Russia Dumps Treasurys For 14 Consecutive Months; China Slashes Holdings To Lowest In Over A Year
Today's disappointing TIC report confirmed what Zero Hedge reported back in January,
namely the record dumping of Treasurys by foreign entities as tracked
by the Fed's custodial account. And while we will spare you the details
of the report (found here), two things bear pointing out: the very demonstrative selling of US paper by Russia continues, and is now in its 14th consecutive month (as has been reported here consistently), as
total USTs in Putin's possession declined to a fresh multi-year low of
$88.4 billion, half of the $176 billion in October 2010. Also
confirming that the Asian anti-USD axis is now one which consists of at least Russia
and China (and certainly Iran), was the stepwise dump of US paper by
Beijing which sold $32 billion in US bonds in December, bringing its
total to a new post 2010 low of $1100.7 billion. And lastly, this was
not isolated to just these two: in December the grand total of US
Treasury holding by foreigners declined from $4.75 trillion to $4.732
trillion. The question then is: just what are China and Russia buying (ahem stockpiling) with all the dollars that are not recycled back into Treasurys?Farage On Greek Chaos: "You Ain't Seen Nothing Yet"
Outspoken
and oracular MEP Nigel Farage bombards his fellow unelected officials
with 'you can't handle the truth' comments as he points out the total
contradiction that is the European Parliament's (and 'Puppet Papademos') view of how things are going in their democracy relative
to the reality of a TROIKA-ordered coup forced on the man in the
street. Greece is being driven further and further into chaos and as he
implores his peers: "If they don't get the Drachma back, you will be responsible for something truly truly horrible!".My Dear Extended Family,
Click here to listen to the interview…
Tonight’s interview with Erik King of www.KingWorldNews.com is the summation of the last three special emails and the introduction of the ISDA to you.
I feel it is the most important offering that I have made in the past 9 years of our relationship. The future is not going to be easy, but with foreknowledge we can all survive and even prosper. This message is extremely important so if you have a moment please consider listening to the interview and then reviewing the last three emails.
Respectfully,
Jim
How Do I Learn How To Follow The Money?
Hi Craig, For now I rely on the sharing model for reward. Statistical
analysis often looks fancy and impressive, but it’s merely a tool that
focuses the message of the market. Statistical understanding without the
ability to interpret the messages contained in global capital flows is like
saying geologist needs only side-scanning radar to find gold deposits. It
gives the impression that finding...
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Be Less Bullish Toward Stocks Now?
The headlines have been filled with experts urging caution towards stocks
recently. Record bullish sentiment, we've come too far too fast, and
deteriorating economic fundamentals in the US are but a few of the reasons
cited as reasons to be increasingly cautious towards stocks. Of course,
this is the point where I discredit the experts by saying they're all
wrong. But I won't. I will say,...
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Countries All Over The World Are Debasing Their Currencies Now, Singapore Is Not
"I still hold all my gold - if gold goes down more I will certainly buy
more gold. Gold is going to be much, much higher over the next decade.
Countries all over the world are debasing their currencies now, Singapore
is not. But nearly every place else yes. I think I have to own some gold."
- in Channel New Asia
*Related, iShares MSCI Singapore Index Fund ETF (EWS) and SPDR Gold Trust
ETF (GLD) *
*Jim Rogers is an author, financial commentator and successful
international investor. He has been frequently featured in Time, The New
York Times, Barron’s, Forbes, Fortune, The Wall Stre... more »
S&P 500 Index: We Don`t Know How Bad The Correction Will Look Like
The homebuilders in some cases are up 100 percent from the lows last
October/November. The banks are up 60, 70 percent from the November lows. I
would just wait here a little bit because we don`t know how bad the
correction will look like... It could be 100 points on the S&P (500 Index),
it could be 200 points. - *in Fox Business*
Related, SPDR S&P Homebuilders ETF (XHB), Financial Select Sector SPDR ETF
(XLF), SPDR S&P 500 ETF (SPY) and ProShares UltraShort S&P500 ETF (SDS)
*Marc Faber is an international investor known for his uncanny predictions
of the stock market and futures m... more »
The Grand Failure Of The Econometric Model
A certain flavor of econometric model dominates conventional portfolio management and financial analysis. This model can be paraphrased thusly: seasonally adjusted economic data such as the unemployment rate and financially derived data such as forward earnings and price-earnings ratios are reliable guides to future economic growth and future stock prices....If this model is so accurate and reliable, why did it fail so completely in 2008 when a visibly imploding debt-bubble brought down the entire global economy and crashed stock valuations? Of the tens of thousands of fund managers and financial analysts who made their living off various iterations of this econometric model, how many correctly called the implosion in the economy and stock prices? How many articles in Barrons, BusinessWeek, The Economist or the Wall Street Journal correctly predicted the rollover of stocks and how low they would fall? Of the tens of thousands of managers and analysts, perhaps a few dozen got it right (and that is a guess--it may have been more like a handful). In any event, the number who got it right using any econometric model was statistical noise, i.e. random flecks of accuracy. The entire econometric model of relying on P-E ratios, forward earnings, the unemployment rate, etc. to predict future economic trends and future stock valuations was proven catastrophically inadequate. The problem is these models are detached from the actual drivers of growth and stock valuations.
UBS Counts The Nails In Greece's Coffin
UBS' economics research group do not believe that Greece is saved but hope that it is at best ring-fenced.
In an excellent Q&A follow up, Stephane Deo and his team address
the role of the EFSF, the IMF package and its austerity measures, the
ECB's participation, and finally the likelihood of the PSI being
successful and its fallout. As Greek 2Y yields break 200% (obviously
price is the critical part but these yields are stupendous) and bridge
loan discussions appear for the March 20th maturity, perhaps UBS view of
the IMF 'walking away' is more credible if they manage to ring-fence a
recap of the banking sector. We would be surprised if contagion was
contained and, as we have seen before, that risk leaks out somewhere and
unintended consequences (or unknown unknowns) tend to pop up just when
we least expect them. Perhaps the FT's note this morning (which incidentally confirms the everything that Zero Hedge warned about almost a month earlier) that deadlines are slipping rapidly is the bright yellow canary in the Piraeus coal-mine as 'time is running out' for a solution here very quickly (as seemingly is the desire).Apple Responsible For 90% Of Intraday NASDAPPLE Gain
With
AAPL's stock price up another 1.5-2% today, we thought it instructive
for all those index traders, hedgers, arbitrageurs, and market
prognostictors to comprehend the scale. 90% of the move in the NASDAQ today is directly due to AAPL. Perhaps the drop in iAd sales rates
or the drop in market share will dent expectations? Perhaps growth
expectations from Europe will temper the excess? Or perhaps the 209 hedgies
who rely on this stock for their year will play prisoner's dilemma (and
free ride) one too many times and dismiss their recency bias to
remember that the first one to migrate wins when prices go vertical.Point Out The Housing Recovery On This Chart
No this is not a trick question... well maybe a little. Minutes ago the National Association of Home Builders announced that its Housing Market index soared from 25 to 29, trouncing not only expectations of a 26 print, but just like the Empire Fed, the highest forecast. This was supposedly the highest since May 2007. In other words, everyone is confident, and the commentary is that this print is "reinforcing optimism that the housing market is finding a bottom" and that "this consistency suggests that the housing market is moving toward more sustainable growth." That at least is the spin. Below we show the reality, in the form of the Mortgage Brokers' Association mortgage applications index. We somehow fail to see just where the onslaught of demand for new home loans is, and just where all this optimism comes from.
Cash For Clunkers - ECB Style
Overnight, Peugeot, the struggling European car-maker, announced dismal results and significant over-capacity in Europe pushing its stocks down 6% (down almost 13% since last week). The somewhat unsurprising twist was that the CFO said they were approaching the ECB about collateralized loans. As Bloomberg notes:- *PEUGEOT DISCUSSING WITH ECB, PRESENTING COLLATERAL, CFO SAYS
- *PEUGEOT PRESENTING COLLATERAL ABOVE EU1 BLN TO ECB
Keep Stacking...BTFD...
Despite Two Thirds Of Components Declining, Empire Fed Prints At Highest Since June 2010
Chalk this one to "seasonal adjustments" or something, cause we no longer have any clue what is going on with the data fudging in America. When it comes to banana republic economic indicators the US is rapidly eclipsing China - case in point the Empire State Manufacturing Survey, which despite seeing the majority, or 6 out of 9 sub indices, declining in February, managed to not only rise, but beat the highest Wall Street estimate, printing at 19.53, the highest since June 2010, on expectations of 15.00, and compared to a previous print of 13.48. What lead to this epic surge? Why nothing short of a decline in just about two thirds of the components: New Orders declined from 21.69 to 22.79, Unfilled Orders declined from -5.49 to -7.06; Inventories declined from 6.59 to -4.71, Prices Paid declined from 26.37 to 25.88; Prices received declined from 23.08 to 15.29, and Number of Employees declined from 12.09 to 11.76. What increased? Shipments, Average Employee Workweek, and, drumroll, Delivery Times. And somehow this disaster of a report is supposed to bring peace and comfort to the market that things are getting better? Perhaps at the Fed's data manipulation department. And just like a 2.9 million seasonal NFP adjustment in January has resulted in an ebullient market tone, we wonder just how high 3 out of 9 subindices improving will send the market today?
Credit Vs Equity. Logical Vs Illogical?
S&P
futures have moved more than 20 points since 3:30. The first big move
was on the back of a story that Greece really will commit to the
whatever the EU demands. The second move was after China re-pledged to
invest in Europe. IG17 is about 1.5 bps tighter than the wides of the
day and is unchanged this morning. In Europe, Main is unchanged while
stocks are up about 1% across the board. Even the 10 year bond which
saw yields drop from 1.98% to a low of 1.92% are only back to 1.94%.
Why? Sentiment seems overly bullish, overly complacent, and the
credit markets are sending a warning sign to stocks about irrational
exuberance.Meanwhile Gold...
While the pathetic lunatics and kleptocrats in Europe debate just who wants Greece to default more, gold has had enough of the endless BS. And while one would think that the plunge in the EUR, and the resultant surge in the USD would push gold lower. Wrong. After all a strong dollar means weak gold, conventional wisdom says. Apparently a continent on the verge of dissolution is gold beneficial. Strange.
EURUSD Collapses On Report Eurozone Considering Delay Of Greek Bailout
And scene.- EURO ZONE FINANCE OFFICIALS CONSIDERING PROPOSAL TO DELAY ALL OR PART OF GREEK BAILOUT YET STILL AVOID DEFAULT-EU SOURCES
PIMCO, Texas Teacher Retirement System, Soros Buy GLD; Paulson Sells
While much of the focus has been on Paulson & Co., the hedge fund founded by billionaire John Paulson, cutting its stake in the SPDR Gold Trust by 15% in the fourth quarter, possibly of more importance is the fact that PIMCO, the Texas Teacher Retirement System and George Soros all increased their holdings of the biggest exchange-traded product backed by gold. Paulson cut his gold ETF bullion holdings by about 600 million dollars in Q4, a reduction that was likely driven by client redemption needs as he and his fund remain upbeat on gold – primarily due to inflation concerns. Paulson’s reduction in SPDR was offset by other important buyers such as PIMCO, which oversees $1.36 trillion and is home to the world's biggest bond fund and significant institutional buying from the likes of the Texas Teacher Retirement System and billionaire investor George Soros. ‘Bond King’, Bill Gross recently wrote about gold as a “store of value” and PIMCO’s allocation to GLD may be ongoing as they seek to diversify their portfolios and hedge against inflation. Soros, who once suggested gold was or would be "the ultimate asset bubble," raised his stake in the SPDR Gold Trust (GLD), a gold-backed exchanged-traded fund, to 85,450 shares, up from 48,350 shares in the period. Soros, who had disclosed call and put options on the gold fund in the prior period, reported no such investments in the fourth quarter. Soros’ GLD position is worth a mere $13 million, however it suggests that he is not as bearish on gold as portrayed and that he sees further upside for gold.Schauble Dashes Hopes (Again) For Greek Bailout, EURUSD Slides (Again)
And the hits from the broken gramophone just keep on coming... on coming.... on coming:
SCHAUBLE: SO FAR THE NECESSARY DOCUMENTS FROM GREECE ARE NOT PRESENT
Wait, Germany wants.... Greece to fail? Shocker. But, but, but at least China is still bailing out the world. Right? We are now taking bets on what today's idiotic 3:45pm rumor will be.
Greek "idiotic" 3:30 pm rumor undone-
- GREEK CONSERVATIVE PARTY SAYS POLICY MODIFICATIONS "MIGHT BE REQUIRED" FOR IMPLEMENTATION
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