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May 8, 2010 / Hal (GT)

What an incredible week for stock and precious metals.


Okay, everyone with me inhale a nice deep breath.

Hold it.

Hold it.

Hold it.

Exhale………….

Now, don’t you feel better.

WOW! What a interesting way to end the week. Simply amazing.

Were you watching gold and silver the past two days. You should have been tracking it in real time with the free app, ExactPrice.

Did you watch the Stock Market on Thursday? Better yet did you hear it?

Go listen to this incredible recording as it happened on the floor over at ZeroHedge. Thanks to @Future_Shock for tweeting it.

In concert with that MP3 recording, check out this post I received thanks to @MikeCane, titled:

Will God Destroy Our Money or Will We Do It First?

Quantitative trader and controversialist Espen Haug uploaded a very interesting little paper to the Social Science Research Network in April (thanks to Felix Salmon for tipping me off to it). After Thursday’s brief insanity on Wall Street, I couldn’t help but go back to it.

More on the subject of Thursday’s meltdown is this absurdity and it’s absurd because what they are doing is trying to engender the need for strong and tighter government regulation if you were to ask me:

White House doesn’t rule out sabotage in Thursday’s wild market fluctuation

President Barack Obama has not ruled out sabotage in the near-panic on Wall Street Thursday afternoon.

White House press secretary Robert Gibbs said Obama’s economic team was jolted by the news and met with Obama shortly after the market plunged.

I found this bit from Eric Harding at Lear Capital rather sobering:

Accenture stock (ACN) which trades on the NASDAQ went from $42 per share to $.01 in the span of 20 minutes (yes, it did recover). That is a loss of 99.976% of the stock’s value in 20 minutes.

Probably the best thing you will read on the whole thing is found on ZeroHedge, thanks to Ed Steer at Casey Research (read his gold and silver commentary also: ‘Gold is the New Reserve Currency’ – Larry Kudlow, CNBC)

From ZeroHedge:

The Day The Market Almost Died (Courtesy Of High Frequency Trading)

Today, it was too late. Liquidity disappeared.

And now we have to deal with the consequences. One amateurish way is to cancel trades which is what the Nasdaq is doing. This is simply pathetic, and indicates that everyone is powerless to stand before the consolidated idiocy of the HFT “cash cows.”

One person who does get it is Senator Kaufman, who should be a shining example to all the other idiots and traitors in both Congress and Senate….

And if that wasn’t bad enough the labor stats came out and they frankly pointed??? Umm…. Which way. I’m a bit confused. But maybe that’s because I don’t speak LaLa.

Thankfully, I’m not the only one that felt this way:

How Do You Add Jobs and Have Unemployment Rise?

Oh, and be sure to check out Casey’s Daily Dispatch. It’s a must read today:

A Confluence of Crises

Speaking of Crises. Greece and Europe are what’s behind it in everyone’s mind. Though I personally think that’s shifting blame from plain greed and poor decisions. But on this front check out this:

US Banks Heavily Exposed to Europe Debt Woes: Bove

How many big US Banks? Five. To the toon of $2.5 Trillion dollars!!!

David Engstrom at Lear Capital I think has a wonderfully funny solution:

US To Buy Greece for $400 Billion?

On a global scale, Greece could be the first dominoe to tip over.  It’s incredibly ironic.  Greece’s debt is some $400 billion and if my numbers are right each 200 points lost on the DOW represents about $350 billion of lost Market Cap.  Now, what do you think all the geniuses in government and on Wall Street would say to this recommendation?

We should print $400 billion and buy Greece.  Just make it our 52nd state after Puerto Rico and be done with all this.  Europe would be off the hook along with the Euro.  It seems the more money we print the stronger the dollar gets anyway. So while the dollar gets stronger we just keep buying all the countries that go into default.  Spain #53.  Portugal #54.  The UK?  We can get 4 states out of them.

All this I believe is important to consider when thinking about where the precious metals will be heading. Today silver, which on Thursday had completely broken from gold, seemed to finally get it’s engine lit and climbed to close for the weekend at $18.45. Up $1.14 in the last 24hours. Gold closed at $1,210.50 and platinum $1,668.30.

Next week I’ll be watching. Hope you will be too.

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