Tuesday, October 11, 2011

Senate Votes To Block Obama Jobs Plan

The Senate is busy tonight: on one they have just started a currency war with China, on the other, they are about to force every bank to cut its GDP forecast now that the prospect of incremental future fiscal stimulus has just been kneecapped, following a widely expected failure to vote through Obama's job plan a move that immediately forcedthat pathological of pathologies, the US Treasury Secretary to announce that "the action by Republicans to block the full plan would likely result in weaker U.S. growth." Somehow, it will all be Bush's fault.

Senate Passes China Currency Legislation Bill 63-35

So while the US is setting the stage for a possible retaliation against Iranians hiring Mexicans to kill for them, because they obviously can't do it on their own, the US Senate has just passed the China currency legislation bill in a 63 to 35 vote, which in turn will do miracles for Sino-US foreign relations. According to the legislation, it would let companies seek duties to compensate for a weak Chinese yuan. However, as Goldman indicated first thing this morning, the probability of this bill actually being enacted in its current form, or any, is slim to nil: while the Bill is under review by Obama administration, John Boehner, has called it "dangerous." If only he had an idea... Full Goldman take can be found here.

Bill Gross Goes Massively Short Cash As He Bets The Newport Farm On Uber Duration

Two things stand out in the just released September holdings update of Pimco's flagship Total Return Fund: first, what appears to be a record cash short of 19% of the fund's total unchanged AUM of $245 billion, doubling the previous short of -9%. The incremental cash was used almost entirely to purchase Mortgage Backed Securities, which jumped to 38% of total from 32%, even as the fund kept its government exposure virtually flat at 22%( 21% previously). Yet where it gets downright surreal is the duration and maturity exposure of the fund. Duration has gone from a record low 3.6 in March to 4.56 in July to 6.27 in August to... well, just look at the black line on the chart below.

Gold and silver ounces for October delivery rises/Vote ongoing in Slovakia

Good evening Ladies and Gentlemen: Gold today was whacked by the bankers at the usual 3 am time slot as gold was hitting $1684 at that time.  The bankers were trying to quell the huge demand for physical metal  You can see for yourself the demand for gold and silver by reviewing  the comex data.  The price of silver refused to buckle as it rose by one cent to $31.96 Let us head over to the

Alcoa Posts Disappointing EPS, Sees Growth Slowing

Eric De Groot at Eric De Groot - 4 hours ago
As always, follow the money in the real economy. An investment strategy based on the timely execution of public policy to save the day tends to disappoint more often than not. Headline: Alcoa Posts Disappointing EPS, Sees Growth Slowing Earnings season began today, with a whimper. Alcoa (AA) shares fell 4.3% in after-market trading as the company said its growth rate should slow in the second... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

Commodity complex reflecting more optimism related to the European bailout plan

Trader Dan at Trader Dan's Market Views - 4 hours ago
The commodity sector has been slammed by hedge fund long side liquidation over the last 5 weeks which has basically taken the complex on a one way ride down and down hard at that. It has now finally bounced as nervous shorts cover for fear of getting caught overstaying their welcome on that side of the market should the hedgies' algorithms flip over into the buy mode over the chatter over European and IMF plans to deal with Greece. The bounce could take it as high as the zone delineated by the pair of blue lines drawn on the chart. Should it breach this area with some gusto, it shou... more » 

Gold chart update

Trader Dan at Trader Dan's Market Views - 5 hours ago
Gold took out overhead chart resistance last evening in Asian trade and looked very strong until trading came around into the London session, where selling surfaced taking it back down from its best levels and dropping it into negative territory for the day. Support surfaced just below $1665 level but the market could not get back into positive territory. Gold is trying to break out to the upside but is being kept in check. Silver once again flirted with overhead resistance near $32.50, moved through it and them promptly failed to hold onto its gains above that level. It found sup... more » 

Corn closes 'limit' up

Eric De Groot at Eric De Groot - 5 hours ago
Corn has been showing heavy accumulation since September. The longer corn goes limit up, the more likely confidence and patience goes limit down in cash strapped households. Headline: Corn closes 'limit' up DES MOINES, Iowa (Agriculture.com)--With corn finishing 'limit up' and the rest of the CME Group farm futures sharply higher, the stage is set for tomorrow's USDA Crop Production &... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

No Surprise Here For Me

Dave in Denver at The Golden Truth - 6 hours ago
It was revealed yesterday that the Austrian bank - Erste Group - had $5.2 billion in undisclosed Credit Default Swap (CDS) derivative losses sitting on - or rather "off" - its balance sheet. Here's a link from zerohedge.com if you would like to read about the details: LINK To zerohedge and its slavish readers, this is being described as a "stunner." But I've been arguing all along that the big banks have off-balance-sheet problems that are potentially far bigger and more destructive than what is revealed by the "on-balance-sheet" public financials. Indeed, this is no "stunner" t... more » 
10/11/2011 - 15:49
The Media Boycott Heats Up. 

Watch The WaPo/Bloomberg Republican Presidential Candidate Debate Live

For all those who can't seem to ever get enough of beltway theater, and enjoy listening to republicans do what they do best when they open their mouths, er, lips are moving, you are in luck: Charlie Rose is hosting a presidential round table with all the usual suspects live from the last resort backup Ivy, Dartmouth college.

The Evolution Of The EFSF, And Its €726 Billion In Max Losses

Now we have a new plan. EFSF would take first loss on the full guarantee amount of 726 billion. Given everything that EFSF can now invest in, and the fact that it is taking first loss risk, the potential loss is 726 billion. So in a little over a year, the risk of loss transfer from private companies to sovereign nations has increased from 120 billion, to 270 billion, to 360 billion, to the possibility of 726 billion! That seems bad enough, but the situation is worse than that. At each turn, Greece has underperformed and been found to have bigger needs than previously thought, but the latest IMF decision to go ahead with the next tranche anyways, sends a clear signal to Greece that they are in the drivers seat. Why do more now when IMF will keep picking up the tab until you finally decide that drachma's suit you better. Portugal cannot be blind. It sees where Greece has failed but still gotten money, and that Italy barely goes through the motions of pretending to try, so why should they?

And Now Back To The Real News: Saudi Arabia Blasts Iran, Verbally For Now

Ignore Slovakia: everyone has a price. This is the real news:
And logically:
Take home: Talk is cheap but Brent here is even cheaper... Either way, it is a win win for Saudi which needs crude to go up in price.

Slovakia Rejects Plan To Expand EFSF, Government Falls

From Reuters:
Insert clip about the Spanish inquisition.

And Back To Slovakia, Where EFSF Vote Is Imminent

Refuting the previous update from the WSJ of a vote delay, is the latest rumor-cum-pseudo confirmation that the Slovak EFSF vote is due at 10pm local time or 4pm EDT. In Gasparino's immortal words the situation is fluid. That said, here is a live feed from Slovakia where it can be watch in case it does take place.

PrimeX Selling Accelerates

Update: Jeff Gundlach just said on his conference call that PrimeX is 6-8 points overvalued vis a vis the cash prime-backed RMBS
It only took a little over an hour...

Casus Belli? US Accuses Iran Of Plotting Assassination, Attempt To Blow Up Saudi, Israel Embassies

The war watchers (such as Marc Faber and everyone else who knows what follows an episode of epic Keynesian failure) have just lowered DefCon to level 2 after in a very surprising development the US accused Iran of backing a plot to assassinate the Saudi ambassador to the US and to blow up the Saudi and Israel embassies in Washington. "The plot was part of a $1.5m “international murder-for-hire scheme” that was directly linked to Iran’s Islamic Revolutionary Guard Corps, said Eric Holder, attorney-general." Now, any press report that details Eric Holder being active in any capacity is almost certainly a confirmation of a false flag, although we will gladly reserve judgment for now. However, if this is indeed the precursor to war, at least CVN 74 and CVN 77 will be quite busy in the next few months. Also, the price chart of Brent will surely to quite surely point from the lower left to the parabolic up.

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