Alaska, Texas, Louisiana and North Dakota have returned to their peak pre-recession employment levels, a new analysis from IHS Global Insight shows, with 16 set to do so by the end of 2013. The formula for success includes avoiding the housing bust and having lots of oil and gas. [View news story]
Quickly becoming old news, as three critical industries (nat gas, coal production and electric utilities) are now in a bust, capital destruction mode. http://bit.ly/Jukps6
China Initiates Gold And Silver Futures Trading [View article]
There are stories that Chinese industrialists have already stored huge, but undetermined quantities of silver. For what purpose you ask? To profitable sell to the surge in demand from these new exchanges and outlets.
I looked at the Daily Treasury Statement for tax day, April 16, and corporate tax collections this fiscal year to date, compared to last year was virtually flat $126.6 bn vs 125.9 bn. And this is for an economy that supposedly grew 3%. Total taxes collected from January 1- tax day, YoY were up less than 1%; $666bn vs 661bn.
Europe closes sharply lower, weighed down by realization the LTRO was a heckuva band-aid, but still just a band-aid. Stoxx 50 -2.6%, Germany -2.4%, France -2.4, Italy -3.3%, Spain -3.6%, U.K. -1%. For the week Spain's IBEX was off 5.3%, for the year, -15%. Germany's Dax +11.6% YTD. [View news story]
How many times has Unicredit been halted in the last two weeks? Message to ECB, you own this POS.
"Even a minor downdraft gets cut short by a flood of buyers," says Byron Wien, explaining why he's unworried optimistic sentiment readings are presaging anything more than the most minor of sell-offs. "There are many investors looking for an opportunity ... This could continue for a while." [View news story]
Flood of buyers, ridiculous, most of the volume is on the sell side, followed by yet another manipulated rigged vapor rally back.
Jon Corzine (MFGLQ.PK) ordered $200M in customer funds moved to JPMorgan to cover an overdraft, an email from MF Global's treasurer suggests - a seeming contradiction of Corzine's congressional testimony "I did not instruct anyone to lend customer funds to anyone." [View news story]
The bond market's (still the world's most hated asset class) continued strength in the face of positive economic surprises and the embracing of risk means Treasurys are treating spiking oil prices as a "deflationary shock," writes David Rosenberg, reminding that each penny increase at the pump "siphons away around $1.5B from consumer wallets." [View news story]
How is that a 5 year US Treasury yielding 0.85% is classified as "hated". Sounds like Animal House to me.
The ECB is now considering allowing Greek bonds held by EU central banks to subjected to PSI writedowns, according to a Reuters report. European shares and the euro rip off to new highs for the session. You can't make this stuff up. (yesterday) [View news story]
Send the bill to the ECB contributors, specifically Germany 27.9%, France 20.9%, Italy 18.4%, Spain 12.2%. But wait there is even Portugal 2.6% to eat a billion in losses.
Charles Murray’s new book highlights striking trends among less-educated white Americans, with marriage rates and male labor force participation down, and out-of-wedlock births up. But Paul Krugman finds it "amazing how quickly and blithely conservatives dismiss the seemingly obvious answer: A drastic reduction in the work opportunities available to less-educated men." [View news story]
Well at least the impoverished white working class isn't carrying a trillion student debt like the educated, so called upper classes.
Another lure for the rebound of manufacturing in the U.S.: taking advantage of cheap natural gas, which is spurring major investments in petrochemical and steel production in the Gulf Coast and Midwest, WSJ reports. The energy boom is revving up the whole economy - landowners are raking in money, while consumers are paying lower bills for heating and electricity. [View news story]
Sub $3 Nat Gas is now causing a big downturn in dry gas drilling to get underway. Baker Hughes reported a 6% drop just in the last week.
De-Mystifying The Central Bank Balance Sheets [View article]
Huh? It is all by degree, but the Fed has a trillion in mortgages, which is unprecedented, and now has a huge portfolio of extremely low yielding long dated Treasuries that will cost them $2 billion for every bp increase. All laid out here:
The "fade Whitney" trade may be getting close to played out as municipals tack a 2.31% rise in January onto a 10.7% gain in 2011, with yields for top-rated paper now at or near all-time lows. Lower-rated munis offer the best relative value, says Jim Kochan, but investors should expect coupon income and nothing more for the rest of the year. [View news story]
The only thing Whitney missed is the ability of the Fed and other central banks to purchase trillions in inflated debt issues, and put their sponsoring countries at huge risk as a consequence.
"Recovery now, thrift later, generic speeches in the meantime," writes Cardiff Garcia of Bernanke's Congressional testimony. Between the prepared remarks and early questioning, not a lot of new ground is covered as the Chairman recites the usual warnings that the government needs to get the deficit under control, but not yet. Watch live here. [View news story]
Bernanke admits there will be losses on Fed’s trillion MBS portfolio under new refi proposal, but fails to quantify.
Is nobody listening, Bernanke admits that Fed will have no control over rates should markets lose confidence in fiscal policy.
Bernanke says we don't know how Greek talks will work out.
De-Mystifying The Central Bank Balance Sheets [View article]
The real issue is the quality of collateral and securities on the central banks balance sheet. This has gotten bigger and bigger and worse and worse. The ECB LTRO program takes the cake.
Looks like a repeat headline, but isn't: Negotiators say Greece and private creditors are close to a deal on a debt swap. Now, creditor reps Charles Dallara and Jean Lemierre may offer interest rates that would mean bigger losses for bondholders that would still be recouped if strong growth returns. (last weekend) [View news story]
If the details are accurate, this is absurdly inadequate without the ECB, EU and IMF being haircutted too. The whole burden is going to private holders, and now they know the formula for the rest of Europe, SUBORDINATION. This is a horrible approach.
Greece debt is nearly 160 percent of the country's annual economic output this year and 187% in 2013. Private creditors hold around €206 billion of Greek debt. Assuming a participation rate in the debt swap of 80%, a 50% writedown to private holders would cut Greece’s debt by around €80 billion, or 35% of GDP, a spit in the bucket, leaving it still at 125% and climbing.
The official holders like the ECB and IMF get a free pass, and with the official holders then holding half the new par value debt. With the private debt subordinated to the ECB, and EU, and IMF who are prepared to shell out more (if they can run Greece's budget), this subordinates the private holders into an even bigger hole. Further the private debtholders get a tiny 3.75% coupon on the new 50% markdown.
It is hard to imagine this trading well at all, in fact even half the new par bonds would be a real stretch. Greece or for that matter any other stressed European nation are going to struggle getting new private investment at all with the operating theme being constant subordination to official holders. Since this is no solution, why would any IMF nation step up?
Alaska, Texas, Louisiana and North Dakota have returned to their peak pre-recession employment levels, a new analysis from IHS Global Insight shows, with 16 set to do so by the end of 2013. The formula for success includes avoiding the housing bust and having lots of oil and gas. [View news story]
http://bit.ly/Jukps6
China Initiates Gold And Silver Futures Trading [View article]
Ugly chart of the day: The recent trend in federal tax receipts suggests the economy is not "getting stronger," as Tim Geithner maintains; if anything, it looks like the opposite. [View news story]
Europe closes sharply lower, weighed down by realization the LTRO was a heckuva band-aid, but still just a band-aid. Stoxx 50 -2.6%, Germany -2.4%, France -2.4, Italy -3.3%, Spain -3.6%, U.K. -1%. For the week Spain's IBEX was off 5.3%, for the year, -15%. Germany's Dax +11.6% YTD. [View news story]
"Even a minor downdraft gets cut short by a flood of buyers," says Byron Wien, explaining why he's unworried optimistic sentiment readings are presaging anything more than the most minor of sell-offs. "There are many investors looking for an opportunity ... This could continue for a while." [View news story]
Jon Corzine (MFGLQ.PK) ordered $200M in customer funds moved to JPMorgan to cover an overdraft, an email from MF Global's treasurer suggests - a seeming contradiction of Corzine's congressional testimony "I did not instruct anyone to lend customer funds to anyone." [View news story]
http://bit.ly/GMJgS4
The bond market's (still the world's most hated asset class) continued strength in the face of positive economic surprises and the embracing of risk means Treasurys are treating spiking oil prices as a "deflationary shock," writes David Rosenberg, reminding that each penny increase at the pump "siphons away around $1.5B from consumer wallets." [View news story]
The ECB is now considering allowing Greek bonds held by EU central banks to subjected to PSI writedowns, according to a Reuters report. European shares and the euro rip off to new highs for the session. You can't make this stuff up. (yesterday) [View news story]
http://bit.ly/wxG7pe
Charles Murray’s new book highlights striking trends among less-educated white Americans, with marriage rates and male labor force participation down, and out-of-wedlock births up. But Paul Krugman finds it "amazing how quickly and blithely conservatives dismiss the seemingly obvious answer: A drastic reduction in the work opportunities available to less-educated men." [View news story]
Another lure for the rebound of manufacturing in the U.S.: taking advantage of cheap natural gas, which is spurring major investments in petrochemical and steel production in the Gulf Coast and Midwest, WSJ reports. The energy boom is revving up the whole economy - landowners are raking in money, while consumers are paying lower bills for heating and electricity. [View news story]
De-Mystifying The Central Bank Balance Sheets [View article]
Federal Reserve’s Portfolio: the Short of a Lifetime
http://bit.ly/zdXUXg
The "fade Whitney" trade may be getting close to played out as municipals tack a 2.31% rise in January onto a 10.7% gain in 2011, with yields for top-rated paper now at or near all-time lows. Lower-rated munis offer the best relative value, says Jim Kochan, but investors should expect coupon income and nothing more for the rest of the year. [View news story]
Federal Reserve's Portfolio, short of a lifetime.
http://bit.ly/zdXUXg
Largest central banks now hold 15 trillion in fictitious capital:
http://bit.ly/xr68Jl
"Recovery now, thrift later, generic speeches in the meantime," writes Cardiff Garcia of Bernanke's Congressional testimony. Between the prepared remarks and early questioning, not a lot of new ground is covered as the Chairman recites the usual warnings that the government needs to get the deficit under control, but not yet. Watch live here. [View news story]
Is nobody listening, Bernanke admits that Fed will have no control over rates should markets lose confidence in fiscal policy.
Bernanke says we don't know how Greek talks will work out.
De-Mystifying The Central Bank Balance Sheets [View article]
http://bit.ly/AAFSJe
Looks like a repeat headline, but isn't: Negotiators say Greece and private creditors are close to a deal on a debt swap. Now, creditor reps Charles Dallara and Jean Lemierre may offer interest rates that would mean bigger losses for bondholders that would still be recouped if strong growth returns. (last weekend) [View news story]
Greece debt is nearly 160 percent of the country's annual economic output this year and 187% in 2013. Private creditors hold around €206 billion of Greek debt. Assuming a participation rate in the debt swap of 80%, a 50% writedown to private holders would cut Greece’s debt by around €80 billion, or 35% of GDP, a spit in the bucket, leaving it still at 125% and climbing.
The official holders like the ECB and IMF get a free pass, and with the official holders then holding half the new par value debt. With the private debt subordinated to the ECB, and EU, and IMF who are prepared to shell out more (if they can run Greece's budget), this subordinates the private holders into an even bigger hole. Further the private debtholders get a tiny 3.75% coupon on the new 50% markdown.
It is hard to imagine this trading well at all, in fact even half the new par bonds would be a real stretch. Greece or for that matter any other stressed European nation are going to struggle getting new private investment at all with the operating theme being constant subordination to official holders. Since this is no solution, why would any IMF nation step up?
http://bit.ly/AFtcKV