US Accuses Russia Of Sending 10 Tanks Into Ukraine; Russia Responds Merely “Enhancing Border Security”

US officials are “readying targeted sanctions on finance, defense, and tech sectors,” as they tell Bloomberg that 10 Russian tanks crossed the border into Ukraine in the last 24 hours. Speaking on condition of anonymity, the official noted that EU-US discussions on Ukraine are intensifying. Russia has responded, “we are surprised by statements of alleged deployment of Russian troops along the border with Ukraine. In this case, there is no military buildup, there are only measures to strengthen the border security of the Russian Federation, measures taken on direct instructions from Russian president.” This is all occurring with the background of Poroshenko’s cease-fire plan.


Via Bloomberg:



The US official’s comments appear to reflect Ukraine Pravda…

“We have had operational reports that 10 Grad BM-21 military vehicles have crossed the Ukrainian state border and are in Ukrainian territory”, said Koval.


According to him, one vehicle has been caught and destroyed.


The Ukrainian military have found evidence that it belongs to the Russian army.

And of course, the US has its YouTube clips…

As Interpretermag reports, a closer inspection of a video of Russian armoured vehicles being transported near the border at Millerovo yesterday shows that a number of the vehicles are unmarked, like those seen in eastern Ukraine.



But Russia is denying the intrusion…

Moscow is surprised by allegations of a buildup of Russian troops near Ukraine, saying it is only taking measures backed by European leaders to better protect its border, a Kremlin spokesman said Friday.


Dmitry Peskov, a spokesman for Russian President Vladimir Putin, said Russia had to tighten security at the Ukrainian border “because it is being increasingly violated, including by military vehicles.”


“We are surprised by statements of alleged deployment of Russian troops along the border with Ukraine. In this case, there is no military buildup, there are only measures to strengthen the border security of the Russian Federation, measures taken on direct instructions from Russian president,” Peskov said.


“[The instructions] were given several weeks ago, and they were made public and received a positive response from European leaders,” the spokesman added.


“As for the troop numbers, this is defined by the need to ensure the due level of border security,” Peskov said.

While markets appear to have shrugged off any and every potential WWIII related geopolitcs, the Ukraine tensions are re-building and if the US does sectoral sanctions, we can only imagine the ‘boomerang’ that Russia will throw.

via Zero Hedge Tyler Durden

What Medicaid Fraud Looks Like: Mansions, Sports Cars, Klingon Battle Swords, and 30,000 Dubious Claims

Yesterday, I
a recent Government Accountability Office (GAO) report
finding that, even after a decade on GAO’s list of programs at high
risk for fraud, Medicaid had made $14.4 billion in improper
payments during the 2013 fiscal year.

Not all of that is outright fraud, but some of it is. And it’s
not all piddly scam-work either—minor billing tricks or other
small-time schemes. Some of the fraud is really

For example: There’s the recent case of Rehan Zuberi, who
allegedly managed to defraud New Jersey’s Medicaid program of about
$8 million over a five year period,
to a report in
yesterday’s Star-Ledger.

Zuberi ran a network of diagnostic imaging centers, and
allegedly paid other doctors a total of about $300,000 to send
patients to his offices for scans that they didn’t need. Zuberi
charged Medicaid for the procedures, kept most of the money for
himself, and tipped other doctors to keep referring additional
patients in order to keep the scan-scam going. According to the
state’s Attorney General, Zuberi filed some 30,000 fraudulent
claims to the program before he was caught.

During the time he is alleged to have been running the scam,
Zuberi managed to live the high life: He resided in what the
Star-Ledger describes as a 9,000-square foot mansion, and
kept $100,000 in cash in his home. He used a $400,000 cashier’s
check to buy a brand new 2014 Lamborghini. The state AG’s office
also reportedly seized a Ferrari and a Roll Royce as part of the
investigation this week. 

You hear this sort of large-scale fraud story far too often in
conjunction with the nation’s two big governemnt-run health
programs. In February, officials
20 people with operating multiple competing Medicaid
fraud rings in the District of Columbia—including one woman who had
been barred from participating in federal health programs, but went
on to bill D.C. Medicaid for $75 million. 

These sorts of stories aren’t limited to Medicaid. Medicare, the
federal health program for seniors, made $49.9 billion in improper
payments last year, up more than 10 percent from the year before.
In 2011, the Justice Department busted a mob ring that had made
$163 billion worth of fraudulent bills. Authorities took custody of
a cache of weapons, including a replica
of a Klingon battle sword.

In 2011 congressional testimony, a Texas concert-promoter turned
Medicare fraudster explained how he fraudulently billed the
government for $10 million over three years. It’s “incredibly easy
to commit,” he said.
“The primary skill required to do it successfully is knowledge of
basic data entry on a computer.” 

The is what health care fraud looks like: mansions and fancy
cars, mob activity and weird weapons, and tens or hundreds of
millions of taxpayer dollars spent funding fraudsters who find the
program incredibly easy to scam. 

from Hit & Run

Friday A/V Club: Philip Marlowe in the French Revolution

History!Today is
the 225th anniversary of the Tennis Court
, a key moment in the early stages of the French
Revolution. To mark the occasion, watch one of the strangest movies
ever made about the revolutionary period: Anthony Mann’s The
Black Book
, a.k.a. Reign of Terror.

This came out in 1949, a time when Mann mostly worked in the
film noir genre. The first time I sat down to watch it,
many years ago, I wondered how Mann would adjust to making a period
picture. I quickly got my answer: He treated it like it was just
another noir. From the beginning this looks like an
18th-century Big Sleep, and after a few minutes it starts
to sound like one too. By the time Robespierre shouts “Don’t call
me Max!” at 6:46, you know you’re seeing something wonderfully

The history is completely garbled, of course, but in a picture
like this that only adds to the charm. Enjoy:

Bonus links: This isn’t the only good French Revolution
film floating around on the Internet. Marat/Sade
is on YouTube, while Hulu Plus has Andrzej Wajda’s 1983
picture Danton, with its
deliberate echoes of the repression then ongoing in Poland. If
you’re looking for something lighter, you can watch Scaramouche or Start the
Revolution Without Me
. And then there’s my favorite D.W.
Griffith flick, the overlong but enjoyably insane Orphans of the
. As I wrote

If you’d like to peer directly into an artist’s anxious
psyche, you need only watch the two most powerful scenes in
Orphans of the Storm. One is a decadent aristocratic
bacchanal; the other is a chaotic riot. One is filled with
resentment of the rich; the other, fear of the poor. It’s like
writing hysteria with Lightning.

For past installments of the Friday A/V Club, go here.

from Hit & Run

Fourth Largest Bulgarian Bank Seized After Bank Run: “Let’s Not Tear Down Our House” Central Banker Begs

The small, impoverished country of Bulgaria may not be in the Eurozone (even though its currency is pegged to the Euro), but it is in the European Union. Which is why we find it surprising that there has been relatively little mention that overnight the fourth largest Bulgarian bank, Corporate Commercial Bank (Corpbank) and which in recent weeks has made headlines due to the political exposure of one of its largest shareholders, was seized by the Bulgarian central bank following what Reuters reports was a run on the bank.

With preserving confidence in the banking system key, and since the small country is not immune from failure unlike its southern neighbor which knows Europe will now never let its banks fail, the central bank promptly took to boosting morale, when its governor Ivan Iskrov begged depositors to stay calm, saying: “Let’s not tear down our house.

Reuters also reports that the Bulgarian National Bank said it had taken control of Corpbank’s operations for a period of three months and removed its  management and supervisory board, but stressed it was not bankrupt.  A Reuters photographer saw dozens of people queuing outside the main office of the bank in the Bulgarian capital on Friday.

The central bank said the run on the lender was triggered by adverse media reports, and that it acted after receiving information from Corpbank on Friday morning that it had stopped all payments and bank operations due to a liquidity drain.


“As you know, there has been a lot of talk about the bank and one of its shareholders, which triggered bank runs,” central bank governor Ivan Iskrov said at a news conference. “It is very important to be very careful when we talk about banks. Let’s not tear down our house alone unnecessarily.”


“Let me make this very clear. Corporate Commercial Bank is not a bankrupt bank. We are acting swiftly to avoid a bankruptcy,” said Iskrov.

Iskrov said the banking system was not so interlinked that Corpbank’s situation would affect other commercial banks in the country.

Alas, appeals to keep calm failed when as AP adds, long queues could be seen Friday at the bank’s offices as people become worried over media reports about the bank’s poor finances. Turns out the media reports were right, although in a world of self-fulfilling prophecies one never knows what came first: the rumor (pardon fact) of insolvency, or the reports surrounding it.

While relatively small by European standards, there are 29 commercial banks operating in Bulgaria and about three quarters of the banking system’s assets are foreign-owned. Among foreign banks with operations in Bulgaria are Unicredit, Raiffeisen Bank, Hungary’s OTP , National Bank of Greece, EFG and Alpha Bank. Curiously, Russia’s largest bank, VTB Bank, is a minority owner of Corpbank – it said it was ready to support the bank.

Bulgarian website Novinite provided further details about what may be the first domino in Bulgaria’s banking sector:

Bulgarian National Bank (BNB)’s Governing Council held a press conference just an hour after the central bank announced it had placed KTB under special supervision upon the commercial bank’s request. It decided to do so after KTB sent a letter asking for the step, due to “exhaustion of liquidity and termination of all payments and banking operations”.

With its move, as of June 20, 2014 BNB revokes the rights of KTB shareholders and appoints a supervisory board.


In the Governing Gouncil’s statement to the media delivered at the press conference, Iskrov reminded that KTB was “among the banks with the highest liquidity” before a “rumor” involving a BNB Deputy Governor and his alleged dependency on “a certain bank” (implying the role of KTB) was spread by an anonymous e-mail sent from a purported central bank employee to the media.


The rumor coincided with the start of pre-trial proceedings against BNB Deputy Governor Tsvetan Gounev.


It also led to the withdrawal of “huge amounts of ready money” and prevented the bank from delivering on its liabilities, the BNB Governor explained

In the statement Iskrov presented the Governing Council’s decision, under which BNB places KTB under supervision for a period of three months.


The bank is to freeze any operations within that stretch of time and is forbidden to perform any activity. As a result clients of the bank would have it difficult to be provided any services. A Supervisory Board of two members, Hristina Stanova and Slavyana Danailova, has been appointed.


BNB also temporarily dismisses KTB’s four Governing Council members and four Supervisory Board members and transfers their competencies to its own two-strong board.


Voting rights of shareholders controlling more than 10% of KTB assets – namely Bromak Invest (owned by Tsvetan Vasilev) and Bulgarian Acquisition Company Luxembourg – are also being suspended for three months.


The BNB Supervisory Board is now virtually KTB’s governing body, with “huge competencies” and in charge of safeguarding the bank’s exclusion from the Bulgarian payment system.


The Board is also to conduct an assessment of the bank so that talks could be held with shareholders “and other potential buyers”.


“Conversations with the shareholder having expressed interest are starting immediately. They can end in a day, a week or a month, when the interest has been confirmed by shareholders and they provide the respective support,” Iskrov explained.

Perhaps the bigger problem for Bulgaria is that its central bank itself is now the target of an official probe after its deputy governor for bank supervision, Tsvetan Gounev, took a leave as a result of a pre-trial investigation aimed at him. Furthermore, From Sofia Globe:

Bulgarian National Bank (BNB) said on June 18 that its deputy governor for bank supervision, Tsvetan Gounev, has taken leave from the central bank as a result of pre-trial investigation against him.


In a statement posted on its website, BNB said that Gounev put in his leave request in order to “not allow any doubts about obstacles to the investigation”. The central bank said that “from the moment that the BNB was notified of Mr Gounev’s repealed permit for classified information, his access to such documents has been suspended.”


Repealing the permit for access to classified information is often the first indication that a senior official is under investigation.


The prosecutor’s office initially made no comment, but later in the day, Prosecutor-General Sotir Tsatsarov said that the investigation had been under way for two weeks and was a result of allegations made by the anti-government Protest Network.


(The prosecutor’s office statement did not specify which allegations this referred, but it is presumed to be in connection to the dossier based on media reports containing various allegations, submitted to prosecutors in February, which called for an investigation into media mogul Delyan Peevski, Corporate Commercial Bank majority shareholder Tsvetan Vassilev and Nikolai Barekov, the former talk show host-turned-politician that fronts the Bulgaria Without Censorship party.)


Earlier in the day, however, Bulgarian media reported receiving an anonymous letter, whose author claims to be an employee of BNB, alleging that Gounev was under investigation by prosecutors on charges of mismanagement in office.


The letter claims that Gounev failed to exercise proper oversight of a “bank that has become the centre of attention in recent days”, but did not name the bank. The author claims that both Gounev and BNB governor Ivan Iskrov “put pressure” on the bank supervision department not to apply proper oversight on the affairs of this bank and “have been financially dependent on this bank for years.”

So is this just a political witch hunt in a country notorious for backroom dealings, or the start of something greater? The answer will depend on whether the local population does indeed, as the central bank requests, stay calm or if people decide en masse once again that the best option is simply to put what little savings they have in the ir local mattress, while they still can (or before the Fed suggest fee gates be implemented, the same way it would like to force a ran out of US bank funds).

via Zero Hedge Tyler Durden

World War III Has Begun! – Weekly Wrap – June 20, 2014


























TedBits Weekly Wrap  –  June 20, 2014 

Insanity is coming at US in huge waves.  This week really saw a lot of new tea leaves presented to those working through the puzzle of the MAN MADE disaster.  We are indeed living in interesting times, and I believe they will be studied and written about for decades and centuries into the future.  I also believe this time period offers the greatest opportunity’s in history if played from an applied Austrian economic perspective, and a good handle on history.  They are one and the same actually. 
So let’s look at some of the vignettes we covered this week:; “>; “>An Islamic Caliphate has been born, World War III has BEGUN!; “>Central Banks Lifeboating themselves; “>Highest Market Cap for US bank since 2001?; “>The Dollar and the DODO bird; “>Friday night info dump; “>UNRELIABLE SUPPLY; “>SILVER coiled and ready to LAUNCH?; “>Federal Reserve FOLLIES; “>Political correctness that short circuits an invaluable gathering of EXPERIENCE

An Islamic Caliphate has been born, World War III has BEGUN!
Lightly covered by the Mainstream News, a new and vicious ISLAMIC caliphate has been born and World War III has commenced.  The Middle East will be irreparably changed in the near future or should I say engulfed in FLAMES.  The spineless leaders of the developed world have allowed order to be DESTROYED rather than place the proper emphasis on peace through strength.  Now we will pay the price of the breach for their fiduciary duties.  Teddy Roosevelt in 1907 said: “walk softly and carry a big stick”, sadly those wise words have been lost and forgotten.  Relearning this will be extremely difficult as humpty dumpty has fallen, and putting him back together again may be an impossible task.  Global and regional leadership is dead in the developed world: where are the Reagans, Churchill’s and Thatcher’s of the world for this generation.  The bold leaders NOW with visions for the future reside in the Chinas, Russias, Singapores and al Qaedas of the world.
"If history teaches anything, it teaches that simple-minded appeasement or wishful thinking about our adversaries is folly. It means the betrayal of our past, the squandering of our freedom."                                        

– President Ronald Reagan, 1983

The Caliphate calls itself ISIS (the Islamic States of Iraq and Syria) and is a ruthless Al Qaeda political force.  Numerous reports of beheadings, mass executions and random killings to foster TERROR in the eyes of their opponents are occurring and it is working.  If you are a Christian or Shiite Muslim, the sentence is immediate death upon discovery or capture.   Thousands have already been executed already and posted on the internet.  A small army of less than 10,000 men has faced and beaten forces 10 times their size.  
Soldiers are taking off their uniforms to avoid certain death that capture insures.  Then, the terrorists take the discarded uniforms and use them to move freely behind enemy lines. They have now captured major IRAQI military bases and are well armed and supplied with MODERN WEAPONS.  At this point, stopping them is not an option.  They then retain the territory, oil fields, refineries and the funds for future JIHAD.  I can promise you 10’s of thousands of jihadists are making their way there from around the world to participate in the JIHAD state.  They have already looted over $450,000,000 million dollars from banks, while the oil insures ongoing income.  This is not a group that wants to live peacefully with their neighbors. No, they want to consolidate long enough to develop plans for the next excursion to expand their territory, treasure and sharia law. 
“The Syrians and the Iraqis have made their own beds—so why stick our noses in now? The answer is that al Qaeda, ISIS and others will not stop at Iraq and Syria. Lebanon, Jordan, Israel, Turkey, Egypt, Yemen, Saudi Arabia, the United Arab Emirates and others will be next.” 

– General Jack Keane ret.

To them, it is convert to Sunni Islam or be killed as INFIDELS.  For many of the terrorists that will not be enough and if they capture the US embassy (to me this is just a matter of time, just like the Viet Nam War).  The carnage and death to many Americans is assured.  Mercy is and will not be considered. It is part of their power over their adversaries.  The power of abject FEAR!

In my opinion the greatest manmade disaster and OPPORTUNITY in history is unfolding in every corner of the world.  Are you diversified or operating with EYES WIDE SHUT?  Are you prepared to turn it into opportunity by properly diversifying your portfolio?  Adding absolute return investments which have the potential to thrive (up and down markets) regardless of what unfolds economically or politically?  This is what I do for investors; help them diversify into investments which are created to potentially thrive in the storm.  For a personal FREE consultation with me CLICK HERE!

The main stream news breathlessly reports the news without telling the audience the grim conclusions that can already be made.  The administration is calling for a multi ethnic reconciliation of the Sunnis, Shiites and Kurds before help is considered, placing an impossible task for the Iraqi government on the table to prevent the US from having any possibility providing assistance.  This type of reconciliation takes weeks and months to accomplish… do you really think that republicans and democrats could reconcile overnight in Washington?  The world knows through the experience of the last 6 years that there is no challenge or previous commitment from which America will not retreat.  This administration in Washington has systematically undermined the strongmen of the Middle East and, if we ever find out the truth, maybe had a hand in overthrowing them.  Did any of you think someday you would be rooting for IRAN to prevail in IRAQ?  Me neither but now it is in my daily prayers as the developed world will just sit around and let us be destroyed.  There is no shrinking from this moment.  We must confront it or be killed by it as we shall soon see!
“Think subcontracting the job to Iran is the right call? Surely, no one wishes a Middle East managed by the ayatollahs in Tehran. Don't care? Remember the admonition of the 9/11 Commission: "The most important failure was one of imagination." Imagine what controlling vast areas of the Middle East will do for extremists of all stripes.”                                   
– General Jack Keane ret.

Say what you will about Saddam Hussein, Moamar Qaddafi and Hosni Mubarak, strong men and dictators who held power in an iron and sadistic grip.  But they all understood the DEADLY NATURE of FUNDAMENTALIST ISLAM and DID NOT ALLOW IT TO GAIN FOOTHOLDS in their COUNTRIES.  They also controlled the thousands of years of tribal animosities in their countries, which as we can see was and is enormous.  Just stopping ISIS is insufficient.  They must completely be vanquished and the territory they hold liberated. Nothing less, or a regional war will widen into conflicts/attacks throughout Europe and then the world.  Nothing like that will be considered by the developed world and many in the Middle East wish to see the latter happen.  ISIS has been primarily funded by Saudi Arabia, Qatar, and Kuwait up to this point.  Since the conflict has flared, Putin has sent arms, tanks and supplies into Ukraine in the last week.  When can we expect the next move by China to be? Will they widen their grasp of the South China Sea? SOON! A weak US military and NATO will be challenged as NEVER BEFORE around the world.  The socialists and leaders of the developed world are weak as kittens and spineless as worms.  Mark my word, World War III has JUST BEGUN!

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It has been a wild and woolly weekend as the news just keeps shocking a numb population too weary to keep up with the tea leaves:  Important announcements about central banks lifeboating themselves from their own money printing, rotating HUGE parts of their reserves from INTANGIBLE financial assets to tangibles. 
Central Banks Lifeboating themselves
Regardless of their words, the highest echelons of the Central banks know some history.  Their rhetoric and obfuscation of their true motives remain indecipherable.  But sometime we get a glimpse of their actions to find out the true story.  In this case, it is being reported by the financial times and Official Monetary and financial institutions forum that they have ACCUMULATED over $29 TRILLION dollars ($29 million million) of REAL THINGS such as Gold, Stocks, Real estate, etc. This report is due to be released on June 17, 2014.  Of course, a lot of the money they are SPENDING was PRINTED out of THIN air.  Now, instead of buying WORTHLESS government bonds and calling them assets on their balance sheets they are buying REAL tangible property in exchange for their worthless IOU’s known as sovereign currencies.  The sum of the currencies that the sellers are reaping would appear to be gains, thus becoming the future victims of the systems they live in (who do not teach them what money is).  Money in the developed world is mathematically WORTHLESS; we are just waiting for the public to WAKE UP to the crime perpetrated on them by their central banks and public servants.
Highest Market Cap for US bank since 2001?
Today’s Wall Street Journal TRUMPETS the new high equity valuation by some of the nation’s BIGGEST banks;

Look at all the dinosaurs that went extinct over the last 13 years, rolled up just as banks were during the GREAT DEPRESSION.  An ‘apples to apples’ comparison would not include the assets that were gathered.  The WSJ wants you to believe it signifies a recovery of asset values, which couldn’t be further from the truth.  The purchasing power of the currency they are dominated (dollar) has been cut in half since 2001.  So have the values of these behemoths in purchasing power terms (what you can by with the same amount of money).  Hugely misleading to those who do not know the dollar is an IOU (printed endlessly) and no longer MONEY (store of value) in the historical sense.  Do you really think the dollars have the same value (purchasing power) after this?


M2 up 200% in 10 years!  Base money supply up 500%! Do you really believe that PILE of worthless paper can be RESOLVED in a SAFE manner?   Do you think the value (purchasing power) of the dollars is worth the same as it was in 2000 (or is it down 50 to 80%)?  Do you think the value of a dollar has held constant after these moon shot of money printing?  Nominally (in fiat currency) they are approaching old highs, by this measure alone Banks are still down about 75% from those values.  Do you believe in the tooth fairy?  Santa Claus?
Friday night info dump
Friday nights are typically the days governments release information they do not want reported or noticed by the public.  Last Friday was a doozy as the administration er IRS said they had lost several years of emails from Lois Lerner’s computer who had had a hard drive failure.  What a hoot.  For you readers who do not know, nothing is ever LOST on the internet, ever.  You can delete it over and over again and it will never be lost.  These files are not lost either, if you or I attempted this we would be obstructing justice and destroying evidence among a number of other felonies we would be charged with.  But the administration has shown many times that laws can be used or ignored at will and do so with regularity.  This is just another constitutional crisis going unreported or addressed.
The internet is like a postcard and YOUR privacy is the victim.  Do not ever write something you don’t want another to see.  It becomes public information for governments and anyone else…
The unrest unfolding in the Middle East has far more implications for the price of energy than can be seen in the mild breakout of recent TRADING ranges actually portends an explosive move in energy markets.  A rising wedge can be clearly seen and OIL is COILED for an explosive move higher.  Take a look at this weekly chart formation:

  2011             2012                  2013                  2014                  2015
This pattern has been under construction for almost 4 ½ years and it is a rising wedge.  When we move through the high trend line priced should quickly move $20 dollars a barrel and ultimately should move at least 40 dollars higher.  During the time it was being formed we have seen shale oil production in the US skyrocket, while production out of OPEC members Libya, Iran, Nigeria, and Venezuela (don’t leave Mexico out where production has declined by over 1 million barrels a day) tumbling with losses of production outpacing the increases.  Now Oil production looks set to tumble in Iraq as it breaks apart before our eyes.  The IEA expects Oil consumption is set to rise about 6.58 million barrels a day by 2018, with most of the additional supply forecast to come out of North America and Iraq.  Forecasted supply and demand growth per year:

Do you really think any investment is going to enter Iraq?  Do you think the ISIS will attack the oil fields of their foes?  Do you think instability or stability will grow in the Middle East?  My bet is on INSTABILITY!  Do you think this will be good for economic growth?
SILVER coiled and ready to LAUNCH?
Silver has been undergoing in my opinion a cyclical bear market since 2011in a secular bull market which began with the gold bull market back in 2001.  It has been correcting and moving sideways just as crude oil has done above virtually the same amount of time.  Bear markets don’t last forever just as bulls don’t.  Take a look at this weekly chart:

2011               2012                  2013                   2014                 2015
RSI which is the first study under the chart has CLEAR BULLISH Divergences, slow stochastic’s is clearly giving a buy signal and MACD show virtually no Volatility. In terms of time and price Fibonacci has been quite an accurate overlay and trend lines are now under challenge from BELOW.  A clear Bear wedge is in place and the market would look to be coiled like a spring to leap higher.  Now let’s look at a graph of gross SHORTS provided by :

Any kind of move higher should light a BONFIRE under the shorts.  Typically when it has been this high a powerful move is in the offing.  Could this be the beginning of the end of the bear market that began in 2011?
It doesn’t matter whether it is food, energy or precious metals it appears the next legs higher for the commodity complex could be on the near horizon after almost 4 years of corrective activity.

Federal Reserve FOLLIES
The market saw a crash yesterday after Janet Yellen gave her remarks. The crash was in the VIX volatility index and it was down almost 13% signifying the magnitude of the moral hazard her words meant to the markets, market makers and investors.  Worldwide stock and bomb er bond markets have NO FEAR and she fed the beast of insane behavior.  She also ventured where no Fed Chairman had publicly gone before in that she commented on Stock market valuations.  Saying she saw no problems with valuations.  Well a quick look at market valuations reveals a Janet in Wonderland perspective on a historical basis.

Look carefully at this chart.  We are at valuations which have PRECEDED every crash in the last 100 years (1929, 1937, 2000, and 2008) except 2000, which went insanely above current levels.  What do you think is the chance that this is not a prelude to a similar resolution?  That this time is different?
In my opinion the greatest manmade disaster and OPPORTUNITY in history is unfolding in every corner of the world.  Are you diversified or operating with EYES WIDE SHUT?  Are you prepared to turn it into opportunity by properly diversifying your portfolio?  Adding absolute return investments which have the potential to thrive (up and down markets) regardless of what unfolds economically or politically?  This is what I do for investors; help them diversify into investments which are created to potentially thrive in the storm.  For a personal FREE consultation with me CLICK HERE!
Political correctness that short circuits an invaluable gathering of EXPERIENCE
John Stossel writing at, June 4:
I've had hundreds of employees whom I paid nothing: student interns. Unpaid internships were allowed for years, because it was understood that interns learn by working. My interns learned a lot. Many went on to successful careers in journalism. One won a Pulitzer Prize. Many said they learned more working for me than at college (despite $50,000 tuition). They benefited and I benefited. Win-win.
So for year’s government ignored Labor Department rules that decreed unpaid internships legal only if an employer gets "no immediate advantage" from the intern. Geez, who wants that? Of course I got an advantage from my interns. That's why I employed them! 
Recently, President Barack Obama's Labor Department announced it would enforce the internship rules, and some interns sued their former employers, claiming internships were "unfair." Charlie Rose forked over a quarter of a million dollars. Word spread, so now unpaid internships are vanishing. 
Some people say it's good that unpaid internships are gone, because they are unfair to poor people, who can't afford volunteer work. But getting rid of opportunities does nothing to help anyone. Employers lose and students lose.
Difficult as it can seem to make your own way in this world without a phony government promise that you'll be taken care of, or that every job will pay at least $15 an hour, success happens when markets are relatively free. Individual initiative creates new things, companies, job opportunities—whole new ways of life—that make the world better for all of us. 
In closing, Iraq just keeps going down the rabbit hole and will continue to do so.  Southern Iraq is where the bulk of Iraqi oil production takes place and probably will soon be a territory of Iran.  In anticipation of the battlefront to move to them the oil majors in southern Iraq are pulling out their personnel.  How long do you think oil production will continue without the professionals that keep it GOING?   What do you think the price of oil will be if OPEC quits supplying the 10% of production Iraq represents?  Keep in mind that the EPA is effectively shutting down the coal fired electric supply’s (about 40%) in the United States over the next several years.  A perfect storm is rapidly unfolding in the energy sector and the next decade could be brutal.  Do you think the blind ideologues in Washington care about the public at large?  The answer is self-evident. Think about what impact their policy’s may have 1, 5 or 10 years into the future.
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via Zero Hedge tedbits

Silver (And Gold) Are Breaking Out Again

Despite the utter deluge of "this won't last" explanations of why yesterday's surge in gold and silver is transitory (and nothing to worry about), the sell-side is staring agog this morning as the precious metals markets are breaking out to new cycle highs. While the CCFD unwinds appear the clearest driver, Yellen's aggressive inflationist bias, and unintended consequence of increasing supply destruction (as prices were manipulated below production costs) appear to be trumping any short-covering, opex-related reasons for the push higher.

PMs are breaking out again…


Much to the chagrin of the analysts:

NY Trader (via Bloomberg) – Gold Spikes on ‘Massive’ Hedge Fund Short Covering in NY

Spot gold touched $1,322.12, strongest since April 15, partly on buying led by leveraged accounts that included hedge funds, according to an FX trader based in North America.

Gold Spike Yday May Be Related to Quadruple Witching: BMO

Yday’s 3.3% spike in NY gold futures to $1,314/oz “may simply be a function of closing out or rolling over large futures and options positions” that are part of today’s so-called quadruple witching, when four futures, options contracts expire, writes BMO technical analyst Russ Visch in note.


He notes last “dramatic spike” in gold in March was during that month’s quadruple witching, after which gold retreated from nearly $1,400 to $1,240/oz


Says long-term downtrend in gold is “probably not” over


Watching for 200-DMA to turn higher, which wold increase the chances that a bottom is in.

SMRA – Be Skeptical Of This Gold Rally

Make no mistake; the latest data from the CFTC regarding Commitments of Traders reveals nothing to suggest that there was a cathartic level (i.e., a contrarian extreme) of disdain toward gold at the late May/early June lows. For this reason, we think the gold market lacks the psychological foundation for the recent rally to be the start of a major turnaround. Instead, as the chart below shows, gold is rallying as part of a predetermined pattern (triangle), with the primary source of inspiration for the late May/early June reversal being the yellow metal's extreme undervaluation vs. equity prices.

But it appears other factors are at play.

As CCFDs unwind..

Here's how that might work:

In the gold markets, the paper or synthetic 'demand/supply' dominates pricing as opposed to the non-precious metals which have at least a grain of fundamental sense to them still


Throughout 2012/2013 – as the gold CFDs were booming, Chinese demand for physical gold was soaring as the price plunged (due to the forward hedging required in the CFD transactions which pressured gold swaps/futures lower and thus dominated pricing)


As CFD unwinds hit en masse, these flows must unwind (cover hedges and ensure the underlying physical is there… and if not buy it)


This will pressure gold futures prices higher and because unlike in non-precious commodities where spot markets wag the tail of the futures markets – spot gold will likely be dragged higher also (as we know the demand for the physical has been high).

So unlike in the industrial commodities – where the CCFD unwind drives prices down as the image above shows, thanks to synthetic manipulation and domination of the paper gold (and silver) market, the opposite occurs in PMs.

… and perhaps most importantly, supply destruction is starting to bite:

Mining Company Is Canada’s Second Chapter 15 of 2014


Mining company Veris Gold, which listed debt of as much as $500 million, is the seco d Canadian business to file a Chapter 15 petition so far this year. Veris sought court protection in Nevada and Fox Rothschild is debtor counsel. While Canada was the biggest source of Chapter 15s in 2013, Brazilian companies are the biggest source of these cases this year.

Meaning less and less gold is produced as there is virtually no margin at current prices, which means supply will soon tumble or force more consolidation. The end result, far less supply even as demand from China, be it for funding deals or otherwise, continues to rise.

via Zero Hedge Tyler Durden

Colorado’s Cannabis Conundrum: Marijuana Everywhere, but Not a Spot to Smoke

For visitors to Colorado,
legally buying marijuana is easy; legally consuming it, not so
much. In my latest Forbes column, I explain why
tourists in Colorado, where marijuana has been legal for
recreational use since 2012, still have to smoke pot on the sly.
Here is how it starts:

For cannabis consumers who are accustomed to the black market’s
meager selection and iffy quality, Colorado’s dispensaries are a
revelation: dozens of strains, each with a distinctive bouquet,
fresh enough that you can actually smell the difference.
Denver-area budtenders, who say tourists account for half or more
of their business, are used to amazed reactions, reminiscent of the
scene in Moscow on the Hudson where Robin
Williams, playing a Soviet defector, encounters an American
supermarket for the first time. But once a visitor
 settles on a gram of Budderface or
a quarter-ounce of Cinderella 99,
he has a problem: Where can he smoke it? State and local
restrictions have made answering that question a much bigger
challenge than it needs to be.

Read the whole thing.

from Hit & Run

Ed Krayewski on Inchon, Noah, and Faith-Based Filmmaking

1984In the
October 1984 issue of Reason, David Brudnoy wrote
that conservatives “have a grudge against Hollywood, and against
movie critics, too.” But they had failed to create a sustainable
alternative. While some movies may contain clear liberal biases,
Brudnoy noted, movies funded by conservatives didn’t do well.
1982’s Inchon, for example, was “the most phenomenal
money-loser of all time.”

What happened? Brudnoy wrote that Inchon was
“virtually impossible to sit through, embarrassing even to those
who liked its politics.” Better movies, though, didn’t necessarily
do bigger business; Brudnoy cites 1983’s The Final
, which “stood forthrightly against the left and for the
established verities” but bombed in the box office. Brudnoy
suggested “the right wing doesn’t attend the cinema,” and that is
part of why conservatism didn’t have influence in Hollywood.

Thirty years later, writes Ed Krayewski, it’s still possible to
find antipathy toward Tinseltown among the religious right.

View this article.

from Hit & Run

Spot The Oxymoron: “Growth Down, Optimism Up”

Submitted by Simon Black of Sovereign Man blog,

With a nod to the absurd, Federal Reserve Chair Janet Yellen freely admitted earlier this week that the Fed really has no idea what’s going to happen to the economy.

Bear in mind this is the person who controls interest rates in the United States, effectively setting the ‘price of money’ for the most widely used currency in the world.

This is key– because the price of money (interest rates) influence the prices of so many other things. Real estate. Business investment. Automobile sales. Agricultural commodity prices. Oil prices. Etc.

Of course, there’s a knock-on effect. Consider, for example, how many products and services are influenced by the price of oil… fertilizers, plastics, shipping, etc. And then how many products and services are influenced by the price of shipping… like everything in the world that’s imported / exported.

So in setting the price of money, Ms. Yellen is influencing the price of just about everything.

Yet she and her fellow members of the Federal Open Market Committee (FOMC) admittedly don’t have a clue where the economy’s going.

This stands in stark contrast to what investors are used to. Back in the 90s, Fortune put former Fed Chair Alan Greenspan on the cover with a headline– “It’s HIS economy, stupid”.

Greenspan 290x300 Spot the oxymoron: Growth down, optimism up

That’s how clear it was back then. Greenspan was the benevolent wizard… the ‘maestro’ in masterful command pulling the strings of the largest economy in the world. And investors had all the [misplaced] confidence in the world in this arrangement.

So you’d think that with such a demonstration of ignorance that investors would be heading for the hills, right?

Not so. The big banks and institutional investors (who appointed most of the FOMC members to begin with) rewarded the Fed’s stunning admission and lack of foresight with… record high stock prices.

If I could quote our long-lost Billy Mays– BUT WAIT, THERE’S MORE!

The Fed also reduced its GDP growth forecasts for the US economy from 2.9% to 2.2%. In case you’re not too fast on the ‘calc’ icon, that’s a 24% proportional reduction in GDP growth. Not exactly a drop in the bucket.

AND, of course, there’s the recent data that inflation has ticked up, even according to their own official numbers. Of course Ms. Yellen proceeded to downplay the inflation, writing it off as ‘noise’.

So this morning I received yet another analysis from a large private bank I deal with; the report’s headline– FED: Growth down, optimism up.

Hmmm. Spot the oxymoron here. (OK fine, paradox)

Growth is down. Inflation is up. The grand wizards don’t have a clue. Yet people are excited about this?

I feel like there’s an alternate universe out there where this sort of paradox would make sense… some magical 5th dimensional world where up is down and men breathe through their nipples. (why else are they there, gents?)

But alas, this is not some alternate universe… ’tis the sad state of our FUBARTASTIC financial system.

Fundamentals no longer matter. Common sense is now a totally foreign entity. High frequency traders and algorithms dominate the marketplace, brokers steal customer funds to cover their own losses, banks sell their customers ‘shitty deals’ and take the other side of the trades.

And everyone is drinking from the same spiked punch bowl where bad news is good news, good news is good news, and a single clueless committee has all the power.

Looking at this ridiculous market, I really I find it hard to believe that the odds are stacked particularly well in favor of the little guy.

Bottom line: if you’re in the markets, invest with caution. And if you have the courage to swim against the school, bear in mind there’s a whole world of alternative investments– primarily things like private businesses that are far less susceptible of being directly manipulated.

via Zero Hedge Tyler Durden