China Dumps $100+ Billion In USTs In December Per Revised TIC Data; UK Is Now Russia's Shadow Buyer
Every year in February, the Treasury department releases its adjustment to
foreign purchases of Treasury bond holdings as of the previous June
(with revised and overriding estimates for all the intervening months in
the interim, as well as previous monthly forecasts). It did that
earlier today. And while many may have been expecting the revision to
show that contrary to Zero Hedge claims China
has in fact been building up its Treasury stake (following the now
traditional transfer of UK purchases to China), the reality is that not only has China indeed been dumping US exposure (first reported by us previously
when we observed the plunge in holdings in the Fed's custodial
account), selling over $100 billion in Treasurys in December alone
(bringing its total to $1152 billion, and down 12% from its June total
of $1307 billion) but that probably far more curiously, the UK is no
longer a shadow buyer of Chinese bond accumulation and instead has
become a secret accumulator of Russian holdings. Ron Paul To Ben Bernanke: "People Lose Trust In The Government Because You Lie To Them About Inflation"
Anytime
Ron Paul sits across from Ben Bernanke you know sparks will fly. Sure
enough, they did: starting 3 mins 50 seconds into the clip below, Ron
Paul, guns blazing, asks the Chairman if he does his own shopping, if
he is aware of what true inflation is, and if he knows that Americans
don't trust the government because they are being lied to about
inflation. And it only gets better, once Paul starts brandishing a
silver coin. The punchline: "The Fed will self-destruct anyway when the money is gone"
- amen. And ironically letting the Fed keep on doing what it is doing
will achieve that in the fastest possible way. In fact, letting the
system cannibalize itself with no further hindrances may be the best
option currently available - just go to town.Dow Jones 13,000 Crossed 52 Times in Past 3 Days, Wreaks Havoc With Retirement Plans Of Trader Community
Since the amount of coverage the Dow 13,000 has received on CNBC indicates that it is clearly the indicator for half of the actively trading population in America to hang its hat and retire, we can only commiserate with the retirement planners of America who have had to do only to undo retirement plans for all of 7 people give or take (as we said, half the entire active trading population of America, although we should clarify of the carbon-based variety) a whopping 52 times. Yup: that is the amount of times the 13,000 barrier has been crossed, and uncrossed in the past 3 days alone. We fail to recall any other Dow milestone that has been proven such a technical problem for the market to succumb. And that it closed below it after the second LTRO, and after today's Bernanke testimony is certainly not a good sign. On the other hand, all those people who are going bald from putting on and taking off the 13K hat, can finally take a break.
Worry About 2013, Panic About 2014.
Worry about 2013. Be panicked about 2014. But this year a lot of good news
is coming out. - *in CNBC with Larry Kudlow*
*Related, SPDR S&P 500 Index ETF (SPY)*
*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.*
Ron Paul Brutalizes The Bernank
Some of the highlights are when Ron Paul asks Bernanke if he does his own
grocery shopping. Bernanke says he does, which I don't believe. Paul
also explains that the Fed is lying about inflation. So I'm not the only
one calling Bernanke a liar. Then Ron Paul holds up a 1 oz. silver eagle
and goes through the same exercise with gasoline that I did with oil on
Monday to illustrate why silver/gold is real money that holds its value
over time (video sourced from zerohedge - my only complaint about Ron Paul
is that he has an opportunity to really hold Bernanke's feet to the fire in
... more »
Discrepancy
Two of these charts just ain't like the othere. Two of these charts just
ain't quite the same.
Actually, crude is now UP 40 cents.
Combine this with what we know from our loyal Turdite regarding JPM
indiscriminately dumping 10,000 contracts of gold in two minutes this
morning.
Clearly this was a coordinated attack, meant to create the cascading
waterfall which ensued.
1705 and 34 are still holding, however, and must be watched closely for
clues as to whether or not there is more bullshit to come.
TF
Silver Chart Analysis
Following is an 8 hour chart of the front month silver contract (that will
be changing to May from March) detailing the technical action.
All of the readers know by now that the commodity complex was being
targetted by the Fed in today's comments coming from Chairman Bernanke.
Prior to his testimony in front of the House Committee, silver was trading
higher recovering from some mild profit taking late in yesterday's session
and into early Asian trading in the evening. This is normal in a market
especially after having put in a strong upside breakout on heavy volume
from a recent con... more »
A Few Passing Observations
Just a quick update and follow-up on my recent housing commentary. I'm
sure everyone saw that the Case-Shiller 20 metro area home price index
dropped 1.1% on an unadjusted basis on a trailing 3-month basis for
December vs. November LINK. The overall index is back to its 2002 level.
I remember in 2005 telling people that home prices in general would
eventually revert back to early 1990's levels (before
the Clinton/Reuben/Greenspan strong dollar/money inflation policy was
implemented) and I was laughed at heartily. A couple years later I decided
we could well see 1981 levels, whic... more »
Window Dressing Doesn't Change The View Outside the Window
Jim has an excellent 'feel' for the markets because he not understands the forces driving the trends but also discipline needed to participate against the crowd regardless of the strings attached to price. Today's massive surge in volume, likely to exceed that which formed the 9/22 gap, suggests a strong attack on overhead resistance in silver (see chart 1). This suggests the gap will be tested... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]
Dow Closes Below 13K For The First Time Since February 27, 2012; Flash Crashes
Risk off. On one of the highest volume days in months
(for equity cash and futures), ES (the S&P e-mini futures contract)
fell over 20pts from high to low following Bernanke's lack of
expansionary comment. Right at the close we accelerated very fast losing
around 6pts almost instantly as the market had a very jittery feel. The major financials were off 2.5-3% from the 10amET Bernanke speech release (and XLF was down 1.4% from that peak) but it was the precious metals that shocked. Gold had it largest percentage drop (over 5%) since early December 2008 (around $100) and Silver plunged over 7% at its worst, managing to come back a little to close down around 6%. Oil did not follow the Central-Plan
(to talk down the print-fest) as WTI pushed back up to $107 and Brent
over $123 as the USD rallied aggressively - now up over 0.5% on the
week. Treasuries early dislike for the removal of the punchbowl was
quickly dismissed as equities sold off this afternoon and we drifted
back 1-2bps from high yields of the day (though still higher yields
close to close). As we noted two days ago on Twitter, the market seems only capable of reacting to addition or removal of central bank liquidity and what was perhaps odd today was the delayed reaction - one of incredulity maybe at the gall of these printers to stop/pause.BTFD...
Gold Tumbles More Than $100 As $1700 Stops Triggered
In
what is increasingly peculiar market action, gold dropped over $100
intraday, following triggering of $1700 sell limits, at which point sell
signals hit every bid all the way to $1685 then a knee jerk bounce
appeared, in some rather chaotic late day trading in paper gold. Whether
this is due solely to algo driven liquidations following the earlier
described shift in sentiment, or has some assistance from central banks
is irrelevant as anyone and everyone who is happy to convert paper fiat
into hard currencies is taking advantage of this latest short-term
rout, to prepare for the next battery of printing which will come with
100% certainty. Remember: as we have been saying since the summer of
2011, Bernanke needs a tumble in stocks to get a green
light for more easing, and he obviously won't get that with the
S&P where it is, nor with WTI still sticking to $107. Apple Decouples From Stock Market Gravity
For
the first time since the end of January (and for only the 4th day this
year) AAPL is trading higher with the S&P trading down... the
S&P has surged after each previous event, will it this time or has
it lost its QE mojo?Art Cashin And Europe's Clashin' Culture
As the ECB supposedly takes it foot off the gas, and EU Summits and 'events' loom large for the careening wagon of shared sacrifice, unity, and sovereign risk, perhaps it is the nodding donkeys of Greek and Italian technocrats juxtaposed with Ireland's feistier "R" word gambit (and of course Zee German Overlords) that makes Art Cashin reflect somewhat philosophically on recent headlines. Their stereotypical interpretation has him concerned as the potential for ever-increasing culture clashes increases across the pond as sour memories and generational hatreds abound.Exhibit A: Selective Fat Finger Deus Ex
Presented with little comment except to say, get some 'price change' context before you start throwing fat finger fantasies around... as 10Y Treasury Futures dropped 0.5% peak to trough while Silver lost at least 2% at a time in 3 legs down...Fed's Beige iPad Notes The Usual Regurgitated Fluff About The Economy
For those confused, the Fed's Beige Book has been upgraded to the Beige iPad (apparently Ben is not a fan of the black or white version). Regardless, the latest version has just been released spewing forth the usual reflexive platitudes, in which the economy is said to be better because the stock market is higher, and so forth. In other words, the same stuff that completely ignores $110 WTI. Via Bloomberg:- FED SAYS U.S. ECONOMY EXPANDED AT `MODEST TO MODERATE PACE'
- FED SAYS CONSUMER SPENDING WAS `GENERALLY POSITIVE'
- FED SAYS MANUFACTURING EXPANDED AT `STEADY PACE' NATIONWIDE
More Liquidity Extraction: Fed Resumes Reverse Repos
Dumping yet another liquidity cold shower in the aftermath of today's less than dovish Humphrey Hawkins speech by Bernanke (and sending precious metals even lower, albeit briefly), is the Fed's resumption of even more purely optical liquidity extractions, however symbolic, in the form of reverse repos, after the NY Fed just completed the first such operation since the dark days of summer 2011. As a reminder, the last time the Fed did these was back in August 2011 which cemented the market's plunge as it gave the market the impression that at least superficially no more money was coming in (intuitively it makes no sense to have Reverse Repos running at the same time as incremental liquidity), even as the reliquification baton was quietly being passed to the ECB. Today, reverse repos resume, as the Fed pays Primary Dealers an annualized rate of 0.17% in exchange for lending out $100 million in Treasurys. Will this continue? It depends entirely on what the economy, pardon, the Russell 2000 does. After all, that is the third and only mandate of the Fed that matter. And if the market considers this an indicator that QE3 really is delayed indefinitely, the FRBNY will mostly likely be forced to reassess.QE3 Or Not To Be, A Brief Q & A
As
good news appears to be bad news for now and the hopes of imminent
dovish QE3-gasms gets pushed off a week or two, we thought it useful to
dig into the mysterious central bank go-to play in a little more
detail. Morgan Stanley's European Economics Team asks and answers five of the most frequently discussed questions with regard quantitative easing. From whether QE has worked to inflation fears and concerns over policy normalization and what happens if the public lose confidence in central bank liabilities,
we suspect these questions, rather dovishly answered by the MS team,
will reappear sooner rather than later, and as they interestingly note, the deployment of central bank balance sheets is, in essence, a confidence trick.The Bernank: "The ECB Is Well Capitalized"
This will be one of those "one picture is worth a thousand words" posts...Greek Bank Deposit Outflows Soar In January, Third Largest Ever
Just like the housing market in the US, following the modest blip higher in December Greek bank deposits, immediately the great unwashed took to calling an end of the Greek deposit outflow and seeing a glorious renaissance for the country's bank industry. Well look again. According to just released data from the Bank of Greece, January saw Greeks doing what they do best (in addition to striking of course): pulling their money from local banks, after a near record €5.3 billion, or the third highest on record, was withdrawn from the local banking system. As a result, total bank cash has now dropped to just €169 billion, down from €174 billion in December, and the lowest since 2006. This is an 18% decline from a year ago, or €37 billion less than the €206 billion last January, and is a whopping 30% lower than the all time deposit highs from 2007, as nearly €70 billion in cash has quietly either left the country or been parked deep in the local mattress bank.
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