Unearthing Dark Money

“Virginia-based charity Donors Trust has promised anonymity to donors who seek to fund “sensitive or controversial” issues.

A Center for Public Integrity report last week lifted that veil — at least partially — revealing dozens of conservative foundations that together in recent years have given tens of millions of dollars to Donors Trust .

Donors Trust, in turn, has funded a nationwide network of free-market think tanks, media outlets and university programs to the tune of nearly $400 million since 2002.

Recently, much of that funding has gone toward state-based policy efforts. For example, Donors Trust provided 95 percent of the funding for a conservative media clearinghouse called the Franklin Center for Government and Public Integrity, which runs a network of state-based blogs.

While many of the charity’s 193 donors remain anonymous, a variety of media reports have shown where Donors Trust money ends up:

Climate change-denial

In late February, The Guardian reported that 46 percent of Donors Trust grants in 2010 went to groups opposing climate science. Between 2002 and 2010, the group gave $118 million to about 100 such groups.

A detailed 2012 report published on DeSmog Blog ties Donors Trust to a vast climate science denial machine through its generous support for the Heartland Institute, a Chicago-based think tank that mobilized support for the tobacco industry before shifting its focus to climate change.

An October episode of PBS Frontline said Donors Trust has become “the number one supporter” of climate denial groups like Heartland and the Koch brothers-fundedAmericans for Prosperity after industry giants such as ExxonMobil curtailed funding to Heartland following public protest.

Islamic radicalism 

Donors Trust made its largest grant in 2007 to a New York-based group called Clarion Fund. The $17 million donation went toward the production of a documentary called “Obsession: Radical Islam’s War Against the West.”

Seven weeks before the 2008 election of Barack Obama as president, Clarion distributed millions of copies of the movie, which stirred fear about Islamic radicalism, by inserting DVDs as ads in daily newspapers nationwide.

Reports later suggested that Chicago businessman Barry Seid may have passed the $17 million through Donors Trust to Clarion. Seid and Donors Trust director Whitney Ball co-chair another foundation called Chicago Freedom Trust.

Academic coups?…”

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“Developing market activity is the best and most reliable source for market information. All you have to do is follow what the activity is saying, and you will have the clearest idea of where the market is headed. For the near term, of heightened concern for many, the market says the current decline is far from over. Price may not be far from the low of the decline, but the trend is down, and it takes time to turn a trend around, so do not expect to see a dramatic rise in the price of either gold or silver.

Our downside target of $1600 gold has been exceeded, while the $28 target for silver has not been met, although in horseshoes, it would be a leaner. [See Decline Not Over, 1st and 3rd charts, click on http://bit.ly/WWXFlt]. Next week, who knows?

The biggest advantage in letting the market speak loudest is that all one need do is follow its path, for it always leads to a logical conclusion. The conclusion may not fit with one’s hopes or expectations, many times, but the market never misleads in its intent. It is not always easy to read, occasionally, so during those times, it is best to do nothing until a clearer direction becomes more discernible.

This week, the silver charts lead because we see them as more telling than gold. The monthly is our starting point. It will become apparent why silver warrants more focus when compared to gold as you view the respective charts.

We continue to mention the bullish spacing because it puts the metals into an important context from a larger perspective, and the spacing lets us know that silver and gold remain in uptrends with gold net stronger, but just not for the near term. A look at the monthly gold chart will make that perfectly clear.

This does not mean gold/silver will not still go lower. For now, developing market activity continues to point in that direction. Prices may be at or near a low, but we see no ending action that says one has been reached.

There is a very positive development in silver, even after last week’s sharp decline. An important change in behavior occurred in August 2012 when silver rallied out of the doldrums for two strong months, “2” on the chart. What is somewhat impressive about the current decline is how it has been labored relative to the two month rally in mid-2012. After 4+ months, [it says 5* on the charts, the * signifying the 5th month is not over, and no one knows where it will end], that breakout area is still holding.

Compare the two strong rally bars with the 5 overlapping decline bars. They tells us sellers are expending a lot more effort to drive price down to the starting level where buyers took over last August.

It could be that February will continue to fall and go under the 26 level, we do not know. All we can do is look at what is known, to date, and draw some conclusions. Seeing more detail in the weekly and daily charts may help.

When you compare the weekly gold chart to silver, you will see how gold is weaker for the near term. We do not follow any fundamentals, but it could well be that the underlying supply/demand factors for silver, with its industrial use, are far more important than viewing silver as a poor man’s gold substitute as a store of wealth. Similar usage demands do not exist for gold.

Price remains in a down channel, just it is slightly under, and it is also near the breakout level from August 2012, both concurrently offering potential support in this negative market.

An explanation is provided in the left corner of the chart concerning the dashed portion of the lines. They extend from 3 and 2, respectively, at the point in time just after swing high 3 is known. How price reacts to these lines provides important market information.

In the previous article, Decline Not Over, http://bit.ly/WWXFlt, also on the third chart we commented how price failed to reach the upper channel line, see arrows below, and maybe head back toward $28? This is how one pays attention to the market’s message in order to avoid surprises or be on the wrong side.

One reason why we say silver may be at/near a low point is the climatic volume, three days ago, which also drove price under the lower channel oversold line. Markets often end in excess, and sharply higher volume always warrants attention for it almost always entails a transfer of risk from weak into strong hands. Smart money buys bottoms, and they show their hand by increased volume.

The volume from last Wednesday is mostly all short-covering. Net new buying usually comes in after a bottom is confirmed, and that is a caveat for acknowledging that price can still go lower, maybe not by much, but sill lower, to whatever degree. There has been no indication of confirmed ending action, yet.

The last two trading days have much smaller ranges and overlapping bars. The market is telling us there was zero downside follow-through after Wednesday, and overlapping bars reflect a balance between buyers and sellers at a point where sellers have been in total control. These are littler messages, and they need confirmation before acting on them.

It is interesting to note…”

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Asian boards 

The Nikkei Falls

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[youtube://http://www.youtube.com/watch?v=wf2i2H17xDQ 450 300]

Remember what happened in New Orleans:

[youtube://http://www.youtube.com/watch?v=B1Qx0cTze0M 450 300]

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This is a start, but means nothing until major gun makers make a stand…..

“Upset by efforts to impose new gun control restrictions, a group of small firearms manufacturers are threatening to not sell weapons to local police in states that adopt new restrictions. The group currently numbers about 50 and includes gun shops as well as machinists. The Police Loophole web site lists 87 such companies.

New York State is reportedly a top concern of the group, due to lawmakers adopting new gun-control regulations, including limiting the size of magazines.

York Arms of Buxton, Maine, a boycott participant, wrote on its website that they will not sell to any government agency in New York State….”

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“Check out which companies are making headlines after the bell Tuesday”

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Source

“Treat this one lightly, but investment manager Doug Kass is floating a rumor that Apple will announce a stock split tomorrow at its shareholders’ meeting. Kass is long Apple.”

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“Ben Bernanke was testified before the Senate Banking committee today, and for the most part, things proceeded as usual.

Until Elizabeth Warren took the mic.

Senator Warren grilled Bernanke on ‘too big to fail’ and the subsidy economists have calculated big banks get from the American tax payers through preferential borrowing costs. \

Here’s what she said (via Bloomberg):

“Now we have a double problem which is the big banks… have gotten bigger and at the same time… investors believe with too big too fail out there investors that it’s safer to put your money into the big banks and not the big banks, effectively creating an insurance policy for the big banks…. Last week Bloomberg did the math on it and came up with the number $83 billion, that the big banks get in what is essentially a free insurance policy… So I understand that we’re all trying to get to the end of TBTF, but my question Mr. Chairman is, until we do, should those biggest financial institutions be paying the American tax payer that $83 billion subsidy they’re getting.”

Bernanke responded that those subsidies are coming from the market’s expectation that the government will bail out banks, when it reality, the government has figured out a way to wind them down. He also added that the government wiped out the shareholders at AIG.

To which Warren countered, “excuse me Mr. Chairman but you did not wipe out the shareholders at the big banks… Whatever you say, Mr. Chairman, $83 billion says there will be a bailout for financial institutions.” …”

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“Lenders from JPMorgan Chase & Co. (JPM) to Bank of America Corp. (BAC) that sold $51 billion of securities backed by equity derivatives the past two years are being pushed by regulators to disclose that the banks valued the debt as much as 10 percent less than customers paid.

Banks are being given 10 days to tell the U.S. Securities and Exchange Commission whether they will comply with rules intended to increase transparency in the structured-notes market, the SEC said in a letter sent to some banks this month. Goldman Sachs Group Inc. (GS), Bank of America, and Royal Bank of Canada began disclosures as early as May on securities sold at prices that were typically 2 to 4 cents on the dollar more than where the banks valued them, data compiled by Bloomberg show….”

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Forget about estimating costs were talking about simple counting….or lying.

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“Federal Reserve Chairman Ben S. Bernanke’s efforts to rescue the economy could result in more than a half trillion dollars of paper losses on the central bank’s books if interest rates rise abruptly from recent levels.

That sum is the difference between the value of securities in the Fed’s portfolio on Dec. 31 and what they may fetch in three years, according to data compiled by MSCI Inc. of New York for Bloomberg News. MSCI applied scenarios devised by the Fed itself for stress-testing the nation’s 19 largest banks.

MSCI sees the market value of Fed holdings shrinking by $547 billion over three years under an adverse scenario that includes an economic contraction and rising inflation. MSCI puts the Fed’s mark-to-market loss at less than half that, or $216 billion, if the economy performs in line with consensus forecasts of gradually rising growth, inflation and interest rates.

The potential losses are unprecedented in the Fed’s 100- year history. Bernanke began describing in detail the risk of lower payments to taxpayers for the first time today in his monetary policy testimony before the Senate Banking Committee saying that “remittances to the Treasury could be quite low for a time” if interest rates “were to rise quickly.” Bernanke didn’t describe the overall interest-rate risk to the portfolio or potential mark-to-market losses. He said the Fed is “confident” it has tools to tighten monetary policy.

Where’s Money?….”

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“JOHANNESBURG — Worried about horse meat in your beef? Try water buffalo, donkey and goat.

South African food scientists said they have found all three in mislabeled foods including beef burgers, ground beef and sausages.

A study published by three professors at Stellenbosch University found that 68 percent of 139 samples contained species not declared in the product label, with the highest incidence in sausages, burger patties and deli meats.

The study found soya and gluten were not labeled in 28 percent of products tested, it found undeclared pork in 37 percent and chicken in 23 percent.

“This study confirms that the mislabeling of processed meats is commonplace in South Africa and not only violates food labeling regulations but also poses economic, religious, ethical and health impacts,” co-author Professor Louwrens C. Hoffman said Tuesday.

He said tests the past two weeks on hundreds of samples of imported meat have found no horse meat….”

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“Like most soft-spined Americans, you probably have painful memories of the financial crisis and consequent recession. Perhaps you even think of those things as “bad.” Fortunately, Jamie Dimon is not like the rest of you losers.

That is because, unlike you, Jamie Dimon is CEO of JPMorgan Friggin’ Chase, America’s greatest bank, which just so happens to snack on financial crises and recessions like so much KIND bar.

“This bank is anti-fragile, we actually benefit from downturns,” Dimon bragged to his bank’s investors at a conference on Tuesday.

And it is true! The bank definitely benefited from the last downturn. It got to buy Bear Stearns in a government-backed fire sale, getting itself a brokerage business on the cheap in exchange for shouldering only a few tiresome legal burdens. It also got billions of dollars in government handouts, from $25 billion in TARP funds to billions in savings from low-interest-rate borrowing programs to a permanent subsidy arising from the idea that the government will bail out the bank if it ever gets in trouble.

That permanent subsidy amounts to about $17 billion per year, according to a recent Bloomberg study, representing nearly all of the bank’s profits. No other bank gets such a large subsidy, according to Bloomberg’s study (although, to be fair, some find Bloomberg’s methods unsound, to quote from Jamie Dimon’s favorite movie)…..”

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“Google is in hot water once again after application developers have discovered that the Silicon Valley giant is sharing its users’ personal information without obtaining their consent.

Non-profit advocacy group Consumer Watchdog has sent a letter to the United States Federal Trade Commission that implores for the FTC’s Bureau of Consumer Protection to intervene in the latest goof-up courtesy of Google.

According to watchdog group, Google could be forced to pay over billions of dollars in penalties after violating its own privacy promises yet again.

“Google has become a serial privacy abuser and the FTC must change its tactics to curb the Internet giant’s abuses,” John M. Simpson  of Consumer Watchdog’s Privacy Project said at a news conference held this week to discuss the group’s complaint. “Google’s wanton disregard for its obligations under the law demonstrate the need for meaningful penalties – in this case a fine in the billions of dollars.”

Consumer Watchdog’s call for action was made after news circulated that the programmers responsible for applications sold through Google’s online store are provided with the detailed personal information pertaining to customers who’ve made purchases, despite no warning being given.

“If you bought the app on Google Play (even if you cancelled the order) I have your email address, your suburb, and in many instances your full name,” Australian app developer Dan Nolan warns on his personal blog. “Let me make this crystal clear: every App purchase you make on Google Play gives the developer your name, suburb and email address with no indication that this information is actually being transferred,” he says.

In an issue that’s echoed in the Consumer Watchdog letter, Nolan says that letting developers have unfettered access to this information could pose quite a few problems for the consumers, not to mention the Silicon Valley company that is quickly finding itself entangled in yet another privacy snafu….”

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“I see lots of people discussing how “successful” Japan’s strategic decimation of the Yen has been so far.  They mainly just cite the Nikkei’s enormous rally as “proof” that all’s well that begins well.  Of course, that’s not always the case when you’re using a nominal wealth metric to describe how the real economy is responding.  Remember, the stock market is not the economy.  It is essentially the guesses of a group of semi-intelligent half apes who all think they’re smarter than one another.

Anyhow, the more important point to understand is that a currency war will likely end up with no winners.  This isn’t a poker table where one central bank happens to be much better at the game than all other central banks.  This is a poker table with a whole punch of very powerful silver backs who are all on relatively equal footing in aggregate.

Let’s just take a look at how this could all unfold for instance.  So, Japan has been talking down the Yen and everyone sees how well that’s working.  Then the ECB decides they also want to stimulate their economy by driving the Euro down….”

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“Few people have been more bullish on government bonds over the last 30 years than Gary Shilling.  So love his advice or hate it, he seems to have a pretty good feel for the government bond markets.  I thoughtthis interview with Forbes was interesting (via Meb Faber). His macro view is always interesting, but it’s also interesting that he thinks junk bonds are a bubble.  In addition, Shilling says the 10 year is going to 1%:

“I’m suggesting 2% on the long bond and 1% on the ten-year….”

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U.S. equities made a hopeful bounce into the clam testimony. This seemed to help European indices a bit, but have now closed in vice territory.

Italy is closing down 4.89% while Spain is off 3.7% France and Germany are off by more than 2%.

U.S. markets are mixed where the S&P and NASDAQ have pared most of their gains, the DOW is up 70 points.. Oil is more or less the same off $0.52.

Gold is up $27.

Market update

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“Federal Reserve Chairman Ben Bernanke strongly defended the U.S. central bank’s bond-buying stimulus before Congress on Tuesday, saying its benefits clearly exceed possible costs.

The Fed chairman also urged lawmakers to avoid sharp spending cuts set to go into effect on Friday, which he warned could combine with earlier tax increases to create a “significant headwind” for the economic recovery.

Bernanke said Fed policymakers are cognizant of potential risks from their extraordinary support for the economy, including the possibility the public loses confidence in the central bank’s ability to unwind its stimulus smoothly or the potentially destabilizing effect of low rates on key markets.

But he added these did not seem material at the moment, adding the central bank has all the tools it needs to retreat from its monetary support in a timely fashion.

“To this point, we do not see the potential costs of the increased risk-taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery and more rapid job creation,” Bernanke said in remarks prepared for delivery to the Senate Banking Committee.

Minutes of the Fed’s Jan. 29-30 policy meeting, released last week, showed that a number of officials felt the potential risks posed by buying bonds could warrant tapering or ending the program before hiring picks up. However, several others argued there was a danger in halting it prematurely.

Bernanke appeared to be in the latter camp, citing improvements in the housing and auto sectors and tracing them in part to the Fed’s stimulus.

He also noted that inflation, one of the risks most often cited by critics of the central bank’s so-called quantitative easing, remains projected to stay at or below the Fed’s 2 percent target for the foreseeable future.

In response to the financial crisis and deep recession of 2007-2009, the Fed not only slashed official interest rates to effectively zero but also bought more than $2.5 trillion in mortgage and Treasury debt in an effort to push down long-term interest rates and spur investment….”
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“Standard & Poor’s didn’t commit fraud or intentional misconduct, according to Floyd
Abrams, the firm’s attorney.

The government alleges that S&P engaged in a scheme to defraud investors in structured
financial products, claiming its ratings misrepresented the risks involved. The Department
of Justice claims S&P issued ratings on complex securities related to the mortgage industry, including residential mortgage backed securities and collateralized debt obligations (CDOs), that it knew were inaccurate and continued to do so.

“The basic allegation is false,” Abrams, a partner at Cahill Gordon & Reindel, told Newsmax TV in an exclusive interview. “There was no fraud. There was no intentional misconduct.” …”

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“Twitter has announced that Twitter for Firefox OS will be available in the Firefox Marketplace when devices powered by Mozilla’s new operating system start to ship.

According to the company, Twitter for Firefox OS will be similar to its other mobile apps, with the same Home, Connect, Discover, and Me tabs, as well as search and compose Tweet icons. One feature that is unique to the Firefox OS Twitter app is Web Activities, which will let users tweet photos directly out of any app that also supports Web activity, including Firefox OS’ built-in photos app….”

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