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This morning we saw two huge housing data points.
Home prices posted their biggest gain since July 2006, while new home sales surged 15.6 percent month-over-month. However, the already tight housing supply is getting even tighter. Bank of America economist Michelle Meyer tells us that while we are seeing an improvement in new home sales, today’s data could be revised in coming months and that monthly data should be interpreted with caution since it can be very volatile. She [...] In one of the most bullish gold calls since the Federal Reserve announced a new round of easing last week, one strategist sees a 36 percent jump in the metal’s price [GCCV1 1767.00 -1.00 (-0.06%) ], to $2,400 an ounce, by the end of 2014. “The new target reflects our view that the Fed will maintain mortgage purchases until the end of 2014 and will move to buy Treasuries following the end of Operation Twist this coming [...] by GoldCore
XAU/EUR Exchange Rate Daily – (Bloomberg) Gold at €1,355/oz, just 2.5% from the record high of €1,390/oz, is a sign of a continuing lack of trust in the euro and in Draghi’s stewardship at the ECB. Investment and diversification demand for gold remains robust as seen in the gold holdings in exchange-traded products or trusts rose to a record for a second straight day. The amount increased 2.85 metric tons, or 0.1 [...] From Points and Figures: The economy is definitely sputtering. Clearly, all the stimulus, cheap money and extraordinary market manipulation by the Federal Reserve and US Treasury haven’t worked. But there is a new storm brewing. It’s in the [...] Thetrader.se With news dominated by the Greek elections, the imploding Spanish economy and more, people tend to forget about other issues. One of those being the currency wars going on.http://www.thetrader.se/2012/06/18/notes-for-currency-wars/ Ft.com Banks brace for likely downgrade California Pension Fund Down Almost 5% as End of the Year Looms
Spain insists it will continue to tap private debt markets “SPAIN REITERATED its determination to continue tapping private debt markets for day-to-day funds as financial markets delivered a cold response to Europe’s €100 billion support package for the country’s banks. While the Spanish request for aid is predicated on access to markets for nonbank borrowing, the agreement [...] GasBuddy.com blogger Patrick DeHaan has some unfortunate news about what would happen to oil prices if Greece exits the Eurozone.
While there would likely be a short-term drop in prices in a controlled departure, the value of the Euro would eventually come roaring back, driving prices higher, he writes. Here’s how it would work: “You see, the situation in Greece has devalued the euro significantly, driving the dollar higher because of the situation. Since oil is globally traded in [...] Jim Jubak: Got A crisis? Roll The Printing Press – Get Ready For The Age Of Bad Money (April 17, 2012) The number the market has been waiting for with bated breath arrives: CHINA 1Q GDP GROWS 8.1% ON YEAR, EXPECTED 8.4%, and whispered at 9.0% Visually: And the worst: no RRR cut coming either it appears: NBS: CHINA [...] By Benoit Faucon –Iran stopped shipping oil to Greek refiners Hellenic Petroleum and Motor Oil, may halt supplies to Royal Dutch Shell over unpaid bills –EU oil ban on Iran is se to come fully into force on July 1 –Industry source says Shell is on cusp of stopping Iran oil purchases (Adds confirmation from Motor Oil in the third paragraph.) LONDON -(MarketWatch)- Iran stopped shipping oil to Greece [...] * Strong correlation with high oil price * Corn, soybeans gain on physical markets in March -FAO data * U.S. soybean futures jump in March on tight supply concerns By Svetlana Kovalyova MILAN, April 5 (Reuters) – World food prices are likely to rise for a third successive month in March, and could gain further beyond that, with expensive oil and chronically low stocks of some key grains putting food inflation firmly back on the economic [...] Reuters, Washington
Greece would face a disorderly and costly exit from the euro area without financial support from international lenders, the IMF said on Friday. A day after the IMF approved a 28 billion euro (US$36.9 billion) bailout loan for Greece, part of a broader 130 billion euro rescue package by European partners and the European Central Bank (ECB), an IMF staff report warned that Athens had no space for error as [...] In a recent letter, Scott Minerd of Guggenheim Partners argues that thanks to the world’s central banks, the economy — at least in the US — has entered a self-sustaining recovery, and that domestic investments will continue to do well. And like many other top tier investors (too many to count, really) he loathes Treasuries. In the U.S. fixed income markets, the credit trade has worked very well. As concerns about the [...] Yes, it would increase the amount to service national debt. But leaving rates artificially low in the face of a discouraged Bond market would require the Fed to buy Treasuries (or cancel the auction and raise the question of default) thereby increasing the National Debt and the cost to service. Of the two the later is slower, albeit a Faustian Bargain. But both the spector of default AND awareness of [...] by Joe Weisenthal This morning we mentionedhow apartment vacancies had fallen to their lowest level since 2001, offering up yet another reason to be (somewhat) bullish on housing in 2012. But it’s a bigger deal than just the obvious point that lower vacancies = more need for construction. Karl Smith at Modeled Behavior has a great post about the inevitable upward pressure on rents, and what higher rents mean for the economy. This make single family rental [...] Today sees policy meetings at both the Bank of England and the European Central Bank and we could see moves from both although action from the European Central Bank is much more likely, indeed very likely. I think that the ECB is more likely to follow the example of the Reserve Bank of Australia which cut rates by 0.25% this week than the Reserve Bank of New Zealand which lefts its [...] Brian Sack, the Federal Reserve Bank of New York’s markets group chief, said the central bank’s program of reinvesting proceeds from maturing housing debt into mortgage-backed securities isn’t disrupting markets. “The purchases have gone smoothly and market liquidity seems to be quite good,” Sack said today in the text of remarks given at the New York Fed’s annual meeting with primary dealers. The policy-setting Federal Open Market Committee last month said it would [...] From FT:
The US Treasury and Wall Street dealers are set to discuss whether to introduce a new debt security to help finance the country’s mounting budget deficit in the coming years. Topping the agenda of a meeting on Friday between Treasury officials and dealers, who underwrite US government debt sales, is the possible introduction of floating-rate notes.
In contrast to normal fixed-rate Treasuries, which pay the same coupon throughout their lifespan, the payment [...] NEW YORK (CNNMoney) — The Thanksgiving holiday is not only one of the busiest times to travel but it’s also the most expensive. And this year it will only get worse. Average airfares over Thanksgiving week (from Nov. 20 to Nov. 27) are 6% higher this year, according to data compiled by Hotwire. In December, airfares are projected to be about 10% higher than last year. As major airlines like American Airlines [...] European central banks have become net buyers of gold for the first time in more than two decades, a significant sign that the role of precious metals in currency markets is not only being reassessed but actually changing, reported The Financial Times, while there also is a campaign afoot to include gold as a Tier 1 bank asset with the Basel Committee on Banking [...] Federal Reserve Chairman Ben Bernanke used the word “inflation” exactly seven times in this Jackson Hole speech Friday. What he didn’t mention once was inflation’s ugly cousin and its baggage of not only rising prices but also higher unemployment. The prospect of stagflation, indeed, is raising a growing amount of hackles on Wall Street these days on worries that the jobless picture isn’t getting any better and the cost [...] Here is the latest comment from Bob Eisenbeis at Cumberland Advisors on de facto QE3. Why is it that so few people understand the Fed’s desperate game — and why it is not working? — Chris Central Bank Policy, Euro Bonds, and QE3 Cumberland Advisors August 19, 2011
Developments the last few weeks have significantly changed the monetary policy landscape in [...] The forecast for the summer driving season: Hit the road early. Not to beat the traffic, but to beat the higher gas prices expected in mid-July. Goldman Sachs’ crystal ball is proclaiming that oil will soon soar to $135 a barrel, and likely have service stations jacking up fuel prices to $5 a gallon in New York just like the summer of 2008 that preceded the [...] Floods swamping large areas in the lower Mississippi River region are imposing significant economic costs that may ultimately total several billion dollars. The precise damage to economic activity is still uncertain, since the floods have not yet crested in key areas such as Baton Rouge. The impact could end up being relatively small in the context of the economy of the region and nation. But for farmers, businesses, [...] Sowing bubbles http://www.economist.com/node/18586884 FINANCIAL regulators in America were criticised for doing too little about the country’s housing bubble. Now they face an early test of whether lessons have been learned: a farmland boom. The stakes are lower. America’s farms were collectively valued at just under $2 trillion last year, compared with $16 trillion for housing. But a bust would still be painful: more than 1,500 of [...] The S&P credit agency sent shockwaves through the global financial system on Monday when it issued a warning on U.S. debt and changed its outlook on the U.S. sovereign credit rating from “stable” to “negative.” This sent markets lower and the prices of commodities such as oil rocketing back above $110 per barrel and both gold and silver to new highs. It should be clear the [...] A dollar plumbing three-year lows is hitting Americans squarely in the gas tank, and one economist thinks it could drive prices as high as $6 a gallon or more by summertime under the right conditions. CNBC With the greenback coming under increased pressure from Federal Reserve policies and investor appetite for more risk, there seems little direction but up for commodity prices, in particular energy [...] A dollar plumbing three-year lows is hitting Americans squarely in the gas tank, and one economist thinks it could drive prices as high as $6 a gallon or more by summertime under the right conditions. CNBC With the greenback coming under increased pressure from Federal Reserve policies and investor appetite for more risk, there seems little direction but up for commodity prices, in particular energy [...] by ZH As was first disclosed by Zero Hedge, PIMCO trimmed its Treasury holdings in February to zero. While many speculated that the reason is concern for global inflation, we now have the confirmation courtesy of a rhetorical Q&A with Saumil Parikh released by the Newport asset management giant. In a nutshell: “Setting aside immediate oil shocks, we believe global inflation has cyclically troughed and we [...] Smart Money Europe – http://www.smartmoney.eu Short squeeze! Here comes 50-dollar-Silver Silver is blasting through all barriers, topping $36.5 this morning! The white bullion market is tight, and the short squeeze in the futures market is exerting a constant upward pressure on the price. If current trends persist, the all-time high of $49.45/ounce will be reached in the near future. Silver is performing exceptionally, outstripping a [...] The Fed Beige Book is out. Generally the economy is improving in most districts, but inflation is up. Real estate is still pretty mediocre. The full report is here. Here’s the nut graph: Most District reports cited comments by both retailers and manufacturers that costs were rising, but indicated that competitive pressures had led to only modest pass-through into final prices. Labor markets appeared to be firming somewhat [...] by ZH Jan Hatzius is the bellwether of the sellside economist crowd. When he was bearish (2009), most were bearish, when he turned bullish (early half of 2010), everyone else followed suit. Then he turned bearish again (early August 2010) and convinced his friend and former co-worker Bill Dudley to launch QE2. Then, in December, he turned very bullish again. And now we are here. We [...] |
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OUCH: Spanish Stocks Are Getting Gored, Down 2.4%
Market are selling off across Europe. But Spain is clearly seeing the worst of it. Borrowing costs are surging with the 10-year yield at around 5.9 percent.
Here’s the intraday chart of Spain’s IBEX market index.
businessinsider
Data released by the Bank of Spain showed gross borrowing hit 316.3 billion euros ($416.7 billion) in March, versus €169.86 billion in February.
But investors are now singing a different tune. Monthly data from the ECB and [...]