Over 46 Million Americans On Foodstamps For The First Time Ever

While the capital markets may be cheering that in the past month 120,000 people supposedly found jobs, even if these were largely temporary or part-time just in time for the year end shopping sprees, we wonder how they will react to learn that according to the latest update from the Supplemental Nutrition Assistance program, some 423,000 Americans found their way to minimum way subsistence, courtesy of Food Stamp handouts from Uncle Sam. Since the start of the Second Great Depression, food stamp participation has increased by 18.7 million Americans, and is now at an all time higher 46.3 million. All Bush's fault, or something. At least the chart below appears to be plateauing... Actually, sorry, no isn't.

 

 

Presenting The Market Schizophrenia In One Handy Chart

Short-dated TSY Bill yields have remained negative for almost two months now and even as the S&P 500 has roared 100 points higher in the last week signaling seeming risk appetite and optimism, other investors are so scared to hold money with banks that they are willing to pay the US Treasury (a veritable paragon of virtue) to hold their money and keep it safe. Of course there is likely year-end effects in the T-Bill but still it seems the bifurcation among market participants perceptions of risk remains extremely

 

 

Q.E. 3...Fed's Evans Sees More Easing As Necessary To Avoid "Debt Trap"; Fed Must Act Now

While Italy's Mario Monti earlier said that the country with the still ridiculously high bond yields would be somehow able to avoid a debt trap on its own (for its second largest debt load in the entire Eurozone), the Chicago Fed's Evans just said that America, which has the lowest rates in the world (with the possible exception of Japan) just said that unlike Italy, the US apparently needs far more help, and "further monetary stimulus is needed" to avoid a relapse into the debt trap. This probably means that sooner or later Italy will follow through with statements that "Italy is not the US" - after all, they are perfectly ok as is.

 

 

CFTC Votes Unanimously To Make Client Money Commingling Really Illegal This Time

In the aftermath of the MF Global fiasco, popular anger has understandable been focused on the complete lack of any response (let alone prevention) by regulators, in this case by Goldman's Gary Gensler, currently head of the CFTC, who quite comically had to recuse himself from an MF Global investigation due to his previous ties to Jon Corzine. So today, in a unanimous vote, "The U.S. futures regulator approved on Monday a rule that puts tighter limits on how brokerage firms can use customer funds, a measure that the now-bankrupt MF Global had encouraged the agency to delay." In other words, while before commingling client accounts was assumed to be a clear violation of every logical fiduciary imperative, now it is set in stone. For real. The CFTC means it. Said otherwise, clients can now rush back into the rigged casino and put their money because as of today illegal activity on behalf of futures dealers will really be illegal. Or else. And one wonders why there has been relentless outflows from anything remotely resembling retail capital in the past two years.

Nomura Presents The Fair-Value Of European Currencies In A Euro Breakup Scenario

As investors proceed happily through the forest that is this week's potentially epic fail, Nomura asks the question on every European is asking - What's in my wallet? Investors holding EUR-denominated assets and obligations face potential redenomination of contracts into new currencies. Based on the current misalignment of the real exchange rate and future inflation risk estimates, the fixed income group sees very material depreciation risks in most of the periphery and one surprise but critically the research enables risk-reward trade-offs on intra-European trades. This potential 'fungibility' issue is exactly what we described last week as a potential driver of stress and Nomura's work provides a framework for quantifying that relative stress. That said, Nomura adds the usual disclaimer: "For full disclosure, we are not regarding the break-up scenario as our central case." But... there is always a But. "But it has become a real risk over the last few months, and a possibility for which investors should now plan."

The Suits Commence: Two Former MF Global Employees Sue Jon Corzine

While the US Attorney General's office, presided by a very much embroiled in the Fast and Furious scandal Eric Holder, who at last check was spending 90% of his time frozen in carbonite, may believe that Jon Corzine is the homo sapiens equivalent of holy water, others appear to not share the sentiment. And as of today, two former employees have proceeded to sue Jon Corzine as fins.com reports. "Two former employees of MF Global have filed a class-action lawsuit against the firm's former Chief Executive Jon Corzine, other senior executives and board directors on behalf of themselves and current and former employees who acquired stock in the company while Corzine led the firm. The lawsuit, filed in the United States District Court for the Southern District of New York, alleges that the defendants provided false information regarding the company's financial condition and made statements that artificially inflated the stock price." Jon Corzine and the board breached their fiduciary duty to their employees and destroyed their careers and retirement savings," Jacob Zamansky, lead counsel for the plaintiffs, said in an email. The plaintiffs are Monica Rodriguez, the New York-based head of credit for the Americas, and Cyrille Guillaume, the London-based managing director of the commodities and stock division....If employees had known MF Global's true financial state, Zamansky said, "they could have refused to buy in or insisted on compensation arrangements that were all cash." And here is why Corzine's life is about to get very difficult now that the precedent has been set: "The employees did not file suit against MF Global, the company itself, because it is currently undergoing bankruptcy proceedings." One wonders how much more various Attorneys General need to see to perhaps consider to at least question the former CEO of Goldman Sachs, pardon, MF Global.

Ambrose Evans-Pritchard Summarizes The Latest Hopium Dud Out Of Europe: "Quatsch, Bêtises, And Eyewash"

Yesterday we proclaimed via Twitter, with the now traditional dose of cynical skepticism, that "this week Europe will fail to achieve anything all over again" a statement which apparently was taken to task by some Bloomberg TV anchors this morning who were displeased with our gloomy outlook that this time may not be different. Unfortunately for now it is Cynicism 1 - Naievete 0. The Telegraph's Ambrose Evans-Pritchard gives our friends at Bloomberg TV the low down.




David Kotok | USD-EUR currency exchange rate and the Ellsberg paradox




Graham Summers’ FREE Weekly Market Forecast (Fade the Fed? Edition)

Gold: The Price At Which I Buy Will Depend On The Circumstances

Admin at Jim Rogers Blog - 31 minutes ago

“It has been correcting for the past three months so it is overdue for a stronger correction, but I have no idea by how much. It is very unusual for any asset to go up for eleven years in a row with no correction. I own gold and I am not selling my gold. The price at which I buy will depend on the circumstances. If it is going down because the world is going bankrupt then it would need to be priced at 900 USD for me to buy it. If there is an artificial occurrence then maybe between 1,200 USD and 1,400 USD. It depends on what is going on in the world.” - *in Investment Week* Related... more » 

 

 

 

 

It's Easier To Ignore The Global Contraction Underway

Eric De Groot at Eric De Groot - 1 hour ago

Liquidity can't reverse the economic trends set by excessive debt and rising unemployment. The 8.6% reported unemployment rate ranks finds company with "Santa Claus is real" debate. The sharp dive in Prices Paid to PMI ratio illustrates the depth of economic deceleration. The speed of the decline shown not be easily discounted by shallow, “don’t worry, be happy” arguments. Chart 1: ISM Prices... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

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