The Investment World Knows That The U.S. Is Not AAA
Admin at Jim Rogers Blog - 2 hours ago
Everyone already knows that the U.S. has lost its AAA status. Anyone who knows what is going on, already knows that the U.S. is now the biggest debtor nation in the history of the world. It’s only S&P and Moody’s that haven’t figured out what is going on. The investment world knows that the U.S. is not AAA. - *in the WSJ* *Tickers: ProShares UltraShort 20+ Year Trea (ETF) (NYSE:TBT) iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSE:TLT) iShares Lehman 7-10 Yr Treas. Bond (ETF) (NYSE:IEF) iPath S&P 500 VIX Short-Term Futures ETN (NYSE:VXX) * *Jim Rogers is an author, financial commenta...
more » Video On Gold As Independent Money - Return to Gold Standard Advocated in Print and Video
A picture paints a thousand words and a video hundreds of thousands of words and this is a very informative video about our modern monetary system, fiat currencies and gold. It shows how fiat money has led to wars, massive debt, social inequality, economic bubbles, rampant consumerism, and environmental destruction. It shows that a return to a gold standard would help ameliorate today’s monetary, financial and economic ills. “A gold standard will not cure every social ill in the world, nor will it stop all senseless wars. Nothing will. However, by now it should be clear to everyone that the current fiat system is good only for bankers, brokers, politicians, war mongers, and the already wealthy. Everyone else loses as inflation eventually eats away at what's left of the rapidly shrinking 'middle class'. All fiat currencies including the US dollar are doomed. The only debate is the path it takes to get there.”Goldman On The Various Deficit Reduction/Debt Ceiling Plans And Immediate Next Steps
Still confused by all the various plans offered by the two parties? That is to be expected: after all these change on a daily, if not hourly basis, which was great a week ago, but now with just 3 days until the absolutely latest deadline by which congressional legislation has to be enacted, which is this Thursday, some cohesion would have been good. Instead D.C. keeps pushing further apart with no chance of a compromise anywhere on the immediate horizon. And while it does provide daily TV opera, it does nothing to assuage fears that next week America may stop paying out its checks as soon as a week from today (the details of when Treasury runs out of cash are irrelevant: the absolutely drop dead date is August 15, but without the machinery in place to resume refunding well ahead of it, the market will have no choice but to begin discounting that fact). And while we know that S&P has now sided with the uber-fluffy Reid plan, which does nothing at all to address America's encroaching insolvency, the real question here, as in every other topic, is what does Goldman think. Because after all Goldman rules the world. Here is the answer.May Case Shiller Composite Misses Expectations, Yearly Drop Biggest Since November 2009
Remember those June calls after April's (yes, two month delayed) Case Shiller report that housing has hit a bottom? Scratch them. The Case Shiller 20 City composite for May (so why anyone even looks at this is beyond us) just came at -0.05% M/M on expectations of an unchanged print, with the previous revised from -0.09% to 0.44%. On a Year over Year basis the 20 City Composite dropped 4.51% on consensus of a -4.50% drop (the previous -3.96% was revised lower to -4.22%) - this was the biggest drop since November 2009. Washington DC was up 1.3% Y/Y (2.4% M/M) and was the only city to gain on a yearly basis. Minneapolis was down the most: 12%. That said there were some modest improvements in several of the regions: “We see some seasonal improvements with May’s data,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices. “This is a seasonal period of stronger demand for houses, so monthly price increases are to be expected and were seen in 16 of the 20 cities. The exceptions where prices fell were Detroit, Las Vegas and Tampa. However, 19 of 20 cities saw prices drop over the last 12 months. The concern is that much of the monthly gains are only seasonal." Good luck trying to extrapolate data away from seasonal adjustments: "May’s report showed unusually large revisions across some of the MSAs. In particular, Detroit, New York, Tampa and Washington DC all saw above normal revisions. Our sales pairs data indicate that these markets reported a lot more sales from prior months, which caused the revisions. The lag in reporting home sales in these markets has increased over the past few months. Also, when sales volumes...Visualizing America's Cash Outflows Between August 3 And August 15
Submitted by Tyler Durden on 07/26/2011 - 09:31 Reuters
We have previously presented this data in tabular format but because we realize that some readers are visual learners, here is a compilation of total US Federal obligations (read cash outlays) between August 3 and August 15, this time from Reuters, at which point all the money runs out no questions asked. The total: $246 billion.
As Spanish, Italian Treasury Auctions Come In Weaker Than Expected, Nerves Return
While pundits are still contemplating yesterday's CME move to hike collateral haircuts on US Treasurys (absolutely nothing more then merely more posturing) today's European auction results indicate that the time to expand the EFSF to the €1.5 trillion threshold may be approaching faster than anyone expected. In Spain, the Treasury sold 750 million euros of 3-month bills at an average yield of 1.899 percent compared to 1.568 percent at the previous auction and at a bid-to-cover ratio of 6.3 after 9.5 in June. Spain also sold 2.14 billion euros of 6-month bills, with the average yield rising to 2.519 percent, the highest since Dec. 2010, from 1.776 percent in June, while the offer was 2.2 times subscribed after 3.8 times at the last auction. In other words: far higher interest and far lower demand than the last such sale in June. As Reuters cites, "The most important point again is the fact that relative to the last auction yields are much, much higher ... It's not a good situation to be in," strategist at Monument Securities Marc Ostwald said. "It shows we may have had some relief last week but that relief has proven to be rather short-lived." We wonder just how much of these auctions were allocated to the EFSF monetization mechanism and/or Asian proxies that know they can promptly use it for precisely such purposes. Elsewhere Italy sold €10 billion in 6 month Bills and 2 year notes, and just like in Spain, both saw their respective yields rising and investor demand falling: 6-mo auc avg yld 2.269% vs 1.988%, bid/cover 1.56 vs 1.72, 2-yr auc avg yld 4.038% vs 3.219%, bid/cover 1.66 vs 1.87. End result of today's auctions: both Spanish and Italian Bund spreads jump to day wides as the IBEX is now underperforming on concerns Europe's second bailout bought less than a week of calm.Soros To Return $1 Bilion Capital To External Investors To Avoid Registering His $25 Billion Hedge Fund
Bloomberg reports that George Soros will return client capital, and will focus exclusively on managing his own and his family's money, apparently in an indirect protest against the reporting hedge fund requirement of Dodd Frank. Since the capital in question is only about $1 billion of $25.5 billion, this is hardly the big move some are making it out to be, as the bulk of Soros Fund Management is already primarily funded by his own money. Also notable, is that Keith Anderson, the company's COO, has decided to depart. But yes: for all those who wished they could have given money to Soros to manage for them, it is now too late. As for the reason for the change: "Soros’s sons said they took the decision because new financial regulations would have made it necessary for the firm to register with the Securities and Exchange Commission by March 2012 if it continued to manage money for outsiders. Because the firm has overseen mostly family assets since 2000, when outside money accounted for about $4 billion, they decided it made more sense to run it as a family office, according to the letter." Expect to see many more hedge funds based on family capital, for whom external investors are merely a nuisance, do the same thing.Frontrunning: July 26
Submitted by Tyler Durden on 07/26/2011 - 08:26 Consumer Confidence France Germany Global Economy Gross Domestic Product International Monetary Fund Lehman Reuters SWIFT United Kingdom- Frenemies: Two Greek Rivals Hold Nation's Fate in Balance (WSJ)
- Obama Attacks Republicans over Debt Talks (FT)
- Swift U.S. Action on Debt Needed in Global Interest: IMF (Reuters)
- FHA May Be Next in Line for Bailout: Delisle and Papagianis (Bloomberg)
- And the requisite NYT editorial piece: The Republican Wreckage (NYT)
- Bank Lobbyists Push European Members to Support Greek Debt Rollover Plan (Bloomberg)
- A Global Economy Held Hostage by Lehman (RCM)
- Banks 'Safe from Debt Defaults' But the Days of Double-Digit Growth May Be Over (Australian)
- Is Obama Wall Street’s Best Friend or Mortal Foe? (Bloomberg)
Government Unemployment Watch: USPS To Close Up To 3,700 Post Offices
The problem with bloated central planning is that when austerity hits, the bloat goes away, and millions of government employees suddenly find themselves trying to enter the private sector, realizing they have absolutely no real competitive and marketable skills (more or less like investment bankers and hedge fund managers). And while America has yet to even remotely sniff austerity, the unemployment rate is already set to spike, after the USPS just announced it was preparing to close 3,653 out of its 32,000 total post office sites. Per UPI: "The U.S. Postal Service is expected to announce a plan to close 3,653 post offices, mostly in small communities, in a cost-cutting measure, officials said. A USPS spokeswoman said the post offices were chosen because they get the "least amount of foot traffic and retail sales," The Wall Street Journal reported Monday." Trust the bureaucrats to try spinning this bad news as good: "They also were selected because there may be local businesses that could provide some postal services to the community, spokeswoman Sue Brennan said." Well by that logic there are private businesses that cover every aspect of the government's "job" much better, and much more efficiently, up to and including that of the Fed (sorry, that already is private). Does that mean we should outsource every aspect of the bloated centrally planned economy that America has become? Of course the answer is yes, but that just does not jive with the current iteration of kleptofascist socialism.The Anatomy of a Tech Giant's Fall From Grace: Research in Motion's Problems Are Far From Over
07/26/2011 - 09:30
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