GM's call of the year

November 18, 2012:
"I'm long the S&P 500 because I don't think the Plunge Protection Team will let gold outperform the S&P 500 in 2012, as it currently is on this ratio chart:"

Jim Sinclair:
Goldman is, in all practical senses, the Exchange Stabilization Fund because ESF is only a brokerage account. There is no fund in terms of what one thinks a fund’s office should look like. Read the law.

The President or US Secretary of the Treasury may appoint ANY person or entity to act on their behalf as the manager of the Exchange Stabilization Fund. The Exchange Stabilization Fund has a broad mandate that allows it to trade many things including GOLD.

And buy stocks, of course.


Warren James said...

GM, Good call ;)

Btw, from antipodes no end of world current despite date turnover. will update report accor

duggo said...


So Gold and the S&P 500 are both being manipulated by the "plunge protection team"

They are pumping gas into the S&P 500 balloon which is leaking to get it to float and they are trying to hold under water the Gold balloon which is increasing in pressure.

Which will win?

My guess is when they run out of gas..... Gold.

Jeanne d'Arc said...

Very good call GM!

Do I at least get an honourable mention for my comment on your 18 November post:

"I like what you see in the S&P... I see the same in other stock markets. One could just throw a dart at a table of stocks, and make a long profit."

Followed by this on 2 December:

"Sharp analysis, GM. I know everyone thinks I'm just a perma-bear, but I'll say it anyway: this all looks really ugly to me...

I don't just trade on charts, but also on a sense of momentum (which can, of course, also be mathematically described in charts and indicators), and it all just looks very, very sick to me for the PMs. I think I'll be taking profits (and closing entirely) my positions on my few remaining gold miners on (probably) Tuesday.

Still looking for a good entry point for gold. I arrogantly think I'll know it when I see it...


Jeanne d'Arc said...

It looks like Warren's sudden disappearance has been explained: see this photo taken from his bedroom window...

Good luck, world!

duggo said...

@ Jeanne d'Arc

Just seen the photo

Damn! I've just opened account with Perth Mint.
Do you think the Fin du Monde will affect Western Australia?

Funky Tape said...

You know I've never doubted your baller status, GM.

One of my most successful trades this year was buying NFLX at $53. The stock ole Jim used to joke tongue-in-cheek about to go buy as though to sound hip like the hobby bear kewl kidz on ZeroEdge.

Funny how the market makes you eat your words just when you have your mouth full.

BTW, I had $1630 on my gold chart ever since it failed $1800. I think East is the most likely direction until The Move in the spring of 2013. Not sure the PPT or the CB's will let it slide much more. Because, hey, if you're a CB buying it buy the ton, it's probably to your advantage to see that it doesn't. BWTFDIK?

costata said...

Fundamental chickens and TA eggs?

The new rates would be set at 20 percent for both dividends and capital gains. Health care reform will add another 3.8 percent surcharge on top of the 20 percent, giving the Treasury a substantial boost in revenue. The New York Times' Paul Krugman reported earlier Tuesday that he had been told by a senior administration official that the White House expected movement on capital gains and dividends rates.

"As I understand it -- the reporting is weirdly silent on this, but it's what I got from my own conversation with an SAO -- is that taxes on unearned income are going back to pre-Bush levels: capital gains at 20 instead of 15 percent, dividends taxed as ordinary income," he wrote.

costata said...


Let's revisit the discussion about your "Little Lemur Purse" on March 31st, 2013.


Tony said...

@ JdA,

Props are very much in order, especially for your 12/2 post. Can't wait for that arrogance to manifest itself in a publicized PM re-entry forecast. I'm inclined to blindly follow your lead, just for fun!

Jeanne d'Arc said...

@Costata - very happy to do so. I may well have bought gold by then. I may not. I promise to write a post if I buy any. If there's no post, you can take it to mean that I haven't. I'm basically retired from Screwtape now... sort of.

Of course, to win my bet with Turd I need gold to finish as high as possible this year, and then be smashed on 3 January or something. And the inverse for the S+P. I have put in this request to my agents at JPM and they were very open to it as usual... ;-)

@Tony - Not a bad idea... ;-) Anyone who followed my lead on Lloyds-TSB at the start of this year are very much in my debt (over 100% returns on unleveraged investments). As are those who bought resource stocks following this post in mid November (15 - 20% in a month).

If anyone did make any money from these calls, then please consider sending a couple of percent as a Christmas donation to Oxfam, or to your favourite charity (unless your favourite charity is the NRA or the Lemur Extermination Society).

GM Jenkins said...

LOL Warren. Caught the flu, I needed a good laugh.

JdA, you get more than an honorable mention, since you were actually short gold, where I was long both. Kudos. Your sober analysis this year has been extremely helpful. However, I must take issue with your statement that you're "basically retired from Screwtape for now." For your convenience, as I assume you've lost it, I'm sending you a reprint of your indenture document. I presume you're aware that American peonage laws do not apply to contracts signed in Costa Rica. Your stellar work thus far in the coal cellar notwithstanding, you have not yet repaid Louis your original travel costs from Madagascar.

GM Jenkins said...

Regarding comments above by duggo, FTape, and costata, I probably shouldn't have quoted Jim Sinclair unskeptically. Though he deserves respect, sometimes he seems quite nutty (and unable to write coherent sentences). Jim Rickards says it's China driving the price down, which makes at least as much sense. Or perhaps it is "natural" market action (and by natural I mean no less corrupt than any other market). Unlikely to my eyes, but not impossible.

But the main reason I posted this was and quoted Sinclair was to (1) bring attention to the incredible power and freedom of the ESF to control price in any market they please; absolute power corrupts absolutely and (2) I do make some trading decisions based on "tin foil hat" premises, and they have a good track record (for whatever reason).

mr pinnion said...

"I may well have bought gold by then. I may not."

How does that fit in with the reply you gave me..
" My fiat will be converted into housing and land (or even stocks) before gold, until all of this nonsense has worn off."

So are we to presume you could have converted you fiat into and then out of housing, land and /or even stocks , then bought gold, after the nonsense has worn off , before March 31st 2013?

Which begs the question, what is the nonsense you were refaring to?
I assumed it was the mad sheeple and their political representatives and the effect they have on the economy.
If thats the the case, then its highly unlikely the 'nonsense' will have worn off by then.
Thats some serious rate of erosion there.


costata said...

GM Jenkins,

In my opinion price discovery of any product that is traded on an exchange which has an OTC/shadow banking counterpart is dubious these days.

One of the assumptions that I work on is that the BBs are flat most of the time. The trading strategy of going long or short at low risk points to take advantage of the volatility that Jim Sinclair describes sounds plausible to me (though I am no trader).

So when Turd and the other buffoons such as Ted Butler are screaming "massive short" my thoughts turn to the question: So who is massively long where we can't observe them?

(And GMJ if you're the massive long please don't do the show and tell thing.)


The significance of March 31st is that it is the end of the Japanese financial year and the last of the strong-Yen supporters at the BOJ will be on the way out. Shinzo Abe will have free reign to devalue the Yen.

The upper levels of the commercial/industrial complex (Japan Inc) will be alerted well in advance as to how they should play this new policy direction. So the directional flow of money should leave some tracks.

According to Andy Xie (former Morgan Stanley Asia analyst) a rapid 40 per cent devaluation of the Yen would fix their export problem. I don't think it matters to traders anymore whether any of these decisions are based on sound economics. If the Japan reflation story is considered to be good news then it will be a very powerful kick of the can.

I think we'll know the answer toward the end of January. Hopefully it will show up in your TA well in advance and continue to give you your 51 per cent edge (but who knows).

If the markets buy this Japan reflation = good story then I think it gives perfect cover for the BBs to run another pump and dump operation in silver. The pump is primed and it doesn't matter what the excuse is. It just needs to be plausible. And for the ardent silver advocates plausibility has a rather low threshold IMVHO.

FWIW I view gold as a somewhat different story but regardless the current gold price is too low. I think it needs to be shifted into a higher trading range for political reasons.

IMHO Sinclair will be proven right. And I agree with GMJ, Sinclair has a tendency to get "carried away". It's offputting but I think if you can look past that he has a lot to offer.

Merry Christmas to all of the good folks at the STFU.

duggo said...

I think Costata has nailed the Long and Short of it.

Merry Christmas!

Funky Tape said...

Interesting take on Japan, Costata. Do you read M. Armstrong's blog? He's basically saying the same thing.

costata said...


I don't read Armstrong's writings regularly these days. Thanks for the heads up. I'll visit his lair.



Merry Christmas