Gold Shakes Off $1.24 Billion 'Fat Finger' - MarketBeat - WSJ: "One indicator that the transaction was a mistake was its size. At 750,000 troy ounces, such large trades are rarely conducted amid very thin trading volumes. Monday trading was expected to be quiet as market participants in China and Japan are out on holiday and many European traders are preparing for a holidays there."
'via Blog this'
Monday, April 30, 2012
Friday, April 27, 2012
The End of Pax Americana: How Western Decline Became Inevitable - Christopher Layne - International - The Atlantic
The End of Pax Americana: How Western Decline Became Inevitable - Christopher Layne - International - The Atlantic: "Indeed, looking forward a decade, the two biggest domestic threats to U.S. power are the country's bleak fiscal outlook and deepening doubts about the dollar's future role as the international economy's reserve currency. Economists regard a 100 percent debt-to-GDP ratio as a flashing warning light that a country is at risk of defaulting on its financial obligations. The nonpartisan Congressional Budget Office (CBO) has warned that the U.S. debt-to-GDP ratio could exceed that level by 2020--and swell to 190 percent by 2035."
'via Blog this'
'via Blog this'
Thursday, April 26, 2012
Bill Gross on Euro Zone and US problems
Gross on whether he's betting on another round of quantitative easing:
"I don't at the moment. I am willing to listen and I did listen intently at the press conference and to prior speeches from Janet Yellin and Mr. Dudley in New York. The big three at the Fed I think have moved closer to the middle in terms of the need for additional QE. They in the market are going to wait for the next eight weeks for two key employment Friday reports between now and then, as well as tomorrow's GDP number, which I think should be judged in my opinion by nominal growth as opposed to real growth. The Fed does not target nominal GDP. They target inflation though. They want lower unemployment, which requires 3% real growth. So the 2 plus the 3 equals a 5% nominal GDP growth target, which the Fed really wants to shoot for. So watch tomorrow's numbers and don't be dissuaded by the 2.5% number or the 3% real growth number. It's the nominal growth number that is key."
On whether the Federal Reserve will resist an additional round of quantitative easing:
"I think so. The Fed does want unemployment to come down. It has been coming down. As a matter of fact, it's lower than their prior projections were. There's little doubt in my mind that a target for unemployment of at least 7% and perhaps lower is what they're shooting for and that is going to require, 6, 12, 18 months, in my view. It might and probably will require, maybe not on June 30, additional quantitative easing. Quantitative easing is basically writing checks. The Fed's been writing checks, the ECB has been writing checks, the Bank of England has been writing checks, even the Bank of Japan has been writing checks. This is $2-3-4 trillion worth of check writing that has supported financial markets, but in turn has allowed for employment growth and lower unemployment. I really think that it's required. I don't welcome it from the standpoint of the negative consequences, but I think it is required."
On whether he would rule out QE3 down the road:
"I don't think so. The Chairman has not ruled it out. Again, to reaffirm, if we see some weak employment reports over the next two months, then QE3 is back on."
On whether there's a risk of a double-dip recession:
"I think so, if liquidity disappears. That was the recessionary implications of 2008 and 2009. Investors fled to cash and it was up to the central banks to re-liquefy the markets and to lever the markets, which they have done. If you have problems in euro land where money basically flees to the center, to Germany, to banks, to cash, as opposed to outward, then euro land continues with their recessionary environment. Ultimately that effects the United States. We at PIMCO are not believers that the United States can simply go it alone on this 2-3% growth path without other countries and other continents participating at the same time."
On when inflation will hit:
"It has already started to hit. Let's look at it this way. In a very slow-growth, in euro land, a very recessionary environment, we still have inflation at over 2%. It is really remarkable. The amount of easing we have seen over the past three years in terms of quantitative easing and extremely low policy rates everywhere has really been an inflationary thrust. I think even the Chairman would be willing to acknowledge that. None of them are willing to acknowledge that it will not come back down. They still think it will be 2% or lower. We suspect not. We suspect, like the Bank of England, Mervyn King always writes letters of apology, saying that the 3% inflation will really become 2%, all we have to do is wait. I think that will be the standard, you know, we will hear from the Chairman and other Fed officials that inevitable inflation will come back down to 2% or maybe lower, but I suspect it will not."
On whether a breakup of the euro zone will happen in the next several years:
"We certainly do not want that. A break up produces disastrous short-term consequences. I think markets know that and policymakers know that, too. Euro land is a dysfunctional family, more dysfunctional than Democrats and Republicans in Washington, DC. The Germans versus the Spanish and the Germans versus the Greeks in terms of ethics so to speak and fiscal discipline is quite a disparity. It's really that requirement for Germany to begin to write checks not only through the ECB, but to basically subsidize through their own fiscal maneuverings, that produces the problems. The Germans, for a long time, have supported East Germany in terms of the amalgamation of the two countries. They are not quite willing to go that far in terms of the big family in euro land and so those are the problems we see on a day to day basis."
On the employment reports coming out:
"They are beginning to move lower, it appears. Ben Bernanke spoke to that and answered some questions in terms of seasonality. We may have seen some strong seasonality in terms of prior reports, not last month's, but the two before that. We have seen initial claims on unemployment move up today. They have indicated for the past three weeks that we are really moving into a weaker employment framework, which would probably produce 150,000 jobs, but not the 200,000 that really got the market excited."
On where he sees the 10-year at the end of 2012:
"I see it around 2%. It is dependent on the Fed continuing to buy 10-year Treasuries. It will be interesting in June to see what happens if the Fed stops writing checks. Basically the Fed says that this is a stock type of argument. It is really like a wine cellar. They have taken half of the wine out of the seller and now they basically said that at the end of June, it will be up to the private market to restock the wine cellar because it is empty. I basically take the flow view that says, hey, at 1.95%, not much of a value there. So let's see, if the Fed doesn't buy them, let's see who else will. It will be an interesting experiment at the end of June if the Fed does not do a quantitative easing, but for the moment, I think the 10-year stays at where it is."
On mortgage-backed securities:
"Mortgages benefit from inactivity and low volatility. A mortgage can prepay or a mortgage can not prepay. So that shifts the average life of a mortgage back and forth. For that negativity and for that optionality that that mortgage holders holds, you get a higher yield. If you expect yields to stay the same for the next one, two or three years, then the 100 or 150 basis points from a mortgage is much better than 2% from a 10-year Treasury."
Wednesday, April 25, 2012
Tuesday, April 24, 2012
Greece revises GDP down 3 weeks after bailout. REMINDER- One primary premise for bailout to work as per the ECB was that Greece's GDP was to go to -1% within 12 months of bailout. Hmmmm... not looking good.
Greece is facing yet another year of sharp recession with GDP expected to contract by as much as 5% in 2012, higher than previously forecast, the Bank of Greece said in a report released today.
The central bank said the recession would weigh on the ability of Athens to meet its fiscal targets.
The forecast is being revised only three weeks after the central bank's monetary policy report had said the economy would contract by 4.5% this year.
Greece has been in recession since 2008, and its GDP contracted by a debilitating 6.9% last year.
"The recession is expected to be close to 5% in 2012, milder than 2011, but only provided that all structural reforms are implemented," the central bank's report said. It attributed its new projection of a bigger contraction to a slump in consumption and productivity, slower overall business activity and a deterioration in the financial sector.
The report underlined that there is no time to waste in implementing the country's economic program, and it urged that after the general election on May 6 the implementation process continue immediately, echoing the fears of Greece's leading European partners that the elections could bring delays.
The Bank of Greece conceded that the bigger-than-expected recession in Greece feeds into higher deficits, but argued that it is a mistake to think the strict fiscal discipline is to be blamed.
"As long as the vicious cycle of fiscal contraction-recession- uncertainty is being fed, our goal to meet our debt and deficit targets becomes difficult," the bank said. "Some blame it on the current fiscal policy, but this is of course a mistake. Fiscal adjustment affects general demand, but it also affects expectations. And positive expectations could emerge if we shrink the public sector and continue implementation despite political developments."
And some more bad news: more wage cuts are coming. Yes, soon our Onionesque forecast of negative wages will come true...
Apart from reiterating its call for further layoffs in the public sector, the Bank of Greece also said that wages should be cut further in order to boost competitiveness. It added that Greece is still missing structural reforms that could boost productivity, services and the business environment generally.
Euro zone Bond yields 4-24-2012 - Mark for future
- Spain sold a total of EUR1.93 billion in 3 and 6 month bills as EUR2 billion was targeted with borrowing costs rising, while BTCs were mixed.
- The EUR725MM 3 month auction saw a yield 0.634% nearly double the March 27 yield 0.381% yet a soaring Bid/Cover of 7.61 vs 3.51 at auction on March 27
- The EUR1.21MM 6 month auction saw a yield of 1.580%, also double the March 27 auction of 0.836%, only this time the Bid/Cover plunged to 3.25 from 5.56 previously
As a reminder this auction was originally supposed to be EUR3 billion and was cut by a third following the recent rout in Spanish bonds.
- Netherlands was another country which sold Bill equivalents by placing EUR1 billion of 3.75% 2014 Bonds, or in other words paper that matures inside the LTRO and is meaningless in terms of actual demand, as it merely piles up Europe's rollover needs around the time of LTRO expiration. However, it also sold EUR0.995billion in 2037 paper at an average yield f 2.782%
The good news is that despite the fact that the country's cabinet just resigned, the yield 0.523% was lower compared to the 0.618% printed at the 0.75% 2015 auction on March 13
Of the 25 year bonds, which saw EUR995MM total sold, the average yield rose to 2.782% vs 2.736% at 2.50% 2033 auction on March 6
Finally, the maximum offering size was EUR 2.5 billion, so the total issuance demand was 20% below max. Yet somehow this was "good enough"
Finally,
- Italy sold a total of EUR2.5b in Bill equivalent Zero Coupon 2014 bonds (again inside TARP), meeting the issuance target.
The average yield soared to 3.355% vs 2.352% at the auction on March 27
The Bid/Cover declined to 1.80 vs 1.86 at auction on March 27
Monday, April 23, 2012
Wednesday, April 18, 2012
Another Hidden Bailout: Helping Wall Street Collect Your Rent | Matt Taibbi | Rolling Stone
Another Hidden Bailout: Helping Wall Street Collect Your Rent | Matt Taibbi | Rolling Stone: "This is from the WSJ this morning:
Some of the biggest names on Wall Street are lining up to become landlords to cash-strapped Americans by bidding on pools of foreclosed properties being sold by Fannie Mae...
While the current approach of selling homes one-by-one has its own high costs and is sometimes inefficient, selling properties in bulk to large investors could require Fannie Mae to sell at a big discount, leading to larger initial costs."
'via Blog this'
Some of the biggest names on Wall Street are lining up to become landlords to cash-strapped Americans by bidding on pools of foreclosed properties being sold by Fannie Mae...
While the current approach of selling homes one-by-one has its own high costs and is sometimes inefficient, selling properties in bulk to large investors could require Fannie Mae to sell at a big discount, leading to larger initial costs."
'via Blog this'
BoE Warns Inflation Could Run Into Medium Term - Europe Business News - CNBC
BoE Warns Inflation Could Run Into Medium Term - Europe Business News - CNBC: ""The sharp falls in construction output in December and January were perplexing, and the Committee was minded not to place much weight on them," the minutes said. "But a wide range of survey indicators pointed to a moderate rate of growth in activity in the first half of the year."
The BoE's greater concern appeared to be inflation."
'via Blog this'
The BoE's greater concern appeared to be inflation."
'via Blog this'
Tuesday, April 17, 2012
Can't Trust Spanish Bond Auctions: Pimco's Gross - US Business News - CNBC
Can't Trust Spanish Bond Auctions: Pimco's Gross - US Business News - CNBC: "That's why "you can’t really trust an auction in Spain" or anywhere else in Europe where the auction is "a function of what the banks are doing rather than what we are doing from the outside," according to Gross."
'via Blog this'
'via Blog this'
Monday, April 16, 2012
Charles Biderman of TrimTabs blows out the BS Of BLS, Census Bureau and other garbage US Govt data manipulation and reporting.
In one of the most coherent take-downs of the government's data gatherers, economists, reporters, and the general investing public that soak up the propaganda spewed forth by the former, TrimTab's CEO Charles Biderman destroys today's 'Advance' retail sales, and crushes the Census Bureau's process. Needing little additional comment, we can only hope that the 'ignorance is bliss' approach of the mainstream media and self-serving talking heads is at least questioned by the broad investing public when they hear the sense that Biderman speaks with regard to the antiquated methodologies used to gather data and the factual destruction of Wall Street Journal "I am the law" headlines straight off the government's press releases. The simple fact is that while anyone suggesting the government's data may not be accurate is dismissed as a tin-foil-hat-wearing conspiracy theorist (Goldman Sachs client 'muppetry', high-frequency-trading liquidity destruction, rehypothecation and shadow-banking deleveraging, LTRO-Stigma, and real European sovereign balance sheet aside for example), when faced with the facts - the unadulterated numbers - it is hard to argue with tough reality; leaving only the shrug, 'money-on-the-sidelines', 'trend-is-your-friend', 'retail not participating yet', self-fulfilling mutual masturbation that is now become our virtuous circle of reporting, government data, and sell-side economists.
http://youtu.be/GzBrJQK010Q
This pretty much covers all the garbage we see on CNBC, I feel for those guys....
http://youtu.be/GzBrJQK010Q
This pretty much covers all the garbage we see on CNBC, I feel for those guys....
Wednesday, April 11, 2012
Monday, April 9, 2012
JOBS Act as per White House PDF Flyer
The American Jobs Act President Obama’s Plan to Create Jobs Now
1. TAX CUTS TO HELP AMERICA’S SMALL BUSINESSES HIRE AND GROW
• Cutting the payroll tax cut in half for 98 percent of businesses: The President’s plan will cut in half
the taxes paid by businesses on their first $5 million in payroll, targeting the benefit to the 98
percent of firms that have payroll below this threshold.
• A complete payroll tax holiday for added workers or increased wages: The President’s plan will
completely eliminate payroll taxes for firms that increase their payroll by adding new workers or
increasing the wages of their current worker (the benefit is capped at the first $50 million in
payroll increases).
• Extending 100% expensing into 2012: This continues an effective incentive for new investment.
• Reforms and regulatory reductions to help entrepreneurs and small businesses access capital.
2. PUTTING WORKERS BACK ON THE JOB WHILE REBUILDING AND MODERNIZING AMERICA
• A “Returning Heroes” hiring tax credit for veterans: This provides tax credits from $5,600 to
$9,600 to encourage the hiring of unemployed veterans.
• Preventing up to 280,000 teacher layoffs, while keeping cops and firefighters on the job.
• Modernizing at least 35,000 public schools across the country, supporting new science labs, Internetready classrooms and renovations at schools across the country, in rural and urban areas.
• Immediate investments in infrastructure and a bipartisan National Infrastructure Bank,
modernizing our roads, rail, airports and waterways while putting hundreds of thousands of workers
back on the job.
• A New “Project Rebuild”, which will put people to work rehabilitating homes, businesses and
communities, leveraging private capital and scaling land banks and other public-private
collaborations.
• Expanding access to high-speed wireless as part of a plan for freeing up the nation’s spectrum.
3. PATHWAYS BACK TO WORK FOR AMERICANS LOOKING FOR JOBS
• The most innovative reform to the unemployment insurance program in 40 years: As part of an
extension of unemployment insurance to prevent 5 million Americans looking for work from losing
their benefits, the President’s plan includes innovative work-based reforms to prevent layoffs and give
states greater flexibility to use UI funds to best support job-seekers, including:
› Work-Sharing: UI for workers whose employers choose work-sharing over layoffs.
› A new “Bridge to Work” program: The plan builds on and improves innovative state programs
where those displaced take temporary, voluntary work or pursue on-the-job training.
LEARN MORE AT WWW.WHITEHOUSE.GOVThe American Jobs Act President Obama’s Plan to Create Jobs Now
› Innovative entrepreneurship and wage insurance programs: States will also be empowered
to implement wage insurance to help reemploy older workers and programs that make it easier
for unemployed workers to start their own businesses.
• A $4,000 tax credit to employers for hiring long-term unemployed workers.
• Prohibiting employers from discriminating against unemployed workers when hiring.
• Expanding job opportunities for low-income youth and adults through a fund for successful
approaches for subsidized employment, innovative training programs and summer/year-round jobs
for youth.
4. TAX RELIEF FOR EVERY AMERICAN WORKER AND FAMILY
• Cutting payroll taxes in half for 160 million workers next year: The President’s plan will expand the
payroll tax cut passed last year to cut workers payroll taxes in half in 2012 – providing a $1,500 tax cut
to the typical American family, without negatively impacting the Social Security Trust Fund.
• Allowing more Americans to refinance their mortgages at today’s near 4 percent interest rates, which
can put more than $2,000 a year in a family’s pocket.
5. FULLY PAID FOR AS PART OF THE PRESIDENT’S LONG-TERM DEFICIT REDUCTION PLAN.
To ensure that the American Jobs Act is fully paid for, the President will call on the Joint Committee
to come up with additional deficit reduction necessary to pay for the Act and still meet its deficit target.
The President will, in the coming days, release a detailed plan that will show how we can do that while
achieving the additional deficit reduction necessary to meet the President’s broader goal of stabilizing our
debt as a share of the economy.
'via Blog this'
1. TAX CUTS TO HELP AMERICA’S SMALL BUSINESSES HIRE AND GROW
• Cutting the payroll tax cut in half for 98 percent of businesses: The President’s plan will cut in half
the taxes paid by businesses on their first $5 million in payroll, targeting the benefit to the 98
percent of firms that have payroll below this threshold.
• A complete payroll tax holiday for added workers or increased wages: The President’s plan will
completely eliminate payroll taxes for firms that increase their payroll by adding new workers or
increasing the wages of their current worker (the benefit is capped at the first $50 million in
payroll increases).
• Extending 100% expensing into 2012: This continues an effective incentive for new investment.
• Reforms and regulatory reductions to help entrepreneurs and small businesses access capital.
2. PUTTING WORKERS BACK ON THE JOB WHILE REBUILDING AND MODERNIZING AMERICA
• A “Returning Heroes” hiring tax credit for veterans: This provides tax credits from $5,600 to
$9,600 to encourage the hiring of unemployed veterans.
• Preventing up to 280,000 teacher layoffs, while keeping cops and firefighters on the job.
• Modernizing at least 35,000 public schools across the country, supporting new science labs, Internetready classrooms and renovations at schools across the country, in rural and urban areas.
• Immediate investments in infrastructure and a bipartisan National Infrastructure Bank,
modernizing our roads, rail, airports and waterways while putting hundreds of thousands of workers
back on the job.
• A New “Project Rebuild”, which will put people to work rehabilitating homes, businesses and
communities, leveraging private capital and scaling land banks and other public-private
collaborations.
• Expanding access to high-speed wireless as part of a plan for freeing up the nation’s spectrum.
3. PATHWAYS BACK TO WORK FOR AMERICANS LOOKING FOR JOBS
• The most innovative reform to the unemployment insurance program in 40 years: As part of an
extension of unemployment insurance to prevent 5 million Americans looking for work from losing
their benefits, the President’s plan includes innovative work-based reforms to prevent layoffs and give
states greater flexibility to use UI funds to best support job-seekers, including:
› Work-Sharing: UI for workers whose employers choose work-sharing over layoffs.
› A new “Bridge to Work” program: The plan builds on and improves innovative state programs
where those displaced take temporary, voluntary work or pursue on-the-job training.
LEARN MORE AT WWW.WHITEHOUSE.GOVThe American Jobs Act President Obama’s Plan to Create Jobs Now
› Innovative entrepreneurship and wage insurance programs: States will also be empowered
to implement wage insurance to help reemploy older workers and programs that make it easier
for unemployed workers to start their own businesses.
• A $4,000 tax credit to employers for hiring long-term unemployed workers.
• Prohibiting employers from discriminating against unemployed workers when hiring.
• Expanding job opportunities for low-income youth and adults through a fund for successful
approaches for subsidized employment, innovative training programs and summer/year-round jobs
for youth.
4. TAX RELIEF FOR EVERY AMERICAN WORKER AND FAMILY
• Cutting payroll taxes in half for 160 million workers next year: The President’s plan will expand the
payroll tax cut passed last year to cut workers payroll taxes in half in 2012 – providing a $1,500 tax cut
to the typical American family, without negatively impacting the Social Security Trust Fund.
• Allowing more Americans to refinance their mortgages at today’s near 4 percent interest rates, which
can put more than $2,000 a year in a family’s pocket.
5. FULLY PAID FOR AS PART OF THE PRESIDENT’S LONG-TERM DEFICIT REDUCTION PLAN.
To ensure that the American Jobs Act is fully paid for, the President will call on the Joint Committee
to come up with additional deficit reduction necessary to pay for the Act and still meet its deficit target.
The President will, in the coming days, release a detailed plan that will show how we can do that while
achieving the additional deficit reduction necessary to meet the President’s broader goal of stabilizing our
debt as a share of the economy.
'via Blog this'
Wednesday, April 4, 2012
America Debt to GDP - 102%......Spain 78.9%....just who is in a crisis !!!
Guest Post: You Ain't Seen Nothing Yet - Part 3 | ZeroHedge: "On this date the U.S. debt to GDP ratio is 102%. Our debt accumulation is on automatic pilot and the national GDP is incapable of growing above 3%. Anyone with the most basic math skills (this excludes Wall Street economists, CNBC bimbo anchors, and Bernanke) can determine the ratio will pass 120% in 2015."
'via Blog this'
'via Blog this'
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