"A source provides me with this internal advisory put out by the Depository Trust & Clearing Corporation. Always be on your toes when 'simulations' are scheduled. Remember, simulation drills were on going at the time of 9-11 and also at the Boston Marathon bombing." Continue reading →
"It appears that the bulk of the bonds that Japanese investors sold in May were US Treasurys and the roughly $30 billion were a record amount. This follows the $15.5 billion sales in April. May was the fifth consecutive month Japanese investors have reduced their U.S. Treasury holdings and over this period sold about 8 trilion yen. The second-quarter selloff appears driven to a larger extent by worries about Fed tapering and its potential to push up global bond yields, they said. This is what is going to make it very difficult for the Fed to slow/stop buying Treasury securities. When they slow/stop, there will be even more upside pressure on rates, with very serious sellers." Continue reading →
"The US economy reached a turning point in the 1980s. Natural, healthy, sustainable growth gave way to credit-boosted phony growth. The 'growth' of the last 30 years was not like the growth of the 30 years before it. It was not based on rising productivity, increased wages and real capital formation. Wages stagnated. The only way people could increase their standards of living was by spending money they didn't have. That's where the credit came in, made possible by America's post-1971 flexible paper money system. Spending money you don't have is one of those things that economist Herb Stein had in mind when he said, 'When something can't go on forever, it will stop.'" Continue reading →
"GM and its Chinese joint venture partners saw sales surge by 10.6 percent during the first half of 2013, to nearly 1.6 million vehicles, an all-time record that positions it as the booming Asian nation's No. 2 automotive manufacturer. It sold just over 1.4 million vehicles in the U.S. during the same period. GM isn't the only American maker outpacing the growth of the overall Chinese market. Rival Ford set its own record for the first half, with sales surging 47 percent there and demand up 44 percent in June. While several makers have yet to report their final numbers, it appears that the two American makers significantly outperformed the overall Chinese market." Continue reading →
"Over the last several years, an exclusive group of investors has paid a steep premium to receive the results of a closely watched economic survey a full two seconds before its broader release. Those two seconds can mean millions of dollars in profits for the investors, who practice a computer-driven strategy called high-frequency trading. On Monday, the company providing these investors with that lucrative edge, Thomson Reuters, is expected to announce that it will suspend the practice, yielding to pressure from the New York attorney general, according to a person with direct knowledge of the matter." Continue reading →
"Today, Mr. López is one of about 300,000 Spaniards who, in the midst of a brutal recession, have seen their life savings virtually wiped out in what critics call a deceptive and possibly fraudulent sales campaign by banks that were threatened by the implosion of Spain’s property market. Many, like Mr. López, are older and lack formal education, and were easily misled when bank officials hit on the idea of raising capital and cleaning debts off their books by getting people with savings accounts to invest in their banks instead. oon, they came to understand that they had purchased complex financial products, originally designed for sophisticated investors." Continue reading →
"A government report says that 1.7 million homeowners are 90 days or more late in their mortgage payments. Fannie Mae and HUD will wind up with these homes on their books, unless they decide to let the homeowners live rent-free. This is shadow inventory. It hangs like the sword of Damocles over the housing market. If the government does nothing, these homeowners will receive a huge subsidy: a tax-free grant equal to their mortgage payment, month after month, year after year. But if it forecloses, what will it do with these empty houses. Then the subsidy goes to operators of the squatters. Will the government kick the can? Probably." Continue reading →
"Let's talk about heroes. For thousands of years, people have sat around campfires and told the stories of their heroes. Leonidas at Thermopylae... Horatius at the bridge... Stout Cortez on a hill in Darien. But a real hero gets little notice, few poems and no statues. If he is lucky, someone lights a candle in his memory and he feels the brush of angel wings on his face. Real heroes do not don their armor to protect the realm; instead, they take up pens to criticize it. They are not defenders of the law, but lawbreakers and iconoclasts. They are not True Believers, but heretics, dissidents and corruptors of the youth. Like Sophocles. And Edward Snowden." Continue reading →
"Nothing, and I mean nothing, has been solved in Europe. The crisis will soon escalate with a vengeance. When, not if, Europe’s economy roils again, likely later this summer: First, you’re going to see trillions of euros stampede for the exits. Second, that will likely send global interest rates rocketing higher. Third, it’s going to send the U.S. dollar into rally mode, right along with gold. Fourth, it’s also going to send our stock markets roaring higher. Fifth, it’s going to give you many profit opportunities to potentially make more money that you ever dreamed of. In stocks. In commodities. In the dollar. And in gold and silver." Continue reading →
"While the current correction hasn't been as deep as that of the mid-'70s, the decline is already longer, and it's the most prolonged of the current cycle. It is thus reasonable to expect gold to take two years or more to regain the $1,900 level and continue beyond. Barring a black swan event, gold will likely log its first annual loss since 2000 this year. However, it's not all bad news, as the chart shows: gold nearly doubled in the two years from its '76 low to its '78 return to former highs. The message here is obvious: add to your inventory at depressed levels. And don't worry about missing the bottom." Continue reading →