Guest Post: The Bond Bust Has Begun

 

PIMCO Shares Its Thoughts On The BAB Dilemma; Discloses How It Is "Protecting" Itself From A Worst Case Scenario

 

David Rosenberg's 10 Themes For 2011

The Timing of QE2 Was No Accident

Posted: Dec 10 2010     By: Eric De Groot      Post Edited: December 10, 2010 at 4:56 pm
Filed under: General Editorial
Do you think the Fed’s decision to move ahead with QE2, despite the strengthening economy rhetoric, was coincidence with the rollover in "the Formula" and "Leading Formula" in November? Don’t think so. When the formula rolls over, it begins to feed on itself as described by Jim.
Identification of the real secular trends shows the path to profit in this business.
"The Formula" US Fiscal Balance vs US Dollar: Federal Government Budget As A % of GDP, 12 Month Moving Average:

"Leading Formula" Federal Taxes Withheld (TW) Less Total Government Outlays (TO) As A % of GDP, 12 Month Moving Average:

November federal budget deficit highest on record
Treasury says deficit hit $150.4 billion last month, largest November imbalance on record
Associated Press
Martin Crutsinger, AP Economics Writer, On Friday December 10, 2010, 3:56 pm
WASHINGTON (AP) — The federal budget deficit rose to $150.4 billion last month, the largest November gap on record. And the government’s deficits are set to climb higher if Congress passes a tax-cut plan that’s estimated to cost $855 billion over two years.
The Treasury Department says November’s budget gap was 25 percent more than the deficit in November 2009.
For the first two months of the current budget year, which began Oct. 1, the deficit totals $290.8 billion. That’s 2 percent less than for the same period a year ago. And economists had been estimating that the full-year deficit would decline after two years of record highs.
But analysts say the tax deal President Barack Obama reached with Republicans this week will give the 2011 budget year the largest deficit in history — $1.5 trillion, according to economists at JPMorgan Chase. It would mark the third straight year of trillion-dollar-plus deficits.
More…

In the News

Posted: Dec 10 2010     By: Eric De Groot      Post Edited: December 10, 2010 at 7:56 pm
Filed under: In The News
Jim Sinclair’s Commentary
Think about this: US banks have the ability to value their assets however they choose, making their balance sheets a total cartoon.
The problem with falsification of legal forms on foreclosures is not resolved. Yet the rating agencies are totally silent on US banks.
The shorting of the euro operation is still progressing. But you must admit that it is making a lot less progress than the first go-around – even though the media commentary is dire and constant.

Moody’s: May Downgrade Portugal Banks
THE WALL STREE JOURNAL
DECEMBER 10, 2010, 4:55 P.M. ET
BY ALEX MACDONALD AND PATRICIA KOWSMANN
LISBON—Portugal’s banks received another blow Friday when Moody’s Investors Service became the second ratings firm in a week to threaten a downgrade over their continued reliance on funding from the European Central Bank.
Many analysts say the problem is likely to persist until the Portuguese government shores up its finances. Shares in Spanish banks also came under pressure, as investors continued to see parallels between the situations in the fiscally frail Southern European economies.
More…


Jim Sinclair’s Commentary 
So far this Friday:

Bank Closing Information – December 10, 2010
These links contain useful information for the customers and vendors of these closed banks. 
Earthstar Bank, Southampton, PA
Paramount Bank, Farmington Hills, MI 
More… 

Comex Continuous Gold

Posted: Dec 10 2010     By: Dan Norcini      Post Edited: December 10, 2010 at 2:04 pm
Filed under: Trader Dan Norcini