Saturday, July 27, 2013
Takeover: Banks Act In Their Own Interests, And They Own The Fed – Make Viral!
The Federal Reserve together with it’s owners, the mega-banks, have engineered a takeover of every citizen on the planet. By giving themselves competitive advantage (free money), and setting up laws so that they can monopolize large parts of the real economy, they have acted like a cartel and will continue doing so until they are stopped.
Clips from Senate committee on Banking, Housing and Urban Affairs, 23rd July 2013.
http://www.banking.senate.gov/public/…
Fed Economist Fired for Investigating Suspicious 9-11 Cash Transfers
Would you be surprised to learn that tens of billions in cold, hard cash was shuffled around just prior to 9-11 by none other than the Fed itself? Probably not.
That’s right. The average increase was $8 billion over five years, but it exploded to $18 billion just prior to that fateful day. None other than a Federal Reserve economist discovered this and was promptly fired for his efforts to reveal the cause. The official story involves an Argentine currency crisis. Clearly, this required his termination.
His story at 2m49s:
Profiting from Food Stamps, Student Loans, Unemployment: Wall Street, US Congress, Obama Cash-in
Profiting from Food Stamps, Student Loans, Unemployment: Wall Street, US Congress, Obama Cash-in
“Despite being the richest country in the world, poverty remains an important social issue in the United States. All too often poverty in America is used as a political weapon by both political parties to galvanize their voting base. What is lost in the midst of such politicking is the crony connection of corporations that have positioned themselves to profit from poverty. The welfare programs we use to attempt to alleviate poverty actually play directly into the plans of companies that lobby on behalf of legislation lauded as anti-poverty programs. Rather than overcoming poverty, these programs line the pockets of their promoters. Such crony connections must end.” Government Accountability Institute
According to the US Census Bureau’s Median Value of Debt by Household (2011), the median household debt (both secured and unsecured) for 35-44 year olds was $108,000 (USD); for those 45-54, $86,500; and for 55-64 age group it was $70,000. The data in the Census Bureau report also shows that the less formally educated one is the less debt one has.
The median debt for someone with no high school diploma is $20,000 (with a high school diploma is $42,000), while the median debt for a holder of a graduate or professional degree is $130,705. So while America’s educational leaders say that a college degree will likely lead to increased income over the years, they don’t mention that secured and unsecured debt increases the “smarter” one becomes.
Debt for You, Profit for Them
Maybe Americans should dump the pursuit of a college degree particularly in the face of rising interest rates for federal student loans and increased tuition and ancillary fees at colleges and universities across the land. High interest rates (the cost of money) on student loans can also serve as a barrier to college entry. Perhaps the “hidden hand of the market” is sending a message of some sort, that the financially sound path is to get an education in the 21st Century trades that combine, say, computers and engines or computer systems and networks. Add a Cisco or Microsoft certification to the tradecraft and a job for life is possible. But buyer beware, earning an Associate’s Degree earns you a median debt of $63,000.
Moreover pushing the myth that a college education is a must-have in the USA tends to generate excellent profits for investors, and makes college/university presidents, administrators and senior faculty, quite comfortable. Take the case of Sallie Mae. According to the Huffington Post’s September 2013 report Sallie Mae Profit Boosts College Endowments and Pension Funds As Students Pay More, “University endowments and teachers’ pension funds are among big investors in Sallie Mae, the private lender that has been generating enormous profits thanks to soaring student debt and the climbing cost of education…previously unreported investments [obtained by Huffington Post] mean that education professionals are able to profit twice off the same student: first by hiking the cost of tuition, then through dividends and higher valuations on their holdings in Sallie Mae, the largest student lender and loan servicer in the country, which profits by charging relatively high interest rates on its loans and not refinancing high-rate loans after students graduate and get well-paying jobs. Sallie Mae is a former government-sponsored enterprise that was fully privatized in 2004 and now trades publicly as SLM Corp…
Sallie Mae reported $939 million in net income last year, the highest since 2006. The publicly-traded company, which enjoys a government guarantee on most of its $174 billion in assets, has been profitable in eight of the last 10 years, generating a cumulative $7.3 billion profit. Its shares have risen 54 percent over the past year, outpacing the 19 percent gain in the Standard & Poor’s 500 Index, America’s benchmark equity gauge…The endowments of Furman University, Harvard University, Mount Holyoke College, and University of Michigan all hold stakes in Sallie Mae through their investments in Highfields Capital Management, a hedge fund that manages more than $11 billion and is the second-biggest Sallie Mae shareholder… Pension funds for teachers and other school employees such as the New York State Teachers’ Retirement System, State Teachers Retirement Board of Ohio, Pennsylvania Public School Employees Retirement System, New Mexico Educational Retirement Board, Teacher Retirement System of Texas and California State Teachers Retirement System (CalSTRS) also own significant chunks of Sallie Mae, as does asset manager TIAA-CREF, which oversees retirement funds for teachers, among others… Federal records show the company spent more than $1.4 million lobbying members of Congress last quarter.”
Rockefeller, Obama Nest Eggs Turn Gold
Cyprus Deposits Plunge At Fastest Rate In History
Perhaps the most underreported news to come out of Europe this
morning had nothing to do with PMI or employment or credit creation in
the Eurozone. It had to do with Cyprus - the insolvent island that
everyone forgot - and which since its March bail in has been left for a
state of Schrodingerian suspended animation, where it is either alive or
dead depending on what propaganda wave function it had to satisfy.
Recall that many, most certainly us, said that the imposed capital controls would have no impact in stemming the massive outflow of what money is left with the insolvent banking system, and very soon the entire banking system would remain deposit, and thus funding, free requiring more and bigger bailouts. Sure enough, this was just confirmed when the Central Bank of Cyprus reported that not only did local deposits drop to a level not seen since 2007, plunging by the second fastest absolute amount in history, but declined at the fastest rate ever!
Recall that many, most certainly us, said that the imposed capital controls would have no impact in stemming the massive outflow of what money is left with the insolvent banking system, and very soon the entire banking system would remain deposit, and thus funding, free requiring more and bigger bailouts. Sure enough, this was just confirmed when the Central Bank of Cyprus reported that not only did local deposits drop to a level not seen since 2007, plunging by the second fastest absolute amount in history, but declined at the fastest rate ever!
Central Banks ‘Vote For Gold’ Due To Sovereign And Currency Concerns
by GoldCore
Today’s AM fix was USD 1,327.75, EUR 998.76 and GBP 861.73 per ounce.
Yesterday’s AM fix was USD 1,312.00, EUR 994.92 and GBP 857.63 per ounce.
Gold climbed $11.60 or 0.88% yesterday and closed at $1,331.50/oz.
Silver rose $0.04 or 0.2% and closed at $20.20.
Gold is 8.4% higher in July and set for the best month since January 2012 as lower prices lead to increased demand.
Gold Prices/ Fixes / Rates /Vols
Gold is on course for its third week of gains, buoyed by a weak dollar, no definite end to quantitative easing and continuing ultra loose monetary policies. Central bank gold buying is also supporting gold.
Premiums in India are $20 per ounce over London prices as demand outstrips government restricted supply before the festival season on the subcontinent.
Premiums in China have come down but remain robust at $12 per ounce and gold forward rates (GOFO) remain negative in the near term – 1, 2 and 3 months (see table above and chart below).
Central banks remained net buyers of gold last month as seen in the IMF data released overnight.
Many emerging-market countries with considerable foreign exchange reserves continue to diversify their fx reserves, most of which are in dollars and euros, and increase their gold reserves.
Emerging market central banks have increased their holdings of the monetary asset over the past few years as the sovereign debt crises in the EU, U.S. and Japan put pressure on reserve currencies such as the Japanese yen, U.S. dollar and the euro.
Falling gold prices to their lowest levels in almost three years made gold more attractive to many central banks.
LBMA 1 Month Gold Forward Offered Rate (GOFO)
Russia, Greece, Ukraine, Kazakhstan, Kyrgyzstan, Belarus and Azerbaijan increased their gold holdings in June according to the IMF data.
Mozambique, Serbia and Tajikistan increased holdings in May, which updates as countries report according to Bloomberg.
Russia which now has the seventh-largest gold holdings in the world,added just 9,000 ounces to its holdings, which now stand at 32.0 million ounces.
Russia, which has purchased significant volumes of gold in recent years, has increased its reserves by almost 10% over the past year alone.
Kazakhstan, another regular bullion buyer in recent months, also increased its holdings in June. The country’s central bank bought more than 45,000 ounces, taking its reserves to 4.2 million ounces.
Russia and Kazakhstan increased their gold reserves for a ninth straight month in June.
Greece added 1,000 ounces to its 3.6-million-ounce reserve, while Kyrgyzstan and Belarus also added a small amount of gold to their holdings.
Ukraine returned for the second month running in June, adding another large 80,000 troy ounces of gold to its official reserves, which now stand at nearly 1.3 million ounces.
Azerbaijan bought nearly 65,000 ounces, lifting its reserves to more than 250,000 ounces. It is the sixth consecutive month the country has added to its official holdings, which in December stood at nearly nothing.
Central banks were overwhelmingly buyers and were net buyers again last month but there were some gold reserve sales too.
Guatemala, which last sold gold in July 2012 cut its holdings by 7,300 ounces. The Central American country’s reserves now stand at 214,300 ounces. Neighboring Mexico and the South American nation Suriname made small cuts to their official reserves too.
Germany sold a very small amount of their gold reserves in June and it is believed this was done in order to mint commemorative gold coins. Germany lowered its gold holdings by 25,000 ounces. The reduction is, however, small compared with the overall size of the country’s reserves, which stand at more than 109.0 million ounces.
Germany has the second-largest reserves of gold, behind the U.S. and is attempting to repatriate to Germany its gold reserves that have been stored in the New York Federal Reserve since after World War II.
The Bundesbank wasn’t immediately available for comment according to Marketwatch. It has previously said it sporadically sells gold to the nation’s Ministry of Finance to mint commemorative coins.
Turkey’s gold reserves also declined by just over 120,000 ounces to 14.2 million ounces. Their gold reserves have nearly quadrupled over the past two years after its central bank began accepting gold as collateral from commercial banks. It is believed that rather than on-market purchases, this is the main reason for the recent increases.
China does not report to the IMF and there are strong grounds for believing thatChina continues to accumulate gold quietly and without declaring … for now.
When China does announce its expected increase in holdings it could be of a significant amount that could reignite gold’s secular bull market.
‘Vote For Gold’
“You have to choose, as a voter, between trusting to the natural stability of gold and the natural stability and intelligence of the members of the government. And with due respect to these gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold.”
The above quotation from GB Shaw who was born on this day July 26, in 1856, is ringing true during these uncertain political and economic times.
Shaw’s witty but pointed quotation was featured in a letter printed in the Financial Times today and it is featured on our Facebook page today.
Given the high level of financial and economic uncertainty facing us, it is wise to step back and take a long term historical perspective of the current crisis.
Throughout history, gold has been used as the safest form of money – a form of money that cannot be debased or printed into oblivion by bankers, politicians and reckless governments. When experiments with paper money and massive creation of debt go wrong as unfortunately they inevitably have done throughout history, economic hardship has been the result.
This is why wise people throughout history have always appreciated the finite currency that is gold.
From Aristotle to G. B. Shaw to Kyle Bass to Voltaire their thoughts help enlighten why one should save or invest in precious metals.
Kyle Bass, the respected hedge fund manager recently said:
“Buying gold is just buying a put against the idiocy of the political cycle. It’s that simple.”
Aristotle, the Greek philosopher and genius (384-322BC) wrote:
“In effect, there is nothing inherently wrong with fiat money, provided we get perfect authority and god-like intelligence for kings.”
Lord Rees Mogg, economist & former editor of The Times & assistant editor of The Sunday Times said:
“Governments lie; bankers lie; even auditors sometimes lie: gold tells the truth.”
More recently Hans Sennholz, author & economist of Austrian school wrote:
“For more than two thousand years gold’s natural qualities made it man’s universal medium of exchange. In contrast to political money, gold is honest money that survived the ages and will live on long after the political fiats of today have gone the way of all paper. No other commodity enjoys as much universal acceptability and marketability as gold.”
In the same vein, Voltaire, the French poet, historian & philosopher ( 1694 – 1778) wrote:
“Paper money goes down to its intrinsic value – zero.”
Today’s AM fix was USD 1,327.75, EUR 998.76 and GBP 861.73 per ounce.
Yesterday’s AM fix was USD 1,312.00, EUR 994.92 and GBP 857.63 per ounce.
Gold climbed $11.60 or 0.88% yesterday and closed at $1,331.50/oz.
Silver rose $0.04 or 0.2% and closed at $20.20.
Gold is 8.4% higher in July and set for the best month since January 2012 as lower prices lead to increased demand.
Gold Prices/ Fixes / Rates /Vols
Gold is on course for its third week of gains, buoyed by a weak dollar, no definite end to quantitative easing and continuing ultra loose monetary policies. Central bank gold buying is also supporting gold.
Premiums in India are $20 per ounce over London prices as demand outstrips government restricted supply before the festival season on the subcontinent.
Premiums in China have come down but remain robust at $12 per ounce and gold forward rates (GOFO) remain negative in the near term – 1, 2 and 3 months (see table above and chart below).
Central banks remained net buyers of gold last month as seen in the IMF data released overnight.
Many emerging-market countries with considerable foreign exchange reserves continue to diversify their fx reserves, most of which are in dollars and euros, and increase their gold reserves.
Emerging market central banks have increased their holdings of the monetary asset over the past few years as the sovereign debt crises in the EU, U.S. and Japan put pressure on reserve currencies such as the Japanese yen, U.S. dollar and the euro.
Falling gold prices to their lowest levels in almost three years made gold more attractive to many central banks.
LBMA 1 Month Gold Forward Offered Rate (GOFO)
Russia, Greece, Ukraine, Kazakhstan, Kyrgyzstan, Belarus and Azerbaijan increased their gold holdings in June according to the IMF data.
Mozambique, Serbia and Tajikistan increased holdings in May, which updates as countries report according to Bloomberg.
Russia which now has the seventh-largest gold holdings in the world,added just 9,000 ounces to its holdings, which now stand at 32.0 million ounces.
Russia, which has purchased significant volumes of gold in recent years, has increased its reserves by almost 10% over the past year alone.
Kazakhstan, another regular bullion buyer in recent months, also increased its holdings in June. The country’s central bank bought more than 45,000 ounces, taking its reserves to 4.2 million ounces.
Russia and Kazakhstan increased their gold reserves for a ninth straight month in June.
Greece added 1,000 ounces to its 3.6-million-ounce reserve, while Kyrgyzstan and Belarus also added a small amount of gold to their holdings.
Ukraine returned for the second month running in June, adding another large 80,000 troy ounces of gold to its official reserves, which now stand at nearly 1.3 million ounces.
Azerbaijan bought nearly 65,000 ounces, lifting its reserves to more than 250,000 ounces. It is the sixth consecutive month the country has added to its official holdings, which in December stood at nearly nothing.
Central banks were overwhelmingly buyers and were net buyers again last month but there were some gold reserve sales too.
Guatemala, which last sold gold in July 2012 cut its holdings by 7,300 ounces. The Central American country’s reserves now stand at 214,300 ounces. Neighboring Mexico and the South American nation Suriname made small cuts to their official reserves too.
Germany sold a very small amount of their gold reserves in June and it is believed this was done in order to mint commemorative gold coins. Germany lowered its gold holdings by 25,000 ounces. The reduction is, however, small compared with the overall size of the country’s reserves, which stand at more than 109.0 million ounces.
Germany has the second-largest reserves of gold, behind the U.S. and is attempting to repatriate to Germany its gold reserves that have been stored in the New York Federal Reserve since after World War II.
The Bundesbank wasn’t immediately available for comment according to Marketwatch. It has previously said it sporadically sells gold to the nation’s Ministry of Finance to mint commemorative coins.
Turkey’s gold reserves also declined by just over 120,000 ounces to 14.2 million ounces. Their gold reserves have nearly quadrupled over the past two years after its central bank began accepting gold as collateral from commercial banks. It is believed that rather than on-market purchases, this is the main reason for the recent increases.
China does not report to the IMF and there are strong grounds for believing thatChina continues to accumulate gold quietly and without declaring … for now.
When China does announce its expected increase in holdings it could be of a significant amount that could reignite gold’s secular bull market.
‘Vote For Gold’
“You have to choose, as a voter, between trusting to the natural stability of gold and the natural stability and intelligence of the members of the government. And with due respect to these gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold.”
The above quotation from GB Shaw who was born on this day July 26, in 1856, is ringing true during these uncertain political and economic times.
Shaw’s witty but pointed quotation was featured in a letter printed in the Financial Times today and it is featured on our Facebook page today.
Given the high level of financial and economic uncertainty facing us, it is wise to step back and take a long term historical perspective of the current crisis.
Throughout history, gold has been used as the safest form of money – a form of money that cannot be debased or printed into oblivion by bankers, politicians and reckless governments. When experiments with paper money and massive creation of debt go wrong as unfortunately they inevitably have done throughout history, economic hardship has been the result.
This is why wise people throughout history have always appreciated the finite currency that is gold.
From Aristotle to G. B. Shaw to Kyle Bass to Voltaire their thoughts help enlighten why one should save or invest in precious metals.
Kyle Bass, the respected hedge fund manager recently said:
“Buying gold is just buying a put against the idiocy of the political cycle. It’s that simple.”
Aristotle, the Greek philosopher and genius (384-322BC) wrote:
“In effect, there is nothing inherently wrong with fiat money, provided we get perfect authority and god-like intelligence for kings.”
Lord Rees Mogg, economist & former editor of The Times & assistant editor of The Sunday Times said:
“Governments lie; bankers lie; even auditors sometimes lie: gold tells the truth.”
More recently Hans Sennholz, author & economist of Austrian school wrote:
“For more than two thousand years gold’s natural qualities made it man’s universal medium of exchange. In contrast to political money, gold is honest money that survived the ages and will live on long after the political fiats of today have gone the way of all paper. No other commodity enjoys as much universal acceptability and marketability as gold.”
In the same vein, Voltaire, the French poet, historian & philosopher ( 1694 – 1778) wrote:
“Paper money goes down to its intrinsic value – zero.”
Gold Retreats to April-Crash Low, China to Beat India as No.1 Buyer
Gold Retreats to April-Crash Low, China to Beat India as No.1 Buyer
The PRICE of gold bullion retreated from an overnight rise to $1340 per ounce in London on Friday morning, trading back down to $1322 – the low hit by the mid-April crash – as the US Dollar ticked higher.
Silver prices slipped back below $20 per ounce – a 33-month low when first breached in June.
Japanese stocks meantime fell hard as the Yen rose on the currency markets, and European equities slipped with commodities.
Government bond prices held steady, with 10-year US Treasury yields at 2.57%.
The US Federal Reserve next announces interest-rate and quantitative easing policy on Wednesday.
“I don’t really see how gold can go much higher,” says Matthew Turner, precious metals analyst at Australian bank Macquarie.
“After all the shenanigans of the last few weeks, we know that [QE] tapering at some point is clearly still the policy.”
China’s households will meantime overtake India as the world’s No.1 buyer of goldin 2013, said Marcus Grubb, managing director for investment at market-development organization the World Gold Council, on Thursday.
Buying perhaps 1,000 tonnes of gold – around 1 ounce in every 4 sold worldwide in 2013 – China is growing its jewellery demand, Grubb says, but not as fast as it’s growing demand for investment gold bars and coin.
Analysts have been forecasting China to overtake India since late 2009.
Investment bank and bullion market-maker Societe Generale yesterday warned thatgold-price volatility looks certain if there’s a “hard landing” in China‘s economy.
“Gold purchases by central banks have noticeably slowed of late,” says a note from Germany’s Commerzbank, pointing to the 400 tonnes forecast for 2013 against last year’s 532 tonnes.
New data from the International Monetary Fund showed only light gold buying amongst central banks in June, with Turkey’s reserves falling for the first time in a year, down 0.8% to 441.5 tonnes.
“The flows in the central banks are pretty small now, the big shifts are gone,” Bloomberg quotes economist Justin Smirk at Westpac Banking in Sydney.
“Central bank buying might give us a little bit of a floor, but they’re just soaking up some of what the ETFs are selling. You’re not going to see central banks coming in to push the price up.”
The world’s largest exchange-traded gold trust fund, the SPDR (ticker: GLD) yesterday shed another 2 tonnes on Thursday, taking its bullion – held to back shares in the trust – down to 927 tonnes, the lowest level since Feb. 2009.
Lower prices mean supplies of scrap gold from existing jewelry and investment owners may slump by three-quarters to 400 tonnes or below, according to 2013 forecasts earlier this week.
“The pawn-broking industry is facing a collapse in the price of gold,” reports NPR’s Planet Money, reducing margins on gold items pledged by borrowers.
On the mining supply side, meantime, world No.3 Goldcorp joined No.2 Newmont in announcing sharp write-downs on the value of its assets, thanks to the 20% drop in world gold prices so far in 2013.
Adding $2 billion and $1.8bn respectively to the gold mining majors’ recent $9bn in writedowns, Goldcorp and Newmont Mining have both dropped more than 40% already on the stock market since gold began falling from $1800 per ounce last fall
Adrian Ash
The PRICE of gold bullion retreated from an overnight rise to $1340 per ounce in London on Friday morning, trading back down to $1322 – the low hit by the mid-April crash – as the US Dollar ticked higher.
Silver prices slipped back below $20 per ounce – a 33-month low when first breached in June.
Japanese stocks meantime fell hard as the Yen rose on the currency markets, and European equities slipped with commodities.
Government bond prices held steady, with 10-year US Treasury yields at 2.57%.
The US Federal Reserve next announces interest-rate and quantitative easing policy on Wednesday.
“I don’t really see how gold can go much higher,” says Matthew Turner, precious metals analyst at Australian bank Macquarie.
“After all the shenanigans of the last few weeks, we know that [QE] tapering at some point is clearly still the policy.”
China’s households will meantime overtake India as the world’s No.1 buyer of goldin 2013, said Marcus Grubb, managing director for investment at market-development organization the World Gold Council, on Thursday.
Buying perhaps 1,000 tonnes of gold – around 1 ounce in every 4 sold worldwide in 2013 – China is growing its jewellery demand, Grubb says, but not as fast as it’s growing demand for investment gold bars and coin.
Analysts have been forecasting China to overtake India since late 2009.
Investment bank and bullion market-maker Societe Generale yesterday warned thatgold-price volatility looks certain if there’s a “hard landing” in China‘s economy.
“Gold purchases by central banks have noticeably slowed of late,” says a note from Germany’s Commerzbank, pointing to the 400 tonnes forecast for 2013 against last year’s 532 tonnes.
New data from the International Monetary Fund showed only light gold buying amongst central banks in June, with Turkey’s reserves falling for the first time in a year, down 0.8% to 441.5 tonnes.
“The flows in the central banks are pretty small now, the big shifts are gone,” Bloomberg quotes economist Justin Smirk at Westpac Banking in Sydney.
“Central bank buying might give us a little bit of a floor, but they’re just soaking up some of what the ETFs are selling. You’re not going to see central banks coming in to push the price up.”
The world’s largest exchange-traded gold trust fund, the SPDR (ticker: GLD) yesterday shed another 2 tonnes on Thursday, taking its bullion – held to back shares in the trust – down to 927 tonnes, the lowest level since Feb. 2009.
Lower prices mean supplies of scrap gold from existing jewelry and investment owners may slump by three-quarters to 400 tonnes or below, according to 2013 forecasts earlier this week.
“The pawn-broking industry is facing a collapse in the price of gold,” reports NPR’s Planet Money, reducing margins on gold items pledged by borrowers.
On the mining supply side, meantime, world No.3 Goldcorp joined No.2 Newmont in announcing sharp write-downs on the value of its assets, thanks to the 20% drop in world gold prices so far in 2013.
Adding $2 billion and $1.8bn respectively to the gold mining majors’ recent $9bn in writedowns, Goldcorp and Newmont Mining have both dropped more than 40% already on the stock market since gold began falling from $1800 per ounce last fall
Adrian Ash
Stocks Sliding: A Wave of Municipal Bankruptcies Looms, Japan Food And Energy Prices Rise; All Others Drop, China Risks A Crisis
With hotter than expected inflation in Japan (yes we know that’s what
they wanted), it appears (from Nikkei and JPY) that there is a growing
concern Kuroda will back off just a little during his speech on Sunday
night (NY time) from the print-til-we-stink paradigm. Japanese stocks
are down over 5% since Tuesday and the JPY is surging (suggesting markets are crying out for Kuroda to do a Bernanke and shift to longer/lower forward guidance). US equities – dragged by JPY-related carry unwinds – are also diving, back near yesterday’s lows.
http://www.zerohedge.com/news/2013-07-26/stocks-sliding-pre-market
Detroit bankruptcy case could bring unwanted change for muni market
Detroit’s bankruptcy is sending shivers through the more than $3.7 trillion municipal bond market, as investors worry the case will change the way certain bondholders are dealt with.
The municipal bond market is concerned on several fronts, but one of the thorniest problems is how the city’s general obligation bonds will be viewed. Detroit Emergency Manager Kevyn Orr said that the city is treating its limited and unlimited-tax General Obligation bonds as unsecured debt, except for those backed by liens on state aid.
The market has been selling off, with other credit, since early May on talk from theFed that it will likely pare down the size of its bond purchases before the end of the year. The 10-year Treasury yield has gone from a low of 1.61 percent in early May to 2.57 percent Thursday. In the same time frame, the 10-year 10 year AAA muni yield, as defined by the MMD scale, went from 1.66 percent to 2.75 percent.
http://www.cnbc.com/id/100914877
Japan Food And Energy Prices Rise; All Others Drop
Today, to much fanfare, the FT and other media blast that “Japan posts highest inflation rate since 2008” using this as evidence that Abenomics is once again working (i.e., that the Nikkei 225 has resumed its upward nominal path). Unfortunately, as usually happens, there is a problem here: this is simply not true.
The only reason why Japan posted its first positive CPI print in years has nothing to do with demand-pull broad “benign” inflation driven by rising wages, and everything to do with the “cost-push” of a plunging Yen forcing food and energy prices higher, something we predicted long ago would happen. In fact, when stripping away food and energy, core inflation was slightly weaker than expected with the first month-on month declines in both Tokyo and nationwide in the latest data in several months (seasonally adjusted). Which is to be expected: with incomes flat at best, in order to accommodate soaring food and energy prices the local population has to cut their spending for all other products, leading to deflation.
But what is most ironic is that economists in the US advise everyone to ignore soaring food and energy costs and to focus on the benign sub 2% annual rise in “other” hedonically-adjusted prices. However, when it comes to Japan, it is the opposite.
http://www.zerohedge.com/news/2013-07-26/japan-food-and-energy-prices-rise-all-others-drop
Japan Just Had Its Worst Day In A Month, And US Markets Are Heading Lower
Read more: http://www.businessinsider.com/markets-lower-after-japan-stocks-drop-2013-7#ixzz2a9xu3HCo
Japanese Inflation Is Entirely Due To Higher Energy Prices
http://www.businessinsider.com/japan-inflation-driven-by-energy-prices-2013-7
China Meltdown 2013: Economy Is Rapidly Approaching ZERO Growth, Money-Market Funds See Big Outflows, Wage Growth Is Slowing Significantly…
Read more at http://investmentwatchblog.com/china-meltdown-2013-economy-is-rapidly-approaching-zero-growth-money-market-funds-see-big-outflows-wage-growth-is-slowing-significantly/#j8quPoWBJOQJvSJZ.99
Good morning. Here’s what you need to know.
http://www.zerohedge.com/news/2013-07-26/stocks-sliding-pre-market
Detroit bankruptcy case could bring unwanted change for muni market
Detroit’s bankruptcy is sending shivers through the more than $3.7 trillion municipal bond market, as investors worry the case will change the way certain bondholders are dealt with.
The municipal bond market is concerned on several fronts, but one of the thorniest problems is how the city’s general obligation bonds will be viewed. Detroit Emergency Manager Kevyn Orr said that the city is treating its limited and unlimited-tax General Obligation bonds as unsecured debt, except for those backed by liens on state aid.
The market has been selling off, with other credit, since early May on talk from theFed that it will likely pare down the size of its bond purchases before the end of the year. The 10-year Treasury yield has gone from a low of 1.61 percent in early May to 2.57 percent Thursday. In the same time frame, the 10-year 10 year AAA muni yield, as defined by the MMD scale, went from 1.66 percent to 2.75 percent.
http://www.cnbc.com/id/100914877
Japan Food And Energy Prices Rise; All Others Drop
Today, to much fanfare, the FT and other media blast that “Japan posts highest inflation rate since 2008” using this as evidence that Abenomics is once again working (i.e., that the Nikkei 225 has resumed its upward nominal path). Unfortunately, as usually happens, there is a problem here: this is simply not true.
The only reason why Japan posted its first positive CPI print in years has nothing to do with demand-pull broad “benign” inflation driven by rising wages, and everything to do with the “cost-push” of a plunging Yen forcing food and energy prices higher, something we predicted long ago would happen. In fact, when stripping away food and energy, core inflation was slightly weaker than expected with the first month-on month declines in both Tokyo and nationwide in the latest data in several months (seasonally adjusted). Which is to be expected: with incomes flat at best, in order to accommodate soaring food and energy prices the local population has to cut their spending for all other products, leading to deflation.
But what is most ironic is that economists in the US advise everyone to ignore soaring food and energy costs and to focus on the benign sub 2% annual rise in “other” hedonically-adjusted prices. However, when it comes to Japan, it is the opposite.
http://www.zerohedge.com/news/2013-07-26/japan-food-and-energy-prices-rise-all-others-drop
Japan Just Had Its Worst Day In A Month, And US Markets Are Heading Lower
Read more: http://www.businessinsider.com/markets-lower-after-japan-stocks-drop-2013-7#ixzz2a9xu3HCo
Japanese Inflation Is Entirely Due To Higher Energy Prices
http://www.businessinsider.com/japan-inflation-driven-by-energy-prices-2013-7
China Meltdown 2013: Economy Is Rapidly Approaching ZERO Growth, Money-Market Funds See Big Outflows, Wage Growth Is Slowing Significantly…
Read more at http://investmentwatchblog.com/china-meltdown-2013-economy-is-rapidly-approaching-zero-growth-money-market-funds-see-big-outflows-wage-growth-is-slowing-significantly/#j8quPoWBJOQJvSJZ.99
Good morning. Here’s what you need to know.
- Markets in Asia were mixed in overnight trading. The Japanese Nikkei 225 fell 3%, the Hong Kong Hang Seng rose 0.3%, and the Shanghai Composite fell 0.5%. European markets are in the red with the exception of France and Spain. In the United States, futures point to a negative open.
- Japanese consumer prices rose 0.2% year over year in June after declining 0.3% in May, marking the first positive annual inflation rate in over a year and the biggest monthly jump in prices since November 2008. Economists were looking for a smaller advance to 0.1% inflation. The increase was largely due to higher energy prices. Stripping out food and energy, consumer prices were still down 0.2% year over year in June.
- In the week ended July 24, equity funds reported $8.0 billion in inflows, while bond funds saw $4.4 billion in inflows. High yield bond and leveraged loan funds were the big winners, with both asset classes receiving record inflows this week.
- Amazon reported a loss of $0.02 per share in the second quarter on revenues of $15.7 billion. Both numbers missed consensus forecasts for earnings of $0.06 per share and revenues of $15.73 billion. The company offered third-quarter revenue guidance in the range of $14.45 billion to $17.15 billion versus estimates for $16.98 billion, and shares are lower in pre-market trading.
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