JOBLESS CLAIMS MUCH WORSE THAN EXPECTED

URSDAY, APRIL 15, 2010

AAII Bulls minus Bears hits 19, equal to levels at the start of the year.

JOBLESS CLAIMS MUCH WORSE THAN EXPECTED

+ 24,000 vs. last week. 4 wk moving avg rises too.

Japanese PM Mulls Devaluation by 30%

Link: Japanese Consider Devaluation Despite BOJ Stance - Telegraph

Capacity Utilization Edges Up

Recent Data

Home Prices in Orange County are bouncing...

For March

Slice	Price	Yr. ago	Sales	Yr. ago
Houses	$515,000	+19.4%	1,668	+4.2%
Condos	$300,000	+19.0%	855	+18.3%
New	$471.500	-1.8%	129	+18.3%
All O.C.	$432,000	+12.2%	2,652	+9.0%

Orange County Office Vacancies, Should we relocate?

Mortgage Apps drop 9.6% on Higher FHA premiums.

Retail Sales up 1.6% m/m

IS this the biggest story of the year???

Link: Whistleblower tells all regarding JPMorgan Gold Price Manipulation

Excerpt:

There is no silver lining to the activities of JPMorgan Chase and HSBC in the precious-metals market here and in London, says a 40-year veteran of the metal pits.

The banks, which do the Federal Reserve's bidding in the metals markets, have long been the government's lead actors in keeping down the prices of gold and silver, according to a former Goldman Sachs trader working at the London Bullion Market Association.

Maguire was scheduled to testify last week before the Commodities Futures Trade Commission, which is looking into the activities of large banks in the metals market, but was knocked off the list at the last moment. So, he went public.

Maguire -- in an exclusive interview with The Post -- explained JPMorgan's role in the metals pits in both London and here, and how they can generate a profit either way the market moves.

SATURDAY, APRIL 10, 2010

Making Sure We Don't Lose Sight of the Big Picture!

Doug Noland, Federated Funds:

Despite alarming financial vulnerability, state and local governments continue to pile on debt at incredibly attractive terms. In spite of underlying financial and economic fragility, junk debt issuance is running at record pace. Inflows continue to inundate bond funds - at home and abroad. Estimates now put hedge fund asset as high as $2 Trillion by the end of the year. Retail stocks are not far away from record highs. Risk premiums are narrow throughout.

The massive issuance of government “money” has always been inflationism’s trump card. It’s now in play, and this latest round of inflationism is again profoundly distorting market perceptions. “Too big to fail” has broadened from large financial institutions to encompass the entire system. Today, GSE obligations and municipal debt enjoy “moneyness” only because of the markets’ belief that Washington will not tolerate disruptions in these key markets. Risk premiums throughout the corporate debt market have collapsed on the back of the view that massive stimulus ensures economic growth and strong company balance sheets. Throughout the risk markets, prices are bouyed by confidence that the Fed will restart monetization operations in the event of any market liquidity disruption. Hedge funds and other speculators are thriving once again as they successfully exploite Washington’s inflationary policymaking. Washington is there with ongoing massive fiscal stimulus, ultra-low interest rates, and a liquidity backstop.

I noted above that “‘Money’ is inherently dangerous because virtually insatiable demand creates a propensity for over-issuance.” There is a second fundamental danger inherent in “money:” A loss of confidence immediately incites a very disruptive systemic dislocation. If you can’t trust money, what can you trust? No trust – no functioning Credit system or stable economy. Indeed, you really don’t want to mess with “money.”

Importantly, you don’t want to allow distortions in money perceptions to establish a foothold. Such distortions are always and everywhere the lifeblood of Bubbles. Above all, you certainly don’t want to finance a massive inflation of non-productive debt with “money.” This only ensures a problematic widening gulf between perceptions of safety and liquidity and the actual deteriorating underlying soundness of these financial claims. And when the inflation of this money is also distorting market perceptions for Credit and asset prices throughout the entire system, inflationism is really playing with fire. Money Not Good.

THURSDAY, APRIL 8, 2010

Perspectives on the Recession

Change in Nonfarm Payroll

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Change in GDP

Change in Industrial Output

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Chris Martenson - must read!!

YIKES!!!! This is a must read. To whet your appetite, here is a excerpt:

Taken together, this means that in only two short years, 2009 and 2010, as much new Treasury debt will be auctioned off to the public as was outstanding in 1995. Since government borrowing never gets paid down, at least in modern history, it means that the last two years have seen as much borrowing as happened over the period in which electricity was strung to every house, the highways were built, and our population tripled. What can we point to that was created over the last two years to rival those accomplishments.

Link: Must read Chris Martensen piece.

From The Bank of Intl Settlements:

Distressed sales as a % of home sales rising...

Links:

Sovereign Debt at the Boiling Point - Daily Telegraph

Projected Interest Payments as a % of GDP:

Jobless Claims came in 10k above the high estimate.

No wonder Ben said what he said yesterday.

Links:

Bernanke says the Economy still needs help - Bloomberg

Deflation on the Prowl - AEP

Gold in Euros, not Pesos.....Euros

Consumer credit decreased at an annual rate of 5-1/2 percent in February 2010. Revolving credit decreased at an annual rate of
13 percent, and nonrevolving credit decreased at an annual rate of 1-1/2 percent.

Shopping Ctr Vacancies still Rising.

Mortgage Rates Rising:

The Mortgage Bankers' purchase index, up 0.2 percent in the Easter week, added slightly to prior gains. But mortgage rates are the report's big headline, jumping 27 basis points in the week for 30-year loans to 5.31 percent in what the report blames on the end to Fed purchases of mortgage-backed securities. The jump in rates dried up demand for refinancing with the index down 16.9 percent. - Bloomberg

-Bank Credit: $8,853 bn.Bank credit has contracted $145 bn since Dec. 2009, vs. a contraction of $280 bn for all of 2009.

-Rates: 10yr: 3.94%(++) Fed Funds: 0.25% (=) See Chart Here.

-S&P eps estimate: $80 (+) P/E: 14.3x See Source Here.

-U6 (Jobless + Marginally attached workers): 16.9% Upticks from 16.5%

-Dollar Index: 98.42, down vs. 99.5 on gains in oil and gold last week...Index rebased to 100 on 1.1.10.

-Weightings: US Broad Dollar Index: 60%/Gold 20%/Oil 20%

-DXY index: 103.67 vs. last week's 104.78. (for reference) rebased to 100 on 1.1.10.

-BIC est. 2010 gdp growth: 8.9%, raised from 8.75% due to China forecast

raised by 0.5% by the World Bank.

Weightings: China 60%/India 20%/Brazil 20%.

-China Rates: Tightening bias through loan restrictions: (=/-)