in-tray messages
player tj: Thursday night in hk. Been in office since very early morning.
Worked on proposal to charge a bomb for women's apparel effort of prospective client from the desert.
Had successfully bailed out another desert client out of a $230m jam earlier in the year.
Seems a lot of desert money is washing on to china / hong kong.
Walked through lkf bar district just now, simply over flowing with beautiful people and wonderful appetite. So much so that I was even feeling bullish.
I was going to swing for a taxi and get a meal on stanley main street. Then I remembered, when starting to feeling bullish, start to get to the exit.
Then I received sms warning [to sell gold]
Am now on bus, heading home for leftovers.
Note: girls are hot looking in lkf on thursdays
player b: The message is ready to be sent with the following file or link attachments:
Shortcut to:
washingtonpost.com
227.html
player r, - Comment?
player r: I think it is a very big deal.
The system is broken. Our politicians and policy makers have no clue. They are accelerating the demise instead of worrying about the consequences.
Bottom line, there were borrowers who borrowed money to buy houses. The general practice had been if the borrowers stop paying, the lenders repo the houses. Now if the lenders can not foreclose because of some technicalities, the entire food chain is going to be broken link by link.
In no particular order:
all the servicers will be sued for robo signing. The liability will put everyone of them out of business.
Every Wall Street firm that had any secondary market activities, from securitizing and subsequently brokering the MBS would be sued. The liability should put them out of business.
Every State would have class action suits, the uncertainty should trigger massive defaults.
Foreign investment in US mortgages would grind to a halt.
Bernanke becomes the only buying of mortgages, with FRE/FNM/FHA being the only originator.
We are so deep in uncharted waters that I can't even figure out if this is good or bad. The current cast of characters are proven failures with brains a fraction of the size of their egos.
May be we need a real hard landing to get rid of Bernanke and Geithner.
The Barney Franks are far more difficult to get rid off. What the system need now is something simple, well defined and bullet proof. Lawyers should never be allowed to run for office. They are destroyers, nit pickers. They only know how to tear a bad system down but have no clue how to rebuild it.
So what if everyone stop paying their mortgage? That would not only be the mother of all stimulus, it would be directly targeting at the middle class, those who are at least "homeowners" but carrying a big loan. Not having to pay the mortgage would stimulate retail, restaurants, dog grooming, breast enlargements or other equally meaningful businesses.
player m: One out of every eight Americans are now on food stamps.....wow, just wow...
zerohedge.com
SNIP:
July foodstamp has just climbed to a new all time high. According to the Supplemental Nutrition Assistance Program (SNAP) at the Food and Nutrition Service, July foodstamp usage rose 1.4% from June, hitting a new record of 41.8 million, and 17.5% higher than the 35.6 million on assistance from a year ago.
player r: two homeless were digging through my recycle trash can last night, the man got to be way past 60 while the woman in her 50s. I was tempted to ask them how they ended up in that predicament but decided against it. They may contradict what my government is telling me.
player j: 8:55 AM The Fed spent the last three decades batting inflation down and getting it to stay there, but some officials are starting to publicly discuss lifting inflation above the Fed's informal target. The controversial move could potentially spur spending at the expense of the Fed's anti-inflation credibility.
player m: What has Paul Ruddleston been saying?
Haven't heard him comment in a long time.
player c: There was an interview with all knowing Bernstein yesterday on Bloomberg. He made some good points, but he so bearish and hard headed he will miss it all. Also he looks a little fucked up in the head. In sum, I think his value is negated.
player tj: Warning to player c, I am even feeling frisky n bullish, always a bad sign. Hk is clouding my judgement I fear.
player c: I am litttle worried to and am not buying postions with new money at this time except a few names.
Qe2 trade feels too easy.player h:a few charts .... Consumer Metrics Institute indicator, DJIA overlay with 1937
from (more charts there):
theautomaticearth.blogspot.com
so , it's unanimous now? this is the consensus basically - 'the Fed has our back so nothing bad can happen anymore'.
this is not how it usually works in debt-deflationary secular contractions however. you do of course get good trading rallies, for which the entire move from March 09 is / was a good example. eventually though, the market gets disenchanted with tricks like QE , namely once it finds out they really don't work all that well.
the enormous expectations the Fed has now raised are a set-up for eventual disappointment. ultimately the whole thing is a mixture of the potent directors fallacy and the greater fool theory. can work for a while, but when it stops working, watch out.
player r:gents-am nervous too-traded dome chf for usd but still sold no gold-denominated in chf...
am unsure but the gold bull press is getting me nervous-think something out to call the top of rally-hoping to see another 20 up day with the economist
cover of fort knox-soemthing even I could not miss..
player h:the air is getting thin....that much is certain. and today's trading volume in gold futures and options is very similar to the explosion in volume in early December 09 when the last big correction began.
also, I don't like the heavy underperformance of gold stocks. gold itself is only down 15 or so, which is just a little over 1%, but the shares are down much more with the HUI losing 20 points. it never had a single similarly sized up day during the rally phase. of course the day isn't over - in terms of patterns, in 2009 a similar down day in gold stocks (also on a comparatively small pullback in gold) happened exactly three trading days before the final high of the move.
more likely though it will play out as a pullback to the 50 dma, followed by one more rally leg into November. that in any case is the pattern most closely associated with the normal cycle behavior of the sector.
player tj:otoh
businessinsider.com
Bill Fleckenstein: Here's Why Gold Could Shoot To $8250
player h: the fact that Fleckenstein mentioned this is not the problem - from a contrarian PoV the problem is that the financial media have picked it up and are running with it, and that we have Cramer prancing around on TV with a self-made 'golden calf' (i haven't seen this myself, second hand information).
i personally find the cycle top callers far more comforting, although i acknowledge they could well be right.
e.g. in 1973, gold briefly shot from about 90 to about 130 and then immediately plummeted back to 90. then it went to 200 (see attached chart).
we should expect similar volatility (multiply by ten).
player s:for discussion purposes let us hypothesize that today's POG reversal marks the beginning a correction of some proportion
Anybody want to place a bet on any of the following?
1. a mere blip back down to 1320
2. a healthy 10% correction to the low 1200s to blow off some froth
3. a white knuckle flight back under 1000 to test the faithful
4. something even more wicked than #3
FWIW I'm inclined to go with #2
player g: My main question is does one go short gbp and euro for 6-12 months. For all the usd ills , the euro has more !
On gold. Don't be faint of heart. We gave up 2 days gains. That is all. Not even a real set back , and silver and plat were resilient . If we had all gone on holiday last friday, would be excited to be returning tomorrow , one week later !
QE2 is in silo and ready to be launched. Global politicians talking about currency devaluation to the bottom !
Chinese desperate to diversify , at same time into what !!!
They know that holding usd tbills is a death sentence , either tomorrow or next week or 5 years. Just a matter of when.
And they will keep encouraging their masses to buy gold.
player s: player g -- Duly noted that we may only be backfilling a bit -- nevertheless, I got stopped out of a lot of positions today -- not sure if that's a good thing or not
Having said that, I have to confess that I do not feel warm & fuzzy about the manner in which we topped out and headed south in size this morning, nor do I like the look of the volume bar on the GLD chart in light of how other indicators are stretched -- I thought we had another week or two of upside left, but I've been considering what Heinz has been saying about a USD rally-in-waiting, and now that there's a crack in the wall, I will be very surprised if today is all there is to it
GLD chart link for further tinkering -- stockcharts.com
player h: another point worth noting is that Anglo today announced it has finalized the covering its hedge book. in late November 2009, ABX had finished covering its book. in mid 2006, ABX had finished covering the Placer Dome book. point being, at these previous occasions the announcement that a major hedger had finished covering coincided with medium term highs. note though that the sample size is very small, so it doesn't have to work out the same way every time.
still, it was notable that the market started selling off as soon as that announcement was out.
player tj:heinz, that 1937 vs 2010 chart is eerie. what should we do!
between adding and subtracting, i am biased towards adding gold, silver, platinum
or just do nothing
have puts/calls out there wasting away on my counterparties given all the to and fro, zig n zag
player h: a correction that boots out some of the late-coming buyers would probably be healthy, but we can not be sure that we'll get one. these outside down candles are actually NOT very reliable.
as to the chart overlay: normally these soon diverge (especially when, like this one, they have seen print in the financial mainstream media), but the reason why it's worth considering is of course the continued weakness in the US economy.
player c: player h, with all due respect, lets not make make investment decisions based on what happened in the 30's. There have been so many people on CNBC using the same comparisons in make me sick. The last notable one was in August and he used the 1934 template vs. the S&P at 1040 and it was sure to drop to at least 800 in a two month time frame based on correlations, etc.
Wrong!!! History is not purely cyclical nor linear, it always a little different, but humans tend to make the same mistakes. You how many Generals have lost battles using pure military history to map there decisions, too many. The smart ones Napoleon and Austerlitz and Patton and 44-45 combine everthing and use a linear approach to crush their opponents.
player m:This fact is probably more relevant:
KIVANC ARDA (CITIGROUP GLOBAL MAR) At: 10/07 14:19:45 EUR fell to session lows to 1.3857 after trading as high as 1.4030 post Trichet speech. We are seeing short USD position adjustments ahead of tomorrow's US Non Farm Payrolls data. Markets will have an interesting direction bet if tomorrow's data comes better than expected. QE seems to be priced in, and some think that it is overdone. Our traders are saying that liquidity was not that good on the way lower. CAD is also giving the gains from earlier after weaker than expected CAD data. AUD/JPY is also back to 80.80 level that I have been watching for a while (it has been around that level since Sep 20). Earnings season is kicking off this afternoon with Alcoa. Sentiment is bullish, Bull Bear index is at +21.3, second highest reading this year. Gold as a first time since Jul 27 sold off this much on daily basis. we will see what tomorrow brings. Regards, Kivanc
*FISHER: MARKETS HAVE DRAWN TOO QUICK A CONCLUSION ON EASING
player s:FWIW -- gold.org
player x: sh*t, chad has more gold than i
not fair
player m: How about Hong Kong? They have 2.1 tonnes, but it is 0.0% of reserves.....not even a rounding error....
They should move that number up to 1.5%....same as China. But I'm not sure that China Great Wall has that much in stock! <g>
How high is gold anyway? Or is it merely a function of the weak US Dollar.
I don't think that gold has made anywhere close to a new high in Yen, Euros, AUD or CHF.... no?
Time to go long the USD? Buy UUP?
player s: Following on to someone's Hinde Capital posting the other day, here are some debatable but interesting musings on QE dynamics and their corresponding impact on gold and the EM --
roubini.com
Basically he's suggesting that gold isn't rising out of fear of systemic collapse -- on the contrary, it's just another plain vanilla reflection of too much loose money chasing but one of many risk assets, including e.g. EM stocks, and that this front running of the QE process has gotten way ahead of itself
player m:
Tom Lawler:
calculatedriskblog.com
SNIP:
What if there is a national “foreclosure moratorium” triggered by mortgage servicer mistakes that ultimately increase the severity of losses? Who “pays the price” in reality, as opposed to who “should?” Will there be lawsuits from mortgage investors whose loans and/or loans backing securities they own find that their incidence and/or severity of loss was adversely impacted by servicers mistakes, and will they be able to ensure that servicers who “screwed up” bear those losses instead of them?
I don’t know the “technically right” answers to any of the above questions, but it is crystal clear that the “right” answer should be that mortgage servicers who messed up should bear all of the costs associated with their mess up.
And who are the biggest servicers?
Bank Total Loans Market
Servicing now Share
in $billions
1) Bank of America (BAC.N) $2,135.30 19.9%
2) Wells Fargo (WFC.N) $1,811.97 16.9%
3) JPMorgan Chase & Co (JPM.N) $1,353.60 12.6%
4) Citigroup Inc (C.N) $677.81 6.3%
5) GMAC/Ally Financial $349.08 3.2%
6) US Bancorp (USB.N) $189.85 1.8%
7) SunTrust Banks Inc (STI.N) $175.93 1.6%
8) PHH Mortgage (PHH.N) $155.97 1.4%
9) OneWest Bank, CA (IndyMac) $155.00 1.4%
10)PNC Financial Services (PNC.N) $149.94 1.4%
Total residential mortgages outstanding $10,640
Another reason to avoid / short the banks
i am just curious.
By law, the IRS has to announce all those that have renounced US Citizenship quarterly and have it published in the Federal Register (6039G). They have done this regularly for years, yet, they have now failed to submit those that renounced in Q2. Historically, the names were printed in late July or early August each year. But it is now October, and they haven't disclosed the data. Are they afraid to do so fearing a big story on the numbers of those fleeing the US? Any thoughts?
federalregister.gov[term]=6039G&order=newest&quiet=true |
