For those with a good memory this is the promised follow up to my piece on the manipulation of the silver market and its very scary ramifications. Before we get into the possible end of civilization as we know it details, a recap is in order. Andrew Maguire of London blew the whistle on JP Morgan Chase's very likely profound manipulation of the silver market to the CFTC. As financial government watchdog agencies are wont to do these days, they did their best to sweep it all under the carpet. How the SEC handled Bernie Madoff's ponzi scheme is a prime example of this. This matter is not a ponzi scheme but it is a the largest scam ever going into the trillions of dollars territory. But back to Maguire who was quite determined to clean up the business of commodities trading. He goes public with powerful compelling evidence of JP Morgan Chase's manipulation of the silver market. This happens on a Kingsworld radio show. The next day someone tries to kill him by ramming a car into Maguire's car. Maguire and his wife who was also in the car are hurt pretty bad but survive. After this in their infinite wisdom the commodities watchdog the CFTC decides to have a meeting with most of the key players in commodities trading but exclude Maguire from attending. At this meeting a secret is revealed that could easily tear apart the fabric of our barely functional financial system. The secret is that for every 100 ounces of gold and for every 100 ounces of silver traded on paper there is only one actual ounce of gold and one actual once of silver to back up these trades. Given that yearly there is trillions of gold and silver traded on paper this is the literally biggest scam in the history of scams. Now the guy who let this cat out of the bag didn't think it was a big deal using the logic that as long as the buyer was paid the value of his purchase at the time he wants to sell it doesn't matter if his purchase was backed up by an actual commodity. This cavalier attitude does seem to reflect the mind set of people working in our financial system that everything is smoke and mirrors except the money being exchanged. READ MORE

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he president's pandering to public unions has backfired and now he wants to create an “infrastructure bank” which would be run by the government but would pool tax dollars with private investment.

The New York Times reports Obama Offers a Transit Plan to Create Jobs.
President Obama, looking to stimulate a sluggish economy and create jobs, called Monday for Congress to approve major upgrades to the nation’s roads, rail lines and runways — part of a six-year plan that would cost tens of billions of dollars and create a government-run bank to finance innovative transportation projects. READ MORE

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European currencies dragging indices down this morning. We have warned about the Euro leading everything down as reality over the financial woes sets in. Obama throwing stimulus money around and promising tax cuts so the market can hold up into the end of the week. It does get difficult as the PPT has never been more active. Being more of a trader with the aggressive positions is the only way to play this game. Those who took an aggressive position Friday would be advised to risk very little here. Again, I am not looking for too much on the upside here but we could possible test 1115-1125.

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So two months before an election, and 19 months after the mother of all spending programs, President Obama said yesterday he's rolling out one more plan to stimulate the economy. We'll discuss the details when they're released, but the effort itself is a tacit admission that his earlier proposals have flopped. As the autumn economic debate gets underway, it's important to understand how and why we got here.

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"And God blessed the seventh day and made it holy, because on it he rested from all the work of creating that he had done." Genesis 2:3 (NIV)

In 1882 U.S. cabinet maker Peter McGuire introduced his idea for a new holiday saying, "Let us have a festive day during which a parade through the streets of the city would permit public tribute to American Industry." A dozen years later President Cleveland signed a bill into law designating the first Monday in September "Labor Day." For many Americans today is a day off from work, a chance to cook-out and hang-out in the lingering warm weather of summer.

A day off from labor, however, was not a new concept when McGuire suggested his holiday. The concept of a day of rest was first declared by the Lord in Genesis. In illustration, God rested the seventh day after creating the world and He deemed the day of rest holy (Gen. 2:2-3). He didn't call it Labor Day - He called it the Sabbath.

Sabbath is a not a day of tribute to workers, it's a day of tribute to their Maker. It's a day to rest your body while renewing your mind by making the focus of the day your Maker and your relationship with Him. In the Jewish tradition, the Sabbath is the focal point of the week - not just a day of laundry or list-making to gear back up for the week ahead. The Jewish people spent three days preparing for Sabbath, and three days reflecting on what they had learned or encountered of God during the Sabbath. They were a Sabbath-focused people, and therefore a God-focused people.

Keri Wyatt Kent, author of Breathe, writes, "This creates a rhythm of life that puts our focus not on our stuff or our schedule but on the opportunity to meet with God."

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First of all, yesterday was a travel day for me and I was unable to get mobile access to post a closing audio blog. Next week should get back to normal.

This is a rally I want to fade but it may be smart to wait to see what the commander-in-chief (cough) has up his sleeve for his talk this a.m. Will he tout the fantasic -50K job loss? 2 1/2 years into the recession and we are STILL losing jobs! Recovery? Please. What a rigged game this has become. The yen and treasuries started tanking a full 15 seconds before the report.  Managing expectations is what this government is all about. Better than expected numbers is now the propaganda. Lower expectations down so much that anything is a relef.

Technically we have rallied up to our top resistance and should fail. The Dow will open near 10,450 which should be near the high of the rally. No volume again on the rally and today will be worse. Again, I am looking to get aggressive but next week may be a better time.

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August Total Non Farm Payrolls Come At -54K On Consensus Of -105K, Unchanged From July, Unemployment Rate 9.6%, Birth Death Adds 115K

Private payrolls come in at +67K as Birth Death adds 115K, compared to just 6K previously, as U-6 rises from 16.5 to 16.7%, highest since April. Total Part time workers (all industries) increased by 401k from 18,157 to 18,558; part time workers for economic reasons increased by 331K. Workweek unchanged month over month at 34.2 hours, with average hourly earnings up slightly from 0.2% to 0.3%. 42% of the unemployed were out of a job for 27 weeks or READ MORE

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This is just getting silly: perhaps the next update on ICI mutual fund flows should occur if there is an inflow for once...ever again. In the meantime,

we have just recorded the 17th

weekly outflow from domestic equity mutual funds, and what's worse for mutual funds' depleted liquidity ratios, it is now accelerating, hitting a total of $4.3 billion, a more than 50% increase from last week's $2.7 billion. YTD outflows have now hit $54 billion, as ever more capital is going into far safer fixed income instruments. As a reminder, here is what Rosenberg said on the issue yesterday: "

. Tack on the fact that there are really not very many shorts to be covered – since the market peaked in April, short interest is 4.3% of the S&P 500 market cap (in August 2008 it was 6%) and

" As for this being a contrarian signal, hopefully all those who see this as a buying opportunity can also find a way to make the now retiring baby boomers about 10 years younger and force them away from fixed income capital reallocation. Oh, and fix the broken market and restore investor confidence that the casino is only modestly rigged.

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The Global Perspectives Update team invites your comments here on the featured YouTube video, 'Overdose: The Next Financial Crisis '.

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