More Americans Believe The Country Is In A Depression Than Growing

Submitted by Tyler Durden on 04/28/2011 14:59 -0400

Probably the only piece of economic news that matters today, and possibly all year, no scratch that, since the "End Of The Recession" (NBER ^TM) - according to Reuters: "The April 20-23 Gallup survey of 1,013 U.S. adults found that only 27 percent said the economy is growing. 29 percent said the economy is in a depression and 26 percent said it is in a recession, with another 16 percent saying it is "slowing down," Gallup said." That means that more Americans think the country is in a Depression, let alone recession, than growing. Cue crickets and a Bernanke press conference where he discusses alien abductions and 8 toed mutant Madagascar lemurs.

 

Dollar's 'waterfall' decline began with Bernanke press conference, Turk says

 

Crispin Odey: "The West Will Become Flooded With Inflation"

Submitted by Tyler Durden on 04/28/2011 13:58 -0400

Some interesting observations from the transcript of Crispin Odey's Q1 2011 conference call. In a nutshell: inflationary re-exports from the developing world back into the developed is about to make life for chairprinters a living hell.

As One Million Exhaust Jobless Benefits, A Look At What Recent Deteriorating Layoff Trends Means

Submitted by Tyler Durden on 04/28/2011 12:56

In addition to today's broad economic disappointment that once again nobody could have foreseen (save for a few comments from us back in January predicting just this most recent contraction), another incrementally negative development which will force the spin doctor to earn their overtime is the observation that over the past year at least 1 million unemployed have now officially fallen off the 99-week gravy train, and exhausted their entire jobless benefits. Luckily, for 10% of the US population there is the magically levitating S&P. For everyone else, there are foodstamps (for now).. and of course the worthless dollar. And in other news, Peter Tchir looks at the recent deplorable jobless claims numbers (wonder why you aren't hearing much about today's initial claims on CNBC? that's why) and comes to the following logical conclusion: "Currently expectations for next Friday's NFP is 183k.  I think the number will be 160k, but in this world it makes no difference since that will encourage belief in QE3 which will trigger dollar weakness which will cause stocks to go up.  Since its hard to go long stocks with this logic, it leaves me looking at precious metals." Tchir is not the only one doing so.

Guest Post: Bernanke's Press Conference, August 1, 2012

Submitted by Tyler Durden on 04/28/2011 12:19 -0400

August 1, 2012: Federal Reserve Chairman Ben Bernanke once again defended the Fed's accommodative monetary policy at today's press conference. Mr. Bernanke was late to the conference, which was shielded from protesters by riot police. In his absence, a pet parrot was brought out to amuse the waiting journalists, who had been carefully vetted by the Fed to "represent the nation's media." The parrot had apparently occupied a perch in the Fed's conference room, for it repeatedly squawked, "Stocks are up, stocks are up." The Fed chairman finally emerged sometime later, looking somewhat distracted. Recent developments in the global economy have cast a shadow on the Fed's continuation of zero interest rates and quantitative easing, the term describing direct purchases of assets such as mortgages, Treasury bonds and stocks. As the dollar continued its slide, unemployed German workers shouted "Death to America" in mass protests in Germany's industrial heartland. With the euro worth $2, German exports to the U.S. have shriveled, causing a sharp contraction in the once robust German economy.

Indirects Flee From Poor 7 Year Auction Which Pushes Bond Curve Wider

Submitted by Tyler Durden on 04/28/2011 13:13 -0400

Today's final auction of the week just closed in the form of a $29 billion 7 year bond issue (Cusip: QG8). While we will find out whether or not this is the auction that broke the debt ceiling camel's back when everything settles on Tuesday of next week, the internals were downright ugly: the WI of the bond was trading at 2.68% when the auction priced at 2.712%, a surprisingly wide tail into what everyone claims is a risk free asset. As a result the entire curve has been dragged wider on the news. Among the internals, the Bid To Cover came at 2.63, far weaker than both the previous (2.80) and the average (2.79). But the most notable metric as usual was the Indirect Bid, which traditionally strong at the belly of the curve, saw only 39.1% of the auction going to foreign bidders. This compares to 49.31% in the last auction and 51.45% on average. This meant that Primary Dealers, better known as Brian Sack, were forced to preemptively monetize 53% of the auction, and 7.8% going to Directs. Overall a very poor auction, considering that conventional wisdom was that when the Fed launches QE3 it will focus on bonds at the belly and to the right, in order to moderate inflation. Hopefully (for some) this is not a harbinger that the Bill Gross thesis is finally starting to materialize.

Former SAC PM Pleads Guilty To Insider Trading

Submitted by Tyler Durden on 04/28/2011 14:41 -0400

Former SAC portfolio manager Donald Longueuil has just pled guilty to charges of insider trading (before the (in)famous Judge Jed Rakoff) in Federal District Court in Manhattan. Dealbook reports: "Mr. Longueuil described in court how after reading news reports about the government’s insider trading last fall he destroyed his hard drive that contained incriminating evidence. The government, however, dropped its obstruction of justice charge against Mr. Longueuil. Under the plea agreement with the government, Mr. Longueuil faces a prison sentence between 46 months to 57 months. Judge Rakoff could depart from those guidelines." And he certainly will if Longueuil, who is a cooperating witness, drops some juicy bombs about every DA's public enemoy number one: ole Crown Lane, Greenwich residing blue eyes himself.

Simon Black Podcast: The Most Sound Opportunities Are Outside The Western World

Submitted by Tyler Durden on 04/28/2011 14:17 -0400

"In the long run, as decades of capital misallocations and inefficiencies in the global economy get shaken out, there’s going to be a redistribution of the wealth. And I think the wealth is going to go to where it’s treated best. And at the end of the day, that’s really what I’m looking for: the places that have the most solid fundamentals and the best growth potential." So states Simon Black, who travels the world (over 20 countries in the past 3 months) in order to assess and report on the investment and lifestyle opportunities offered by various international destinations for the readers of his blog, SovereignMan.com. His boots-on-the ground observations lead him to conclude that there are a number of resource-rich and fiscally-sound developing nations that are much better positioned to meet the future than the US and its developed counterparts. Smart investors, in his opinion, can't afford to ignore the stability and returns (both financial and lifestyle) these countries offer. They should be asking themselves: do I have sufficient exposure to these opportunities?

In The News Today

Posted: Apr 28 2011     By: Jim Sinclair      Post Edited: April 28, 2011 at 1:21 pm
Filed under: In The News





Jim Sinclair’s Commentary

The weather caused the GDP to be disappointing and that is nothing to be concerned about?

Economy in U.S. Grew 1.8% in First Quarter, Less Than Forecast By Timothy R. Homan – Apr 28, 2011 7:53 AM MT
The U.S. economy grew at a slower pace than forecast in the first quarter as government spending declined by the most since 1983.
Gross domestic product rose at a 1.8 percent annual rate from January through March after a 3.1 percent pace in the last three months of 2010, the Commerce Department said today in Washington. Economists projected 2 percent growth, according to the median estimate in a Bloomberg News survey.
To keep spurring the expansion, Federal Reserve policy makers said yesterday they’ll complete their $600 billion round of stimulus through June. While slower than the previous three months, a reflection of higher gasoline prices, consumer spending climbed more than projected in the first quarter.
“We’ve sputtered a bit here, especially coming off a relatively strong fourth quarter,” said Sam Bullard, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who accurately forecast first-quarter growth. Even with the higher costs for fuel and food, “consumers are going to continue to spend. Growth should pick up toward the 3 percent level” later this year, he said.
GDP estimates from 80 economists surveyed by Bloomberg ranged from 0.5 percent to 3.5 percent. The first-quarter pace was the slowest since April through June of last year. For all of 2010, the world’s largest economy expanded 2.9 percent, the most in five years, after shrinking 2.6 percent in 2009.
More…



Jobless Claims in U.S. Unexpectedly Rise to Three-Month High By Bob Willis – Apr 28, 2011 6:57 AM MT
New applications for unemployment benefits in the U.S. unexpectedly rose last week to the highest level in three months, a sign progress in the labor market may be stalling.
Jobless claims increased by 25,000 to 429,000 in the week ended April 23, the most since late January, Labor Department figures showed today in Washington. The government anticipates a drop in unadjusted applications during the Good Friday holiday week, something that didn’t happen this year, a Labor Department spokesman said.
The report also showed the number of people on unemployment benefit rolls and those receiving extended payments dropped, a sign the jobless rate may fall in coming months. Companies have been cautious about ramping up hiring until they see further signs the recovery is self-sustaining, one reason why Federal Reserve policy makers yesterday pledged to complete their asset- purchase plan by June and keep borrowing costs near zero.
“It’s clearly disappointing,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. “It may be that the pace of improvement is slowing.”
The economy grew at a 1.8 percent annual rate in the first three months of the year, down from a 3.1 percent pace in the fourth quarter, as government spending dropped by the most in 28 years, a report from the Commerce Department also showed today.
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Jim Sinclair’s Commentary

I thought when a rating agency did this it was only a warning! Did this not occur to the US dollar a week ago and was defined as a light warning?

S&P cuts Japan rating outlook to negative By Lisa Twaronite, MarketWatch
April 27, 2011, 7:48 a.m. EDT
TOKYO (MarketWatch) — Standard & Poor’s cut its outlook on Japan’s sovereign rating to negative from stable Wednesday to reflect the potential for a downgrade if the country’s fiscal situation deteriorates more than expected in the wake of last month’s disaster.
S&P said it expects costs related to the March 11 earthquake, tsunami and nuclear crisis to increase Japan’s fiscal deficits above prior estimates by a cumulative 3.7% of gross domestic product through 2013.
“We revised the outlook on the long-term rating on Japan to negative to reflect the potential for a downgrade if fiscal deterioration materially exceeds these estimates in the absence of greater fiscal consolidation,” the rating agency said in a statement.
Three months ago, before the disaster, S&P cut Japan’s rating for the first time in nine years by one notch, to AA-minus. That’s its fourth-highest rating, and is one notch below Moody’s Investors Service’s Japan debt rating of Aa2. Moody’s also has a negative outlook on Japan’s rating.
Much depends on Japan’s political leadership and its ability to forge consensus on how to offset fiscal measures in the future, S&P said Wednesday.
“As long as there are no revenue-enhancing measures such as tax increases, we currently project that reconstruction costs could range from 20 trillion yen ($245 billion) to ¥50 trillion, with ¥30 trillion being our central forecast,” S&P said.
More…