Monday, August 31, 2009

Sunday, August 30, 2009

'Israel has Iran in its sights'


"Iran has until late September to respond to the latest international proposal aimed at stopping the Islamic Republic from developing a nuclear weapon. Under the proposal, Iran would suspend its uranium enrichment program in exchange for a U.N. Security Council commitment to forgo a fourth round of economic and diplomatic sanctions.


But if diplomacy fails, the world should be prepared for an Israeli attack on Iran's suspected nuclear weapons facilities. As Adm. Michael Mullen, the chairman of the U.S. Joint Chiefs of Staff, recently acknowledged: "The window between a strike on Iran and their getting nuclear weapons is a pretty narrow window.""


Continue...


The baseline assumptions about Iran's Nuclear Program always amaze me, considering this was only a few months ago:

Friday, August 28, 2009

Taking The Day Off

Should be back Monday...

Thursday, August 27, 2009

Not Sure If Marc Faber Has Gone Completely Nuts Or Is Dead On


Video of his recent interview with Australian Broadcasting. Here's the transcript and some of the highlights are quoted below:

"ALI MOORE: And then the next question is how that stimulus is wound back and whether or not governments can do it. Is that what you see as triggering the next crisis?


MARC FABER: I don't think they will wind it back voluntarily. I think one stimulus package will lead to the next one and to more money printing. So in five to 10 years time the real crisis will break out when the whole system collapses. That will be the end...

...You have no faith in the administration's ability to wind back business and start dealing with the problem[?]

MARC FABER: Are you joking - having faith the US administration! I wonder who on earth would face [sic] the US administration, certainly not someone who thinks.

ALI MOORE: So therefore I take it that you are appalled they've reappointed Ben Bernanke?

MARC FABER: I think Ben Bernanke is like a ship captain. He has warning signs, he sails the ship, there's a storm coming. He disregards any warning signals, he disregards the storm signals. He sinks the ship, 1,000 passengers drown. He saves the crew in his control tower, five officers and himself in a lifeboat. They get a medal for saving five people. That's Wall Street. The rest of the country is basically bankrupt.

ALI MOORE: So you see this reappointment as reward.

MARC FABER: A total joke..."

On A Heavier Note


KFC Has a Bacon Sandwich That Uses Fried Chicken as "Bread"


This is perhaps man's greatest achievement or evidence of our civilization's impending doom. Maybe it's both.

Meet the KFC "double down." Although no mention of it is made on KFC.com and we have never seen an ad for it ourselves, we are being lead to believe that it is real by Foodgeekery.com. They have crappy cell phone camera footage of a commercial (from Omaha, apparently) for the mysterious beast, as well as photographic evidence of it in the wild.

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I don't even know what to say about this one...

Just Can't Keep This Market Down (thank you USD devaluation)

Banks: Secret Bailouts or Bankruptcy? Depends...


Big Banks get your money in secret - making huge profits instead of going BK - while small, non-connected ones go under in droves and have their assets scooped up at a discount by "stronger" competitors
: American State-Financial Capitalism at its best(worst). Thanks Hamilton!

Federal Reserve Says Disclosing Loans Will Hurt Banks

"Aug. 27 (Bloomberg) -- The Federal Reserve argued yesterday that identifying the financial institutions that benefited from its emergency loans would harm the companies and render the central bank’s planned appeal of a court ruling moot.

The Fed’s board of governors asked Manhattan Chief U.S. District Judge Loretta Preska to delay enforcement of her Aug. 24 decision that the identities of borrowers in 11 lending programs must be made public by Aug. 31. The central bank wants Preska to stay her order until the U.S. Court of Appeals in New York can hear the case.

“The immediate release of these documents will destroy the board’s claims of exemption and right of appellate review,” the motion said. “The institutions whose names and information would be disclosed will also suffer irreparable harm.”"

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FDIC Problem Bank List Surges, Putting Fund at Risk

"Aug. 27 (Bloomberg) -- The U.S. added 111 lenders to its list of “problem banks,” a jump that suggests rising bank failures may force the Federal Deposit Insurance Corp. to deplete a reserve fund that shrank 40 percent this year.

A total of 416 banks with combined assets of $299.8 billion failed the FDIC’s grading system for asset quality, liquidity and earnings in the second quarter, the most since June 1994, the Washington-based FDIC said in a report today. Regulators didn’t identify companies deemed “problem” lenders."

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Why GDP Numbers (and American Democracy) Are A Joke


From today's BEA GDP release:
"The decrease in real GDP in the second quarter primarily reflected negative contributions from
private inventory investment, nonresidential fixed investment, personal consumption expenditures
(PCE), residential fixed investment, and exports that were partly offset by positive contributions from
federal government spending and state and local government spending. Imports, which are a subtraction
in the calculation of GDP, decreased....

Real personal consumption expenditures decreased 1.0 percent in the second quarter, in contrast
to an increase of 0.6 percent in the first. Real nonresidential fixed investment decreased 10.9 percent,
compared with a decrease of 39.2 percent. Nonresidential structures decreased 15.1 percent, compared
with a decrease of 43.6 percent. Equipment and software decreased 8.4 percent, compared with a
decrease of 36.4 percent. Real residential fixed investment decreased 22.8 percent, compared with a
decrease of 38.2 percent.

Real exports of goods and services decreased 5.0 percent in the second quarter, compared with a
decrease of 29.9 percent in the first. Real imports of goods and services decreased 15.1 percent,
compared with a decrease of 36.4 percent.

Real federal government consumption expenditures and gross investment increased 11.0 percent
in the second quarter
, in contrast to a decrease of 4.3 percent in the first. National defense increased
13.3 percent
, in contrast to a decrease of 5.1 percent. Nondefense increased 6.2 percent, in contrast to a
decrease of 2.5 percent. Real state and local government consumption expenditures and gross
investment increased 3.6 percent, in contrast to a decrease of 1.5 percent.

The change in real private inventories subtracted 1.39 percentage points from the second-quarter
change in real GDP, after subtracting 2.36 percentage points from the first-quarter change. Private
businesses decreased inventories $159.2 billion in the second quarter, following decreases of $113.9
billion in the first and $37.4 billion in the fourth..."

So to recap: Consumption was down, private investment was way down, inventories were down, exports were down, global trade(exports AND imports) is still severely contracting and yet GDP is only -1% ? Not to worry folks, the private economy doesn't matter in Keynesian-Monetarist Bizarro World because we have the resplendent state with our omniscient overlords at the helm picking up the slack. The reason why GDP isn't cratering (like it should if we only looked at private consumption, investment, and trade) is because of an increase of 11% in gov consumption/investment and the fact that we've been forced to import less crap for consumption. This also assumes we don't purposely understate the deflator to hide inflation and overstate GDP.

The most comical part is the "anti-war" candidate
, and the democratic congress, who were elected ostensibly to challenge the foreign policy establishment have sat by as defense spending rose 13.3% !! Lockhead, Boeing, Raytheon, United Tech, KBR, GE etc; the pentagon, state department, and military proper; AIPAC, AEI, CSIS, CFR and the litany of think-tanks, lobbies, and foundations that promote western hegemony/empire must not have gotten the message that we elected a "change" candidate. American Democracy is such a joke. De La Boetie was correct - which makes our situation all the more pathetic.

UPDATE: For all those convinced Military Keynesianism is utilitarian and/or economically sound (ignoring traditional morality) here's an interesting tribute to Seymour Melman by economic historian Thomas E. Woods, Jr.: 'The Neglected Costs of the Warfare State: An Austrian Tribute to Seymour Melman'

UPDATE 2: My earlier fulmination about American Democracy just reminded me of a favorite Mencken quote: "[Democracy is] the worship of jackals by jackasses"
; as trenchant now as then.

Now Here Are Some 'Green Shoots':


Downturn Dims Prospects Even at Top Law Schools

by Gerry Shih

"This fall, law students are competing for half as many openings at big firms as they were last year in what is shaping up to be the most wrenching job search season in over 50 years.

For students now, the promise of the big law firm career — and its paychecks — is slipping through their fingers, forcing them to look at lesser firms in smaller markets as well as opportunities in government or with public interest groups, law school faculty and students say."

Continue...


Fewer lawyers: reason # 397 why I appreciate a good credit-bubble deflation

GOFO, LIBOR, UST & Mortgage Rates


Duration/GOFO/LIBOR/UST

1 month / .31143 / .2613 / .10
3 month / .35000 / .3606 / .14
6 month / .45571 / .7731 / .24
1 year / .64857 / 1.3463 / .44
(as of today)

Best Mortgage Rates
30yr FRM / 5.09
15yr FRM / 4.28
5/1yr ARM / 3.85
(as of yesterday)

Econ Data; Fed & Treasury Info

Treasury:
Fed:

Wednesday, August 26, 2009

Backdoor Monetizations via Custody Account?


Interesting piece on ZeroHedge about Chris Martenson's article "The Shell Game - How The Federal Reserve is Monetizing Debt."


From the ZH article:

"Whether this speculation of dollar abusive policies by the Federal Reserve, which will stop at nothing, to reinflate the credit bubble and debase dollar-based debt, is in fact true, is questionable. However, definitive answers from Chariman Ben will not be forthcoming until he is forced to show his hand, whether via a legal order such as the recently won Bloomberg lawsuit, or through political means, such as HR 1207 and S 604. In the meantime, it appears the Federal Reserve, whose accountability should be to the entire US population, not just to a select crowd of Wall Street oligarchs, continues to pursue activities that facilitiate at any and all cost the stratification of US society into that minority that will benefit vastly from the Fed's ongoing actions and the significant majority who will see the purchasing power of the paper in their wallets gradually disappear, and effectively put the entire concept of the "American Middle Class" at risk."

GOFO, LIBOR & USTs


Duration/GOFO/LIBOR/UST


1 month / .31667 / .2606 / .08
3 month / .37167 / .3719 / .15
6 month / .47333 / .7825 / .25
1 year / .68000 / 1.355 / .45


(as of 2:15 est, GOFO/LIBOR set earlier)

It Takes A Few Physicists To Understand The Economic Landscape (Economists are busy with fantasy-land models)


"WASHINGTON -- A recent analysis of the 2007 financial markets of 48 countries has revealed that the world's finances are in the hands of just a few mutual funds, banks, and corporations. This is the first clear picture of the global concentration of financial power, and point out the worldwide financial system's vulnerability as it stood on the brink of the current economic crisis.


A pair of physicists at the Swiss Federal Institute of Technology in Zurich did a physics-based analysis of the world economy as it looked in early 2007. Stefano Battiston and James Glattfelder extracted the information from the tangled yarn that links 24,877 stocks and 106,141 shareholding entities in 48 countries, revealing what they called the "backbone" of each country's financial market. These backbones represented the owners of 80 percent of a country's market capital, yet consisted of remarkably few shareholders."

Continue...

Econ Data; Fed & Treasury Info

Treasury:
Fed:

Tuesday, August 25, 2009

SnP Update


SnP continues its grind, working up into statistically significant resistance without becoming overbought based on OGD2 indicator*. It has broken through its yearly pivot and 'side-line' money continues to chase this market higher offering support on down days and grinding out short-stops on up days. Trying to fade a move like this is nearly impossible, especially as option premia gets continually drained. Fundamentals don't exist in the New Economic Order - only perceptions and deceptions.


*OGD2 indicator is something I'm working on to determine overbought/oversold conditions which amalgamates the following data: daily range, open vs closing prices, price vs. statistical resistance/support levels, and volatility.

Some Thoughts On Prof. Fekete's 'Dress Rehearsal For The Last Contango'


In
his most recent article Prof Fekete continues to sound the alarm about the shrinking gold basis. Although I don't totally agree with the professor on his overall historical/economic analysis I do think the gold basis, and it's secular diminution, is important to follow.

Simply, the Gold Basis is the price difference between the nearest liquid futures contract and the spot price. As there is no spot price per se, just the daily London Fixes, we need to look at the GOFO rate from the LBMA. This is the rate for a cash-gold swap. In normal times, if you need cash and have gold as collateral you can swap the two at a lower rate than borrowing at LIBOR. This makes sense as the person swapping the cash for gold now has a strong piece of collateral in hand that they have the option of using how they see fit. From this we can calculate a rate to borrow gold outright by subtracting the GOFO from LIBOR(this is the rate you see on Kitco). This is the equivalent of borrowing cash at LIBOR, and then swapping it for gold at a lower rate.

But, we are not in normal times and shorter term gold lease rates have been negative. This can indicate a number of things, which we won't delve into here but the important thing to realize is that the major reason for this is the drop in LIBOR, the high price of gold and the lack of speculative interest to sell physical gold into the market(or a glut of lendable gold). The fact that GOFO is trading above LIBOR allows us, despite the professors warnings, to defer our worries about a potential backwardation. The nominal drop in the GOFO is certainly worrying when viewed over a long period of time but most of the recent move has to do with the drop in the opportunity cost of such a trade. Simply, the rate at which you can buy gold and sell it forward drops as the rate at which you can lend your money at LIBOR does. In fact, recently the short-term interest rate has dropped so much, and/or the desire to sell gold unhedged into the market has dried up, that a premium to carry*(negative lease rate) has appeared. Now there is an incentive to buy physical gold and sell it forward rather than to lend at LIBOR, indicating a glut of metal sitting around to be swapped\lent (or decreased demand for it)... you can get paid a risk-free rate now simply to hold gold, assuming you can do it in a cost efficient way. (note: for most of this analysis we are not factoring in actual carrying costs in order to keep it as simple as possible)

We should start to worry when this condition reverses and gold gets back a discount to carry* (positive lease rate), and this rate starts to increase. This will indicate that a glut in gold has gone and now their is a dearth of metal as the gold market is offering a cheap method of financing for gold holders by selling their metal into the market and buying it forward, essentially borrowing from the gold market or swapping gold for cash. Either the demand for selling uncovered gold into the market increases, the supply of gold to lend/swap decreases, or the market begins to distrust the futures contract for forward delivery. All three are somewhat related but the last two are key; as the GOFO relative to LIBOR drops more than it "should" it sends a signal that gold is either going into hibernation or that gold delivery promised in the future may be suspect, or both.

Despite protestations by mainstream authorities Gold is still considered by many as a default currency; it will rise when the market feels uncertainty about major fiat/credit regimes, as it is a rare form of money that is an asset and not a liability, one that is internationally recognized as a store of value, and one time medium of exchange. This is just a fact, whether people like it or not. During the deflationary portion of the current credit crisis when the USD price of EVERYTHING (except treasuries) cratered the USD price of gold stayed flat to slightly up, showing it's re-emergence as a competing currency. Central Banks and some Governments still have large hordes of Gold for just this reason; in case their micro-managed fiat/credit systems implode there needs to be some Plan B.

With this in mind we need to accept the professors idea that for Gold to serve the international payments system it must be free-flowing, at an adequate price - this price is the basis relative to the prevailing level of interest rates(assuming, of course, gold is not the monetary unit). As the basis drops (relative to rates) there should be an incentive to sell gold into the market, buy it back forward, and invest the proceeds, which should keep the basis in line. But if gold has been slowly going into hibernation or if the gold futures market is becoming less and less trusted as a future delivery mechanism(for a host of reasons) this drop in basis won't elicit the necessary selling of metal and the basis will continue to fall.

It is for this reason that we must watch 1) the basis relative to interest rates and 2) the nominal level of the basis as it heads towards 0. The former let's us know where we're going, the latter lets us know when we are there. Once gold goes into backwardation, and remains there, it doesn't matter what the nominal interest rates are as they can't be less than 0. At this point, even if interest rates are at .0000001% the gold market will be offering "riskless" profit for those willing to dump gold hoards on the market and buy them forward. But when a riskless profit appears for any length of time we can be almost certain that it isn't riskless, and in this case its a signal that gold has "disappeared" and won't come back until the future is, and the futures are, purged and revitalized.


* These terms are my creation, and they exclude actual storage/transport/fees cost of carrying. They are just used to show whether the market is charging or paying(with respect to interest rates) a holder of gold who has sold it forward. When lease rates are positive the market is charging a carrier of gold on top of the storage/transport costs, when they are negative the market is paying the carrier of gold an amount which may or may not account for the storage/transport cost.

The Government Lies About Inflation? Nooo, That's Crazy Talk!


Well, for all those simple-minded, credulous individuals out there maybe a picture will be easier to understand. Also, one should take into account the long-term change in quality of service one receives for that postal price vis-a-vis private alternatives.


Uh Oh...Truth Telling Time

Aug. 25 (Bloomberg) -- The Federal Reserve must make records about emergency lending to financial institutions public within five days because it failed to convince a judge the documents should be exempt from the Freedom of Information Act.

Manhattan Chief U.S. District Judge Loretta Preska rejected the central bank’s argument that the records aren’t covered by the law because their disclosure would harm borrowers’ competitive positions. The collateral lists “are central to understanding and assessing the government’s response to the most cataclysmic financial crisis in America since the Great Depression,” according to the lawsuit that led to yesterday’s ruling.

The Fed has refused to name the borrowers, the amounts of loans or the assets put up as collateral under 11 programs, saying that doing so might set off a run by depositors and unsettle shareholders. Bloomberg LP, the New York-based company majority-owned by Mayor Michael Bloomberg, sued Nov. 7 on behalf of its Bloomberg News unit.

Continue...

Stories of Interest

Econ Data; Fed & Treasury Info

Treasury:
Fed:

Friday, August 21, 2009

Fed Balance Sheet, Reserves, and Money Supply (08-20-09)

  • Securities held outright increase $75.5 Bil, mostly from an increase in MBS of $66.6 Bil
  • Fed liquidity programs continue to contract: TAC by $12.5 Bil, CP funding by $4.3 Bil, CB swaps by $6.07 Bil
  • Deposits held at the fed increased $45.2 Bil; $41.8 Bil from Depository Institutions
  • FRB Capital + $701 Mil
  • Secondary Credit sits at an elevated $620 Mil while primary credit dropped substantially back to $29.9 Bil
  • My preferred measure of "money" supply (Currency[including traveler's checks], Checking/Demand accounts, and Savings accounts) = $6.2 Trillion for the wk ending Aug 10 up $30 Bil from the previous week or ~ 26% annualized

Unemployment Update

Initial and Continuing Unemployment Insurance Claims(red, blue) vs. Avg Weekly Hours and Manufacturing Sector Overtime(green, gold)

Thursday, August 20, 2009

FX Clearance: Centralized or Multi-Tier System?

The big banks want the smaller ones to clear currency trades (net out daily gain/loss) through a firm owned by them. Cost, among other reasons, make the small banks resistant. If the big banks really feel there is a settlement risk than they shouldn't trade outside the centralized clearing system; if that creates a two-tier pricing structure, all the better, as now firms have increased options and some type of market pricing mechanism(the difference between the rates) for currency settlement risk.

From the Financial Times:

"Banks that do not settle currency trades through a central system could be shut out of dealing at the best prices, according to one of the biggest foreign exchange banks.

Zar Amrolia, global head of FX at Deutsche Bank, one of the three biggest foreign exchange banks, said a two-tier system could become a reality as banks reassess their risks in the wake of the credit crunch."

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The More-Perspicacious Socialists (excuse the oxymoron) Aren't Fooled



"He's a marketing dream...he's a brand that promises something special, something exciting, almost risque - as if he might be radical, as if he might enact change; he makes people feel good, he's a post-modern man with no political baggage - and all that's fake!"


Apparently AIG's New CEO Is Also A Comedian


"Robert Benmosche, the newly appointed chief executive officer of AIG (
AIG.N), says he expects the bailed-out insurer to be able to repay its federal debts and boost value for shareholders, according to a report by Bloomberg News.

"At the end of the day, we believe we will be able to pay back the government and we hope we will be able to do something for our shareholders as well," Benmosche said in an interview with Bloomberg while on holiday in Croatia."

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Oct Crude Trying to Break-Out

A Zimbabwe Gold Standard?


"Zimbabwe's central bank governor Gideon Gono on Thursday proposed the introduction of a gold-backed local currency, which was destroyed by hyperinflation and replaced by multiple foreign currencies in January.


A unity government formed by rivals President Robert Mugabe and Prime Minister Morgan Tsvangirai in a bid to end a political crisis introduced multiple foreign currencies to stop sky-rocketing inflation and revive the economy."


Continue...

Stories of Interest

Econ Data; Fed & Treasury Info

Treasury: 3mo bill; 6mo bill; 12mo bill; 2yr note; 5yr note; 7yr note announcements

Fed: balance sheet, money supply, reserves and base; tentative treasury purchase schedule

Wednesday, August 19, 2009

Q2 Gold Demand Falls


According to the recently released Q2
Gold Demand Trends from the World Gold Council 2nd quarter demand dropped 9% from Q2 08'. Jewelry consumption was down 22%; Industrial & Dental down %21; both offset by a surge in Investment of 46%. (these figures based on tonnage)

Supply(mined + recycled) on the other hand was up 14% over the same period while the London fix price was up 3%

Over the first half of 2009 net CBGA Central Bank sales were approx 100 tonnes while net, non-CBGA CB purchases were about 50 tonnes.

Strongest demand came from China and the U.S.

'Corporate Bond Defaults Hit Record'

"The number of companies defaulting on their debts has risen to record levels this year, according to Standard & Poor’s, while investment returns for risky corporate debt have skyrocketed since January.

S&P said 201 borrowers with $453.1bn in debt have defaulted this year, exceeding the 126 defaults for all of 2008, which comprised debt worth $433bn..."

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Cartel Technocrats & Central Planners Off to Jackson Hole


Our financial overlords will be meeting secretly this week in Wyoming to further plan our collective economic futures; this is a great example of how American Democracy works: a group of unelected technocrats, bureaucrats, economists and private bankers meet behind closed doors to congratulate themselves on nearly destroying the global economy, then bringing it back from the brink.

See, they need help deciding how the availability/price of money/credit should be artificially set over the coming months so as to assure the financial-political establishment stays, and grows, in power for the foreseeable future. They understand the obvious short-coming of central planning, that a council of 'wise-men' can not possibly know more than the market itself, so rather than abdicate and let the market set rates, issue bank notes, and extend credit they try to incorporate a greater number of 'wise-men' into the planning. It gives them a sense of confidence in their actions, much like how a child will be more likely to set off a fire-cracker in his mouth if his buddies participate.

They need to figure out the best way to manipulate markets, alter the masses' perceptions, expropriate from one group for the benefit of another, eliminate threats to their financial hegemony, and act like all-knowing-philosopher-god-kings for the benefit of humanity. What, you thought these meetings are secret for the public's benefit?

My suggestion: just hold the meeting out in South Hampton - invite members of the FOMC, Obama's puppet master(s), NY Fed officials, the heads of Goldman, JPM, CITI et. al. - and drop all the pretenses. Ahhh, such a dreamer I am.

Some Simple Nasdaq Technicals

A Bit Off-Topic: Marijuana Economics

Nassim Taleb: A Crazier Future

Stories of Interest

Econ Data; Fed & Treasury Info

Treasury: 70 Day CMB Auction, US International Reserve Position

Fed: Sep 3 TALF announcement

Tuesday, August 18, 2009

Employment Update


Housing Update


In Case You Haven't Seen it Yet

SnP Update

SnP has worked off its over-bought condition and is sitting in limbo here with the potential to trade down towards the lower 2-3 S.D. bands before we start talking about retests of 870 and lower levels.

Latest From Itulip's Eric Janszen


August 2009 FIRE Economy Depression update – Part I: Snowball in Summer
(Update 1)
Credit crunch induced commodity, goods and services supply crash meets government money wave. Can the Fed and Congress stop what they started?

Part I: Snowball in Summer
• Liquidation fire sales ending
• Substitution and stealth inflation
• Deflation fighting policy turns dollar into third world money
• Ready for an epidemic of bank failures?


Article at Itulip.com

Econ Data; Fed & Treasury Info

Treasury: 4wk Bill Auction

Fed: NY fed cuts number of Investment Managers for MBS monetizations

Monday, August 17, 2009

Nassim Taleb Tries to Educate the Financial/Economic Establishment

Of course they won't listen; the State and Financial/Economic Elite are not interested in you or me.

Dear David (if I may),

You and your party may be the only hope we have for a resilient society insulated from negative Black Swans and in which everyone has the opportunity to benefit from positive Black Swans. For I despair of the Obama administration's ability to fix this financial crisis and prevent future ones. I am appalled by the dangers it has been creating and its takeover by the same economic establishment responsible for this crisis.

Continue...

TIC Data; Chinese Holdings Decrease, While Treasury and Equities Buying Stays Strong

Complete TIC data here.

"Treasury International Capital data show a big jump in foreign buying of long-term U.S. financial assets in June, at a net plus $90.7 billion for the strongest reading of the year vs. a net minus $19.4 billion in May (minus $19.8 billion initially reported)"(Bloomberg)

"Foreign demand was centered in Treasury coupons, at a net plus $100.5 billion... Foreigners were also very big buyers of equities where the net gain was $19.1 billion."

Agencies and Corporates were the weak spot.

Chinese holdings drop by $25.1 Bil, Japan holdings up by $34.6 Bil

Econ Data; Fed & Treasury Info

Treasury: 4wk announcement, 3mo bill auction, 6mo bill auction

Fed: TALF program extended,
Commercial Paper

Sunday, August 16, 2009

American Plutocracy


Lobbying (1998-2009)

SectorTotal
Finance, Insurance & Real Estate$3,696,067,299
Health$3,551,488,019
Misc Business$3,401,586,627
Communications/Electronics$3,066,673,860
Energy & Natural Resources$2,573,064,176
Transportation$1,954,022,232
Other$1,909,421,073
Ideological/Single-Issue$1,264,198,306
Agribusiness$1,150,780,371
Defense$1,046,916,782
Construction$401,304,776
Labor$370,674,456
Lawyers & Lobbyists$303,203,122

Oh, and you thought it was just the Republicans who are bought and paid for? Isn't it funny how leading up to the 2000 election Finance-RE-Insurance shifted from funding more Democrats to more Republicans; the Republicans then get elected and towards the end of the Bush terms financing shifts back to favor the Dems, as the Dems get elected. Enough money to control both sides - regardless of who is marginally favored pre-election.


Election CycleTotal ContributionsContributions from IndividualsContributions from PACsSoft Money ContributionsDonations to DemocratsDonations to Republicans% to Dems% to Repubs
2010*$46,610,046$34,616,087$11,993,959N/A$28,039,643$18,506,27760%40%
2008*$474,857,391$402,319,710$72,537,681N/A$240,831,040$233,062,45751%49%
2006*$259,437,470$191,491,504$67,945,966N/A$113,423,098$140,672,98244%54%
2004*$340,099,037$282,129,969$57,969,068N/A$141,099,562$198,059,08341%58%
2002$233,061,144$93,262,735$47,041,232$92,757,177$97,435,828$135,193,10742%58%
2000$309,119,703$153,176,059$46,602,348$109,341,296$126,849,724$180,244,44141%58%
1998$155,005,805$67,560,434$40,351,156$47,094,215$61,462,052$92,233,98140%60%
1996$175,517,301$84,954,588$39,516,102$51,046,611$68,932,555$105,526,45039%60%
1994$103,174,435$52,444,335$33,787,197$16,942,903$50,772,122$52,134,29049%51%
1992$117,126,447$65,122,805$32,621,467$19,382,175$57,538,646$58,976,61249%50%
1990$60,613,414$31,100,577$29,512,837N/A$31,534,784$29,062,91252%48%









Obama the Marxist? Hardly...

Top Donors (2008)*
University of California $1,591,395
Goldman Sachs $994,795
Harvard University $854,747
Microsoft Corp $833,617
Google Inc $803,436
Citigroup Inc $701,290
JPMorgan Chase & Co $695,132
Time Warner $590,084
Sidley Austin LLP $588,598
Stanford University $586,557
National Amusements Inc $551,683
UBS AG $543,219
Wilmerhale Llp $542,618
Skadden, Arps et al $530,839
IBM Corp $528,822
Columbia University $528,302
Morgan Stanley $514,881
General Electric $499,130
* Not from the firm itself; rather it's PAC, employees, partners, owners, and families etc.

(Source for all: Center for Responsive Politics)

Private Investment

Private Investment vs. Consumption, Government Sector

Friday, August 14, 2009

Video Game Industry Sales Plummet 29% in July

The video game industry experienced a stomach-churning 29% drop in U.S. sales in July, its third-worst year-over-year slide since January 1995, when NPD Group Inc. first began tracking sales data.

The monthly decline, the industry's fifth consecutive drop, means game console and software sales are now down 14% from January through July this year compared with the first seven months of 2008.

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Fed Balance Sheet & Monetary Base, Supply

(note: when possible I'm trying to avoid the reported 'average daily' data)

Notables:
  • Securities held outright increase $25.58 Bil ($23.6 Bil in T's) to $1,382 Bil
  • Since Aug 13, 2008 cash in circulation has increased $77.7 Bil to $872.8 Bil
  • Bank deposits increased by $52.4 Bil, while Treasury deposits decreased by $25.8 Bil, for a net increase in deposits at the fed of $24.9 Bil on the week. Deposits of banks moves to a total of $777 Bil
  • FRB Capital dips by $562 mil
  • There was a large jump in Secondary Credit - a type of borrowing from the fed that is considered more risky than primary credit, carrying a 50bp penalty over primary(75+ over fed funds). Throughout the crisis the 2-week daily average never rose above $117 mil, it now stands at $527 mil. The 1 wk average stands at $805 mil and as of Wednesday it has apparently dropped to $705 Mil. - "Secondary credit is available to depository institutions that are not eligible for primary credit... Secondary credit is available to meet backup liquidity needs when its use is consistent with a timely return to a reliance on market sources of funding or the orderly resolution of a troubled institution. Secondary credit may not be used to fund an expansion of the borrower's assets. The secondary credit program entails a higher level of Reserve Bank administration and oversight than the primary credit program..." Primary Credit has moved up to $38 Bil as the 1wk average daily amount was $33.9 Bil. As some of the Fed's liquidity programs wind down, and banks return to more traditional short term financing, jumps in primary and secondary credit will give us better signals about localized distress within the banking sector.
  • Monetary Base(reconstructed with NSA currency and reserve data from the consolidated BS - the rest, less clearing balances and adjustments, is '2 week daily average' data from H.3) = Currency ($872.8 Bil) + Bank Reserves ($777.03) + Surplus Vault Cash ($12.48 Bil) = $1.662 Trillion
  • Other Major Fed liabilities: Treasury Supp Acct continues to stay at a flat $200 Bil, the General Acct dropped $25.8 Bil to $35.8 Bil, and Reverse Repos (where the fed sells treasuries to PDs at a haircut, with an agreement to buy them back later at a higher price, in order to drain reserves and/or drive up the fed funds rate) increased $836 Mil to $67.7 Bil. Total Liabilities of the FRBs = $1.967 Trillion
  • NSA M1 (as of Aug 3) = $1.71 Trillion
  • NSA M2 (as of Aug3) = $ 8.31 Trillion
  • NAS M2 - time deposits - retail MM funds = $6.17 Trillion