MetaPhynance Blog

'Recruited by MI5: the name's Mussolini. Benito Mussolini'

2009-10-15T12:21:00.002-04:00

History remembers Benito Mussolini as a founder member of the original Axis of Evil, the Italian dictator who ruled his country with fear and forged a disastrous alliance with Nazi Germany. But a previously unknown area of Il Duce's CV has come to light: his brief career as a British agent.
Archived documents have revealed that Mussolini got his start in politics in 1917 with the help of a £100 weekly wage from MI5...
Continue...

You Can Run But You Can't Hide

2009-10-14T12:14:00.012-04:00

Support Your Global Police?

...Noble himself said that his organization is pursuing a "visionary model," an "alliance of all nations" under a "global police doctrine." This would, in effect, create the first genuinely planetary police force in human history...
In an address before justice and law enforcement officials from more than 60 nations who had assembled in Singapore, Noble elaborated on that "visionary model": "In the framework of our partnership with the UN, INTERPOL will provide deployed police peacekeepers with access to the world's only secure global police communications system; global police databases including names of criminals, fingerprints, DNA profiles, stolen passports, and stolen vehicles; and specialized investigative support in key crime areas, including fugitives, drugs, terrorism, trafficking in human beings, and corruption."

Apart from some very serious issues of jurisdiction and sovereignty, the most troubling aspect of INTERPOL's "visionary model" is its potential to help create a UN-directed global panopticon – a "Your Papers, Please" system of world-wide scope...
Continue...

'The Message of Dollar Disdain'

2009-10-14T11:52:00.001-04:00

Unprecedented spending, unending fiscal deficits, unconscionable accumulations of government debt: These are the trends that are shaping America's financial future. And since loose monetary policy and a weak U.S. dollar are part of the mix, apparently, it's no wonder people around the world are searching for an alternative form of money in which to calculate and preserve their own wealth.

It may be too soon to dismiss the dollar as an utterly debauched currency. It still is the most used for international transactions and constitutes over 60% of other countries' official foreign-exchange reserves. But the reputation of our nation's money is being severely compromised....
Continue...

GOFO, Libor, UST & Mortgage Rates

2009-10-14T09:08:00.002-04:00

Duration -- GOFO -- LIBOR -- UST
1 month --.33000 --- .2450 --- .04
3 month -- .37750 --- .2841 --- .07
6 month -- .51750 --- .5931 --- .15
1 year ----.70000 --- 1.2325--- .33
(as of today)

Best Mortgage Rates
30yr FRM -- 5.00
15yr FRM -- 4.45
5/1yr ARM -- 3.88
(as of 10/02)

Other
10 Year Note -- 3.41
10 Year Muni -- 3.07
10 Year TIPs -- 1.46
10 Year Bund -- 3.23
10 Year AAA --- 3.80
10 Year A ------ 4.95

Econ Data; Fed & Treasury Info

2009-10-14T08:42:00.002-04:00

Treasury:

Fed:

Who's Got The Gold?

2009-10-13T12:45:00.002-04:00

Largest Gold Reserves by Country

...The SPDR Gold ETF (GLD) has now grown to such a size that if it were a stand alone country it would now be the 6th largest holder of gold in the world. That's remarkable. Even more remarkable, 1 man - hedge fund manager John Paulson - owns nearly 10% of this gold ETF. [May 16, 2009: John Paulson Continues to Pile into SPDR Gold (GLD)] By the transitive theory this would make John Paulson, if he was a stand alone country, somewhere in the 16- 20th largest holder of gold.

Top 15 $ Value of % of

Country Reserves Reserves

United States $298.4 N/A

Germany $125.0 69.2%

International Monetary Fund $118.0 N/A

Italy $89.9 66.6%

France $89.7 70.6%

China $38.7 1.9%

Switzerland $38.2 29.1%

Japan $28.1 2.3%

Netherlands $22.5 59.6%

Russia $20.9 4.3%

European Central Bank $18.4 18.8%

Taiwan $15.5 3.9%

Portugal $14.0 90.9%

India $13.1 4.0%

Venezuela $13.1 36.1%

Continue...

GOFO, Libor, UST & Mortgage Rates

2009-10-13T08:06:00.002-04:00

Duration -- GOFO -- LIBOR -- UST
1 month --.31750 --- .2450 --- .02
3 month -- .35250 --- .2844 --- .06
6 month -- .49500 --- .5956 --- .15
1 year ----.67250 --- 1.2394--- .33
(as of today)

Best Mortgage Rates
30yr FRM -- 5.01
15yr FRM -- 4.48
5/1yr ARM -- 3.92
(as of yesterday)

Other
10 Year Note -- 3.35
10 Year Muni -- 2.99
10 Year TIPs -- 1.47
10 Year Bund -- 3.17
10 Year AAA --- 3.75
10 Year A ------ 4.90

Econ Data; Fed & Treasury Info

2009-10-13T07:57:00.002-04:00

Treasury:

Fed:

Romer Speaks
Kohn Speaks
Dudley Speaks
Commercial Paper
Selected Interest Rates

Holiday Shenanigans?

2009-10-12T15:24:00.001-04:00

Iceland Must Have Missed The Memo: (you can't have price inflation w/ slack in the economy and labor market)

2009-10-12T14:56:00.009-04:00

Iceland Shrinks 8% as Prices Increase 11% in Deepest Recession

...A year after the banking crisis brought Iceland to the brink of bankruptcy, the island nation is mired in the deepest recession among advanced economies. The stock market has lost 97 percent of its value, and more than 780 companies have buckled under the weight of foreign currency loans as the krona plunged...

...Iceland’s economy will shrink 8.5 percent this year and consumer prices will climb 11.7 percent, both the worst performances among the world’s 33 advanced economies, according to the IMF’s latest forecasts. As the rest of the world begins to recover, Iceland’s recession will stretch into next year, with the economy contracting 2 percent, more than any developed nation except Ireland.
Unemployment will rise to 8.6 percent this year, from less than 1 percent in December 2007, the IMF estimates. Iceland will still trail the eurozone average of 9.9 percent and Spain’s 18.2 percent jobless rate, the highest in the developed world.

One of the hardest-hit industries has been construction, where 202 companies filed for bankruptcy in the 11 months after the crash, 67 percent more than in the same period a year earlier, according to data compiled by Statistics Iceland...
Continue...

GOFO, Libor, UST & Mortgage Rates

2009-10-12T08:44:00.002-04:00

Duration -- GOFO -- LIBOR -- UST
1 month --.32400 --- .2444 --- .03
3 month -- .37000 --- .2844 --- .06
6 month -- .48800 --- .6013 --- .15
1 year ----.70400 --- 1.2513--- .34
(as of today)

Best Mortgage Rates
30yr FRM -- 5.01
15yr FRM -- 4.48
5/1yr ARM -- 3.92
(as of 10/02)

Other
10 Year Note -- 3.38
10 Year Muni -- 2.99
10 Year TIPs -- 1.52
10 Year Bund -- 3.18
10 Year AAA --- 3.75
10 Year A ------ 4.90

Econ Data; Fed & Treasury Info

2009-10-12T08:26:00.004-04:00

Columbus Day, markets open

Fed:

Gold COT (Oct 6)

2009-10-12T08:19:00.005-04:00

Gold COT saw an expected jump in O/I of about 30k contracts; Net commercial short jumped while "speculators" took those contracts to the long side, with a large jump in small-trader positions, adding both longs and shorts (more of the former). Again, historically O/I is elevated but the COT structure can support a larger break if the USD and geo-political events remain gold-bullish. Concentrated positions not making a big move...

Sweet Freedom

2009-10-08T23:08:00.010-04:00

Scenes From a Crackdown

...a number of disturbing images, videos, and witness accounts have come out of Pittsburgh, as well as from similar high-stakes political events in recent years, that reveal the disquieting ease with which authorities are willing to crush dissent—and at the very sorts of events where the right to dissent is the entire purpose of protecting free speech. That is, events where influential policymakers meet to make high-level decisions with far-reaching consequences...

...A number of police departments from across the country came to Pittsburgh to help police the summit, and nearly all were dressed in paramilitary garb. In one widely-circulated video from the summit, several police officers dressed entirely in camouflage emerge from an unmarked car, apprehend a young backpack-toting protester, stuff him into the car, and then drive off. It evoked the sort of "disappearance" one might envision in a Latin American junta or Soviet Block country. Matt Drudge linked to the video, describing the officers in it as members of the military. They weren't, though it's certainly easy to understand how someone might make that mistake.

Another video shows a police unit with what seems to be a handcuffed protester. Officers surround the protester and prop him up, at which point another officer snaps what appears to be a trophy photo. (YouTube has since removed the video, citing a terms of use violation.) Other Twitter feeds and uploaded photos and videos claim police fired tear gas canisters into dorm rooms, used sound cannons, and fired bean bags and rubber bullets. One man was arrested for posting the locations of riot police on Twitter...
Continue...

Fed Balance Sheet (Oct 8)

2009-10-08T22:13:00.003-04:00

Total Balance Sheet size continues to plateau as the fed's lending programs contract and their "monetizations" continue to add securities - at a significantly slower pace - to the BS. The program of buying UST/MBS/Agencies is also beginning to wind down. One noticeable development is a large draw-down in the treasury's general account as well as a decrease in the supplemental account causing reserves of depository institutions to balloon to just under $1 Trillion.

'Asian Central Banks Intervene as Dollar Tumbles'

2009-10-08T14:53:00.004-04:00

SINGAPORE -- The U.S. dollar continued to tumble against most Asian currencies Thursday, prompting a wave of foreign-exchange intervention by central banks in South Korea, Taiwan, the Philippines and Thailand seeking to limit damage to their export industries.

Traders said the dollar selloff is unlikely to fade soon, given the prospect for a long period of low U.S. interest rates to support a sluggish U.S. economy and increasing signs central banks in Asia will begin tightening monetary policies in the months ahead.
Continue...

It felt like there was some intervention earlier as the Dec $Index Contract managed (and still manages) to hold above the key 76 level ; whether intervention in "secondary" asian currencies did much, or even anything, to support the $index is debatable though.

Bad 30yr Auction

2009-10-08T13:03:00.005-04:00

$12 Bil 30yr auction
BtC of 2.37
4.009 % yield

10yr note futures dumped from 119.20 to 119.14

UPDATE: 10yr note continues lower to 119.07, stock market may have gotten spooked about the auction as it has followed the bond market lower...only in bizarro world can you have stocks and bonds sell off and watch the dollar rally with it

The USD is Pathetic

2009-10-08T12:32:00.003-04:00

No need to post a chart, just use your imagination...

GOFO, Libor, UST & Mortgage Rates

2009-10-08T09:06:00.001-04:00

Duration -- GOFO -- LIBOR -- UST
1 month --.29750 -- .2444 -- .06
3 month -- .35000 -- .2844 -- .09
6 month -- .43750 -- .5975 -- .14
1 year ----.59500 -- 1.2131-- .34
(as of today)

Best Mortgage Rates
30yr FRM -- 4.92
15yr FRM -- 4.41
5/1yr ARM -- 3.85
(as of 10/02)

Other
10 Year Note -- 3.21
10 Year Muni -- 2.76
10 Year TIPs -- 1.43
10 Year Bund -- 3.12
10 Year AAA --- 3.41
10 Year A ------ 4.56

Econ Data; Fed & Treasury Info

2009-10-08T08:54:00.002-04:00

Treasury:

Fed:

Kohn Speaks
Lacker Speaks
Tarullo Speaks
Hoenig Speaks
Commercial Paper
Selected Interest Rates
Balance Sheet
Base & Reserves
Monetary Aggregates

Iran War Watch

2009-10-07T11:36:00.006-04:00

Is The U.S. Preparing to bomb Iran?

Is the U.S. stepping up preparations for a possible attack on Iran's nuclear facilities? The Pentagon is always making plans, but based on a little-noticed funding request recently sent to Congress, the answer to that question appears to be yes...

Continue...

This could be part of the reason gold is running, although you'd think oil would be rising faster than gold if the market smelled an attack coming.

Here's the contract for an attack on Iran by US-Israel by Dec 31 2009:

GOFO, Libor, UST & Mortgage Rates

2009-10-07T10:04:00.002-04:00

Duration -- GOFO -- LIBOR -- UST
1 month --.30167 -- .2444 -- .03
3 month -- .37500 -- .2844 -- .07
6 month -- .46667 -- .6000 -- .14
1 year ----.63833 -- 1.2169-- .33
(as of today)

Best Mortgage Rates
30yr FRM -- 4.95
15yr FRM -- 4.44
5/1yr ARM -- 3.86
(as of 10/02)

Other
10 Year Note -- 3.21
10 Year Muni -- 2.88
10 Year TIPs -- 1.45
10 Year Bund -- 3.13
10 Year AAA --- 3.41
10 Year A ------ 4.56

Econ Data; Fed & Treasury Info

2009-10-07T09:57:00.003-04:00

Treasury:

Fed:

Tin "Trouble"

2009-10-06T22:47:00.006-04:00

The mystery investor who is turning the tin market on its head

A single investor – thought to be a hedge fund – is sitting on thousands of tonnes of tin in warehouses across London. According to traders almost the entire stocks of tin on the London Metals Exchange (LME) was bought up by a single, mysterious investor, last week...

Continue...

Personally I have no problem with someone partially cornering a market; if they want to put on that type of risk(the riskiest position there is if a forced liquidation occurs, or otherwise) so be it. If they are distorting the "true" price there is a fundamental price inefficiency that allows small (and big) traders to trade against.

Does the semi-corner not have more power? Of course, but why shouldn't they? Someone buying $1 mil of some stock has more power to influence price than someone buying $100 of it. This is just the nature of a society where people exchange things. The thing that people forget is that to manipulate an asset price you have to commit serious capital at price X and eventually be able to liquidate at > X in the future. You can accumulate all you want, but to profit you must distribute it.

If industrial buyers don't like it, they should buy forward and stop bitching about backwardation, or better manage inventory/hedging.

Furthermore a semi-corner would drive the price up/down drastically during the accumulation process creating an incentive, in the case of tin, for more investment in production (with a significant lag) and more metal finding its way on the market.

People don't have a right to tin, they have a right to bid for it. If you don't like the asking price don't buy it. Simple.

UN calls for new reserve currency

2009-10-06T14:19:00.010-04:00

The United Nations called on Tuesday for a new global reserve currency to end dollar supremacy which has allowed the United States the "privilege" of building a huge trade deficit...
..."Greater use of a truly global reserve currency, such as the IMF's special drawing rights (SDRs), enables the seigniorage gained to be deployed for development purposes,"...

Continue...

When an article makes so many spelling/grammatical errors it's tough to take it seriously, although it does fit within the overall theme of global monetary trends...

Dec Gold Destroys Resistance, Heads For Stratosphere

2009-10-06T10:10:00.004-04:00

National Economic Indicators - Charts

2009-10-06T09:36:00.002-04:00

GOFO, Libor, UST & Mortgage Rates

2009-10-06T09:03:00.003-04:00

Duration -- GOFO -- LIBOR -- UST
1 month --.25400 -- .2444 -- .03
3 month -- .38200 -- .2841 -- .07
6 month -- .43800 -- .6000 -- .15
1 year ----.60600 -- 1.2125-- .35
(as of today)

Best Mortgage Rates
30yr FRM -- 4.91
15yr FRM -- 4.42
5/1yr ARM -- 3.84
(as of 10/02)

Other
10 Year Note -- 3.24
10 Year Muni -- 2.90
10 Year TIPs -- 1.48
10 Year Bund -- 3.15
10 Year AAA --- 3.44
10 Year A ------ 4.58

Econ Data; Fed & Treasury Info

2009-10-06T08:43:00.005-04:00

Treasury:

Fed:

Step-By-Step The USD Moves Closer To The Abyss

2009-10-05T20:10:00.004-04:00

The demise of the dollar
In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.
The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years...
Continue...

The end of the dollar spells the rise of a new order

...But the significance of this development goes much further. Since the end of the Second World War the dollar has been the bedrock of world trade. The pre-eminence of the American currency flowed naturally from the economic dominance of the US. Virtually everyone traded with America so it made sense to use their currency.
But the US is not the dominant power that it once was. The financial crisis has left it hobbled with significant government and household debts and sharply reduced prospects for growth. Developing nations such as China, Brazil and India, on the other hand, have weathered the economic storm significantly better. So while this latest proposal is born of financial calculation, it is also a reflection of a new economic world order...

Continue...

GTU Premium

2009-10-05T12:47:00.006-04:00

As Dec gold tests all time highs (1017 last) I figured we should look at the level of retail demand and if we're overbought. We already discussed the drop in O/I and spec long positions which occurred last week but here is a look at the Central GoldTrust(GTU) vs. the Gold etf(GLD). GTU is different than GLD in that its holdings(inventory of metal) stay flat and traders can bid the trust to a premium/discount of its actual holdings. Therefore when GTU rises faster than gold its taking on more of a premium, indicating increased retail appetite which, if severe enough, can lead to an overbought condition.

As you can see GTU has actually been dropping relative to GLD as we head towards the highs, indicating a move from weak to strong hands and silencing the notion of gold being overbought. Of course none of this matters if the USD starts to rally but important nonetheless...

Cherry Picking Price Data

2009-10-05T11:23:00.012-04:00

From ZH:

What was truly notable in today's ISM disclosure was the collapse in the non-manufacturing Prices Paid index, which tumbled a whopping 14.3% in its current read of 48.8 from August's 63.1. Any spin of this data point that does not highlight it for the bright red deflation warning flag it is, would be naive.

This is the problem with cherry picking data - specifically data as volatile as ISM prices paid. Leaving aside the point that one is better served looking at manufacturing prices when you're dealing with cost-push inflation from a weak currency/strong commodity prices, let's look at the the historical data of non-mfg prices paid for the "reflationary" period anyway:

--Date ---% higher --- %same --- %lower --- index

Nov-08	11	49	40	37.0
Dec-08	9	50	41	36.1
Jan-09	13	55	32	42.5
Feb-09	18	57	25	48.1
Mar-09	12	59	29	39.1
Apr-09	9	70	21	40.0
May-09	17	68	15	46.9
Jun-09	26	60	14	53.7
Jul-09	13	59	28	41.3
Aug-09	23	71	6	63.1
Sep-09	9	77	14	48.8

(seasonally adjusted)

Isn't it clear why you shouldn't simply look at Aug-Sep, just as you shouldn't have looked solely at Jul-Aug so as to claim coming hyper-inflation? We must look at the trend, which is clearly up(higher lows, higher highs). Secondly, we also notice the trend of those paying lower prices is decreasing(while those seeing higher prices is flat to slightly up), indicating greater price stability as reflation takes hold.

%14 said they paid lower prices, %9 said higher, and this is a "deflationary red flag"? Look back to the heart of the "deflation" in Nov-Dec when %40 saw lower prices and the index was in the 30's. Now of course I also started my data set at the worst readings on the prices paid index to prove that this is in fact a relfationary period; if you look back further you'll see the deterioration in the index that coincides with the near collapse of the global banking system. If that couldn't cause a "deflationary spiral" should we really be worried about one month of data that does nothing but prove that some people see only what they want to?

btw: I'm a big fan of ZeroHedge and think it's one of the best financial blogs out there, I just disagree with their deflation bias...

SnP Update

2009-10-05T11:02:00.003-04:00

SnP has taken a pause from its relentless grind higher and touched/held a zone of support formed between the Aug highs and the yearly pivot. We're also nearing our statistical measures of support and have the highest downside reading on our OGD 2 overbought/oversold indicator since the Cycle LOW back in march. These levels offer bullish individuals a chance to get on the train; those with a more bearish outlook staying neutral until a clearer technical breakdown occurs, most likely of the 980 and 930 levels. (note: this is not investment advice)

BIS Continues to Warn of Coming Crisis

2009-10-05T09:53:00.004-04:00

Entering the Greatest Depression in History: The Bank for International Settlements (BIS) Warns of Future Crisis
In light of the ever-present and unyieldingly persistent exclamations of “an end” to the recession, a “solution” to the crisis, and a “recovery” of the economy; we must remember that we are being told this by the very same people and institutions which told us, in years past, that there was “nothing to worry about,” that “the fundamentals are fine,” and that there was “no danger” of an economic crisis.

Why do we continue to believe the same people that have, in both statements and choices, been nothing but wrong? Who should we believe and turn to for more accurate information and analysis? Perhaps a useful source would be those at the epicenter of the crisis, in the heart of the shadowy world of central banking, at the global banking regulator, and the “most prestigious financial institution in the world,” which accurately predicted the crisis thus far: The Bank for International Settlements (BIS). This would be a good place to start...
Continue...

GOFO, Libor, UST & Mortgage Rates

2009-10-05T09:19:00.008-04:00

Duration -- GOFO -- LIBOR -- UST
1 month --.28400 -- .2456 -- .02
3 month -- .36800 -- .2844 -- .09
6 month -- .45200 -- .6019 -- .13
1 year ----.64400 -- 1.2069 -- .34
(as of today)

Best Mortgage Rates
30yr FRM -- 4.91
15yr FRM -- 4.42
5/1yr ARM -- 3.84
(as of yesterday)

Other
10 Year Note -- 3.20
10 Year Muni -- 2.90
10 Year TIPs -- 1.50

Econ Data; Fed & Treasury Info

2009-10-05T08:38:00.002-04:00

ISM Non-Mfg Index

Treasury:

Fed:

Weekly Gold COT Update (Sep 29)

2009-10-05T08:24:00.005-04:00

Gold COT data (as of Sep 29) is slightly/moderately bullish as O/I dropped by 12.5k contracts as speculative longs and shorts dropped sharply(longs more than shorts) while Comm shorts not only decreased short positions but added 4.5k long contracts. Concentrated positions increased, especially on the short side. This action along with the sharp sell-off early in the week, followed up by the strong reversal later and firming early Sun-Mon trading put us on a bullish footing. Of course most of the action will be dependent on USD; as the contra-contrarians continue to call the short USD trade crowded and then proceed to crowd the long side we could get our breakout if 76 in $ index breaks and weak-hand USD longs are forced to liquidate. Historically Gold O/I is elevated but can easily run up to over 650k contracts on a serious break of the 1030 area.

The U.S. Is The New U.K.

2009-10-02T16:34:00.004-04:00

Political scientists report drop in US standing
WASHINGTON — The United States' standing in the world declined in the past decade to below Cold War levels, according to a leading group of political scientists.
Favorable attitudes have risen sharply under President Barack Obama with his commitment to "restore American standing," but confidence in him appears to be in conflict with unfavorable attitudes about U.S. foreign policy, the American Political Science Association said in a report released Thursday...
...American standing plunged most sharply in the Middle East and Europe, although authoritarian regimes in the Middle East are more supportive of U.S. policy than they can say publicly, the report said.
In Europe, there is a growing European identity and "a conscious political attempt to delink Europe from American policies," according to the report...
Helping raise U.S. esteem now are Obama's rhetorical skills and "what his election signifies about the openness of America," the report said. [demagoguery and delusion, that's just rich - J.O.]
"In policy terms, however, most (foreigners) believe that there has been little change in the U.S. disregard for the interests of their country, and that U.S. influence in the world is still mostly bad," the report said...
Continue...

Shocking, I know.

Greenspan States The Obvious, Reuters Writes Story

2009-10-02T15:12:00.002-04:00

Greenspan says Fed balance sheet an inflation risk
WASHINGTON (Reuters) - Former Federal Reserve Chairman Alan Greenspan said on Friday that the Fed risks igniting a burst of inflation if it does not withdraw its extensive support for the economy at the right moment.

"You cannot afford to get behind the curve on reining in this extraordinary amount of liquidity because that will create an enormous inflation down the road," Greenspan said at a forum hosted by The Atlantic magazine, the Aspen Institute and the Newseum...
...The Fed has said that with high unemployment and a record level of factory idleness, none of the pressures that would ignite inflation is on the horizon. A government report on Friday that showed a weaker-than-expected job market in September is likely to provide additional support for that view.

Greenspan said the economy is "undergoing a disinflationary process," and stressed that the Fed faces no urgent need at the moment to unwind its monetary stimulus...
Continue...

That statement in bold should scare the hell out of everyone...

THE BEST CNBC VIDEO CLIP I'VE EVER SEEN - AMAZING

2009-10-02T11:36:00.004-04:00

from ZeroHedge

Unemployment Rate Continues Higher

2009-10-02T11:08:00.002-04:00

Look at SA U-6 rate (bottom right hand corner, red box). This rate looks at all those technically unemployed, plus discouraged/marginally attached, and part time workers(available/looking for full time work). Not to worry folks because the technocrats and bureaucrats have announced the recession over; I wonder what the 1 out of 5 people who are (under)unemployed think about that?

USD Still Running The Show

2009-10-02T10:35:00.004-04:00

Huge Reversal in Gold, Bonds and Stocks after the initial reaction to horrible employment news. Gold cleared out longs and trapped shorts; now attempting to break the 1010 ress. area before making a move on the key 1030 area...

Horrible Employment Data

2009-10-02T10:21:00.005-04:00

Here's the BLS Release.

From the Market-Ticker Forum:

...But the Household Data is VASTLY worse than reported. Here are the month-over-month changes, and they're in the realm of frightening. (all numbers in thousands)

Civilian Labor Force: 154,879 to 153,617 this month.

Employed: 140,074 down to 139,079 this month.

That's a loss of 995,000 jobs, not 263,000, and the labor force contracted by 1,262,000 people!

The participation rate was absolutely decimated, down 0.6% this last month alone. The people "not in the labor force" rose by a staggering 1,516,000 in the last month...
Continue...

New Global Monetary System Update

2009-10-02T10:17:00.002-04:00

IMF chief renews call for currency reform
Dominique Strauss-Kahn, the head of the International Monetary Fund, on Friday reiterated his criticism of China’s “undervalued” currency, but said reforms to exchange rate policies were part of wider moves to create more balanced global growth.
Speaking at the opening of the World Bank and IMF annual meetings in Istanbul, Mr Strauss-Kahn and Robert Zoellick, the bank’s president, called for the world to continue co-operating on international economic issues even as the economic and financial crisis fades...
...This build up of reserves, Mr Strauss-Kahn said, should be replaced in future by a “less costly and more efficient pooling of reserves” at the IMF. He said the decision in principle to shift 5 per cent of the votes in the IMF from richer countries to poorer ones was “key” to making the fund more credible and legitimate.
Mr Zoellick also called for a shift in world demand. “A multi-polar economy, less reliant on the US consumer, will be a more stable economy,” he said.
Continue...

GOFO, Libor, UST & Mortgage Rates

2009-10-02T08:58:00.005-04:00

Duration / GOFO / LIBOR/ UST
1 month / .29500/ .2444 / .03
3 month / .36000/ .2841 / .10
6 month/ .41000/ .6031 / .15
1 year / .60833/ 1.2125/ .37
(as of today)

Best Mortgage Rates
30yr FRM /4.93
15yr FRM / 4.45
5/1yr ARM / 3.86
(as of yesterday)

Other
10 Year Note 3.21
10 Year Muni 2.92
10 Year TIPs 1.45

Econ Data; Fed & Treasury Info

2009-10-02T08:51:00.003-04:00

Fed:

Eric Rosengren Speaks (8:15 am)
Commercial Paper
Selected Interest Rates
Richard Fisher Speaks (4:35 am)
Comm. Bank Assets/Liabilities

Fed Balance Sheet Update (Oct 1)

2009-10-01T23:48:00.003-04:00

(small discrepancies may occur as Fed Credit subcategories aren't pulled directly off consolidated balance sheet)

Dec Gold Holding a Bid @ 999-1000

2009-10-01T22:09:00.010-04:00

After an 11pt dip early, around midday we saw gold hold the 999/1000 level despite dollar strength and continued to hold it throughout early overnight trading. The past couple of days we've seen strong dip-buying in the face of dollar strength and if this can continue into a downward reversal in USD we should get our breakout through the 1030 area. Of course if USD continues to bounce 999-1000 will give way... Also, the COT report tomorrow will tell us a lot - bulls should be hoping for a 20-30k contract drop in OI.

Fed Data, Papers, Reports etc.

2009-10-01T21:31:00.004-04:00

Iran War Watch

2009-10-01T14:53:00.003-04:00

'No credible evidence' of Iranian nuclear weapons, says UN inspector

The UN's chief weapons inspector, Mohamed ElBaradei, said today he had seen "no credible evidence" that Iran is developing nuclear weapons, rejecting British intelligence allegations that a weapons programme has been going on for at least four years.

Continue...

Next Week's Treasury Auctions

2009-10-01T12:34:00.002-04:00

Monday:
$30 Bil - 3mo bills
$30 Bil - 6mo bills
$7 Bil - 10yr TIPs
Tuesday:
$39 Bil - 3yr notes
Wednesday:
$20 Bil - 10yr notes
Thursday:
$12 Bil - 30yr bonds

Total: $138 Bil

GOFO, Libor, UST & Mortgage Rates

2009-10-01T09:52:00.001-04:00

Duration / GOFO / LIBOR/ UST
1 month / .30000/ .2456 / .04
3 month / .32600/ .2844 / .19
6 month/ .40600/ .6200 / .15
1 year / .61400/ 1.2419/ .37
(as of today)

Best Mortgage Rates
30yr FRM /4.99
15yr FRM / 4.55
5/1yr ARM / 3.92
(as of yesterday)

Other
10 Year Note 3.27
10 Year Muni 2.93
10 Year TIPs 1.50

Econ Data; Fed & Treasury Info

2009-10-01T09:38:00.003-04:00

Treasury:

Fed:

Ben Bernanke Speaks (9:00 am)
Sandra Pianalro Speaks (5:30 pm)
Dennis Lockhart (5:30 pm)
Donald Kohn on Fed Exit Strategy
Governor Tarullo on international cooperation to modernize financial regulation
Bernanke on regulatory reform
Commercial Paper
Selected Interest Rates
Balance Sheet
Reserves & Base
Monetary Aggregates

Latest From Prof. Fekete

2009-09-30T22:33:00.001-04:00

The Supply of Oxen at the IMF
Some years ago I penned a paper with the title “The Supply of Oxen at the Fed”. I am indebted to Alan Greenspan for a great line in one of his speeches, entitled The History of Money, from where I borrowed my title. He wrote: “If fiat money falters, we may have to go back to oxen as our medium of exchange. In that event, I trust, the Federal Reserve will have an adequate inventory of oxen.” My article was designed to reassure Mr. Greenspan that the supply of oxen at the Fed was very secure indeed, in no small measure due to his stewardship.
Has Barrick Been Barricked by the U.S.?
According to an announcement dated September 8, 2009, Barrick is going to throw into the dustbin its long-standing hedge policy, and pay for buying back its hedge-book by diluting the value of its common stocks through issuing more than 81 million new shares, or about 10 percent of the outstanding. The so-called hedges of Barrick have been thoroughly discredited and will soon be history. So-called, because the long-term forward sales contracts in question that the parvenu gold miner has invented and flaunted are not proper hedges and never have been. They are a fraud. They are naked short positions pretending to be balanced by gold ore reserves in the moon (or on this earth which, for hedging purposes, is practically the same thing). Part of the newsworthy story, of course, is the fact that the hedge book of Barrick has been increasingly under water for some nine years now, threatening the unfriendly giant with drowning.

High Gold Price Curtails Indian Imports

2009-09-30T22:13:00.003-04:00

India’s Gold Imports Drop for Fifth Month, Traders’ Group Says
Sept. 30 (Bloomberg) -- Gold imports by India, the world’s biggest buyer, probably fell for the fifth month in September as rising prices deterred jewelry buyers, a traders’ group said.

Overseas purchases may total 50 metric tons, compared with 54 tons a year ago, said Harmesh Arora, vice president of the Bombay Bullion Association Ltd., citing preliminary data.

“The overall imports will still be less than last year as prices are still too high,” Arora said...
...India’s gold purchases have fallen every month since April and imports last month were 21.8 tons compared with 98 tons a year earlier, according to the association.
Continue...

"US secretly tried to make deal with Goldman Sachs in wake of financial crisis"

2009-09-30T21:52:00.002-04:00

NEW YORK, N.Y.—The government secretly tried to orchestrate a deal involving Goldman Sachs in the week following Lehman Brothers’ collapse and considered using the Federal Reserve to help support such a transaction, Andrew Ross Sorkin reports in the new issue of Vanity Fair.

In an excerpt from his forthcoming book, Too Big To Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System—and Themselves, Sorkin reports that the deal, which was nearly consummated, would have merged Goldman Sachs and Wachovia. Henry M. Paulson, the Treasury secretary and former C.E.O. of Goldman, was deeply involved in the process, contacting both Lloyd Blankfein, Goldman’s current C.E.O., and a Wachovia board member, and strongly urged both to consider it. Wachovia’s C.E.O., Robert Steel, was a former vice-chairman at Goldman Sachs and Paulson’s former number two at the Treasury Department.
Continue...

Some parts of this story don't totally make sense, but interesting nonetheless.

Like It Never Even Happened

2009-09-30T13:15:00.001-04:00

Market Woke Up On Wrong Side Of The Bed

2009-09-30T10:07:00.004-04:00

Chicago PMI the culprit: 46.1 vs. 52 exp

Global Governance (by the few, for the many)

2009-09-30T09:36:00.004-04:00

Morgan Stanley's Mack Proposes Single Global Bank Regulator

Sept. 30 (Bloomberg) -- Morgan Stanley Chief Executive Officer John Mack, who struggled to return the bank to profitability amid the financial crisis, said a single regulator should oversee financial institutions worldwide.

“A better system would be one uber-regulator,” Mack said in an interview in New York for Bloomberg Television’s “Conversations with Judy Woodruff,” parts of which will air today. “We do need an overall systemic-risk management that everyone buys into. It’s not a U.S. systemic boundary -- it’s a global systemic risk manager.”
Continue...

But, but, but... I thought regulation was anathema to these greedy capitalist pigs - not to mention "uber-regulation" on a global scale. Sorry, but the real world isn't as simple as a Micheal Moore movie. Why do big firms push for regulation? To drive up costs to competitors, capture friendly regulators, placate populist indignation, create barriers to entry, incrementally build a global system that can circumvent economic nationalism and set up oligopolies in new markets like carbon credit trading, just to name a few...

Large banks have always been international in nature and have sought regulation to protect their government subsidized monopolies...

GOFO, Libor, UST & Mortgage Rates

2009-09-30T09:22:00.002-04:00

Duration / GOFO / LIBOR / UST
1 month / .30333 / .2456 / .01
3 month / .35833/ .2869 / .12
6 month / .47167/ .6288/ .18
1 year / .68333 / 1.2638/ .39
(as of today)

Best Mortgage Rates
30yr FRM /4.9
15yr FRM / 4.52
5/1yr ARM / 3.88
(as of yesterday)

Other
10 Year Note 3.30
10 Year Muni 2.95
10 Year TIPs 1.54

Econ Data; Fed & Treasury Info

2009-09-30T09:14:00.002-04:00

Treasury:

U.S. International Reserve Position

Fed:

Why There's A Cartel:

2009-09-30T00:12:00.011-04:00

"Insured" Commercial Banks:

Total Tangible Assets = $11,385,309,000,000
Total Liabilities = $10,525,879,000,000
Adjusted Equity = $859,000,000,000
12.25 to 1
MBS held = $1,157,041,000,000

scary...

p.s. I'm beginning to embrace the extended 13 digit notation so as to help us appreciate how far we've come. I figure if the banks/fed (ultimately debtors) go through all that trouble to add 'em I should, at the very least, show due reverence and display them in all their magnificence.

U.S. Economic and Interest Rate Outlook - Paul Kasriel

2009-09-29T22:19:00.004-04:00

(Northern Trust - U.S. Economic Outlook)

Glenn Greenwald Is The Man

2009-09-29T13:30:00.006-04:00

Just another example of why one should eschew the mainstream press and seek alternative media...

Gold Relatively Strong Despite $/Treasury Strength

2009-09-29T13:01:00.001-04:00

Shadow Inventory Of Unsold Homes A Real Problem

2009-09-29T11:09:00.007-04:00

This, along with this, should trouble those predicting a strong recovery for the mortgage/housing market in 2010 and/or 2011.

From the Bloomberg article on shadow foreclosure inventory:

...Legal snarls, bureaucracy and well-meaning efforts to keep families in their homes are slowing the flow of properties headed toward foreclosure sales, even when borrowers are in deep distress. While that buys time for families to work out their problems, some analysts believe the delays are prolonging the mortgage crisis and creating a growing "shadow" inventory of pent-up supply that will eventually hit the market...

...As of July, mortgage companies hadn't begun the foreclosure process on 1.2 million loans that were at least 90 days past due, according to estimates prepared for The Wall Street Journal by LPS Applied Analytics, which collects and analyzes mortgage data. An additional 1.5 million seriously delinquent loans were somewhere in the foreclosure process, though the lender hadn't yet acquired the property. The figures don't include home-equity loans and other second mortgages.

Moreover, there were 217,000 loans in July where the borrower hadn't made a payment in at least a year but the lender hadn't begun the foreclosure process. In other words, 17% of home mortgages that are at least 12 months overdue aren't in foreclosure, up from 8% a year earlier...

...According to Collateral Analytics, a housing research firm, homes that have been foreclosed on typically sell at a 10% to 50% discount...

..But the number of foreclosures is expected to increase in the fourth quarter as mortgage-servicing companies determine who is eligible for a loan modification and who isn't. "We are going to see a spike from now to the end of the year in foreclosures as we take people out of the running" for a loan modification or other alternatives, says a Bank of America Corp. spokeswoman. Foreclosure sales had dropped to "abnormally low" levels in response to government efforts to stem foreclosures, she adds...

Some day - eons from now - the human species will evolve (assuming we don't destroy ourselves first) and finally accept this simple truism: when you try to reflate a debt deflation brought on by the collapse of an asset bubble all you do is prolong the contraction without a compensatory drop in severity(at the onset). (Although, the drop can be cushioned in the short-term with counter-cyclical fiscal and easy monetary policy; and we all know that in the world of political-economy there is no long-term.)

Remember: bubble = problem; deflation = solution. Crazy, I know.

Broke: The New American Dream

2009-09-29T10:49:00.001-04:00

USD Trying to Bottom / Bounce

2009-09-29T10:33:00.007-04:00

(visit: INO.com)

but I'm not gonna hold my breath...

August Price Statistics (Cleveland Fed)

2009-09-29T09:53:00.002-04:00

The CPI jumped up 5.5 percent (annualized rate) in August, almost entirely on a spike in gasoline prices (the BLS says roughly 80 percent of the increase in the overall index was due to the increase in gas prices). Still, the 12-month growth rate in the series is down 1.5 percent. The core CPI (excluding food and energy prices) rose 0.8 percent in August, pushing its 12-month trend down 0.1 percentage point to 1.4 percent.

There were a couple rather curious price moves during the month. First, the price for new vehicles fell 14.7 percent in August, its largest monthly price decrease since the early 1970s. This is in part due to how the BLS calculated the effect of the CARS rebate on the price of new vehicles. Also, used car and truck prices jumped up 25 percent in August (their largest increase since 2004)... Elsewhere, OER (owners’ equivalent rent), which comprises roughly 25 percent of the overall CPI market basket, rose 1.0 percent in August after a virtually flat reading in July...

...The underlying price change distribution showed less softness in August, as roughly 30 percent of the index (by expenditure weight) exhibited outright price decreases, compared to nearly one-half of the index in July. Still, just 26 percent of the consumer market basket rose at rates exceeding 3.0 percent in August, compared to an average of 35 percent so far this year...
...Both one-year ahead and longer-term (5 to10 years ahead) average inflation expectations from the University of Michigan’s Survey of Consumers ticked up in early September. One-year-ahead expectations rose 0.1 percentage point to 3.1 percent, while longer-term expectations increased from 3.1 percent in August to 3.3 percent. While short-term expectations have bounced around over the past year (likely following food and energy prices), it is not clear that longer-term expectations have shifted in any meaningful way recently, as the series has remained close to its five-year average of 3.4 percent.

Complete Aug Price Stats

GOFO, Libor, UST & Mortgage Rates

2009-09-29T09:45:00.000-04:00

Duration / GOFO / LIBOR / UST
1 month / .33000 / .2463 / .01
3 month / .39600/ .2897 / .10
6 month / .48000 / .6313/ .18
1 year / .67600 / 1.2538/ .39
(as of today)

Best Mortgage Rates
30yr FRM /4.97
15yr FRM / 4.59
5/1yr ARM / 3.91
(as of yesterday)

Other
10 Year Note 3.32
10 Year Muni 2.95
10 Year TIPs 1.56

Econ Data; Fed & Treasury Info

2009-09-29T09:33:00.004-04:00

Treasury:

Fed:

A Cold Winter = Some Unexpected Cost-Push Price Inflation (at the margin at least)

2009-09-28T13:36:00.022-04:00

U.S. Northeast May Have Coldest Winter in Decade
Sept. 28 (Bloomberg) -- The U.S. Northeast may have the coldest winter in a decade because of a weak El Nino, a warming current in the Pacific Ocean, according to Matt Rogers, a forecaster at Commodity Weather Group.

“Weak El Ninos are notorious for cold and snowy weather on the Eastern seaboard,” Rogers said in a Bloomberg Television interview from Washington. “About 70 percent to 75 percent of the time a weak El Nino will deliver the goods in terms of above-normal heating demand and cold weather. It’s pretty good odds.”...
...U.S. inventories of distillate fuels, which include heating oil, are at their highest since January 1983, the U.S. Energy Department said Sept. 23. Stockpiles of 170.8 million barrels in the week ended Sept. 18 are 28 percent above the five-year average.
Continue...
Almanac predicts bitterly cold winter for parts of U.S. (Sep 2)
...The longtime periodical, published since 1818 and famous for its long-range weather predictions, is out with its annual winter forecast, which says Old Man Winter is really going to hammer folks in the Midwest and upper Great Lakes region with very cold and very snowy conditions...

...But don't let your guard down if you live along the East or West coasts.
Farmer's Almanac managing editor Sandi Duncan says no one will be immune to the rough weather this winter...
Continue...

Could increased demand from colder weather mitigate demand destruction from economic contraction and a build-up in inventories? The market seems to have already digested inventory and demand trends so a surprisingly cold winter could push oil/fuel prices up which -alongside monetary/fiscal reflation and a weakening dollar- could lead to increased cost-push, price inflation. This could have a double effect on consumption: 1) the obvious displacement of discretionary spending and, 2) a ripple effect of cost side pricing pressure throughout the producing/servicing sectors and the consequent loss of consumer purchasing power.

Cracks In The Financial Establishment?

2009-09-28T11:00:00.004-04:00

World Bank Chief to Take Shots at the Fed
...In a speech he’ll deliver at the Paul H. Nitze School of Advanced International Studies of the Johns Hopkins University Monday, Mr. Zoellick says central banks around the world fell down as regulators. He questions whether Congress should give the Fed any more power as it looks for ways to revamp financial sector oversight.

“Central banks failed to address risks building in the new economy,” Zoellick says...

Zoellick is a veteran U.S. economic-policy official who served at the U.S. Treasury from 1985 and 1993 where he was, among other posts, deputy assistant secretary for financial institutions policy under then Secretary James A. Baker III...

...“It will be difficult to vest the independent and powerful technocrats at the Federal Reserve with more authority. My reading of recent crisis management is that the Treasury Department needed greater authority to pull together a bevy of different regulators. Moreover, the Treasury is an Executive department, and therefore Congress and the public can more directly oversee how it uses any added authority...”
Continue...

Yuan Bonds Issued in Hong Kong

2009-09-28T10:42:00.005-04:00

Beijing sells 1st yuan bonds in Hong Kong
BEIJING (AP) - Beijing sold government bonds denominated in the mainland's yuan for the first time Monday in Hong Kong, adding to gradual moves to expand the international use of its tightly controlled currency.

Bonds from the 6 billion yuan ($875 million) issue were on sale to the public at Hong Kong banks. There was no immediate word on how well they were selling and how many were allocated to institutional investors...
...Monday's sale should increase the private sector use of the yuan, according to finance analysts."

Continue...

GOFO, Libor, UST & Mortgage Rates

2009-09-28T10:25:00.002-04:00

Duration / GOFO / LIBOR / UST
1 month / ..34600 / .2463 / .01
3 month / .44167 / .2825 / .09
6 month / .49667 / .6388/ .19
1 year / .66333 / 1.2550/ .40
(as of today)

Best Mortgage Rates
30yr FRM /4.98
15yr FRM / 4.57
5/1yr ARM / 3.94
(as of yesterday)

Other
10 Year Note 3.31
10 Year Muni 2.96
10 Year TIPs 1.54

Econ Data; Fed & Treasury Info

2009-09-28T10:01:00.003-04:00

Treasury:

Fed:

GOFO & Lease Rates (Gold)

2009-09-27T21:59:00.002-04:00

The State, The Masses, and Perpetual War

2009-09-27T20:45:00.011-04:00

"In later times... growth [of governmental authority] has continued at an accelerated pace, and its extension has brought a corresponding extension of war. And now we no longer understand the process, we no longer protest, we no longer react. This quiescence of ours is a new thing, for which Power has to thank the smoke-screen in which it has wrapped itself. Formerly it could be seen, manifest in the person of the king, who did not disclaim being the master he was, and in whom human passions were discernible. Now, masked in anonymity, it claims to have no existence of its own, and to be but the impersonal and passionless instrument of the general will.

But that is clearly a fiction." - On Power, Bertrand De Jouvenal

I thought that quote was appropriate as the drumbeat for a new conflict in the Middle East intensifies:

etc. etc. etc.

"We are ending where the savages began. We have found again the lost arts of starving non-combatants, burning hovels, and leading away the vanquished into slavery. Barbarian invasions would be superfluous: we are our own Huns" - ibid

UPDATE: According to MI6 the venal, ruling oligarchy of Saudi Arabia gives the nod to Israeli flyovers

Weekly Gold COT Update (Sep 22)

2009-09-27T12:49:00.019-04:00

Total COT Positions as of Sep 22 vs. Gold price (weekly, a.m. fix)
[grey: non-reporting; blue: commercial(hedging?); red: non-commercial, reporting speculative; black: spreading]

Concentrated Positions vs. Commercial Shorts vs. Open Interest

Where's John McClane When You Need Him?

2009-09-25T15:13:00.008-04:00

Robbers fly in by helicopter to raid Swedish cash depot
Masked gunmen used a stolen helicopter and explosives to engineer a spectacular raid on a cash depot in Stockholm yesterday, breaking into the building through the roof and flying off with bags of cash, police said.

The daring pre-dawn heist stunned police, who could not deploy their own helicopters to the scene because explosives had been placed at their hangar.
Investigators believe at least 10 professional criminals were involved...

Continue...

At least these criminals don't pretend they're working for the "collective good" as they rob us blind. I'll take a good ole' fashioned, creative heist over a bank bailout any day.

Fed Adds $3 Bil in SDRs to Balance Sheet

2009-09-25T11:32:00.004-04:00

Not sure if this is significant or not but the fed has increased its holdings of SDRs (Special Drawing Rights) from $2.2 Bil to $5.2 Bil during the last week. Will keep an eye on this...

GOFO, Libor, UST & Mortgage Rates

2009-09-25T10:22:00.004-04:00

Duration / GOFO / LIBOR / UST
1 month / .40800 / .2463 / .01
3 month / .41833 / .2825 / .09
6 month / .48167 / .6363/ .19
1 year / .65000 / 1.2375/ .39
(as of today)

Best Mortgage Rates
30yr FRM /4.98
15yr FRM / 4.57
5/1yr ARM / 3.94
(as of yesterday)

Other
10 Year Note 3.37
10 Year Muni 3.01
10 Year TIPs 1.60

Econ Data; Fed & Treasury Info

2009-09-25T10:22:00.002-04:00

Fed:

Fed Balance Sheet Update (Sep 24)

2009-09-24T23:56:00.003-04:00

Crony Capitalism Continues

2009-09-24T22:51:00.000-04:00

Volker Says Obama Plan Leaves Opening for Bailouts

WASHINGTON (AP) — Paul A. Volcker, a top White House economic adviser, said Thursday that the Obama administration’s proposed overhaul of financial rules would preserve the policy of “too big to fail” and could lead to future banking bailouts...

...Mr. Volcker said he did not differ with the administration on most of its proposals and that he took “as a given” that banks would be bailed out in times of crisis...

Continue...

Forecasting Future Savings Rate

2009-09-24T22:25:00.005-04:00

As domestic dis-inflation, deflation expectations, and a rallying dollar took hold during 2008 the savings rate made a predictable jump. Determining what's the cause and what's the effect can be problematic, but we can look at the PCE price deflator to determine where future savings rate may go. This is important to help us understand the demand for cash balances and the level of consumption going forward. Interestingly it appears the PCE-deflator leads the savings rate; as prices rise faster the savings rate increases with a significant lag. This also has something to do with interest rates lagging inflation rates, making savings appear more/less attractive.

Accordingly, as prices have fallen over the last year, real MZM rates remain low, consumer confidence has increased, relfation has begun, and the USD F/X value has fallen there seems to be all the incentive in the world for people to curtail savings going forward. This is what the following charts seem to say as well.

SnP Update

2009-09-24T21:41:00.001-04:00

SnP has worked off its overbought condition and remains over the yearly pivot while tapping its modified S.D. channel(yellow). We are running into numerous support levels and will treat this move as corrective in a larger intermediate-term bull until key technical levels are broken. I'll update those levels going forward.

NEI Charts

2009-09-24T12:40:00.009-04:00

Here's the complete set of charts. I've added a snapshot below(with a few annotations) of some of the more-important data, although you should peruse the whole thing.

In Case You Forgot: USD Is Driving Everything

2009-09-24T11:01:00.002-04:00

"What Metal Detectorists Dream Of"

2009-09-24T09:55:00.003-04:00

Huge Anglo-Saxon gold hoard found
"The UK's largest haul of Anglo-Saxon treasure has been discovered buried beneath a field in Staffordshire.
Experts said the collection of 1,500 gold and silver pieces, which may date to the 7th Century, was unparalleled in size and worth at least £1m.
It has been declared treasure by South Staffordshire coroner Andrew Haigh, meaning it belongs to the Crown..."

Continue...

GOFO, Libor, UST & Mortgage Rates

2009-09-24T09:42:00.002-04:00

Duration / GOFO / LIBOR / UST
1 month / .38667 / .2463 / .05
3 month / .41000 / .2831 / .09
6 month / .48167 / .6394/ .19
1 year / .62500 / 1.2313/ .39
(as of today)

Best Mortgage Rates
30yr FRM /5.04
15yr FRM / 4.60
5/1yr ARM / 3.99
(as of yesterday)

Other
10 Year Note 3.41
10 Year Muni 3.03
10 Year TIPs 1.875

Econ Data; Fed & Treasury Info

2009-09-24T09:20:00.002-04:00

Treasury:

Fed:

This Must Be Satire

2009-09-23T15:02:00.005-04:00

Gordon Brown honoured in New York as world statesman of the year
Gordon Brown may be trailing in the polls at home, but in the US last night he was hailed as a hero for "stabilising" the world economy and showing "compassionate leadership".
The prime minister, in New York for the UN general assembly, was honoured as world statesman of the year at a VIP-packed gala dinner. The award was presented on behalf of the Appeal of Conscience Foundation, an interfaith organisation which campaigns for religious freedom and human rights, by the veteran US former secretary of state Henry Kissinger...

Continue...

Reminds me of that Horace Walpole quote: "Life is a comedy to those who think and a tragedy to those who feel". When you see things like this all you can do is laugh.

The Dollar Carry Trade

2009-09-23T15:01:00.000-04:00

FOMC Release

2009-09-23T14:18:00.005-04:00

Information received since the Federal Open Market Committee met in August suggests that economic activity has picked up following its severe downturn. Conditions in financial markets have improved further, and activity in the housing sector has increased. Household spending seems to be stabilizing, but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment and staffing, though at a slower pace; they continue to make progress in bringing inventory stocks into better alignment with sales. Although economic activity is likely to remain weak for a time, the Committee anticipates that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will support a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability.

With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time.

In these circumstances, the Federal Reserve will continue to employ a wide range of tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt. The Committee will gradually slow the pace of these purchases in order to promote a smooth transition in markets and anticipates that they will be executed by the end of the first quarter of 2010. As previously announced, the Federal Reserve’s purchases of $300 billion of Treasury securities will be completed by the end of October 2009. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.

UPDATE: USD getting hammered; bonds, stocks and gold moving strongly to the upside. Go figure...

Treasury Market Not Loving 5yr Auction

2009-09-23T13:08:00.005-04:00

A Massive $40 Bil in 5yr paper auctioned @2.47, while the market was around 2.41 (I think, my intra-day t-rate data is crap)...BtC of 2.40

Market throwing up after the auction w/ the 10yr futs trading from 117.09 down to 116.28

Complete auction results

UPDATE: 10y futs continue trading down to 116.205

Iran War Update

2009-09-23T11:58:00.006-04:00

From the LewRockwell Blog:

Oh No
Posted by Lew Rockwell on September 23, 2009 07:22 AM

Writes a friend with many sources in the military:

Just received information that some Special Operations units have been alerted for deployment to Israel. I will keep you posted.

Wonder if it has anything to do with this, which may have something to do with this. In any event, crude doesn't seem to be pricing in military action. We'll have to wait and see.

Hey Kids: Learn About Money From The Cleveland Fed

2009-09-23T11:21:00.006-04:00

Great Minds Think: A Kid's Guide to Money

My favorite part is from p. 10:

One of the most important things you can do with money is to save it—that is, put
some money aside now so that you can use it later. By saving a little bit each week,
you can put together enough money to buy something special, such as a new bicycle,
a trip to an amusement park, or a gift for someone special.

You can save money at home (in a piggy bank, for instance) or at a bank. When
you deposit money in a bank, it’s kept safe in a special account with your name on
it. When you want to use the money you’ve saved, you go to the bank and make a
withdrawal.

Yes kids save your money and watch its purchasing power fall day-by-day, year-by-year. And don't forget to keep your money "safe" in a bank so they can lend it out to someone else who wants to buy something they can't afford.

GOFO, Libor, UST & Mortgage Rates

2009-09-23T10:47:00.014-04:00

Duration / GOFO / LIBOR / UST
1 month / .40333 / .2463 / .02
3 month / .43167 / .2850 / .10
6 month / .47400 / .6606/ .20
1 year / .62333 / 1.2625/ .41
(as of today)

Best Mortgage Rates
30yr FRM /5.03
15yr FRM / 4.59
5/1yr ARM / 3.97
(as of yesterday)

Other
10 Year Note 3.44
10 Year Muni 3.05
10 Year TIPs 1.875

Econ Data; Fed & Treasury Info

2009-09-23T10:24:00.004-04:00

Treasury:

Fed:

Top 15	$ Value of	% of
Country	Reserves	Reserves
United States	$298.4	N/A
Germany	$125.0	69.2%
International Monetary Fund	$118.0	N/A
Italy	$89.9	66.6%
France	$89.7	70.6%
China	$38.7	1.9%
Switzerland	$38.2	29.1%
Japan	$28.1	2.3%
Netherlands	$22.5	59.6%
Russia	$20.9	4.3%
European Central Bank	$18.4	18.8%
Taiwan	$15.5	3.9%
Portugal	$14.0	90.9%
India	$13.1	4.0%
Venezuela	$13.1	36.1%