Bearish News

Guest post by Jesse

The miners were rallying with stocks and the metals today, as one might expect.

In the short term the markets will move on the Greek debt situation, the FOMC monetary policy decision tomorrow, and to some more individual extent the Russell 2000 rebalancing on Friday.

Gold looks to be on the verge of breaking out. Let’s see if they can do it. A great deal will depend on macroeconomic and political events in the short term.

I have included a second gold chart which shows the chart formations should the breakout be confirmed after the July Comex options expiration, and the sturm und drang which follows for a few days afterward.

JP Morgan may wish to plug in a new ‘cost of doing business’ item in their budget for the commodities trading group.  And Ben may need to keep a little ‘walking away’ money at hand for his cronies.

FT
JPMorgan settles SEC charges for $153m
By Kara Scannell in New York
June 21 2011 19:01

JPMorgan Chase agreed to pay $153.6m to resolve US Securities and Exchange Commission civil fraud charges that it misled investors in a mortgage-related security it constructed for Magnetar, an Illinois hedge fund.

The SEC charged JP Morgan with failing to disclose to investors in the collateralised debt obligation, a security linked to mortgage-backed securities, the role played by Magnetar.

The hedge fund helped select mortgages included in the CDO, named Squared, and was betting against them. The SEC alleged that investors were told that an independent firm, GSC Capital, had selected the portfolio.

JPMorgan agreed to settle and reimburse investors in the CDO without admitting or denying wrong-doing. The settlement also requires JPMorgan to change how it reviews and approves offerings of certain mortgage securities.

Visit Jesse’s Cafe, where he blogs daily. Published with author permission.

“Counsel, you’re scaring me”, Mr. Rathers said. “You should be scared, I’m scared. You can’t not be scared.”, former TARP Special Inspector General Neil Barofsky replied.

Worth watching, link. Barofsky mentions that S&P estimates the next financial crisis could cost $5 trillion. Wonder how much will a Big Mac will cost by the time these problems are monetized resolved.

Presidential Candidate Ron Paul was on Bloomberg TV tonight. Topics include the debt ceiling, foreign wars, and of course, the Fed. If you’re skeptical of Dr. Paul’s views, all the more reason to watch.

For those interested, there is a moneybomb to raise money for Paul’s campaign scheduled on June 5. Paul is running 2nd in NH, but Romney is building a warchest of cash. He recently raised $10m in a single day.

Seen riot pics from Greece? Wondering what those citizens could possibly be so angry about? This:

On Monday (23 MAY), the cabinet of leader George Papandreou backed a sale of the country’s holdings in the national telco, its postal savings system, its power company and ports.

Athens is to move forward straight away with a sale of a 10 percent stake in OTE, the telecommunications company, to German telco giant Deutsche Telekom and consider a further sale of a six percent holding in the firm.

A stake of 17 percent in the Public Power Corporation is also to be offloaded as well as a 34 percent stake in the Hellenic Postbank while another 10 percent may be listed on the stock exchange.

Holdings of three quarters of the Piraeus and Thessaloniki Port Authorities will be spun off, as well as a further proportion of the government’s holding in Athens airport.

Details of the timing for the privatisation programme however remain vague.

The plot; it’s thicker now. Deals are being made, and it’s clear that Germany will exact a steep price upon Greece for its “support”. Deutsche Telekom, Germany’s AT&T, winds up with up to 16% of Greek’s national telecom. Ports, postal system, power companies, also for sale. What’s next on the block? The Parthenon, perhaps? Who will buy the rest? Who has the capital to do so?

This is a preview of what much of the world will face in the next 5 years. Banks lent money, knowing full well there could be losses. Now that debt is reaching unsustainable levels, and they will try to force the loss onto taxpayers, as is standard practice. Who cares if savers lose almost everything in the process, and those losses compound over time?

There is a Ron Paul 2012 Presidential campaign moneybomb June 5. Keeping up with Romney, $-wise, won’t be easy.