get what you can out of the system and convert it into gold and silver bullion, especially on price corrections.

Tuesday, December 1, 2009

Is The Comex The Next Madoff Disaster?

Byline:  Has fund manager John Paulson brought a butter knife to an automatic weapon fight?

To start, wouldn't it be ironic if now-famous hedge fund manager John Paulson, who made billions betting against the real estate using derivatives, gave most of those profits back if I'm right about GLD and GLD implodes like Enron?  Judging from Paulson's investment activity in the gold market, he has entered his "horse" into a lucrative race, only his horse is crippled.  His stock picks are pathetic and his choice of using GLD as a proxy for physical gold speaks volumns about his lack of understanding of the precious metals market.  I will circle back around to this after I address the accelerating train wreck at the Comex.

My colleague "Jesse" of Jesse's Cafe Americain has posted a must-read piece about how the Comex now permits gold/silver contracts to be settled using ETF's, like GLD, IAU and SLV.  Those of us who have been watching the Comex for many years have wondered with bewilderment, albeit horrified amazement, as the Comex and its regulators have allowed the short positions controlled by the big banks like JPM and Goldman to build up way beyond the ability of the Comex to settle those contracts with gold and silver, should there come a time when those holding those contracts from the long side decide to stand for actual delivery. This is the definition of a Ponzi scheme.  Keep issuing paper claims and hoping that those claims either expire worthless or enough of the holders do not ask for actual settlement, which has been the case all along.  But what if....?

It has long been suspected that the reported inventory at the Comex is being fraudulently reported such that the Comex would be in trouble even if a portion of the contract longs were to stand for delivery.  Recently, there has been some unexplained inventory occurrences which lend credence to the fraud theory.  More recently, the Comex issued a regulatory change which would permit ETFs to be delivered to contract longs instead of the actual metal.   This quote from Jesse's commentary sums up the situation nicely:

 "Comex is putting forward the offer of paper in the form of money or ETF positions very aggressively, and making it the much easier alternative. Delivery of physical gold from the Comex is no longer as straightforward or even as semi-convenient as it had been in the past. In fact, it is difficult, and one must be very persistent and wait long periods of time" Here is the link:  Exchange For Physical

I can attest from personal experience that the Comex has indeed made it very burdensome to stand for physical delivery.  We waited 7 weeks past "last delivery day" to receive delivery on one measely silver contract.  The person who manages our depository told us were lucky, that he has other clients waiting over 2 months for delivery.

The point here is, why would the Comex be doing this if they were not concerned about a "run on the bank" in which traders stand for delivery of more gold/silver than the Comex is able to produce?  The point of acquiring gold/silver on the Comex is that it enables the buyer to acquire a large quantity of gold/silver which meets specific size, weight and quality specifications at the spot price.  Why now offer paper instead?

My point here is that it is becoming more apparent on a daily basis that the Comex is yet another one of the many large Ponzi schemes operating in the United States financial system, some already busted and some yet to bust - many operating with the enablement of the U.S. Government.  It would seem that a bright light is now illuminating a reality that was once criticized as being pure conspiracy theory.

My next issue is with the idea of settling a Comex position with GLD.  I wrote a research piece last year, and several others have as well, based on a very close reading of the GLD prospectus, in which the validity of GLD's actual physical gold holdings were questioned.  Without going into details, and at some point I'll post my work, there is no possible way to force the Trustee, Sponsor and Custodian of GLD to verify and prove that they actually possess the gold they say they do.  In fact, GLD has been so openly criticized, and has so blatantly rejected calls to provide the market with an independent physical audit of its gold, that GLD's Sponsor, the World Gold Council, and its Trustee, Bank of New York, should feel thoroughly embarrassed.  The same SEC that let Madoff off the hook for several years is the entity which blessed the GLD prospectus, to the utter horrification of those who understood how exposed to fraud GLD investors would be.

As you can see, the fact that Comex would allow contracts to be settled using GLD in lieu of physical gold is absurd.  Essentially, when you get long a Comex contract thinking you are buying into the ability to take delivery of a 100 oz. ounce bar of gold, you are in reality buying into a piece of paper which in all probability is not backed by that bar of gold.  Then, when the Comex asks you to take delivery of the equivalent amount of GLD, you are getting whacked with another piece of paper, which not only is most likely not backed by gold, but you need 100,000 shares of it in order to convert into gold (GLD gold is only redeemable in 100,000 share increments, roughly $11.7 million in GLD stock at today's price).

Which brings me back to John Paulson, who made a big splash by announcing his new gold fund, in which he's investing $250 million of his own money.  Paulson's firm is the largest holder of GLD.  Ever since Paulson made his fortune shorting the housing/mortgage market, his investment ideas have been questionable (BAC, C, CGB).  His big mining stock positions are AU and KGC.  AU is currently sitting on an over 4 million ounce hedge position in gold.  If you look at its latest 10Q, the close to $600 million dollar loss it posted last quarter can be tied to this hedge - AU lost almost $600 million during a period of time when the price of gold was relentlessly going higher and its peers were recording huge profits.  This hedge will be very hard to close out without losing multiples of last quarter's loss.  Paulson's fund owns at least 12% of AU.  KGC has its own issues which make it an inferior large-cap gold mining stock investment.

Experienced gold market investors understand that the only true way to benefit from the attributes of investing in gold is to actually accumulate physical gold and silver and make sure it is held in your own custody or with a safekeeping custodian that is trustworthy.   GLD's custodian, HSBC, is not only NOT trustworthy but is one of the larger gold leasing entities in the market.  GLD is okay to use as a means of indexing the rate of return on gold, but GLD is definitively not an investment in the actual metal.  Someone please ask David Einhorn of Greenlight Capital, and formerly the largest GLD shareholder, why he suddenly announced in July that he dumped his GLD shares and bought physical gold that his firm safekeeps.  Apparently Paulson is arrogant enough to not look into this matter.

Here's the risk with GLD:  the instant that a very large investor attempts to convert his GLD shares into GLD gold, and GLD delays or defaults on this attempt, the price of GLD will plummet.  In other words, if myself and several others are correct about the true nature of GLD, it most likely leases out its physical gold holdings and uses derivatives with funds not used to buy actual gold - GLD could potentially collapse the same way as did Enron and Madoff.  Paulson's massive investment in GLD would vaporize, the price of gold would do a moonshot and everyone holding and investing in the physical metal would have a good laugh.

And finally, to come full circle, an argument can be made that the Comex has turned into just another massive paper Ponzi scheme.  To make matters worse the CFTC, as regulator of the Comex, appears to be looking the other way while a few big banks violate position and trading rules in gold and silver that the CFTC strictly enforces in other commodities markets.  With all signs pointing toward the Ponzi scheme view of the Comex, and in the absence of the Comex itself or its regulator providing any explanations to the contrary, it would appear that the Comex could be headed for the same graveyard as Enron, Refco, Madoff, et. al.  And anyone considering investing large sums of money into GLD or with John Paulson's new gold fund should make sure they engage in very thorough due diligence - the kind of due diligence that many of us have been doing over the 9 year duration of the precious metals bull market.