QE3... The Bernank To The Rescue... "There Is Scope For Further Action By The Federal Reserve"
It
is Friday, and the market is in danger of posting its first weekly
loss in months. Which means it is time for everyone's favorite Fed
mouthpiece, Jon Hilsenrath to hand over the podium to his true superior,
Ben Bernanke, by posting the Chairsatan's response letter to Republican Darrel Issa in which he defends QE and leave in the following: "There is scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery."
And just to make sure that as Hilsenrath is to the Fed, so Reuters is
to the ECB, we get the following tried and now simply pathetic
regurgitation of the Spiegel rumor from this Sunday (which was since
denied at least two times for the simple reason that Germany will never
agree to open-ended debt monetization until global stock markets are
literally collapsing) via Reuters: "ECB considering setting yield band targets under new bond buying programme according to sources."
Of course, neither Ben has said anything new, nor the ECB has said
something that is on the margin either credible or actionable (recall
that earlier today the ECB explicitly said its hands are tied until the
Kardinals of Karlsruhe make their decision in 3 weeks), but the market
doesn't care, and surges. Sadly for the programmed market ramp, the
non-news was leaked too early, and should have been released at 3:30 pm
at the earlier. Look for a full German denial shortly.David Rosenberg With The $64,000 Question On The Political Fed's "NEW QE"
"It is rather amazing that a 2.8% yield on the long bond couldn't do the trick. By hook or by nook, it looks like the Fed is going to make an attempt to drive the rate down even further — but if that was the answer, wouldn't Switzerland, Japan and Germany be in major economic booms right now seeing as how low their 30-year bond yields are? Monetary policy in the U.S.A. is not the problem, so it is doubtful that it will be the solution. It all boils down to fiscal and regulatory policy and how the government can part the clouds of uncertainty — the Fed may be able at the margin to cushion the blow, but that's about it."Obama Requests Europe Bail Out His Reelection
Color us unsurprised; but the UK's Independent
is reporting that American officials are worried that if the Troika
decides Greece has not done enough to meet its deficit targets, it will
withhold the money - triggering Greece's exit from the eurozone weeks
before the presidential election. British government sources have
suggested the Obama administration is urging eurozone
Governments to hold off from taking any drastic action before then -
fearing the resulting market destabilization could damage President
Obama's re-election prospects. The Troika are expected to
report in time for an 8 October meeting of eurozone finance ministers
which will decide on whether to disburse Greece's next EUR31bn aid
tranche, promised under the terms of the bailout for the country.
European leaders are thought to be sympathetic to the Obama lobbying,
fearing that, under pressure from his party in Congress, Mitt Romney
would be a more isolationist president than Mr Obama. So once again GRExit is assured economically; but it is an entirely political decision.Europe Ends Weak Week With Spanish Risk At 10-Day High
Despite
the valiant attempts to create something from absolutely nothing in
the last few minutes of the European week (to wit Hilsenrath's Bernanke
story and ECB bond 'corridor' rumors), Europe fell back from its
hope-ridden highs this week. Spanish 5Y CDS broke back above 500bps, as did its 10Y spread to Bunds - giving back 10 days of 'gains'
- while the exuberant front-end closed the week basically unchanged
(but 40bps higher in yield from Monday's best levels). For context,
Spanish bond spreads remain well above the peak crisis levels of last
November - having bounced perfectly off them on Monday. European stocks ended today with small gains but all red on the week
with Spain's IBEX -3.4%. EURUSD gained 200pips on the week as Fed QE
hope faded and we suspect the re-appearance of EU pain repatriated more
EUR.S&P Futures At Tipping Point On German Finmin Grexit Chatter
The
market was just starting to digest the schizophrenic Durable Goods
data when chatter broke of the German FINMIN discussing a 'temporary'
GRExit. In other words, just like Mario Draghi could transmogrify the
twilight zone into reality during Merkel's vacation, and spread
unfounded rumors that Europe is fine, now that the Chancellor has
returned, the rumors take on the other side of the equation, and the
mice no longer can play. This pushed S&P futures below overnight
lows (down about 5pts from Dur Goods), EUR down 40 more pips (-75pips
from close), and 10Y Treasury yields dropped 3bps (down 6bps from their
overnight open). As we stand S&P 500 futures appear poised at an
important trend-line tipping point in this move as Draghi's dreams are
delayed to mid September and the world stops believing - as
there is market talk also that Netherlands, Finland, Slovakia and
Estonia are said to back the German plan.For Germany, The Four Year Business Cycle Is Complete
Next
week will see a slew of key data releases across the Euro area. The
week will kick off with the German Ifo for August due on Monday which
Goldman expects to fall slightly, reflecting the softening in the August
composite PMI. The business climate index has been signalling a further loss of momentum in the German economy,
with both key dimensions - the assessment of current conditions and
business expectations - deteriorating since May. The chart below shows
how both components have evolved during the European debt crisis. The
'expectations' component appears to have been particularly affected by
European developments. As far as the sectoral breakdown is concerned,
the Ifo was still signalling rather robust domestic growth in
construction, and in retail and wholesale goods, while the manufacturing
sector seemed to have been adversely impacted by a weakening in
external demand. The 'flash' reading of the August manufacturing PMI for Germany, however, seems to indicate that this could be changing.
As the chart indicates, between the survey's mediocre perspective of
the current situation and its negative expectations for the future - we
have completed the circle and stand back at precarious Mid 2008 levels - and we know what came next.CNBC Video: 100 Percent Odds Of A Global Recession
Admin at Marc Faber Blog - 2 hours ago
Short Summary: Marc Faber explains why he thinks there is a 100 percent
chance for an economic recession ahead.
Related ETFs: iShares MSCI Emerging Markets Index ETF (EEM), iShares MSCI
Brazil Index ETF (EWZ), Market Vector Russia ETF Trust (RSX), iShares
FTSE/Xinhua China 25 Index ETF (FXI), SPDR SP 500 ETF (SPY)
*Marc Faber is an international investor known for his uncanny predictions
of the stock market and futures markets around the world.*
Donations will help maintain and defray the operational costs. Paypal, a leading provider of secure
online money transfers, will handle the donations. Thank you for your
contribution.
I'm PayPal VerifiedBeef Herd Tumbles to 40-Year Low After Feed Costs Surge
Eric De Groot at Eric De Groot - 3 hours ago
Decimated grasslands and not enough corn to supply feed lots has driven
herd size to 40 year lows (supply) as global demand continues to rise.
This setup has the potential to accelerate the livestock up trend once the
drought-induced herd reductions subside. The longer the drought continues,
the greater the probability that cookouts will be more expensive in...
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content, and more! ]]
Stay The Course...(aka BTFD...Keep Stacking...)
Eric De Groot at Eric De Groot - 3 hours ago
I agree with Jim, stay the course. GLD's quiet accumulation (chart) and
subsequent break above $1650 confirms an A-wave advance that should
challenge the all-time highs by November 2012 (table). Chart: London PM
Fixed Gold and GLD (ETF) Total Assets WA Stochastic Table: A-Wave Analysis
There's a big difference between campaign talk and executive...
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content, and more! ]]
It`s Easier To Get Rich In Asia
Admin at Jim Rogers Blog - 5 hours ago
It's easier to get rich in Asia than it is in America now. The wind is in
your face. The United S) is the largest debtor nation in the history of the
world. - *in CNN *
*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.*
Agriculture Is Still Cheaper Than Other Commodities
Admin at Jim Rogers Blog - 5 hours ago
On a historic basis, agriculture is still cheaper than others. - *in MSN
Money*
Related: ELEMENTS Rogers Intl Commodity Index - Agriculture Total Return
ETN (NYSE:RJA), PowerShares DB Agriculture Fund (NYSE:DBA)
*
**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.*
Germany Is Likely To Go Into Recession Soon
Admin at Marc Faber Blog - 6 hours ago
Europe is already in recession. Germany is still growing very, very
slightly, but is likely to go into recession soon. - *in CNBC *
Related: iShares MSCI Germany Index Fund ETF (NYSE:EWG), Deutsche Telekom
AG (ETR:DTE), Bayerische Motoren Werke AG (ETR:BMW)
*Marc Faber is an international investor known for his uncanny predictions
of the stock market and futures markets around the world.*Why Volume Matters - The UnBearable Lightness Of Bear Market Rallies
It
is often said a picture paints a thousand words; in the case of this
chart, it paints more. Day in and day out, there is one inimitable
indicator that if looked at will tell you everything you need to know
about the day's market performance - volume. The last few weeks -
post-Draghi, Post-Knight, stunned many with just how low volume can get;
and implicitly just how much the battle-bots remain in charge.
Clarifying this picture of low volume strength and high volume weakness,
John Lohman has created the following chart - summarized thus: YTD,
low volume days have seen the S&P 500 rise around 15% in
aggregate, while high volume days have seen the S&P lose around 5%
in aggregate. The linear nature of the low-volume move is
simply remarkable - perhaps September will bring some real volume back,
and now we know what that means for market direction.July Core Durable Goods Ex-Transports And Defense Implode
Today's Durable Goods number was blistering, if only on the headline. Coming at $230.7 billion, it was up a whopping $9.4 billion or 4.2%, on expectations of a 2.5% increase. The reason for the surge: the volatile transportation segment, which rose 14.1% to $80.4 billion. This is entirely due to Boeing aircraft orders, which rose to 260 this year compared to 10% of that a year ago, which however, as Quantas reminded us yesterday, can and will be promptly reversed (see: "Boeing hit by 'biggest-ever 787 order cancellation'"). In other words next month will be a headline disaster. So what happened beneath the headline when excluding volatile series: well - Durable Goods ex-transportations decline -0.4% in July, missing expectations of a +0.5% print, with the June number revised down from -1.1% to -2.2%. It gets worse: Nondefense capital goods excluding aircraft tumbled in July, and imploded to -3.4%, crashing below expectations of a -0.2% print, with the previous print revised from -1.4% to -2.7%). This means that indeed the brief blip higher in economic activity in the summer was largely transitory and was purely a byproduct of seasonal adjustment. Expect cuts to Q3 GDP forecasts to commence imminently by the sellside lemmings.Precious Metals ‘Perfect Storm’ As MSGM Risks Align
There is a frequent tendency to over state the importance of the Fed and its policies and ignore the primary fundamentals driving the gold market which are what we have long termed the ‘MSGM’ fundamentals. As long as the MSGM fundamentals remain sound than there is little risk of gold and silver’s bull markets ending. What we term MSGM stands for macroeconomic, systemic, geopolitical and monetary risks. The precious metals medium and long term fundamentals remain bullish due to still significant macroeconomic, systemic, monetary and geopolitical risks. We caution that gold could see another sharp selloff and again test the support at €1,200/oz and $1,550/oz. If we get a sharp selloff in stock markets in the traditionally weak ‘Fall’ period, gold could also fall in the short term as speculators, hedge funds etc . liquidate positions en masse. To conclude, always keep an eye on the MSGM and fade the day to day noise in the markets.Frontrunning: August 25
- So Draghi was bluffing after all: ECB Said To Await German ESM Ruling Before Settling Plan (Bloomberg)
- German finance ministry studying "Grexit" costs (Reuters) - it would be bigger news if it wasn't
- Money Funds Test Geithner, Bernanke Resolve as Schapiro Defeated (Bloomberg)
- Top Merkel MP says Greek deal can't be renegotiated (Reuters)
- China Eyes Ways to Broaden Yuan's Use (WSJ)
- Armstrong ends fight against doping charges, to lose titles (Reuters) - Dopestrong?
- Need more socialism: Public confidence in France's Hollande slips (Reuters)
- Seoul court rules Samsung didn't violate Apple design (Reuters)
- France, Germany Unify Approach to Greek Talks (WSJ)
- Stevens Sees Mining Boom Peaking, RBA Ready to Act (Bloomberg)
Citi Hires Top Model Contestant To Sell Equity Derivatives
While
we await the release of pictures for today's caption contest, namely
Merkel and Samaras hugging it out, which incidentally will be today's
top news, as the Greek PM enters the lioness' den and begs for more,
only to hear Merkel recite Herman Cain's tax plan, here is another
picture: it is of "America’s Next Top Model" contestant and MTV anchor
Kim Stolz, who was just hired away by Citigroup from BTIG to be a VP in equity-derivative sales,
according to Bloomberg’s Donal Griffin. This is a welcome development:
with trading volumes at levels last seen in 1998, more and more banks
will resort to hiring underemployed supermodels to incite
their clients to transact with them (for all the obvious and not so
obvious reasons). It also means that said supermodels will soon know
all there is to know about delta, gamma, vega and theta. Which
naturally sets the stage for Zoolander 2 and the latest and greatest
face name: step aside "Blue Steel", enter "The Schwab Baby" - a look
describing what happens when that massive short gamma position suddenly
blows up in your face. At least the next round of Congressional
hearings, when banks scapegoat the next bailout request on supermodels
selling VIX, will be somewhat more attractive. Win win for everyone.Florida Town Buys 9-Ton Emergency TK-4 Tactical Vehicle to “Provide Residents Extra Protection During Hurricanes”
08/23/2012 - 19:03
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