Category: General

Major Averages Fall To Lowest Closing Levels In A Month

Posted on by The INO.com Team

With traders expressing continued concerns about the outlook for the global economy, stocks saw notable weakness during trading on Wednesday. The losses on the day extended a recent downward move for the markets, with the major averages falling to their lowest levels in about a month.

While most of the major sectors moved to the downside on the day, substantial weakness was visible among electronic storage stocks. The NYSE Arca Disk Drive Index fell by 3.8 percent to its lowest closing level in well over two months.

Hutchinson Technology (HTCH) and NetApp (NTAP) turned in two of the storage sector's worst performances, falling by 4.7 percent and 3 percent, respectively. Continue reading "Major Averages Fall To Lowest Closing Levels In A Month" →

John Williams on Lies, Damned Lies and the 7.8% Unemployment Rate

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The Gold Report: John, as Mark Twain famously quipped, "There are three kinds of lies: lies, damned lies and statistics." The Bureau of Labor Statistics (BLS) just came out with new jobs numbers that show the country added 114,000 jobs since September and the unemployment rate dropped to 7.8%, down from 8.1% in August. On Shadowstats.com, you argue that the numbers are wrong and pointed to politics as a possible reason for the incorrect figures. Are unemployment statistics being manipulated and if so how?

John Williams: I normally put out a commentary on the numbers, and, in this one, I raised the possibility of politics as a factor. The problem is very serious misreporting of the numbers and the result is what appears to be a bogus unemployment rate. The BLS reported a drop in the unemployment rate from 8.1% to 7.8%, three-tenths of a percentage point, which runs counter to what is being experienced in the marketplace.

What few people realize is that the headline unemployment rate is calculated each month using a unique set of seasonal adjustments. The August unemployment rate, which was 8.1%, was calculated using what BLS calls a "concurrent seasonal factor adjustment." Each month the agency recalculates the series to adjust for regular seasonal patterns tied to the school year or holiday shopping season or whatever is considered relevant. The next month, it does the same thing using another set of seasonal factors. Rather than publish a number that's consistent with the prior month's estimate, it recalculates everything, including the previous month, but it doesn't publish the revised number from the previous month. Continue reading "John Williams on Lies, Damned Lies and the 7.8% Unemployment Rate" →

"The Bank Was Saved, and the People Were Ruined"

Posted on by The INO.com Team

By Jeff Thomas, International Man

The above quote is from William Gouge, commenting on the Panic of 1819. The panic had been caused when the First Bank of the United States had first expanded the money supply dramatically by offering loans, then contracted the money supply by tightening its requirements for new loans, causing a crash.

This is a useful quote, as, in its simplicity, it states the very nature of crashes brought on by irresponsible banking practices. In every case in which this occurs, it is possible through the complicity of the government of the day.

The origin of this syndrome goes back to Mayer Rothschild, a very clever fellow who, in the late 18th century, offered financial benefits to politicians in Germany in trade for political support for whatever activities his bank might practice. Rothschild was a long-term thinker; his method involved the offering of regular emoluments to politicians without their having to provide him with anything immediately. Then, when he needed a large favour, he would call it in.

Movie buffs may see a similarity between Rothschild's method and the deals made by Don Corleone in The Godfather. "Some day - and that day may never come - I'll call upon you to do a service for me."

Rothschild created boom-and-bust cycles which were highly profitable for his bank, but depended upon the support of the government when the "bust" part came along. Continue reading ""The Bank Was Saved, and the People Were Ruined"" →

How to Trade E-mini Price Channels

Posted on by The INO.com Team

Trading Price Channels is a dynamic yet easy to learn form of trading that relies on the markets natural tendency to trend. It is a type of technical analysis that provides ideal areas from which to buy and sell. Price Channels also show you where to put your stop-loss and where to take your profit. Here are a few of the best ways to take advantage of information the market freely gives you.

STOP ORDERS DO NOT NECESSARILY LIMIT YOUR LOSS TO THE STOP PRICE BECAUSE STOP ORDERS, IF THE PRICE IS HIT, BECOME MARKET ORDERS AND, DEPENDING ON MARKET CONDITIONS, THE ACTUAL FILL PRICE CAN BE DIFFERENT FROM THE STOP PRICE. IF A MARKET REACHED ITS DAILY PRICE FLUCTUATION LIMIT, A “LIMIT MOVE”, IT MAY BE IMPOSSIBLE TO EXECUTE A STOP LOSS ORDER.

In technical analysis, a Price Channel is defined by two parallel trend lines. The upper trend line connects price highs and the lower trend line connects price lows. Here are examples of 3 types of Price Channels. Continue reading "How to Trade E-mini Price Channels" →

Brock Salier Unlocks the Secrets of Gold Miner Valuations

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The Gold Report: Brock, your research suggests that the production margins of gold companies are near all-time highs. Why has that not translated to share price appreciation?

Brock Salier: The weak equity markets play a role in the disconnect between gold prices and gold equities, but a lot has to do with maturing gold assets.

A lot of gold mines were funded between 2007 and 2009 and commissioned between 2008 and 2010. Most companies typically mine above their reserve grade for the first one to three years to speed capital and debt repayments. But, if they have not found an expansion and completed a feasibility study, or if they lack a new mine to develop, that grade has to fall. As production falls, cost rises and share prices legitimately fall along with profits.

TGR: Can you go into a bit more detail about that concept, which is known as "high grading?" Continue reading "Brock Salier Unlocks the Secrets of Gold Miner Valuations" →