Ron Paul's full Fed audit bill approved unanimously by House committee
Reason magazine reports that U.S. Rep. Ron Paul's unadulterated
legislation to audit the Federal Reserve in full, including its dealings
with foreign banks, was approved yesterday in a unanimous vote by the
House Oversight and Government Reform Committee:
Latest Press: JPMorgan Loss As Large As $9 Billion
We have long said that the maximum potential loss of the JPM CIO trade based on the blow out in IG9 10 year (and associated trades complex), which has about a $200 million DV01, is far beyond not only the $2 billion that Jamie Dimon estimated on May 10, but above our own estimate which was $5 billion on that same day. Today, the NYT "according to people who have been briefed on the situation" which translated means just more media propaganda because all the news on the topic in the past month has been leaks by axed parties, says that 'Losses on JPMorgan Chase’s bungled trade could total as much as $9 billion, far exceeding earlier public estimates, according to people who have been briefed on the situation." Also according to the NYT, and roundly refuting what the other leak had told Bloomberg and other media outlets, "The bank’s exit from its money-losing trade is happening faster than many expected. JPMorgan previously said it hoped to clear its position by early next year; now it is already out of more than half of the trade and may be completely free this year." Obviously, this refutes media "reports" also based on "people familiar" or "conflicted sources" that JPM has unwound its trade, either by novating, or by transferring it over to helpful hedge funds. Bottom line: take everything with a grain of salt until Dimon himself gives an update in two weeks, as this could easily be an upper bound loss estimate starwman to set expectations very low, sending the stock soaring when the "final" announce loss comes in at ~$5 billion, courtesy of other well-known "masking" techniques such as loan loss reserve release and DVA benefits.Final GDP Revision Comes In Line; Claims Continue "Improving" Even As They Continue Deteriorating
Two data points out today: the first was Initial Claims which did precisely as expected: it improved even as it deteriorated: why - the media headline will blast: "Initial Claims Decline by 6K" because last week's number of 387K was just revised to 392K. Ironically, enough, this was just as at least we expected. From 8:27 am.Last week's Initial Claims number of 387K will be revised to at least 390K in 3 minutesThat what actually happened was a miss of baseline expectations, in that claims would drop to 385K is irrelevant. Just as it is irrelevant that next week, today's 386K number will be revised to 390K. And the media manipulation song and dance revisions will continue. More importantly, and continuing the 99 week cliff issue, 60,000 people dropped off initial and extended claims in the past week.
— zerohedge (@zerohedge) June 28, 2012
Spain Back Over 7%
What goes down, must shoot right back up. In this case we are talking about Spanish bond yields of course, which have yoyoed from a record 7.3% two weeks ago, back down to 6.3% last week, and right back up over 7% as of this morning. While the hope last week was that since the ECB is expanding its collateral it means an LTRO3 is on the way, the market promptly realized (even before LTRO3 was launched), that such a step means that Europe has run out of actual assets, and at this point is merely diluting the taxpayer collateral base. The result is that Spain is right back in purgatory where talk is cheap and unless Europe comes up with something concrete, purgatory will promptly be upgraded to the 8th circle of hell.
Latest "Europe Is Saved" Rumor Full-Life: Under 40 Minutes
Earlier today there was an amusing headline generated in the WSJ "Berlin Blinks on Shared Debt" which we noted in the frontruninng section and promptly mocked, because it was patently 100% untrue, and would have a chance of happening only if markets were in full on crash mode. It also goes completely against what everyone in Germany has been saying for weeks and months. Still, the stupid markets, and especially the EURUSD algos keep responding as more and more media sources caught on to this headline. It took just under 40 minutes for Germany to get out of bed and slap the WSJ down, which as of this morning has about the same credibility as the Guardian in the Euro-rumor mongering department.
- GERMAN FINANCE MINISTRY SPOKESMAN SAYS SCHAEUBLE DID NOT SAY GERMANY WILL MOVE SOONER THAN EXPECTED TOWARDS SHARED LIABILITY FOR DEBT
Sometimes "No" Means Exactly That
As it dawns upon the world that Ms. Merkel means exactly what she says and is not going to back down you may expect a quite negative reaction in the equity markets and a widening of spreads for some risk assets along with a strengthening of the Dollar. I am talking about the “Trend” here and not some trading strategy for today’s business. Germany is not going to flinch and cannot both due to local politics and to the now obvious fact that Germany has just about reached the limits of what she is financially able to do with a $3.2 trillion economy. To put it quite simply; they have run out of excess cash and more European contributions are only going to weaken the balance sheet of the nation and seriously imperil Germany’s financial condition. I say, one more time, Germany is not going to roll over and all of the pan European schemes brought forward by the bureaucrats and the poorer nations are not going to go anywhere. There is one novel possibility here and that is that the Germans, like the British, may opt out. Germany, Austria, the Netherlands, Finland et al may just say, “Fine, go ahead if you wish to have Eurobonds and the like but we will not guarantee them.” All plans do not need to have an either/or solution and this may well be Germany’s position in the end which would place the periphery nations and France in quite an interesting, if unenviable, place.
Reuters has highlighted today the brisk demand for gold in India as
per the Bullion Cabal’s agenda to manage the precious metal prices in
such a way so as to diminish demand. Whereas in India this has taken
place by way of a a weak Rupee and thus record setting gold prices, in
the US soft, volatile and rangebound prices have kept the precious
metals’ out of the news, and so by extension the dollar crisis as well.
Here is a quote from apiece today:
PHYSICAL DEMAND LANGUISHES
Gold demand languished in major consumer India as record-high local prices resulting from the weak rupee kept buyers on the sidelines, traders said, though premiums stayed steady in Hong Kong, Tokyo and Singapore.
Traders in India are also waiting for the monsoon to pick up, which could boost the income of farmers, who buy more than half of India’s gold.
Data from three major Mints in Europe and North America showed on Tuesday that gold coin sales fell in the first quarter as the strong demand for small investment products that helped send gold to record highs in 2011 eased.
Read More @ Silver Vigilante
U.S. orders for durable goods climb in May
Eric De Groot at Eric De Groot - 15 minutes ago
US orders for durable good may be climbing in May, but its inflation-adjust
trend suggests a top has been formed. A breakdown of the late 2011 swing
low will accelerate the downtrend. This could take months to materialize.
Chart: Real Business Core Capital Spending: Real or CPI-Adjusted New
Orders of Durable Goods ex. defense and aircraft (RBCCS) and YOY...
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content, and more! ]]
Beware The Fat Tail Event In Europe
Eric De Groot at Eric De Groot - 16 minutes ago
Human emotion infects logical decision making from the lowly trader to the
well-connected policy maker. Well all try to act in a timely and logical
manner but emotions tend to screw it up. It's not a matter of if but when
liquidity will be provided to prevent further spread of the European
contagion. Ray Dalio suggests that human nature will likely to prevent
timely execution of the...
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content, and more! ]]
Underperformance and Negative Divergences Sold As Housing Recovery
Eric De Groot at Eric De Groot - 16 minutes ago
The headlines are selling a housing recovery to anyone that wants to listen
and believe. A message of underperformance and negative divergence of
housing stocks relative to stocks contradicts the recovery spin. A similar,
multi-month setup in 2005-2007 preceded the crisis of 2008. Chart: Housing
Stocks to S&P 500 ratio and S&P 500: Headline: Strong Housing Numbers,
Still...
[[ This is a content summary only. Visit my website for full links, other
content, and more! ]]Frontrunning: June 28
- Funny WSJ headline: Berlin Blinks on Shared Debt (WSJ)... sure: if XO hits 1000 bps tomorrow, Eurobonds in 2 days
- Barclays $451 Million Libor Fine Paves Way for Competitors (Bloomberg)
- Fed officials differ on whether more easing needed (Reuters)
- China Local Government Finances Are Unsustainable, Auditor Says (Bloomberg)
- Just because the NYT is not enough, Krugman has now metastasized to the FT: A manifesto for economic sense (FT)
- Merkel dubs quick bond solutions ‘eyewash’ (FT)
- Yuan trade settlements encouraged in SAR (China Daily)
- Katrina Comeback Makes New Orleans Fastest-Growing City (Bloomberg)
- European Leaders Seek to Overcome Divisions at Summit (Bloomberg)
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I'm PayPal Verified As The US CapEx Boom Ends, Is The Fed Now Truly Out Of Ammo?
For the past six months we have extensively discussed the topics of asset depletion, aging and encumbrance in Europe - a theme that has become quite poignant in recent days, culminating with the ECB once again been "forced" to expand the universe of eligible collateral
confirming that credible, money-good European assets have all but run
out. We have also argued that a key culprit for this asset quality
deterioration has been none other than central banks, whose ruinous ZIRP policies have forced companies to hoard cash, but not to
reinvest in their businesses and renew their asset bases, in the form
of CapEx spending, but merely to have dry powder to hand out as
dividends in order to retain shareholders who now demand substantial
dividend sweeteners in a time when stocks are the new "fixed income."
Yet while historically we have focused on Europe whose plight is more
than anything a result of dwindling cash inflows from declining assets
even as cash outflow producing liabilities stay the same or increase,
the "asset" problem is starting to shift to the US. And as everyone who
has taken finance knows, when CapEx goes, revenues promptly follow.
Needless to say, at a time when still near record corporate revenues and
profit margins are all that is supporting the US stock market from
joining its global brethren in tumbling, this will soon be a very
popular point of discussion in the mainstream media... in about 3-6
months.
from KingWorldNews:
Critical meetings are taking place today and tomorrow which may decide
the fate of the EU. With that as the backdrop, today King World News
interviewed acclaimed money manager Stephen Leeb, Chairman & Chief
Investment Officer of Leeb Capital Management, to get his take on what
is happening. Leeb told KWN the situation in Europe has “gone from bad,
to worse, to outright frightening.” Here is what Leeb had to say about
what is taking place: “My attention right now is focused on Europe.
What is going to happen over in Europe is going to be incredibly
important. Any rational person looking at the calculations would expect
Germany to play ball, which means come up with a major funding
package.”
“You would also expect the ECB to be allowed to increase its purchases of bonds because they need some type of major package. But investors have to back up a second, and when you back up, you have to be a little more worried. The reason to worry is because this is the 19th time the European leaders have gotten together.
Stephen Leeb continues @ KingWorldNews.com
Critical meetings are taking place today and tomorrow which may decide
the fate of the EU. With that as the backdrop, today King World News
interviewed acclaimed money manager Stephen Leeb, Chairman & Chief
Investment Officer of Leeb Capital Management, to get his take on what
is happening. Leeb told KWN the situation in Europe has “gone from bad,
to worse, to outright frightening.” Here is what Leeb had to say about
what is taking place: “My attention right now is focused on Europe.
What is going to happen over in Europe is going to be incredibly
important. Any rational person looking at the calculations would expect
Germany to play ball, which means come up with a major funding
package.”“You would also expect the ECB to be allowed to increase its purchases of bonds because they need some type of major package. But investors have to back up a second, and when you back up, you have to be a little more worried. The reason to worry is because this is the 19th time the European leaders have gotten together.
Stephen Leeb continues @ KingWorldNews.com
by Bruce Krasting Bruce Krasting Blog:
I participated in a slow motion disaster back in the early 80’s. I was
working for the global powerhouse, Citibank. Walter Wriston was running
the show at the time. He “famously” said “Countries don’t go bankrupt.”
His thinking resulted in an enormous increase in the bank’s exposure
to global sovereign lending. All of the big global banks followed Citi’s
direction. It was one big party. All the bankers were headed to
Brazil, Mexico and Argentina. They all had checks ready to sign. Of
course, the countries were more than willing to take on more debt.
It was in 1980 that the thinking was forced to change inside Citi. The sovereign loan portfolio was getting too big too fast. The bank had internal country limits and those limits were filling up fast. The worst thing that can happen to a banker is to reach a lending ceiling. The real return for lending to these countries was not the Libor+1 pricing, it was the front end fees from new loans that fed the bonus pools.
Read More @ BruceKrasting.blogspot.com
I participated in a slow motion disaster back in the early 80’s. I was
working for the global powerhouse, Citibank. Walter Wriston was running
the show at the time. He “famously” said “Countries don’t go bankrupt.”
His thinking resulted in an enormous increase in the bank’s exposure
to global sovereign lending. All of the big global banks followed Citi’s
direction. It was one big party. All the bankers were headed to
Brazil, Mexico and Argentina. They all had checks ready to sign. Of
course, the countries were more than willing to take on more debt. It was in 1980 that the thinking was forced to change inside Citi. The sovereign loan portfolio was getting too big too fast. The bank had internal country limits and those limits were filling up fast. The worst thing that can happen to a banker is to reach a lending ceiling. The real return for lending to these countries was not the Libor+1 pricing, it was the front end fees from new loans that fed the bonus pools.
Read More @ BruceKrasting.blogspot.com
from Testosterone Pit.com:
Finland doesn’t get the white-hot attention Germany does, but it
should because it could be the driving force behind a breakup of the
Eurozone. And it fired another shot: it demanded collateral for its share of the billions of euros that Cyprus would receive from the bailout Troika.
Cyprus is the fifth of 17 Eurozone countries to ask for a bailout. It’s panic time. The first tranche, €1.8 billion, is needed by June 30 to prop up its second largest bank, Popular Bank. And suddenly, Bank of Cyprus, the largest bank, needs €500 million. That’s just the beginning. All its big banks have been eviscerated by Greek government bonds, Greek corporate debt, a real estate bubble that collapsed, and a title-deed scandal that they colluded in—whose outcrop is now gumming up their balance sheets [I warned about it in October.... Another Eurozone Country Bites the Dust].
Though the government denied any amounts had been discussed, Reuter’s “Eurozone sources” attached a number to it: €10 billion—for a country that acceded to the Eurozone in 2008, has a GDP of only €17.3 billion, and has the population of San Francisco (just above 800,000). It takes a lot of talent to do so much with so little.
Read More @ TestosteronePit.com
from GoldCore:
Today’s AM fix was USD 1,567.75, EUR 1,261.47, and GBP 1,008.98 per ounce.
Yesterday’s AM fix was USD 1,567.50, EUR 1,255.31, and GBP 1,003.39 per ounce.
Silver is trading at $26.93/oz, €21.77/oz and £17.39/oz. Platinum is trading at $1,406.50/oz, palladium at $575.20/oz and rhodium at $1,190/oz.
Volatile trade yesterday saw gold surge nearly $20 after news that the ECB was considering entering the monetary twilight zone of NIRP or negative interest rate policies.
However, the gains were capped and prices quickly gave up those gains and gold dropped $16.00 or 0.99% and was last quoted in New York at $1,571.50/oz. Gold rose slightly in Asia but then fell soon after the European opening.
There was also chatter that the spike in gold may have been a reaction to a statement from the World Gold Council which said demand for gold in Asia is stronger than what the market is pricing in.
The market has been long under appreciating Asian demand.
Indian demand may be set to pick up again. Prithviraj Kothari, president of the Bombay Bullion Association, told Reuters in an interview this morning that gold imports could pick up in the second half of 2012.
Read More @ GoldCore.com
Today’s Items:
Finland doesn’t get the white-hot attention Germany does, but it
should because it could be the driving force behind a breakup of the
Eurozone. And it fired another shot: it demanded collateral for its share of the billions of euros that Cyprus would receive from the bailout Troika.Cyprus is the fifth of 17 Eurozone countries to ask for a bailout. It’s panic time. The first tranche, €1.8 billion, is needed by June 30 to prop up its second largest bank, Popular Bank. And suddenly, Bank of Cyprus, the largest bank, needs €500 million. That’s just the beginning. All its big banks have been eviscerated by Greek government bonds, Greek corporate debt, a real estate bubble that collapsed, and a title-deed scandal that they colluded in—whose outcrop is now gumming up their balance sheets [I warned about it in October.... Another Eurozone Country Bites the Dust].
Though the government denied any amounts had been discussed, Reuter’s “Eurozone sources” attached a number to it: €10 billion—for a country that acceded to the Eurozone in 2008, has a GDP of only €17.3 billion, and has the population of San Francisco (just above 800,000). It takes a lot of talent to do so much with so little.
Read More @ TestosteronePit.com
Today’s AM fix was USD 1,567.75, EUR 1,261.47, and GBP 1,008.98 per ounce.Yesterday’s AM fix was USD 1,567.50, EUR 1,255.31, and GBP 1,003.39 per ounce.
Silver is trading at $26.93/oz, €21.77/oz and £17.39/oz. Platinum is trading at $1,406.50/oz, palladium at $575.20/oz and rhodium at $1,190/oz.
Volatile trade yesterday saw gold surge nearly $20 after news that the ECB was considering entering the monetary twilight zone of NIRP or negative interest rate policies.
However, the gains were capped and prices quickly gave up those gains and gold dropped $16.00 or 0.99% and was last quoted in New York at $1,571.50/oz. Gold rose slightly in Asia but then fell soon after the European opening.
There was also chatter that the spike in gold may have been a reaction to a statement from the World Gold Council which said demand for gold in Asia is stronger than what the market is pricing in.
The market has been long under appreciating Asian demand.
Indian demand may be set to pick up again. Prithviraj Kothari, president of the Bombay Bullion Association, told Reuters in an interview this morning that gold imports could pick up in the second half of 2012.
Read More @ GoldCore.com
from The American Dream:
U.S. border patrol agents have incredibly dangerous jobs and they are
the first line of defense for our homeland. But instead of training and
equipping them properly to defend themselves and all the rest of us,
the Obama administration is actually attempting to turn them into
spineless jellyfish. If you can believe it, U.S. border patrol agents
are now actually being trained to run away and hide if they encounter an
“active shooter” in a public location. If they are cornered by the
shooter, they are being trained to “throw things” at the shooter. What
in the world is happening to this country? We might as well not even
have borders. The Obama administration has made it abundantly clear
that it has absolutely no intention of protecting our borders or of
enforcing our immigration laws. Protecting our borders is one thing
that the U.S. Constitution requires the president to do, but Barack
Obama and several other past presidents have steadfastly refused to do
this. So just what in the world is going on here?
Read More @ EndOfTheAmericanDream.com
U.S. border patrol agents have incredibly dangerous jobs and they are
the first line of defense for our homeland. But instead of training and
equipping them properly to defend themselves and all the rest of us,
the Obama administration is actually attempting to turn them into
spineless jellyfish. If you can believe it, U.S. border patrol agents
are now actually being trained to run away and hide if they encounter an
“active shooter” in a public location. If they are cornered by the
shooter, they are being trained to “throw things” at the shooter. What
in the world is happening to this country? We might as well not even
have borders. The Obama administration has made it abundantly clear
that it has absolutely no intention of protecting our borders or of
enforcing our immigration laws. Protecting our borders is one thing
that the U.S. Constitution requires the president to do, but Barack
Obama and several other past presidents have steadfastly refused to do
this. So just what in the world is going on here?Read More @ EndOfTheAmericanDream.com
The European Central Bank could reduce the
bank’s deposit rate to zero or even lower. If the ECB cut the deposit
rate, it would take an important profit opportunity away from banks.
The possible result of this is further credit contraction, which will
make the EU economy worse.
Like his soon-to-be predecessor, Obama,
Romney has effectively stated he does not recognize the need for
Congressional Approval, as per the U.S. Constitution, to wage war
against Iran, and by extension… Russia and China. So, in November, the
U.S. will have a change in dictators.
Citibank analyst, Tom Fitzpatrick,
believes that Germany will be consistent with its fiscal beliefs and
will continue its hard line. In addition, he believes that the EU summit
at the end of the week will mirror past ones and will end with no
tangible resolutions. The result of course, will be a further
deteriorating condition in Europe until the next emergency summit. And
the wheel goes round and round.
John Embry believes we are on the edge of
collapse. He believes that if the euro does split apart, because of the
fiscal brinksmanship, it will be chaotic. If it does not, then they will
vote to print up more euros and it will be inflationary. He goes on to
say that we have never, ever been remotely in a condition like this in
all of world history. Hmmm…. Sounds like that Chinese curse… May you
live in interesting times.
The main stream media is now locked in a
furious attempt to explain why they have completely ignored this
incredible story for almost two years now. This lame article actually
had the nerve to claim, in the third paragraph, that there is no federal
statute that outlaws firearms trafficking. So, what they are implying
is that the Department of Injustice and the ATF have spent hundreds of
millions of dollars trying to stop people from engaging in legal acts of
commerce?
Well, big brother government is ramping up
its fight against fat people. Yes, a federal health advisory panel has
recommended that obese adults receive intensive counseling. These
taxpayer funded “Chew-the-fat” sessions would be geared to help people
lose weight with the old mantra “eat less and exercise more”. Excuse
me, my pink slime burger and shake are calling for me.
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