World Financial Report – May 18th, 2012

Radio Show Newsletter

• Charts of the Week-Quotes-Quick Hits
• RareColoredDiamonds.com
• HSFineAuctions.com
• Gold
• Silver
• Platinum-Palladium
• Sovereign Debt
• U.S. Debt-Deficit
• JP Morgan-Banking
• Real Estate

WORLD FINANCIAL REPORT ON RADIO MAY 18 2012

WWPMC.COM PRECIOUS METALS TELEPHONE # 1-866-623-2002

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HSFINEAUCTIONS.COM NEXT AUCTION MAY 22 8PM EASTERN 6PM MOUNTAIN

CHARTS OF THE WEEK-QUOTES-QUICK HITS

-CHART OF THE WEEK: How Stocks Have Tumbled Around The World. Bespoke Investment Group released a chart showing how major market indices across the globe have fallen since their 2012 peaks. To the surprise of nobody, Spain and Italy have dropped more than the rest of the group. The Eurozone in general has seen the biggest percentage drop-off from ‘12 peak highs, with China and the United States performing the best relative to other markets. The United States also has the most recent peak, with Spain having the furthest. Read more here-http://read.bi/JgNLdu

www.chartoftheday.com

-CHART OF THE WEEK: Greece’s Stock Market Collapse vs. The Crash Of 1929. It’s 1929 all over again, but not in the U.S. As Greek markets hit levels not seen since the 90s, we thought it appropriate to look at how the Dow performed during the Great Depression. The results, both suffered huge declines. But the big difference: where as the U.S. began to pick back up five years after its fall, Greece continues to tumble lower. Below, Athex performance from the 2007 peak compared to the Dow Jones Industrial Average and its 1929 peak. Read more here-http://read.bi/JdTXSF

www.chartoftheday.com

-CHART OF THE WEEK: El Nino and La Nina. The continental US posted record warmth from May 2011 through April and drought conditions spread across more than a third of this area during the first months of 2012. Today’s chart is a world map with diagrams explaining how the El Nino weather phenomenon affects precipitation, including a factbox on effects of El Nino and La Nina. Read more here-http://bit.ly/ILAsvw

www.chartoftheday.com

-Scottish infants will be forced to work until they are 77 years old before they become eligible for a state pension, according to a new report that paints a grim picture of aged toil. The age at which the public becomes eligible for a state pension is set to rise to 77 for today’s children, with the following generation likely to work until they are 85. Read more here-http://bit.ly/JIuJc4

-”I would defer to Jim Sinclair, who I have the utmost respect for on this one. He has said for a long time that the derivative situation ‘guarantees quantitative easing to infinity,’ which is one of the great statements of all-time. I think this JP Morgan revelation just confirms that everything Jim’s been saying for a long time on this subject is dead right. The fact that we will have QE to infinity would suggest that an intelligent person would be buying every single ounce of gold and silver he can get his hands on at these prices.” John Embry

-Several on FOMC Said Easing May Be Needed on Faltering. Several Federal Reserve policy makers said a loss of momentum in growth or increased risks to their economic outlook could warrant additional action to keep the recovery going, minutes of their last meeting showed.

“Several members indicated that additional monetary policy accommodation could be necessary if the economic recovery lost momentum or the downside risks to the forecast became great enough,” according to minutes of the Federal Open Market Committee’s April 24-25 meeting released Wednesday in Washington.

Central bankers last month affirmed their plan to hold interest rates near zero at least through late 2014 as they sought to push down an unemployment rate that has stayed above 8 percent for more than three years. Chairman Ben S. Bernanke said following the meeting that policy makers “remain entirely prepared” to take additional actions if necessary. Read more here-http://bloom.bg/Js6oJo

-Softening, Merkel Says She Is Open to Stimulus for Greece. Chancellor Angela Merkel of Germany said Wednesday that she was ready to discuss stimulus programs to get the Greek economy growing again and that she was committed to keeping Greece in the euro zone, signaling a softer approach toward the struggling country. Read more here-http://nyti.ms/KzSEMz

-Bill Gross: Euroland Is Just A Tumor, And The Cancer is Going Global. The world’s financial markets seem obsessed with daily monetary and fiscal policy evolutions in euroland which form the basis for risk on/risk off days in the marketplace and the overall successful deployment of carry strategies so important to asset market total returns.

Euroland is just a localised tumour, however. The developing credit cancer may be metastasised, and the global monetary system fatally flawed by increasingly risky and unacceptably low yields, produced by the debt crisis and policy responses to it. Gross doesn’t specify what change lies ahead, but he says it may involve a shift away from the dollar and toward hard assets. Read more here-http://read.bi/K9WSYn

-Paul Krugman: Here’s How The Whole Eurozone Could Unravel In Just A Matter Of Months. It basically goes like this: Greece leaves the euro “very possibly next month.” That would lead to a massive run on Italian and Spanish banks. There would be massive borrowing from the ECB to prevent a banking collapse. At which point Germany has to decide: Shoulder a major burden for the debts of Spain/Italy, etc., or let it all go. He concludes: “And we’re talking about months, not years, for this to play out.” Read more here-http://read.bi/KywWse

-S&P: Here Comes The ‘$46 Trillion Perfect Storm.’ In the first of a series of reports on corporate credit markets, S&P highlights a truly unsettling downside scenario that could derail the “fragile equilibrium” in credit markets. The title of the report: The Credit Overhang: Is A $46 Trillion Perfect Storm Brewing? S&P estimates up to $46 trillion in refinancing and new financing needs by companies over the next four years. The worry is whether or not the credit markets will be able to handle it. Read more here-http://read.bi/M41XWT

-Bill Fleckenstein: Nothing Will Change Until Change Is Forced Upon Us By A Crisis. Where our current path is taking us has been predictable for quite some time, and I think that continues to be the case. Unfortunately, we have elected officials who are completely incompetent, if not criminal, and the Fed is even worse. None of that is going to change until change is forced upon us (i.e., them) by a crisis. So while events seem to play out at a glacial pace, where we are headed couldn’t be clearer. Read more here-http://read.bi/IUsjVD

-Obama: ‘Sometimes I Forget’ Magnitude of the Recession. Read more here-http://bit.ly/JFqe0Y

-Bye bye unemployment benefits. More than 200,000 long-term jobless Americans will lose their unemployment checks this week, when eight states roll off the federal extended benefits program. Nearly half of them live in California, and the rest reside in Florida, Illinois, North Carolina, Colorado, Connecticut, Pennsylvania and Texas. Read more here-http://cnnmon.ie/INw532

-Frightening IMF Report Warns That Oil Prices Could Double By 2022. Read more here-http://read.bi/JhsSig

-Highest & Cheapest Gas Prices by Country. Read more here-http://bloom.bg/KxT1GI

-Truck Cancellations Hit Two-Year High as Rebound Slows. North American heavy-truck orders are hitting a speed bump, with cancellations jumping to the fastest pace in about two years as a stagnating economic recovery prompts fleet owners to delay or scrap purchases. Buyers are being squeezed by slower cargo volumes, tighter credit and diesel fuel prices exceeding year-earlier levels even with recent declines. Read more here-http://bloom.bg/IXeJVe

-Yahoo confirms CEO is out after resume scandal. Yahoo CEO Scott Thompson is out after it was found he padded his resume with an embellished college degree, ending his term at the company after just four months. Read more here-http://cnnmon.ie/J9S73J

-Facebook Timeline: From Dorm Room to IPO. Watch more here-http://bloom.bg/JzDDMT

-Facebook Raises $16 Billion in Record Technology Offering. Read more here-http://bloom.bg/KpCxOU

-More spies in U.S. than ever, says ex-CIA officer. A former top CIA covert officer, Hank Crumpton, who ran one of the spy agency’s secret domestic networks says there are now more foreign spies on U.S. soil than at the peak of the Cold War. Read and watch more here-http://cbsn.ws/KZcEum and http://cbsn.ws/ISXP6l

-Plans to strike Iran “ready,” says U.S. Israel envoy. U.S. plans for a possible military strike on Iran are ready and the option is “fully available”, the U.S. ambassador to Israel said, days before Tehran resumes talks with world powers which suspect it of seeking to develop nuclear arms. Read more here-http://reut.rs/JQjy1o

-Iran attack decision nears, Israeli elite locks down. Time for that decision is fast running out and the mood in Jerusalem is hardening. Adding to the international pressure, U.S. ambassador to Israel Daniel Shapiro said this week American military plans to strike Iran were “ready” and the option was “fully available”. Read more here-http://reut.rs/Jj1652

-13% in U.S. foreign-born, a level last seen in 1920. Of 40 million born abroad, the greatest number lives in California, with large populations in New York, Texas and Florida, Census Bureau report says. Read more here-http://lat.ms/IY5pRT

-Even More American Families Report Having No Savings At All. Read more here-http://read.bi/Kd8Oqz

-Giants Unveil White Gold ‘Restaurant Ring’ From Super Bowl Title. New York Giants defensive end Justin Tuck said he wanted the team’s Super Bowl championship jewelry to be a “restaurant ring,” big enough to be seen from every corner of any eating establishment. Read more here-http://bloom.bg/JxCBkp

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RARECOLOREDDIAMONDS.COM

-Rarecoloreddiamonds.com Featured Diamond of the Week. This week’s Diamond is a 10.01 Carat Radiant Cut Fancy Intense Yellow Internally Flawless Diamond. Harold Seigel-See video of the Featured Diamond here-http://bit.ly/J0UZC7

-Colored Diamond Auction Results: Sotheby’s Magnificent Jewels and Noble Jewels, Geneva May 14-15 2012. See more auction results here-http://bit.ly/K1FLvk

-’Legendary’ Beau Sancy diamond sells for $9.57 million at Sotheby’s auction. 35-carat stone played role in fluctuating fortunes of European royalty for 400 years. A diamond coveted by kings, queens and princes for centuries, used to reinforce alliances between nations and pawned to pay off royal debts, sold for 9 million Swiss francs ($9.57 million) at Sotheby’s in Geneva on Tuesday night.

The auction house called the “Beau Sancy” diamond “one of the most important historic diamonds ever to come to auction”, reflecting its role in the fluctuating fortunes of Europe’s royal families for more than 400 years. “The legendary Beau Sancy is a truly magical stone that has entranced generations of royal owners and continues to exert a powerful influence over all who see it,” said David Bennett, Sotheby’s chairman of jewelry in Europe and the Middle East, in a statement.

“Its supreme historical importance was reflected tonight in the strength of the bidding and the remarkable result realized.” No fewer than five bidders competed for the stone, driving the price to nearly five times above its pre-sale low estimate of 1.85 million Swiss francs in an eight minute battle before it was bought by an anonymous bidder, Sotheby’s said.

A second historic diamond, a 7.3-carat “fancy yellow” formerly belonging to Charles Edward Stuart, one-time pretender to the thrones of Great Britain and Ireland, sold to a telephone bidder for 902,500 francs ($968,085) including the buyer’s premium. Read more here-http://on.today.com/JsQvlU and http://bit.ly/JHQycH

-For the Rich, Diamonds are the New Stocks. New studies show that the wealthy are pulling back from stocks and stashing more of their money into real estate, art and even diamonds. A recent survey from Harrison Group and American Express Publishing found that the wealthy have cut back their allocations to stocks dramatically since the economic crisis.

In 2007, the top one percent invested 76 percent of their savings into stocks and financial investments. Now, it’s closer to 46 percent. That may not sound like an important drop. But the wealthiest one percent own more than half of the individually held stocks in the U.S. When they stop buying, it matters. So what are the wealthy doing with their money?

Increasingly, they’re looking for hard assets, collectibles and real-estate. Just consider the headlines from the past week. Two trophy apartments in Manhattan sold for more than $50 million. This week Sotheby’s sold $108 million worth of collectible jewelry in Geneva.

The chart-topper was a the $9.7 million sale of the Beau Sancy diamond, a 34.98 carat diamond that was first worn by Marie de Medici in 1610 at her coronation as Queen Consort of Henry IV. Wealth experts say that while diamonds, mansions, art and wine may not appreciate as quickly as stocks, these less liquid assets are also unlikely to crash in value as quickly. And wearing the Beau Sancy or looking at a Picasso on the wall is a lot more pleasurable than watching the ticker. Read more here-http://bit.ly/K9wJsz

-Diamond prices seen up in 2012 on sparkling demand. The Diamond industry gets most of its production from 20 or so mines, no large discovery has been made in 15 years. Read more here-http://reut.rs/JAj6nH

-Queen of diamonds: Together for the first time, the royal gems all cut from one legendary stone. Of all the celebrations planned for the Queen’s Diamond Jubilee, it is perhaps the most fitting. Stunning jewels created from the largest diamond ever found are to be collected together in public for the first time in a unique exhibition at Buckingham Palace. Read more here-http://bit.ly/JGYM4V

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HSFINEAUCTIONS.COM

-Next Auction is May 22 2012, 8pm Eastern-6pm Mountain. See more here-http://bit.ly/KPdhnt

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GOLD

-Your Greatest Enemy Is Your Emotions. Your greatest enemy now is your emotions. In fact it is the only tool that can be used against you. If you have not taken margin your worst case scenario is the pain of quoting. I have suggested at various times since $248 gold that you dig a hole, jump in and pull a rock over your head. Each time I did I was derided thoroughly by the shorts.

Each time I did the price of gold went significantly higher. The price of gold is going much higher. The problems that give gold its reason to go higher are growing, not waning. The entire thesis for gold is illustrated by the three Skiers posted on the weekend. There is no political will for the results of an EU break up. There is no way the Fed is going austere as the austerity is exploding in the face of Europe politically.

There has been no decline in the amount of notional value of OTC derivatives outstanding. If you think Morgan is the only derivative problem out there you are quite wrong. Stay the course, stop looking every few minutes, and quiet your emotions. Gold will trade at and above $2111 after this reaction is completed. Jim Sinclair

-Grandich, Sinclair do hand-holding for monetary metals investors. Read more here-http://www.gata.org/node/11376

-Gold is trading at its lowest levels since December, but Morgan Stanley analysts say gold’s bull market “is not over” and that they are buyers of the metal at current prices. The recent sell-off in prices is “consistent with distressed selling and long liquidation,” but they think prices will recover in the coming weeks. They say the factors that have supported gold remain in place: the European sovereign debt crisis and low interest rates. They also note that the low level of speculative net-length in the CFTC reports is a positive sign. Read more here-http://bit.ly/KgLtpM

-Egon von Greyerz: Gold what correction? Read more here-http://www.gata.org/node/11352

-Gold Pullback Presents Opportunity in the Long Run. If you have a long-term time horizon, the Fast Money at CNBC pros consider the current weakness to be an opportunity. “What I think we’re seeing right now is the decline squeezing some big players out of their positions,” says trader Guy Adami. However, he sees the growing uncertainty and the ‘race to debase’ as two powerful bullish catalysts. “A year from now, I expect gold will be trading north of $2000,” he says. Trader Steve Grasso is also positioned for upside. “I’m long Gold” he says, “and I’m not selling my position.” Read more here-http://bit.ly/JCzggz

-Gold ‘going to $3,000′. Markets are repeating the downturns of 2010 and 2011, and it is time to search for safety, Gluskin Sheff’s David Rosenberg tells James Mackintosh, FT investment editor. That means gold eventually reaching $3,000 an ounce. Watch more here-http://on.ft.com/IO0TnZ

-Miners will need $3,000 gold price to be profitable, WGC head says. Sharp increases in mining costs mean gold will need to reach $3,000 an ounce in five years for the industry to stay profitable, World Gold Council chief executive Aram Shishmanian said. Miners currently needed a gold price of $1,300 to survive, Shishmanian said, but faced steep rises in mining costs, along with the cost of dividends and host nation taxes. “If this continues for the next five years the gold price needs to be at least $3,000 just to stay in the business,” he said. However, he was optimistic sustained demand would drive prices higher over the long term. Read more here-http://www.gata.org/node/11367

-Gold must stay above US$1500 to sustain the gold industry Holland. Gold Fields CEO, Nick Holland believes that gold’s fundamentals remain intact and that patient investors will be rewarded. Read more here-http://bit.ly/JzMmhW

-Gold Trades $2000 by Year’s End: Eric Sprott. Sprott is a hedge fund manager who’s long precious metals and mining stocks and he has no intention of changing that strategy anytime soon. Despite the sharp decline in gold, he tells us by year’s end his price target for gold is $2000.

“We’re seeing statistics on physical gold purchases that argue very strongly for the price of gold to go up,” he says on CNBC’s Halftime Report. In other words, Sprott believes there are plenty of buyers in the market. For example, “Exports of gold from Hong Kong into mainland China went up 600% year over year in the month of March. And that’s not just a one month phenomenon.” “In the last 9 months China has been buying massive amounts of gold,” Sprott says.

Also, Sprott points to gold’s historical performance. “Gold was the investment of the last decade,” he says. “It blew away almost any other investment you could have made.” Although he concedes gold is currently ‘in a funk’ he expects sooner rather than later, gold to resume its march higher. Read more here-http://bit.ly/LeUWzy

-Alasdair Macleod: Gold bugs will be vindicated. Alasdair Macleod argues that when the debt trap is sprung on profligate governments, not just their bonds but their currencies too will be wrecked, and “gold bugs will be vindicated.” Read more here-http://www.gata.org/node/11354

-Ben Davies: 3rd LTRO Coming & Fed to Power Up Swap Lines. Gold bearish sentiment is becoming extreme and with solid physical demand we are not over-thinking the market here. We are in a big range call it 1550-1850. Moves lower will be short lived. Gold mining costs are really $1250 to $1350 and this is the ultimate floor in market. Talk of $1,000 gold is only applicable if all assets collapse in deflationary fall out. In such scenario remember your purchasing power is what is important not nominal prices. Read more here-http://bit.ly/K2qoO5

-Adam Hamilton: Gold Bull Climaxes. Gold has had a rough time lately, grinding relentlessly lower. Such technical weakness has naturally spawned increasingly bearish psychology. This has led to a fringe view growing in popularity that gold’s mighty secular bull has already given up its ghost. If these new-bear arguments are correct, gold’s secular bull had to peak last August. But was that latest topping gold-bull-climax worthy? Not even close.

The bottom line is gold’s latest secular bull almost certainly didn’t climax last summer. Such major bulls need an extreme psychological event to end them. And it comes in the form of a popular speculative mania and vertical parabolic ascent. While gold was indeed overbought last August, the resulting topping looked absolutely nothing like the previous gold-bull climax of several decades ago.

And if gold’s bull isn’t over, then gold is destined to power to new all-time highs sooner or later. And once that inevitable recovery gets rolling, capital will flood back into this metal and the stocks of the companies that bring it to market. So if you can stand strong as a contrarian and fight the popular fear gold’s latest correction spawned, there is a vast smorgasbord of incredible bargains in the precious-metals realm. Read more here-http://bit.ly/J9bivt

-Leeb: This is Why World Markets are Incredibly Unstable. We are in a real mess and it cannot be sorted out in any meaningful way. It’s a matter of when people wake up and start fleeing towards gold. I assure you that five years from now, when you look at this period (in gold), it won’t look like anything on the chart.

But living through this kind of pain is very difficult because you see how it’s going to work out, but you don’t see the exact timing. “You may see a situation where gold is at $1,400, and then two months later it’s at $2,500. That’s just one of many possible scenarios. We don’t know the bottom for sure right now, but one thing is certain, you are going to see new highs in gold. Investors just need to hang in there.

So you are going to have a massive move in real assets, there is no doubt about that. If investors step back and look at this from a longer-term perspective, they will realize that politicians feel the only way out of this mess is to print more money. After the money printing will come the inflation. It will be higher inflation than anything we’ve seen in the post-World War II period and it will send gold, silver and all commodities skyrocketing. But I can’t deny it, this is an incredibly painful transition.” Read more here-http://bit.ly/JRTgtC

-Richard Russell: The Next Sure Thing. I consider gold outside my regular investments. I don’t trade bullion. I hold it as a unit of wealth. I know that one hundred years from now, bullion will possess purchasing power. The dollar? I don’t know. I do know that the history of every fiat currency is a descent into worthlessness. No fiat money has ever survived.

Verdict be Out of all stocks and be very patient. I don’t like the undertone of this market one bit; I think the stock market is under subtle and quiet distribution. Holding any stocks over time will be a loser so it’s simple don’t hold them; stay in cash and gold coins until I think of something better. Read more here-http://bit.ly/Jbp37F

-John Embry: This is One of the Greatest Statements of All-Time. “What they want to do is keep it (gold) in a range. Right now that range is $1,550 to $1,900. Can it go below $1,550? Sure, in the short-run it could. But the fact is the big move coming from these levels is going to be to the upside. Trying to pick a bottom is always a difficult thing to do. Put it this way, you’re a lot closer to a significant bottom than you are to a top.” Read more here-http://bit.ly/KGuCik

-Caesar Bryan: What Investors Need to Know About Gold & the Mining Shares. “You know we’ve seen these type of corrections in this gold bull market before. This reminds me a little bit of 2008, in the sense that there was this selling of quality assets across the board, in an effort to raise dollars.”

The background of all of this has been the possible disruption in the eurozone by Greece exiting the euro or some other type of credit event taking place. On top of that it is a seasonally weak period for gold. There were issues in India on the physical off-take (because of the tax).

Also, as the dollar has gained strength, the knee-jerk reaction is for gold to come down. As gold has breached key technical’s, you’ve had traders selling and shorting more. The fundamental story for gold has not changed, and if it has, it has changed for the better. There is simply too much debt, both here and in Europe. In this environment of too much debt, you are faced with defaults on one hand or money printing and inflation on the other. Both scenarios are positive for gold, but we have to endure these sharp pullbacks. Read more here-http://bit.ly/JsKohk

-James Turk: Expect Tremendous Chaos, Europe Deteriorating Rapidly. My opinion is that holding physical gold, with no counterparty risk, and continuing to accumulate more on dips, is how savvy investors are positioning themselves. The same logic also applies to silver. Right now, the gold market is in the middle of a battle between the paper traders and the holders of physical metal.

We are seeing huge Chinese import stats for physical gold and robust demand elsewhere for physical metal. So gold will eventually win this battle, just like it has for more than a decade. The reason gold will prevail is there are oceans of paper money swirling around, but so little physical gold. Read more here-http://bit.ly/JtDR82

-Gold bull run set for 12th consecutive year, WGC. Read more here-http://reut.rs/ILPzoF

-China May Surpass India as Biggest Gold Market, WGC Says. Gold demand in China may surge as much as 30 percent this year as rising incomes boost consumption, helping the country topple India as the world’s largest bullion market on an annual basis, according to the World Gold Council. Read more here-http://bloom.bg/JxKBlx

-Why Morgan Stanley believes gold may hit $2,175 in 2013. Read more here-http://bit.ly/JbrYDX

-While the buying power of fiat money has fallen by 96% under America’s greatest failure (the Fed), the buying power of Gold has increased 700%. This equals the ‘invisible’ robbing of the Poor and Middle Class by the Fed. Let me give you an example of the difference between average wages in paper fiat over time, compared with equivalent ounces of Gold. Jsmineset.com

-Average wages in 1959 were $5,016 or 143oz of Gold

-Average wages in 1977 were $15,000 or 120oz of Gold

-Average wages in 1999 were $28,970 or 104oz of Gold

-Average wages in 2008 were $41,335 or 53oz of Gold

-Brodsky and Quaintance: Central banks aim to redistribute gold and push it way up. Read more here-http://www.gata.org/node/11373

-Commodity Online withdraws IMF gold purchase report. Read more here-http://www.gata.org/node/11366 and http://www.gata.org/node/11357

-Germans fret about their foreign gold reserves. Germany has gold reserves of just under 3,400 tons, the second-largest reserves in the world after the United States. Much of that is in the safekeeping of central banks outside Germany, especially in the US Federal Reserve in New York. One would think that with such a valuable stash, worth around E133 billion ($170 billion), the German government would want to keep a close eye on its whereabouts. But now a bizarre dispute has broken out between German institutions over how closely the reserves should be checked. Read more here-http://www.gata.org/node/11370

-German Parliament wants accounting of gold reserves; Bundesbank resisting. Read more here-http://www.gata.org/node/11362

-Stoferle, Macleod discuss clamor for gold reserve repatriation. Listen here-http://www.gata.org/node/11368

-Japanese pension fund buys gold but only the ETF kind. Read more here-http://www.gata.org/node/11375

-FT’s Gillian Tett provides the rationale for gold price suppression. Read more here-http://www.gata.org/node/11351

-Yukon gold rush isn’t slowing but watershed raises concerns. Read more here-http://www.gata.org/node/11356

-Proactive Investors interviews GATA Chairman Murphy. Listen here-http://www.gata.org/node/11369

-Pat Heller: U.S. govt. agency is specifically authorized to rig gold market. Read more here-http://www.gata.org/node/11361

-MineWeb: Indian government aims to ‘throttle’ gold demand. Read more here-http://www.gata.org/node/11358

-Peter Grandich renews offer of million-dollar bet on gold’s reaching $2,000 before $1,000. Read more here-http://www.gata.org/node/11372

-Rare gold coin may fetch up to $4 million at Georgia auction. Read more here-http://fxn.ws/Jh0BIF

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SILVER

Gold to silver ratio at 50 to 1 with gold at $2,000 the silver price would be $40.00

Gold to silver ratio at 40 to 1 with gold at $2,000 the silver price would be $50.00

Gold to silver ratio at 30 to 1 with gold at $2,000 the silver price would be $66.67

Gold to silver ratio at 20 to 1 with gold at $2,000 the silver price would be $100.00

Gold to silver ratio at 15 to 1 with gold at $2,000 the silver price would be $133.33

Gold to silver ratio at 50 to 1 with gold at $2,500 the silver price would be $50.00

Gold to silver ratio at 40 to 1 with gold at $2,500 the silver price would be $62.50

Gold to silver ratio at 30 to 1 with gold at $2,500 the silver price would be $83.33

Gold to silver ratio at 20 to 1 with gold at $2,500 the silver price would be $125.00

Gold to silver ratio at 15 to 1 with gold at $2,500 the silver price would be $166.67

-Putting Faith in Holding Physical Metals: Eric Sprott. RI: So the precious metals are a way to protect the wealth? ES: Because there is no counterparty risk. If you own a coin in your hand you don’t have to worry about some institution, such as Dexia, which over a weekend suddenly had to get bailed out by three governments. Just out of nowhere. It was so instantaneous it was unbelievable. Imagine if they didn’t bail them out. The depositors had to fear for their deposits. That’s what the fear is that we’ve expended so much money trying to support the financial system and it’s very debatable whether the powers that be will win in the end. I suggest they will lose. Read more here-http://bit.ly/IVRMxX

-Eric Sprott’s Presentation from New York Hard Assets Conference. Read more here-http://bit.ly/L3DFap

-Peter Cooper: How euro money printing is going to drive up gold and silver prices. Those investors panicking now and selling their gold and silver will feel as sick as dogs when they see what happens next to prices. For after a bleak patch lasting at most a couple of months the eurozone authorities will start their money printing presses rolling and hey what is the one money that they can never print? Read more here-http://bit.ly/JNSH47

-Hubert Moolman: Silver Update. In my latest gold update, explained why I think this week might bring the bottom for gold. My analysis for silver also suggests that we could see a bottom for silver this week. I believe that it is very likely that we will get that massive rally soon.

-Dr. Jeffrey Lewis: The Yuan, Rupee and Physical Silver Demand. Read more here-http://bit.ly/L372K2

-Michael Kilbach: The Power of Relative Value & the Silver Market. Read more here-http://bit.ly/JyGQu3

-Rick Ackerman: Is Fear of Deflation Sapping Gold and Silver? Is that why gold and silver have been taking such a beating lately? We’ll concede that a hyperinflation lies somewhere down the road, since sovereign debt will have to be retired in some fashion. But perhaps bullion is telling us that, more immediately, the central banks lack the guts to go all-out in their effort to hold deflation at bay. Either that, or investors think it may no longer be possible to do so. Read more here-http://bit.ly/J2MP7M

-Keith Weiner: Backwardation in Gold And Silver. Backwardation is when the price of a futures contract is lower than the price in the spot market. Read more here-http://bit.ly/Lc4M8X

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PLATINUM-PALLADIUM

-Platinum to remain in surplus, palladium to move to deficit in 2012: Johnson Matthey. Read more here-http://bit.ly/Ji1fFW

-Johnson Matthey: China, India Lead Rise In Global Platinum Jewelry Demand In 2011. Read more here-http://bit.ly/K9td1S

-PGM investment out of favour. For many investors PGM is not as attractive as gold from an investment point of view in this kind of market because it is not a pure precious metal play. Read more here-http://bit.ly/K9sMER

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SOVEREIGN DEBT

-MAP OF THE WEEK: A Complete Color-Coded Guide To Elections, Growth And Unemployment In Europe. Read more here-http://read.bi/KcOghW

-Draghi Signals ECB Won’t Keep Greece in Euro Area at Any Cost. European Central Bank President Mario Draghi indicated that while his “strong preference” is that Greece stays in the euro area, the bank won’t compromise on its principles to prevent an exit. The comments are the closest Draghi has come to conceding Greece could leave the euro region. Greece faces a fresh election on June 17 that may boost parties opposed to the conditions of its international bailouts, raising the specter of its exit. Read more here-http://bloom.bg/JqUzmO

-Greece will run out of money soon, warns deputy prime minister. Greece’s deputy prime minister has said the country will run out of money in six weeks unless it honours its bitterly-disputed EU bailout deal. Read more here-http://tgr.ph/Ki5IXX

-What Happens When Greece’s Money Runs Out? Speculation about an endgame in Greece’s protracted crisis has flooded markets with euro exit scenarios this week, but investors reckon there’s still every chance that uncertainty will simply drag on for months. Read more here-http://bit.ly/Jp2zoa

-Greek President Told Banks Anxious as Deposits Pulled. Greek President Karolos Papoulias was told by the nation’s central bank chief that financial institutions are worried about their survival as Greeks pull out euros amid a deepening political crisis. Central bank head George Provopoulos told Papoulias that Greeks have withdrawn as much as 700 million euros ($891 million) and the situation could worsen, according to the transcript of the president’s meeting with party leaders on May 14 that was published Tuesday. “Provopoulos told me that of course there’s no panic but there’s great fear which can evolve into panic,” the president said. Read more here-http://bloom.bg/JRByJX

-Greeks not alone in bank savings exodus. Worries about a run on Greek banks has rattled Athens this week, after savers withdrew at least 700 million euros on Monday alone, according to minutes of Papoulias’s comments to political leaders posted on the presidency’s website.

It is not only Greeks who are worried about their savings. Data shows depositors have also taken flight from banks in Belgium, France and Italy. And on Thursday, Spain’s Bankia was reported to have seen more than 1 billion euros drained by its customers in the past week.

Greeks are afraid they could be hit by rapid devaluation if the country leaves the European single currency, while customers at Bankia have been rattled by the government’s takeover of the recently floated bank on May 9 and growing uncertainty about the final cost of Spain’s banking reforms.

In Greece, sources at two banks told Reuters that withdrawals on Tuesday had taken place at about the same rate as on Monday. “The entire Greek banking system is in danger: the banks are now facing the worst of all outcomes, deposit flight,” said Arnaud Poutier, deputy CEO of IG Markets France.

That flight started at least two years ago, as the debt crisis grew more serious. Greece’s banks have lost 72 billion euros in deposits since the start of 2010, or about 30 percent, according to data compiled by Thomson Reuters. Read more here-http://reut.rs/JhV4k7

-Greek Vote Escalates Crisis as Schaeuble Raises Euro-Exit. Greece’s decision to return to the ballot box in the search for a government unleashed a hazardous new phase in Europe’s debt crisis, with German Finance Minister Wolfgang Schaeuble calling the vote a referendum on whether the country stays in the euro. Read more here-http://bloom.bg/JGl71Z

-Greece Makes Repayment on 435M Euro Bond Coming Due. Greece is to repay 435 million euros ($556 million) of bonds falling Tuesday as the nation faces new elections after leaders failed to form a government. Greece will pay the principal and interest on foreign law notes which weren’t tendered into the country’s debt restructuring, the Athens-based Finance Ministry said. The repayment won’t prejudice future decisions on other untendered bonds, the ministry said. Read more here-http://bloom.bg/JGh6dF

-ECB stops operations with some Greek banks. The European Central Bank has stopped providing liquidity to some Greek banks as they have not been successfully recapitalized, the ECB said on Wednesday. Read more here-http://reut.rs/JgITFa

-Influential German magazine calls for Greek exit from euro. “Acropolis, Adieu! Why Greece must leave the euro,” reads the front-page headline of Germany’s most influential magazine Der Spiegel, joining a chorus of voices in Europe’s paymaster country suggesting an exit may now be the best option. Read more here-http://reut.rs/JwDLcp

-IMF’s Lagarde Says Greek Euro Exit Would Be Expensive. International Monetary Fund Managing Director Christine Lagarde said a Greek exit from the euro area would be “extremely expensive” and hard. Read more here-http://bloom.bg/JtuIdJ

-Cost of Greek exit from euro put at $1tn. UK government making urgent preparations to cope with the fallout of a possible Greek exit from the single currency. Read more here-http://bit.ly/JKBiLh

-Ambrose Evans-Pritchard: Debt crisis, Greek euro exit looms closer as banks crumble. A tsunami of capital flight from Greece threatens to overwhelm the authorities, forcing the country out of the euro before fresh elections in June. Read more here-http://tgr.ph/Lc8lfw

-Banks prepare for the return of the drachma. Banks are quietly readying themselves to start trading a new Greek currency. Some banks never erased the drachma from their systems after Greece adopted the euro more than a decade ago and would be ready at the flick of a switch if its debt problems forced it to bring back national banknotes and coins. Read more here-http://reut.rs/Jo9EUx

-”Europe Has Started The Endgame” And Charles Biderman Says “The US Is Next.” Read and watch more here-http://bit.ly/JWIu3K

-High earners say au revoir to France. As summer draws near, thoughts of the well-heeled Parisian turn to Le Grand Départ. Read more here-http://tgr.ph/J8BHUV

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U.S. DEBT-DEFICIT

-CHART OF THE WEEK: Goldman Shows What Happens If We Fly Off The Fiscal Cliff. How big of a hit would the economy take if we flew off the fiscal cliff? A new note from Goldman’s Alec Phillips walks through various scenarios ranging from everything extended (all stimuli and tax cuts) to everything expires (all the spending cuts and tax hikes kick in). The worst case scenario: If everything expires, and we runs straight off the fiscal cliff, a hit of about 4% to GDP. Read more here-http://read.bi/JMbEpD

www.chartoftheday.com

-CHART OF THE WEEK: ‘U.S. Spends More Per Person than Portugal, Italy, Greece, or Spain.’ Read more here-http://bit.ly/JqvFDJ

-The U.S. has an unsustainable and dangerous fiscal trajectory: Robert Rubin. Former Treasury Secretary Robert Rubin states that the country’s deficit will lead to some form of major duress like high inflation, a long period of very slow economic growth and, most likely, a serious financial and economic crisis. Read more here-http://bit.ly/K7gZJt

-Treasury Demand Shows Deficits Irrelevant With Record Yields. The inability of the U.S. government to reduce record debt and deficits is being rewarded in the bond market. For all the concern in Washington that the nation is piling on too much borrowing as the deficit exceeds $1 trillion for a fourth straight year, investors are showing insatiable demand for its bonds.

They snapped up the 10-year notes sold by the Treasury Department at an auction last week at a yield of 1.855 percent, a record low for that maturity. Trading has slowed to levels last seen before the global financial crisis began in 2007 as money managers sock away the securities.

“Are we likely to get out of this unusually low yield environment anytime soon? I don’t think so,” said David Gerstenhaber of Argonaut Management. While deficits will matter someday, investors’ desire to preserve the value of their capital is capping yields, he said. Read more here-http://bloom.bg/JNfAYF

-Boehner Demands Spending Cuts for Any Debt Limit Increase. House Speaker John Boehner revived Republicans’ insistence that any increase in the nation’s debt limit be matched by at least as much in spending cuts, positioning his party for a renewed standoff with Democrats over the federal budget. Read more here-http://bloom.bg/JQtPfn

-Democrats See Leverage as Congress Nears Budget Cliff. Congressional Democrats say they can prevail in a year-end fiscal showdown with Republicans, so long as President Barack Obama and Democrats hold firm in their insistence on higher taxes for the rich. The Democrats are emboldened by the president’s stated refusal to renew expiring income tax cuts for top earners, and they welcome a sequence of deadlines that they say will diminish Republicans’ bargaining power. Treasury Secretary Timothy F. Geithner said that Congress probably won’t need to raise the federal debt ceiling until 2013, allowing a December tax debate to occur without the risk of an imminent default. Read more here-http://bloom.bg/JIORep

-California Deficit Swells to $16 Billion, Governor Says. California’s budget deficit has swelled to $16 billion after tax collections trailed projections amid the tepid economic recovery, Governor Jerry Brown said in a comment on his Twitter post. The shortfall has widened from the $9.2 billion Brown estimated in January, after lawmakers resisted the Democrat’s call for cost cuts, the federal government blocked other reductions and April income-tax revenue missed budget forecasts by $2 billion. Read more here-http://bloom.bg/JAEdEH

-CA. Gov. Jerry Brown Announces $8.3 Billion in Spending Cuts. California Governor Jerry Brown released a revised state budget on Monday, calling for $8.3 billion in spending cuts in an attempt to address the state’s $15.7 billion budget shortfall. Read more here-http://read.bi/IUoMqc

-New Jersey Tax Revenue Coming Up Way Short Of Expectations. Read more here-http://read.bi/KcJMYD

-Needy States Use Housing Aid Cash to Plug Budgets. Hundreds of millions of dollars meant to provide a little relief to the nation’s struggling homeowners is being diverted to plug state budget gaps. Read more here-http://nyti.ms/KukdH4

-CHART OF THE WEEK: Debt Shows College Meltdown to Cuban. Colleges and universities are due for a meltdown as students are increasingly saddled with debt they can’t repay, according to Mark Cuban, the billionaire owner of the HDNet cable-television channel. Read more here-http://bloom.bg/JGhDwf

-Mark Cuban: The Student Debt Crisis Is The Biggest Economic Problem In America. It’s far too easy to borrow money for college. Did you know that there is more outstanding debt for student loans than there is for Auto Loans or Credit Card loans? That’s right. The 37 million holders of student loans have more debt than the 175 million or so credit card owners in this country, and more than all of the debt on cars in this country. While the average student loan debt is about $23k, the median is close to $12,500. And growing. Past 1 Trillion Dollars. We freak out about the trillions of dollars in debt our country faces. What about the Trillion Dollar plus in debt college kids are facing? Read more here-http://read.bi/IU6hSP

-Taxpayers Fund $454,000 Pay for Collector Chasing Student Loans. Joshua Mandelman made $454,000 in a single year as a student-loan debt collector more than twice the pay of the U.S. secretary of education. Read more here-http://bloom.bg/JPxsSM

-Prepare For An Unprecedented Wave Of College Bankruptcies. Read more here-http://read.bi/KhnNln

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JP MORGAN-BANKING

-JPMorgan Loses $2 Billion on Unit’s ‘Egregious Mistakes.’ JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said the firm suffered a $2 billion trading loss after an “egregious” failure in a unit managing risks, jeopardizing Wall Street banks’ efforts to loosen a federal ban on bets with their own money.

The firm’s chief investment office, run by Ina Drew, took flawed positions on synthetic credit securities that remain volatile and may cost an additional $1 billion this quarter or next, Dimon told analysts. Losses mounted as JPMorgan tried to mitigate transactions designed to hedge credit exposure. Read more here-http://bloom.bg/M2q9ZE

-And Now JP Morgan’s $2 Billion Trading Loss Is Already $3 Billion (And Counting). Read more here-http://read.bi/JulwG3

-JPMorgan Says 91.5% of Shareholders Approve Pay Proposal. JPMorgan Chase & Co., the biggest U.S. bank by assets, said its executive compensation plan won the approval of 91.5 percent of shareholders in a non-binding annual advisory vote, up from 73 percent last year. Read more here-http://bloom.bg/JGvKle

-Moody’s Said to Delay Bank Downgrades Amid Crisis, JPMorgan Loss. Moody’s Investors Service is delaying ratings downgrades on more than 100 banks as it assesses the effect of JPMorgan Chase & Co.’s trading losses and a greater possibility of a euro breakup, a Moody’s official said. Read more here-http://bloom.bg/JAdQRf

-Fitch Says Top 29 Banks May Need $556 Billion. The world’s top 29 banks may need a total $556 billion to meet tougher new capital rules, cutting returns by a fifth and forcing them to curb investor payouts and raise customer charges, Fitch Ratings said on Thursday. Read more here-http://bit.ly/JKDwLH

-Goldman, Merrill E-Mails Show Naked Shorting, Filing Says. Goldman Sachs Group Inc. and Merrill Lynch & Co. employees discussed helping naked short-sales by market-maker clients in e-mails the banks sought to keep secret, including one in which a Merrill official told another to ignore compliance rules, Overstock.com Inc. said in a court filing.

The online retailer accused Merrill, now part of Bank of America Corp., and Goldman Sachs of manipulating its stock from 2005 to 2007, causing its shares to fall. Clearing operations at the banks intentionally failed to locate and deliver borrowed shares for clients shorting stocks, including two traders who were fined and suspended from the industry, Overstock’s attorneys said in court filings earlier this year. Read more here-http://bloom.bg/JI2xX2

-Goldman Sachs e-mails show illegal naked short selling was bank’s policy. Read more here-http://www.gata.org/node/11374

-Jonathan Weil: China’s Big Banks Look More Like Paper Tigers. After spending time combing through the financial reports of China’s biggest publicly traded, state-owned banks, I now understand what Jim Chanos, the famous short- seller, means when he keeps saying they are “built on quicksand.” He’s definitely on to something. Read more here-http://bloom.bg/KdC8mA

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REAL ESTATE

-Gary Shilling: Home Prices Will Plummet 20% From Here. Despite growing consensus that it is now cheaper to buy a home than rent one, Gary Shilling, president of A. Gary Shilling & Co. says by previous standards home prices are still high relative to rents. In his latest editorial in The Wall Street Journal, Shilling writes that while home prices have fallen 34 percent since their peak in early 2006, they are not cheap if prices continue to fall.

“But even if homeownership was cheaper than renting, as some claim, buying a house now would be a disastrous investment if prices fall another 20% or more.” Shilling says homes are going to lose market value in coming years because of excess inventories. He says there are an excess of 2 million inventories and that it will take at least four years to work off this excess and quite some time for those surplus homes to bring down prices.

“Additionally, our inventory estimate doesn’t even include future foreclosures, some five million of which are waiting in the wings. Now that mortgage servicers have reached a $25 billion settlement with Washington and state attorneys general, foreclosures are likely to roar back. That likely will trigger the additional price decline, since the National Association of Realtors says foreclosed houses sell at a 19% discount to other listings, and sizable sales of real estate owned by lenders drag down the entire market.

The total peak-to-trough decline in single-family house prices then would be more than 50%. If those foreclosed out of their abodes move to rentals, they’re occupying other housing units, so there is no change in overall inventories. But if they double up or move in with their parents as statistics show they have been doing even more excess inventory results.” Read more here-http://read.bi/JevnzJ

-Florida foreclosure case could slam banks. The Florida Supreme Court heard oral arguments last Thursday in a lawsuit that could undo hundreds of thousands of foreclosures and open up banks to severe financial liabilities in the state where they face the bulk of their foreclosure-fraud litigation. The court is deciding whether banks who used fraudulent documents to file foreclosure lawsuits can dismiss the cases and refile them later with different paperwork. The decision, which may take up to eight months to render, could affect hundreds of thousands of homeowners in Florida, and could also influence judges in the other 26 states that require lawsuits in foreclosures. Read more here-http://reut.rs/IZe2ge

-Mortgage Delinquencies in U.S. Fall to Lowest Since 2008. The U.S. mortgage delinquency rate declined in the first quarter to the lowest level since 2008 as an improving job market and low interest rates helped more borrowers pay their bills. The share of home loans at least 30 days late dropped to 7.4 percent from 7.58 percent in the previous three months, according to a report today from the Mortgage Bankers Association. The rate peaked at 10.1 percent in the first quarter of 2010 and was last lower in the third quarter of 2008, when it was 6.99 percent. Read more here-http://bloom.bg/Km9FqS

-Homebuilder Confidence in U.S. Climbs to Five-Year High. Confidence among U.S. homebuilders jumped more than forecast in May, reaching a five-year high that signals an improving outlook for construction. Read more here-http://bloom.bg/JQspkP

-Luxury Homes Spur Bidding Wars in L.A. as Market Rebounds. A week after Christine Lynch listed her house in the Brentwood neighborhood of Los Angeles for $3.625 million, she had seven offers. Within 10 days, a deal was reached for the five-bedroom, six-bathroom home and for $225,000 more than she asked. Read more here-http://bloom.bg/Knzozo

-Twitter Rent Surge Makes San Francisco Best Office Market. Twitter’s relocation next month to Mid-Market, an area better known until now for drug deals, graffiti and vagrants, has sent rents up as much as 60 percent in a business district that didn’t exist a year ago. That type of growth is making San Francisco the best U.S. office market as demand from Internet and social-media companies surges. Read more here-http://bloom.bg/KUq6JT

-Euro zone turmoil boosts London property stampede. Worsening financial and political turmoil in southern Europe caused a surge of interest in London property last month with buyers from Greece and Spain showing strongly among investors seeking a safe haven for their money. Read more here-http://reut.rs/JwCh1T

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World Financial Report – May 18th, 2012
posted by Rare Colored Diamonds on Friday, May 18, 2012

World Financial Report – May 11th, 2012

Radio Show Newsletter

• Charts of the Week-Quotes-Quick Hits
• RareColoredDiamonds.com
• Gold
• Silver
• QE
• Sovereign Debt
• U.S. Debt-Deficit
• Jobs
• Stock Market
• Real Estate

WORLD FINANCIAL REPORT ON RADIO MAY 11 2012

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CHARTS OF THE WEEK-QUOTES-QUICK HITS

-CHART OF THE WEEK: Poll, Americans Now Think Gold Is The World’s Safest Investment. For the second straight year, an annual Gallup poll has found that a plurality of Americans believe gold is the single safest long term investment option. Safer than savings accounts. Safer than real estate. Safer than stocks. Read more here-http://tinyurl.com/7ay6wew

-18 U.S. veterans commit suicide every day; 29 percent of veterans are unemployed; 20 percent of the homeless in New York City are veterans. Bloomberg

-“We could have a bigger selloff. There’s a lot of reasons for the market to go down. QE3 is coming, so I think that ultimately puts a floor under the market. I wouldn’t be surprised to see stocks selloff from current levels, but I don’t think the market is going to crash. You have a lot of people saying the Fed is on hold, that they are done easing.

There is no way they are done easing. They should be tightening, but they won’t do it. They understand this is all that is keeping this phony recovery going is the cheap money, and they are going to supply as much as they need to. The Fed will continue to do that, the market just hasn’t figured that out yet.” Peter Schiff

-”My investing model is ABCD: Anything Bernanke Cannot Destroy: flashlight batteries, canned beans, bottled water, gold, a cabin in the mountains.” David Stockman, Former Congressman and director of the U.S. Office of Management and Budget

-Inevitable Inflation. Few investors may be worried about inflation now, but ultimately it’s inevitable. So says, John Brynjolfsson, managing director of the global hedge fund Armored Wolf. Brynjolfsson knows a thing or two about inflation, he also spent 19 years at PIMCO directing their inflation-protected assets. Although Brynjolfsson concedes in the near-term the environment is deflationary, he thinks it’s just a matter of time before inflation rears its ugly head.

That’s because in an effort to drive the global economy out of its malaise, “The Fed, the ECB, the Bank Of Japan and other central banks are injecting as much money in the system as possible,” he says. Although they’re trying to drive wages, stock prices and housing prices to stimulate growth, at the end of the day they’re driving inflation. Read more here-http://tinyurl.com/dxjfnbl

-Global Economy Faces a ‘Perfect Storm’ in 2013: Roubini. A “global perfect storm” looms for 2013 in which the U.S. economy could fall back into recession and the euro zone will begin to break up, according to the latest gloomy forecast from economist Nouriel Roubini.

Four primary factors will come together, according to the famed “Dr. Doom,” to create worldwide turbulence: In addition to the troubles in the U.S. and Europe, Roubini sees military conflict in Iran and a slowdown in emerging markets, particularly China, as the added elements to create the storm. “You put it together the euro zone troubles with the US slowdown, China you could have a train wreck next year,” Roubini said.

In particularly, Roubini sees nothing but problems ahead for Europe, where peripheral nations are struggling with inability to pay their debts. Fears are growing that the fiscal problems in Greece, Portugal, Spain and elsewhere will spread to the global economy. “Greece is going to be the first country that’s going to restructure and exit,” he said. “Others will leave also.” Read more here-http://tinyurl.com/cja7uxo

-Marc Faber Sees Crash Like in 1987 If U.S. Stocks Climb Higher. U.S. stocks may plunge in the second half of the year “like in 1987” if the Standard & Poor’s 500 Index climbs without further stimulus from the Federal Reserve, said Marc Faber, the publisher of the Gloom, Boom & Doom report.

“I think the market will have difficulties to move up strongly unless we have a massive QE3,” Faber told Bloomberg, referring to a third round of large-scale asset purchases by the Federal Reserve. “If it moves and makes a high above 1,422, the second half of the year could witness a crash, like in 1987. The Dow Jones Industrial Average plunged 23 percent on Oct. 19, 1987 in the biggest crash since 1914, triggering sharp losses in stock-market values around the world.

The Standard & Poor’s 500 Index plummeted 20 percent. “If the market makes a new high, it will be a new high with very few stocks pushing up and the majority of stocks having already rolled over,” Faber said. “The earnings outlook is not particularly good because most economies in the world are slowing down.” Read more here-http://tinyurl.com/bv7t2rr

-Ross Says Looming ‘Freak Show’ May Threaten U.S. Economy. The U.S. economy is at risk of slipping back into recession in 2013 because of likely impasses in Washington over taxes and mandatory spending cuts, said Wilbur Ross, the billionaire investor. “That’s too big a hit for the economy to take,” Ross said in New York.

“We’re going to have another freak show at the end of the year.” Ross said he’s worried that President Barack Obama and Congress won’t be able to agree on extending tax cuts passed under former President George W. Bush that expire at the end of 2012, or on mandatory spending cuts tied to the extension of the country’s debt-ceiling agreement. Read more here-http://tinyurl.com/cuvtjhs

-Fed Worries ‘Fiscal Cliff’ Is as Big a Threat as Europe. Federal Reserve officials are increasingly concerned about the coming “fiscal cliff,” putting it on par with the European financial crisis and the housing market as among the biggest potential threats for the U.S. economy. Read more here-http://tinyurl.com/c2jyx8s

-Don Luskin: One Element Of The ‘Fiscal Cliff’ Should Cause Stocks To Plummet 30%. It’s all about how dividends are taxed and the reality that we are facing the biggest single hike in dividend tax rates in history. The market sets the price of a dividend-paying stock so that it will pay the after-tax yield required to attract capital. When the tax rate on dividends goes up, the after-tax yield necessarily goes down to restore the after-tax yield to its required level, the stock price has to fall. Read more here-http://tinyurl.com/bswjle9

-We Just Witnessed The Slowest April For Retail Sales In 3 Years. Not since 2009 have retail sales in April been as slow as they were last month. Nine of the 20 retailers tracked by Thomson Reuters missed their sales estimates, and their same-store sales index rose just 0.8 percent compared to 1.5 percent estimates. Read more here-http://tinyurl.com/cbaa3m2

-Japan Will Follow Europe With a Debt Crisis: Kyle Bass. Read more here-http://tinyurl.com/cvgbcc8

-Malawi devalues kwacha by 33%, leading to panic-buying. Shoppers in Malawi have been scrambling to buy basic goods, fearing huge price rises after the currency was devalued by 33%. Read more here-http://tinyurl.com/6m33hpq

-Australia Heading for ‘Mother of All Hard Landings’: Pros. Australia is headed for the “mother of all hard landings,” according to Société Générale strategist Albert Edwards, who says the country’s “credit bubble” could burst if China’s economy suffers a sharp slowdown. Read more here-http://tinyurl.com/72fkbpm

-Jeff Gundlach’s Big Presentation On Debt, Deficits, And The Economy. Read more here-http://tinyurl.com/d47k9kt

-Fed clears China’s first US bank takeover. The United States on Wednesday opened its banking market to ICBC, China’s biggest bank, for the first time clearing a takeover of a US bank by a Chinese state-controlled company. It will buy up to 80 percent of the US unit of the Hong Kong-based Bank of East Asia, which operates 13 branches in New York and California. Read more here-http://tinyurl.com/cyayxa4

-JPMorgan Loses $2 Billion in Chief Investment Office. JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said the firm lost about $2 billion on synthetic credit securities after an “egregious’” failure in its chief investment office, which the bank says focuses on hedging. “This portfolio has proven to be riskier, more volatile and less effective as an economic hedge than the firm previously believed,” the New York-based company said. Read more here-http://tinyurl.com/7ozdeqw

-Bernanke Gets 75% Approval From Investors in Global Poll. Global investors give Federal Reserve Chairman Ben S. Bernanke his highest approval rating since 2009 and expect him to take further action this year to accelerate a revival in the U.S. economy and financial markets. Read more here-http://tinyurl.com/bp6mq39

-Canada Is World’s Biggest Oil Loser With Price Spread. Canada buys high and sells low when it comes to crude oil, costing the world’s 10th largest economy billions in lost revenue as it expands production from one of the world’s largest energy deposits. The gap between Alberta’s exported Western Canada Select and Brent oil imported into Ontario and Quebec was about $30.50 a barrel and that difference is creating a drag on growth according to Bank of Canada Governor Mark Carney. Read more here-http://tinyurl.com/carod2e

-Falling Natural Gas Prices Have Saved Consumers Billions. Read more here-http://tinyurl.com/cufljw5

-UN Sees Risk of Unrest From Food Costs Above 10-Year Average. Food prices may stabilize at high levels and keep government import bills near a record, increasing the risk of social unrest in the world’s least developed countries, the United Nations said. Read more here-http://tinyurl.com/7gtgkpl

-49% of Americans saving zilch for retirement. America has a serious problem saving for retirement. About 49% of Americans say they aren’t contributing to any retirement plan, according to a new survey conducted by LIMRA, a trade association for the financial services industry. Read more here-http://tinyurl.com/ch3vnjt

-Elderly at Record Spurs Japan Stores Chase $1.4 Trillion. Read more here-http://tinyurl.com/d39ahvj

-Lehman E-Mails Show Wall Street Arrogance Led to the Fall. Read more here-http://tinyurl.com/crtftmw

-Madoff Sons’ Wives Sued by Trustee for $57.5 Million. The trustee liquidating Bernard L. Madoff Investment Securities Inc. revised a lawsuit to add the spouses of Bernard Madoff’s two sons as defendants on $57.5 million in claims. The new claims, filed May 4, are part of Irving Picard’s existing $255 million complaint against the Madoff family seeking to recoup money taken out of the Ponzi scheme. Read more here-http://tinyurl.com/cxxu7j2

-Canada Stops Making Cents as Flaherty Lets Penny Drop. Canada minted its final penny today as Finance Minister Jim Flaherty said the coin was too expensive to produce and no longer needed for business. Read more here-http://tinyurl.com/7cmys2u

-’Three topless women and the Twin Towers’: Canadians baffled by picture of WWI memorial on their new $20 dollar bill. Read more here-http://tinyurl.com/84z64r3

-Ferrari Joy Rider Burns Rubber on 600-Year-Old Wall. A Ferrari SpA dealership employee took a spin on Nanjing’s 600-year-old city wall, leaving tire marks on the Chinese relic and prompting an apology from the automaker. Read more here-http://tinyurl.com/7asrhqj

-Earliest Known Mayan Calendar Found in Guatemalan House. A 1,000-year-old house in Guatemala, its interior adorned with paintings of people, numbers and astronomical symbols, has yielded the earliest known Mayan calendar ever found, archaeologists said. The mural, covering three walls and a ceiling, is also the first Mayan art discovered in a building thought to be a house, according to the report, published in the journal Science. Read more here-http://tinyurl.com/crpvofx

-The 11 Most Expensive Watches Ever Sold. Read more here-http://tinyurl.com/c7mo3fj

-Rothko, Richter Set Records in $389 Million Auction. Mark Rothko’s fiery “Orange, Red, Yellow” sold for a record $86.9 million at Christie’s in New York last night in the biggest-ever postwar and contemporary art auction. Artist records were also set for Jackson Pollock, Gerhard Richter, Barnett Newman, Alexander Calder and Yves Klein, among others, in last night’s $388.5 million, 59-lot sale. It exceeded Christie’s $384.7 million tally in May 2007, the previous contemporary auction champ, as well as the high $330 million presale estimate. “Billionaires have gone global,” New York dealer Jack Tilton said upon exiting the midtown salesroom. “It’s very healthy for the market, obviously.” Read more here-http://tinyurl.com/c3owpgm

-Space weather expert has ominous forecast. Mike Hapgood, who studies solar events, says the world isn’t prepared for a truly damaging storm. And one could happen soon. Read more here-http://tinyurl.com/84l6eyg

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RARECOLOREDDIAMONDS.COM

-Rarecoloreddiamonds.com Featured Diamond of the Week. This Week’s Diamond is a 1.34 Round Brilliant Cut D Flawless White Internally Flawless Diamond. Harold Seigel-See video of the Featured Diamond here-http://tinyurl.com/6g37q2r

-”Martian Pink” Diamond May Fetch over $8 million at Auction. The largest pink diamond ever auctioned is expected to fetch over $8 million U.S. dollars at Christie’s Hong Kong spring auction May 29th. Christie’s jewellery specialist May Lim talks about the history of the 12.04-carat brilliant cut pink diamond.

“It’s the largest pink diamond, round pink diamond, ever to appear in auction history. So why is this pink diamond so out of the ordinary? Because in 1976 the collector that actually bought the diamond, bought it from Harry Winston and that was the same year the United States launched the Martian Exhibition and to commemorate this event, Harry Winston decided to name this diamond the Martian Pink.”

“Colored diamonds are very rare, and especially pink diamonds, they don’t usually appear, and in order for a pink diamond to be this intense in color is extremely out of the ordinary. And it for it to be this saturated, for it to become a round brilliant diamond is exceptional, you rarely find it in the market at all.”

The “Martian Pink” diamond is one of two famous pink diamonds in the world. The other is the 23.60-carat Williamson Pink diamond that belongs to Britain’s Queen Elizabeth II. It was given to her as a wedding gift in 1947. Read and watch more here-http://tinyurl.com/d4u4rk4

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