Alt title: Econ Smackdown: Paul Tudor Jones vs Goldman Sachs

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Goldman may (or may not) have top notch analysts and an excellent research department. But given their history of saying and selling one thing and then doing another, can anyone trust what comes from them?

Should hedge funds be setting their Outlook to auto-delete anything from GS.com research department? How can you tell what is a real research report versus disinformation or some bizarre Psy-ops strategy?

All of this raises the more basic question: Can their clients trust what GS generates, when they don’t know if they are a) trading the opposite side of the report for their own accounts; or b) HFT front running ?

The question isn’t whether Goldman Sachs is Taibbi’sgreat vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

It is much more simple than that — the more relevant question is “Can Goldman Sachs be trusted by their own clients ?”

Bloomberg excerpt:

“Paul Tudor Jones, the billionaire hedge-fund manager who outperformed peers last year, is wagering that Goldman Sachs Group Inc. and Morgan Stanley got it wrong in declaring the start of an economic recovery.

Jones’s Tudor Investment Corp., Clarium Capital Management LLC and Horseman Capital Management Ltd. are taking a bearish stand as U.S. stock and bond prices rise, saying that record government spending may be forestalling another slowdown and market selloff. The firms oversee a combined $15 billion in so- called macro funds, which seek to profit from economic trends by trading stocks, bonds, currencies and commodities.”

I am curious if anyone has any related thoughts on the matter . . . ?

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Source:
Goldman Sachs Wrong on Economic Recovery, Macro Hedge Funds Say
Cristina Alesci
Sept. 1 (Bloomberg

http://www.bloomberg.com/apps/news?pid=20601087&sid=auGWGWlnohNo

Category: Corporate Management, Trading

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

237 Responses to “Is Goldman Sachs Trustworthy?”

  1. tagyoureit says:

    Agnotology!

    ;)

  2. Les Lofton says:

    I wouldn’t be surprised if both sides of this trade turn out bad. Uncle Sam’s checkbook is a lot bigger than Mr. Jones’. The government can support the markets in nominal terms, but both the long and short side could be losers in real terms if the dollar tanks. I’m sticking with about equal weightings of cash, metals, and commodity funds until things shake out.

  3. Lt. Dangle says:

    Does a bear s__t in the woods?

  4. CapitalObserver says:

    I wrote an article on who I think will be right. Hint: its not Goldman

    http://capitalobserver.blogspot.com/2009/09/paul-tudor-jones-ii-vs-goldman-sachs.html

  5. cvienne says:

    Let’s put it this way, any fund manager who is lazy enough to simply go by what GS has to say with respect to a research call, or market direction DESERVES to be slimed.

    I think, though, that going forward, this “game” is going to get trickier and trickier for GS to play.

    In this past year (since the Lehman collapse, the AIG conduit, the taxpayer funded PPT) there have simply been too many things that have bubbled to the surface which have made too many people wary about covert operations… & I think there will be more things revealed as time goes by… At any given moment, this little “partnership” they seem to enjoy with the USG may just end up as a power struggle…

    September – October should be interesting months…

    You get this sense that they’d [GS] like to offload this crap they’ve had to buy since March… In the past, it’s always worked flawlessly… But like the REAL retail world out there, what if you held a sale, and nobody showed up?

  6. Bruce N Tennessee says:

    Barry,

    I don’t know if they are trustworthy…but as to the side of the see-saw, I would be, based on what I see here in East Tennessee, on the Paul Jones side of the equation. I missed the downturn here, and as you know, have been in short term cd’s for the bullish uptick we’ve had since March…I’ve slept like a baby. But the point is, I don’t have a dog in this fight, so my observations that business conditions are actually worsening here in East Tennessee are, I think, unbiased. I have quite a few friends that are in business, and I can tell you none of them are happy campers…

    I have a vague feeling of unease when I see very large corporations basically in partnership with the government. And I don’t like it when corporations like Bloomberg have to sue to get any true accounting of what the government is spending and how much we as taxpayers will be liable for in the future. Nor, for that matter, do I like what I see in Afghanistan…having served in the Vietnam era..

    By the way, my little Redbook is still weak again this morning….

    B in T.

  7. Marcus Aurelius says:

    BinT:

    War in Afghanistan is never a good idea. We recut our teeth in Iraq, but Iraq is nothing like Afghanistan (or Vietnam, for that matter). Terrain/environment makes all the difference. Additionally, I wouldn’t doubt if Putin feeds us a little of our own medicine. Pay-backs are a bitch.

  8. Cunning Linguist says:

    To echo Bruce in TN, business conditions are actually worsening here in the NYC area as well.

  9. barryh says:

    Didn’t GS say oil was going to $200 before it dropped?

  10. aitrader says:

    Are some questions rhetorical?

    Goldman Sachs != trustworthy

  11. Bokolis says:

    They’re either dirty or they don’t know. Either way, you’d have to be crazy to buy into analyst reports coming out of GS and the like.

    Does 2% so much as get us even? I wouldn’t trumpet 2%…even if I believed it. But, I also wouldn’t underestimate GS’ power to influence the fulfillment of its prophecies. A new scam will emerge. This economy hummed along for 25 years on bad fundamentals and bears have a way of winding up on the wrong side of a trade even when they are ultimately proven correct.

  12. Freestate says:

    I just have three words that answers this: Abby Joseph Cohen. Please, do you think anyone on the GS trading side takes her or her team’s alleged “research” seriously? If anything, they use her as we do – as very good contrarian signal.

  13. Andy T says:

    I would not bet against Paul Tudor Jones. The analysts making the calls are just that: analysts. The real traders on GS’s prop desks are likely trading much differently than whatever their analysts are spewing.

  14. John from Concord says:

    Of course they have no credibility anymore. I don’ t think you have to be a tinfoil-hat type to think that Goldman, as an institution, is in the *business* of gaming everything it can for its own profit. I think “bizarre Psy-ops strategy” is the safe way to bet on every single public utterance by anyone in any position of authority at GS.

  15. leftback says:

    Q: How do you know when a sell-side analyst is lying?
    A: Whenever his mouth is moving.

  16. Bruce N Tennessee says:

    This is from Mish, who I like, but seems like he feels he’s in a war all the time to read his posts…but, if you missed the Gallup poll he commented upon recently…this makes for very interesting thinking regarding whether Paul Jones or The Squid is correct:

    http://www.gallup.com/poll/122546/Boomers-Spending-Generations-Down-Sharply.aspx?CSTS=alert

    Boomers’ Spending, Like Other Generations’, Down Sharply

    PRINCETON, NJ — Baby boomers’ self-reported average daily spending of $64 in 2009 is down sharply from an average of $98 in 2008. But baby boomers — the largest generational group of Americans — are not alone in pulling back on their consumption, as all generations show significant declines from last year. Generation X has reported the greatest spending on average in both years, and is averaging $71 per day so far in 2009, down from $110 in 2008.

    ….The charts are worth a look….this was published August 27th.

  17. I-Man says:

    Here at Dread we dont fade Paul Tudor Jones…

    and we also think GS is a bunch of douche bag MBA’s with too much OPM and algo’s to throw around.

  18. The Curmudgeon says:

    Okay, if whether Goldman Sachs should be trusted by its clients is a final exam question, and my choices are a) Goldman Sachs should be trusted just because no matter what happens, it makes money, and making money justifies all sorts of nefarious behaviors; or b) Goldman Sachs should not be trusted because it talks out of both sides of its mouth, just like the politicians it has bought and paid for in Washington–then the answer is so easy the test wouldn’t be worth taking.

    Now to the second question on the exam–Will Afghanistan be the undoing of the American empire? a) No, American exceptionalism means the lessons of history, particularly military history, do not apply to America; or b) Yes, Afghanistan is known as the graveyard of empires for good reason. Again, this is so easy it’s like child’s play.

    Both of my answers are “b”. Where’s professor Franklin411? Do I get an “A” on the final?

  19. I-Man says:

    Plus… Paul Tudor Jones is a Tennesseean… and we dont fu*k with our own.

  20. km4 says:

    Larry Flynt weighs in on how Trustworthy….

    Common Sense 2009
    http://www.huffingtonpost.com/larry-flynt/common-sense-2009_b_264706.html

    The American government — which we once called our government — has been taken over by Wall Street, the mega-corporations and the super-rich. They are the ones who decide our fate. It is this group of powerful elites, the people President Franklin D. Roosevelt called “economic royalists,” who choose our elected officials — indeed, our very form of government. Both Democrats and Republicans dance to the tune of their corporate masters. In America, corporations do not control the government. In America, corporations are the government.

    This was never more obvious than with the Wall Street bailout, whereby the very corporations that caused the collapse of our economy were rewarded with taxpayer dollars. So arrogant, so smug were they that, without a moment’s hesitation, they took our money — yours and mine — to pay their executives multimillion-dollar bonuses, something they continue doing to this very day. They have no shame.

  21. leftback says:

    Not only that, Bruce, but the boomers (who are the real vampire squid of the US in some ways) are going to be retrenching from now on into their twilight years – as their self-absorbed orgy of consumption winds down and the rest of us look forward to paying for their largesse for the rest of our lives.

    LB is not ruling out a run by the bulls at SPX 1050. The ADP may be a mellow number. We are almost flat and not anxious to encounter a steamroller headed north in the middle of this week.

  22. Bruce N Tennessee says:

    OT warning:

    I-Man…I guess you saw where a large rock slide closed part of the Smokies for the last several weeks…including your favorite area from the west entrance?

  23. I-Man says:

    @ LB:
    Kinda sweet to have one of the macro all stars of the universe endorsing your trades now aint it?
    The overtones from PTJ’s funds: long dollar, long long bond, short equities, short commodities.

  24. franklin411 says:

    Gotta love that ISM number :)

  25. I-Man says:

    @ BnT:
    No… I hadnt… been on vacation. But man… that’s a pretty big slide! The mtns must be pissed… I know a back way that might get around that tho… look for Wears Valley Road on a map.

  26. Bruce N Tennessee says:

    http://briefing.com/Investor/Public/Calendars/EconomicReleases/napm.htm

    Big Picture

    This is a highly overrated index. It is merely a survey of purchasing managers. It is a diffusion index, which means that it reflects the number of people saying conditions are better compared to the number saying conditions are worse. It does not weight for size of the firm, or for the degree of better/worse. It can therefore underestimate conditions if there is a great deal of strength in a few firms. The data have thus not been either a good forecasting tool or a good read on current conditions during this business cycle. It must be recognized that the index is not hard data of any kind, but simply a survey that provides broad indications of trends.

    ….Franklin, this is from Briefing.com…again, this is a survey….

    …as far as hard data is concerned today…construction spending last month revised down, and down again .2% this month…

  27. leftback says:

    Market failing to rally on good news (ISM and Pending Homes), and presumably the ADP will be inoccuous. Another of those times when it seems wiser to trade the reaction to the news, rather than trade the number itself.

    @I-Man: LB is a long-time fan of the Tennessean, and has in fact witnessed his Xmas entertainment on occasion. Every December, PTJ puts on a musical light show for his Greenrich neighbors and kids travel for miles to see it.

    LB’s Macro list for the Fall: Long: USD/AUD, USD/CAD, JPY/EUR. Short: $wtic, OIH, XLF, FXI, GLD, SLV.

  28. torrie-amos says:

    Goldman doesn’t care two poops, the facts are two years ago they sold subprime too clients and bet against them, that is factually who they are, a group not too be trusted if one has any sense. Now of course GS is like the mob, u r either in or out, you’se takes yours picks and takes yours chances. Short memories allow good sales pitches too work everytime. One would also think, overall they probably do a decent job for clients, most likely better than most, so they should be fine and dandy as always.

  29. cvienne says:

    @franklin411

    Day in and day out, over many months now, the thought process that has matriculated on this BLOG (and on many other respected blogs covering the financial community) is one whereby everything either seems “cooked”, “papered over”, or downright FALSE…

    The very theme of this thread is related to the role GS may be playing in this (in partnership with the government)…

    People are getting weary… I can “sense” their weariness in many ways… I’ve noticed that the number of replies to posts has gone down over the past 2-3 months… I DON’T THINK, the “hits” on the site have gone down… But perhaps POSTS have… Why? Because there are only so many ways to say that the USG, the Fed, and the iBanks are all just gladhandling the situation…

    In the initial stages, you express outrage, you participate… Then you step back and let others do the same (trying to see if your impressions are, in fact, correct, or how far out on the fringe you happen to be)…

    I’d say that the verdict is pretty much IN by this point… It is a “gamed” system (and the “gaming” goes all the way to the top halls of power)… Perhaps it will NEVER fully be uncovered…

    So fine… It is what it is… But in the context of all that I just expressed… to hear a comment like, well looky there…

    “Gotta love that ISM number”…

    Is MORE than laughable… First of all, as if it MEANS something in the broader context of things… or in light that the better reading was most likely due to “one off” scenarios like CASH FOR CLUNKERS, that have no way of generating any long term prosperity for this economy, or ANY OTHER economy that could ever possibly be…

  30. manhattanguy says:

    “Market failing to rally on good news (ISM and Pending Homes), and presumably the ADP will be inoccuous. Another of those times when it seems wiser to trade the reaction to the news, rather than trade the number itself.”

    The usual September blues my friend. Market will take a deep breadth within the next few weeks.

    Taking more debt to get out of existing debt is not a way out of this mess. Bernanke will find out this hard truth very soon. We are living in borrowed time.

  31. Mannwich says:

    It doesn’t matter when our royals are wrong. They still declare “victory” and move onto the next scam. The Tyranny of the Incompetent lives on.

  32. leftback says:

    One more pop tomorrow for the ADP number? After that, this summer of Happy Daze is likely at an end.

  33. cvienne says:

    @f411

    …and FWIW, in the context of your unashamed political bias, every time I read a comment like

    “Gotta love that ISM number”

    I can’t help but thinking of it as some type of clarion call to put a positive spin on things and make it seem like your guy has complete control of things…

    But to me it doesn’t sound much different from another poster, in a timewarp anti-matter universe (let’s say, 2005) saying…

    “Wow, look at those great forecasts from the NAR, it seems like housing prices have reached a permanently high plateau, THANK GOD #43, came through with all those tax cuts, and Greenspan kept interest rates down. Nowwhere to go but UP from here”.

    What a joke!

  34. Mannwich says:

    @f411: Market really loves those ISM numbers.

    To quote Jimmy Johnson: “How ’bout them ISM numbers!!!!”

  35. leftback says:

    An interesting post from Mish on the housing meltdown and deflation in Spain and other European countries.
    http://globaleconomicanalysis.blogspot.com/2009/09/deflation-is-bitch.html

    For “Spain and Ireland” read “CA, NV and FL”, for “London” read “New York”, and for “France and Germany” read “the rest of the U.S.A.” The € ties these countries together in the Euro zone, in the same way that we are tied to CA. Spain and Ireland’s debt overhang is going to drag the other economies of Europe down for years. The UK is a special case because they can weasel out of the depression by devaluing sterling, another good macro bet for 2010. Countries with unique currencies are the likeliest candidates for stagflation, as there is less fiscal discipline.

  36. I-Man says:

    Question for my fellow macro dogs:

    Does being bullish on the USD make you inherently bearish on Gold?
    Is this an assumption we should question?
    Of all my macro charts at the moment… gold is the one that I cant pin. The chart makes me really wanna get long… my fundamental intuition makes me really wanna doubt that. Whenever these instances arise it makes me stop and think and reevaluate.
    Does a rising dollar foretell a falling gold price? Has this always been the case historically?

    To tie it in to this thread again… I’ve read on here before rumors of GS and the USG being large sellers of gold heading into the end of the year… and then again rumors of the UST marking up their gold reserves to market to bolster the balance sheet.

    Has GS put out any macro gold research that any one has read or can link?

  37. mcHAPPY says:

    As the wise president George W. Bush once said:

    “There’s an old saying in Tennessee — I know it’s in Texas, probably in Tennessee — that says, fool me once, shame on — shame on you. Fool me — you can’t get fooled again.”

    I think we can all agree with this sage advice.

  38. karen says:

    this could be good:

    FINRA To Raise Margin Requirement On Leveraged ETFsFont size: A | A | A
    11:07 AM ET 9/1/09 | Dow Jones
    NEW YORK (Dow Jones)–Leveraged exchange-traded funds face yet another restriction as the regulator that oversees the retail brokerage industry said it plans increased margin requirements for the funds and uncovered options tied to the funds starting Dec. 1.

    In general, margin requirements for ETFs and options will be increased “by a factor commensurate with their leverage,” according to the Financial Industry Regulatory Authority. The current margin requirement is typically 25% of the market value of a long ETF and 30% for a short ETF.

    New margin requirements will not exceed 100% of the market value, according to Finra. Finra has already taken steps to warn brokers and investors leveraged ETFs can be tricky for inexperienced traders to handle.

  39. franklin411 says:

    @Mannwich
    The market is not the economy.

  40. karen says:

    also, over at stocktiming, a good look at the falling nyse new highs number:

    http://www.stocktiming.com/Tuesday-DailyMarketUpdate.htm

  41. Mannwich says:

    @f411: Exactly. The economy sucks right now and isn’t getting better. Your boy has done nothing fundamentally different than the last crew.

  42. I-Man says:

    “I love the smell of napalm in the morning.”

  43. manhattanguy says:

    “The market is not the economy”

    Hope you are joking. Is this why Fed is buying futures to pump up the market so they can artificially provide this “feel good” factor about the Economy?

    Dow is down over 100 points as we speak.

  44. leftback says:

    The 2-year is at 0.94%, haven’t seen that in a while, that’s a form of fear gauge right there, now wait until the 3-month T-bill starts to attract buyers and that would be the time to get very short. The mood is shifting.

    Can’t see a drop below spx 1000 today, almost sure the bulls will stage a rally before that. The dollar is looking better today than it has in some considerable time.

  45. Mannwich says:

    @manhattan: f411 only likes to tout the markets as proof that O’s policies are working when they’re rising. When they are falling on supposed good data, it’s to be dismissed blithely with statements like it “is not the economy”.

  46. Andy T says:

    Even the mightiest market of them all, sugar, is down today….after peaking into a perfect technical level, 24.85.

  47. Mannwich says:

    It’s Sept. 1. Might this turn out to be the most predicted market drop in history? Makes me a little nervous that we could be seeing a massive headfake here in the next two-three months.

  48. franklin411 says:

    @Mannwich
    You almost never see me posting here about how the so-called “market” has judged things. The “market” is merely a reflection of the fears, hopes, greed, and intelligence or lack thereof of its participants. The economic data is the only accurate gauge of our present condition, and the numbers for the last 5 months have been nothing but up up up. That fact is undeniable.

  49. rustum says:

    I am still not sure about near term strength in dollar. If it is certain that Dollar will go up near term?

  50. Marcus Aurelius says:

    “market is down on good news.”
    ____________

    Reminds me of an old joke:

    Doc: I’ve got some good news and some bad news, which would you like to hear first?

    Patient: I’d like the good news first.

    Doc: The good news is that we amputated the wrong leg. The bad news is that the other one is getting better.

  51. cvienne says:

    @I-Man (11.12)

    “Does being bullish on the USD make you inherently bearish on Gold?”

    IMO – Not necessarily. Why? Because gold can also be considered the “Armageddon Trade”… So in a collapsing environment (especially where the $ is becoming the new proxy for the carry trade based on ZIRP), there actually could be periods of dollar rally (as commodities are sold to pay off the dollar denominated debt)…

    And think about it… As far as the commodity space is concerned, it’s going to be the “hot money” that gets sold off first (oil, copper, etc.)… There is nothing that’s telling me that there’s any HOT MONEY in Gold at the moment. My own “physical” gold positions I haven’t sold any of, but the last time I made a gold purchase was in 2004. And Gold has yet to even break through the March 2008 highs.

    So what that tells me is that even as the dollar may rally here, gold won’t sell off significantly (Instead, proabably oil & copper [which are the new 'anti-dollar' proxies]), will…

    JMHO

  52. Mannwich says:

    @f411: So is unemployment and foreclosures. It’s up, up, and away from here……….

  53. Andy T says:

    There will clearly be a battle into the 1000 level.

    999 is the 23.6% retrace of the July-Aug leg.
    1002 is the 61.8% retrace of the the most recent advance
    1004 would be an a=c down

    So 999-1004 is going to be critical level for the market in the short term. If 999 gets decisively snapped, this market should head for 950…poste-haste.

  54. leftback says:

    AIG and FNM falling like a stone… such silliness. Brian the Broker’s phone must be ringing off the hook.

    “The numbers for the last 5 months have been nothing but up up up.”
    This is true – in Soros’ “inverted square root sign”, now they are going to be flat flat flat, or down down down.

    “If it is certain that Dollar will go up near term?”

    Nothing is certain except Death and Taxes, but repayment of debt will drive the dollar upwards, and so would the unwinding of certain leveraged carry trades that have been used to drive certain markets up over the summer.

  55. Mannwich says:

    Wow, the rush to the exits begins as scheduled right on Sept 1. Brian the broker getting deluged with calls right now.

  56. leftback says:

    Andy, 1004 seems like a level that may be defended today. But we have close to zero long exposure and are modestly short (oil/energy stocks/financials), so if it fails, we say bring it on!!

  57. Mannwich says:

    I wonder of Harry is buying this dip?

  58. Greg0658 says:

    10:43 – 10:51 .. OUCH

    on the Obama WH not doing anything .. bull crap .. this is BIG you dork

    now .. what would I do …… pull outta Afganistan ASAP … halt trading like 9/11/01 (because the market is not the real economy – but it yanks its chain seriously) ….. institute that .0001 cent tax on every dollar traded and thats just the start

    so aren’t you’s glad I got no chance of being POTUS

  59. manhattanguy says:

    @franklin411
    What if those numbers were goosed up? what if the numbers were just an aberration?

    I still believe we will see a double dip recession early next year.

  60. hopeImwrong says:

    I dare you to buy the dip. I dare you.

  61. cvienne says:

    @f411

    “The “market” is merely a reflection of the fears, hopes, greed, and intelligence or lack thereof of its participants.”

    LMFAO

    Well, as this thread suggests (a thought that is MIRRORED by just about every deep thinking blog in the financial community)… The MARKET is controlled by the USG, the Fed, & GS at the moment…

    Suggesting they are…

    1. Fearful
    2. Hopeful
    3. Greedy
    4. Intelligent (or lack thereof)

  62. Mannwich says:

    @hope: Not a chance. Just watching my DTO, FXP and DUG run a bit.

  63. I-Man says:

    23.45 on UUP fast approaching…

  64. hopeImwrong says:

    watching my spy puts run a bit too.

  65. karen says:

    the spx uptrend from july has been broken.. pull out your straight edges.. and the spy 20 day ema has been broken as well. if it doesn’t regain it’s footage today or tomorrow. my bet is down.. oops, not true. my bet is already down. thin ice always did frighten me.

  66. Mannwich says:

    Man, Mr. Market didn’t even wait until mid-Sept to pull the plug, not even the 2nd. Amazing.

  67. dead hobo says:

    Is GS trustworthy? Is the S&P fall this morning the real thing?

    The answer to both is NO. Look at copper and oil. Copper is up and oil is only down a couple of dimes. The rise in the 10 year is only daily noise. Copper will be in free fall when the market collapse is real. The 10 year will be a safe haven.

    conclusion: Another sucker market for shorts. Will they be fooled successfully for the 53rd time in a row? My guess is ‘yes’. The real fall in the stock markets to something realistic is not here yet and not pending at this moment. There’s no real selling pressure at this time.

  68. ben22 says:

    @I-man,

    imo before you can answer why a rising dollar might be bearish for gold you need to ask why would the dollar go up in the first place. The reason I’m long the dollar is b/c I’m firmly in the deflation camp. I see the answer to the reason the dollar goes up being credit deflation, simply stated, the remaining dollars that stay after the credit (which is most of our “money”) goes away become more valuable. We saw this last year and when we did, Gold, like everything else, went down. In fact it went way down. The problem as I see it is that it did not go down as much as everything else in that space, simply because it never went up as much as everything else in that space, emotions cause this. I’m sure you can think of examples of what I mean. I’m also not at all in the camp that thinks the dollar is going to crash soon or go away soon and therefore the best time to own gold doesn’t seem to be now, nor do I think you are getting a great price for gold now (unless you are short term trading which in that case, aren’t there better things to trade short term?) I’m bearish on Gold currently but don’t have any position either way and prefer to stay short silver here though that needs to be watched really close.

    My top two reasons to worry about not being in gold:
    Seems like some smart money is buying (JP in Q2, others, etc.)
    Dollar does in fact collapse

    Why not:
    This seems like one of the most crowded trades ever, non stop commercials, cash4gold, gold parties, vending machines in Europe selling it, etc. When TLC starts a show about trading gold (like home flipping) then that should be the nail in the coffin. Maybe there already is a show like this.
    Gold bugs basically had all their dreams come true at the end of last year and gold couldn’t even make new highs.
    The threat of inflation in the near term seems unrealistic to me

    Certainly not a complete list at all but just what I could think of off the top.

  69. hopeImwrong says:

    I’ve been waiting for the bull trap to spring.

  70. karen says:

    manhattanguy, that was surely the top for the backward looking ISM and the recoveryless recovery, the second dip has begun.. summer fun is over and the reality of the jobless recovery awaits in September..

  71. hopeImwrong says:

    spy cliff diving lately has always found a quick bottom. not this time.

  72. franklin411 says:

    @Manhattan
    What if an asteroid hits earth tomorrow?

    That’s the beauty of “what if” scenarios–the person making the assertion doesn’t have to offer any kind of proof to support his claim.

    In the complete and utter absence of any proof that the numbers are “faked,” there is no reason to disbelieve them. The Bears have claimed that the numbers are fake for the last 9 months even as the numbers have been A. consistently strong, and B. consistently improving. They have become the boy the cried wolf in this regard.

  73. leftback says:

    It will be interesting to see if the “dip-buying” crowd do indeed come in to “snap up bargain stocks”. A lower high tomorrow or Thursday would be confirmation that the top is in, but remember, we have been here before.

  74. ben22 says:

    I said:

    The problem as I see it is that it did not go down as much as everything else in that space, simply because it never went up as much as everything else in that space, emotions cause this.

    To expand as I didn’t type it correctly, since it didn’t go down as much as other commodities people hold on to this belief that it’s the only thing that didn’t get killed, but it just looks more like it didn’t go down as much as everything else b/c it never went up as much either, if that makes sense.

  75. Mannwich says:

    @karen: It’s time for you to trademark “recoveryless-recovery”.

  76. Marcus Aurelius says:

    ben22:

    Mish has some pretty good posts on gold being strong in a deflationary environment – you might want to check them out.

    That said, gold has been in a channel since the $100+ mark. Big moves in the US every day (up and down), typically followed by steady buying. Only time will tell.

  77. cvienne says:

    @Manny

    If Harry was true to form… He’d have been buying that 2% (which arrived yesterday at 1,016)…

    We will most likely only hear from Harry again at 1,044 – 1,054…

    But by then, we’ll require his own hindsight analysis to know if he, in fact, bought the 2% dip at 1,016… Or had the clever trading acumen, to wait for 935…

    Of course it won’t matter because I’m sure he’s 100% in cash right now (having sold exactly in 5 minutes at 1,038)…

  78. hopeImwrong says:

    sliced through many levels of support very fast (s1, s2, s3, 5day ma, etc).

  79. franklin420d says:

    MOM!!! They are picking on Franky jr again…..

  80. leftback says:

    USO on support level, crude should start to find some buyers here. LB is thinking that this is a good time to leave the building with a bag of cash. Looking at TBT but not pulling the trigger.

  81. cvienne says:

    BTW –

    Those FAZ calls that I bought last week at $6…I just pulled off at $7.20…

    only 20%, but I trust NOTHING these days…

    I had to suffer awhile as they were at $4.50 as early as this morning.

  82. Marcus Aurelius says:

    frankili:

    even tho’ the boy who cried wolf was wrong in every instance but the last and got et, the wolves did show up, and the town wasn’t ready.

  83. Bruce N Tennessee says:

    Any chance the Giant Squid has seen the ADP numbers for tomorrow? That someone found out this morning?

    …just trying my tin hat on for size….

    B in T

  84. dead hobo says:

    OK, it’s looking a little more aggressive, but I still don’t believe it. When/if copper falls from about $2.80 at the rate of +/- 10 cents a day, after three days I’ll believe it. Until then, it’s a short sucker market. They fall for it every time. Especially if a magic chart supports them. Then, the one time they will be right someday, they will appear to forget the 53 times previously they were fooled by HFT kiddies.

  85. call me ahab says:

    dh says-

    “conclusion: Another sucker market for shorts. Will they be fooled successfully for the 53rd time in a row? ”

    could be, could be-

    ’tis happened before- but there will be that time- when the force of gravity will prevail- when reality will set in- when our future is apparent-

    and the markets will reflect the ugly truth

  86. hopeImwrong says:

    sold spy puts. Will buy more on a rally.

  87. cvienne says:

    “Seven weeks of COLLEGE down the drain!”

    Actually, my “pre-amble” here is to look at this as a quick correction (perhaps back to 933 – a 61.8%) of the summer rally…

    What a nice H&S that would look like for the final push to the top into the year end window dressing…

  88. Pat G. says:

    Let’s see. Are any of the TBTF banks trustworthy? No. I don’t have time to read all the comments but I am sure that TBP posters have provided plenty of examples of why not.

  89. torrie-amos says:

    hobo, agree on copper, yet, imho, india breaks first then copper will follow, a nickel a day will be fine

  90. leftback says:

    The € is on support here, but that chart is not looking pretty. Remember EUR:JPY has been the critical carry trade.
    Waiting for what seems like the inevitable rally.

  91. alfred e says:

    IMHO, we’ll have to wait until tonight to see how much the PPT rescues the drop. The day’s not over yet.

  92. manhattanguy says:

    Agree Indian markets need to fill the Election day gap as someone pointed out. But their economy is doing much better than us. They don’t depend so much on exports as the rest of the Tiger economies do.

  93. Mannwich says:

    Sold my DTO a short time ago. Watching now.

  94. cvienne says:

    @ben22

    ZSL finally got jolted out of bed a little there (yet to be confirmed – but I’ll take it)…

    It’s been bugging me, because even when the dollar has been trying to do little moves, silver just lays there like a zombie…I’m owning the ZSL February calls since last week… You’re in there, right?

    Good to see both moving to the same degree for once.

  95. dead hobo says:

    torrie-amos Says:
    September 1st, 2009 at 12:07 pm

    hobo, agree on copper, yet, imho, india breaks first then copper will follow, a nickel a day will be fine

    reply:
    ———–
    In 11 – 2007, copper and the yen broke downwards big time. That was my sell signal. Today, the yen isn’t relevant but copper is overvalued again. When copper breaks, that will be the start of the correction. Until then, it’s just a sucker market for shorts. Right now, the market is down a whopping 3% from the recent top. Heaven forfend the horrors of this drop. ZH noted that there’s only $25b left in the Fed’s fuel injection system and it will be used up in two weeks at the current rate. That might be when it breaks.

  96. Andy T says:

    this is all very short term and intraday stuff, but I can see a completed “five” from this mornings highs…it targets around 997, so I’m thinking that we get some kind of rally….i break down below 995 would start looking pretty bad.

  97. Mannwich says:

    @cvienne: I’m on the ZSL bandwagon too. Not that thrilled so far.

  98. hopeImwrong says:

    Market is absorbing buying here quite well.

    Let see if the PPT is real. Looks like they can’t even get a pop with this low volume mid-day.

  99. Bruce N Tennessee says:

    http://finance.yahoo.com/news/Clunkers-boosts-Ford-sales-apf-4058866656.html?x=0&sec=topStories&pos=main&asset=&ccode=

    Clunkers boosts Ford sales; Chrysler sales fall

    Chrysler sales fall! With the cash for clunkers!

    Trying to sell buggy whips when everyone else has moved to bullet trains….

  100. cvienne says:

    @Andy T

    997 would be right on Harry’s 2nd BUY point (4% from the 1039 high), so you’re sure to see a FLOOD of buying there!