The Plot Thickens: More On The Weekly $88 Billion "Other" Outflow

Following our observations last night that there was an $88 billion swing in the weekly "other" deposit account with the Fed, some have quickly come to the fore to "debunk" our observation that this is a rather curious swing in total notional, by claiming that this can easily be explained away using cash demands at the GSE level. There are two problems with this "explanation" - i) it does not actually explain the swing, and ii) it is incomplete. As noted previously, Fannie tapped the Treasury for $7.8 billion in Q3, while the quarterly Freddie Mac injection amounted to $6.0 billion. In other words the combined $13.8 billion cash draw need (assuming a deferral to the funds flow) would almost explain the $88 billion weekly shift... if only it weren't for the other $74.2 billion, which not even fully unmatched (i.e., assuming no new issuance) weekly debt maturity and interest repayment comes close to filling the gap. Furthermore, the "Other" cumulative delta for November and the YTD period is $61.5 billion and $115 billion, respectively, which is nowhere near close to explaining the total funding needs of these entities. What may explain the delta, and what these "debunkers" have missed is the full definition of the "Deposits with Federal Reserve Banks, other than Reserve Balances: Other (WOTHLB)" from the St Louis Fed which is as follows: "Other deposits at Federal Reserve Banks include balances of international and multilateral organizations with accounts at FRBNY, such as the International Monetary Fund, United Nations, International Bank for Reconstruction and Development (World Bank); the special checking account of the ESF (where deposits from monetizing SDRs would be placed); and balances of a few U.S. government agencies, such as the Fannie Mae and Freddie Mac." In other words, the GSEs may well be a part of last week's cash outflow package, but they certainly are not the full story, and other entities such as the IMF, the UN, the World Bank and the legendary in some circles ESF are all part of the "other" reserve "use of funds" destination. In other words, someone (presumably someone with some urgent window dressing needs), and it sure wasn't only (if at all) the GSEs, had a massive capital shortfall and had to resort to Fed deposits. And by the looks of things, these could have easily been "international" entities tasked with bailing out the world such as the IMF.

Guest Post: Woman Pepper Sprays Shoppers To Get Xbox

It never fails. Every Black Friday we get yet another heaping helping of pure unadulterated ignorant mentally deficient bottom feeding fat-saturated sheeple mania. Every year it gets worse. And, every holiday season I am faced with the painful question of whether or not these people are actually worth saving. My answer so far has always been a begrudging "yes". Many of them have been conditioned by a society on the brink of collapse, not just of economy, but also of conscience. That doesn't mean, however, that I excuse this kind of behavior. Frankly, if some mongoloid Wal-Mart shopper tried to pepper spray me in the face for a video game, I would beat them into cranberry sauce and drink some delicious eggnog to celebrate. Is this a well balanced response? Probably not. But then again, they would likely think twice before pulling the same stunt on anyone else. Actually, in my humble opinion, at least half the population of this country needs a good a smack upside the head. Seriously......this situation is getting uncomfortably crooked.......

China`s Real Estate Market Situation

Admin at Jim Rogers Blog - 4 hours ago

A few thoughts on the China`s real estate market. *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 Street Journal, The Financial Times and is a regular guest on Bloomberg and CNBC.* 

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Italian bonds reach 7.26% yield/record levels for Belgium and Spanish bonds/raid on gold and silver

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 4 hours ago

Good morning Ladies and Gentlemen: Before commencing, no banks entered the morgue ahead of the long Thanksgiving holiday weekend. The FDIC decided to give the boys an extra week's holiday due to their strenuous activity for the past year. The price of gold finished the comex session bat $1685.50 down $10.20 on the day.  Silver continues to be a punching bag closing down 86 cents to $31.02. 

10 Market Conclusions Based On Recent Hedge Fund Exposure

Yesterday we highlighted the top 50 stocks that comprise the hedge fund "darling" universe. And while it is good to know which stocks will get the chop first the next time there is a major margin call induced liquidation scare, as David Kostin points out in a follow-up piece there is a much more nuanced read through for Hedge Fund data. "We estimate hedge funds own roughly 3% of the US equity market. Turnover of all hedge fund positions averaged 34% during 3Q 2011 (nearly 140% annualized). The tilt of hedge fund holdings towards large-cap stocks has been increasing for almost 10 years. The typical hedge fund operates 36% net long, down from 2Q 2011. Combining long and short position data, hedge funds have the greatest net portfolio exposure to Consumer Discretionary (23%), Information Technology (20%), and Energy (14%)." he then proceeds to list the 10 conclusions that can be derived using the most recent public 13F data (which is understandable quite stale already in our day and age of sub-24 hour investment horizons). Yet the bulk of conclusions are mostly fluff save for the following: " The average hedge fund returned -2% YTD in 2011 through November 11th compared with +2% for the S&P 500", "Hedge fund returns are highly dependent on the performance of a few key stocks" and "The typical hedge fund operates 36% net long ($394 billion net/$822 billion long), versus 46% in 2Q 2011." So just why do people still pay 2 and 20 to chase popular, concentrated stock positions while underperforming the broader market again?

Guest Post: The Scientific Challenges To Replacing Oil With Renewables

So, assuming the Peak Oil camp is on to something, what's the likelihood for a disruption-free transition to another energy source that can replace the energy output we currently enjoy from oil? There's no shortage of promising claims from new laboratory experiments, and there is a lot of optimism in political and entrepreneurial circles that renewable, alternative forms of energy (wind, solar, biofuels, etc) may be able to fill the "energy gap" in time. How realistic are these hopes?

Brother, can you spare $2.1 trillion? Eurozone needs a cash infusion "ten times bigger than TARP".



Fed Minutes: Bernanke Firmly in Control of FOMC, QE3 Coming



A Silver Price Surge Coming? Sprott to Buy $1.5 Billion of Silver Bullion!

 


Eurozone Unlikely To Survive Intact:  Reuters Poll



Rich Fleeing Euro, Says Irish Advisor



MF Global Looted Customer Accounts

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