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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: energyplay who wrote (65060)	8/5/2010 12:08:01 PM
From: Canuck Dave	Read Replies (1) \| Respond to of 219439

Mad as it reads, it seems entirely plausible. Lo, the dead dollar. CD

To: energyplay who wrote (65060)	8/5/2010 6:12:40 PM
From: TobagoJack	1 Recommendation Respond to of 219439

i need to get the leverage back into my paper gold in the mean time, just in in-tray, per GREED n fear The risk trade continues to gather momentum. Still GREED & fear remains fundamentally wary of the equity rally and continues to focus on the contrasting messages sent by the stock market and the US Treasury bond market. The importance of the bond market’s action is the message it sends about the trend level of US nominal GDP growth going forward. The US capex cycle continues and has broadened out from pure reliance on IT spending. But the US consumption trend rate remains anaemic and the personal savings rate continues to inch up. Capex alone cannot sustain a recovery without corresponding private-sector releveraging. And the inventory cycle is living on borrowed time. With the effects of fiscal stimulus ebbing and with the housing market weakening again, the overwhelming likelihood is for decelerating US nominal GDP growth going forward, which is bullish for government bonds. GREED & fear continues to believe that, sooner or later, the Fed will resume some form of quantitative easing. There should be more room politically for a more expansionist monetary policy if the US is not embarking on another fiscal stimulus. GREED & fear continues to advise investors to reduce beta into this rally. For those who want to short outright the obvious area to short with oil back above US$80/bbl is the commodity complex and its currency appendage, the Australian dollar. GREED & fear also continues to expect a deceleration in Chinese growth back to the 8-9% level for the rest of this year. The correction in the US dollar has now run quite a long way. GREED & fear would now be looking tactically to buy the US dollar again against the likes of the euro and Aussie dollar on the expectation that the US dollar will rally on the next wave of risk aversion. It is now a good time for macro investors to start thinking about betting again on renewed Euroland turbulence. GREED & fear’s favourite remains the Spanish flu trade (i.e. betting on a rising Spanish CDS spread). Investors should also be aware of national regulatory initiatives which will continue to restrict the supply of credit. One example is the proposed new rules by Britain’s FSA on tougher capital requirements for UK’s non-bank mortgage lenders. Such a stipulation will inevitably make it harder for ordinary people to obtain mortgage financing, which is why Britain’s residential property market is heading down again. It remains deeply shocking to GREED & fear, regardless of jurisdiction, how little control was placed over bank management in return for the taxpayer dollars extended by governments to prevent these banks’ failure. At a minimum, these entities should have been forced to discard non-core businesses, such as Asian equities, in return for being allowed to remain in business courtesy of the taxpayer. It is also deeply shocking to GREED & fear how the politicians have allowed the debate on financial reform to be bogged down in details rather than being based on the simple fundamental principle that commercial banks which receive government-guaranteed retail deposits should not be allowed to engage in “risky” activities. Social housing in China is being implemented faster than expected as a result of pressure from Beijing. Momentum on social housing will be maintained only if pressure to build social housing continues to be applied by the central government. GREED & fear continues to believe it would make sense for China to come up at the national level with a scheme like Brazil’s where developers are incentivised to build social housing. Equally, it also still makes sense for Beijing to introduce a property tax to reduce local governments’ current dangerous reliance on land sales with all the destabilising social consequences that result. Please consider the environment before printing this email. The content of this communication is subject to CLSA Legal and Regulatory Notices These can be viewed at clsa.com or sent to you upon request.

To: energyplay who wrote (65060)	8/5/2010 7:25:56 PM
From: TobagoJack	2 Recommendations Read Replies (1) \| Respond to of 219439

just in in-tray player 1: yrah53.wordpress.com Notes From Underground: Markets awash with a rumor about an Obama August surprise By Yra There is a Reuters blog making the rounds that the Obama administration is planning a surprise for the 15 million homeowners who are undergoing severe stress on their mortgages. It is surmised that Fannie and Freddie are going to absorb the mortgage losses by writing new mortgages based on the depreciated value of the homes in foreclosure. This will be a major act of forebearance on the part of the two NATIONALIZED mortgage lenders. Back in December we warned that the takeover of Fannie and Freddie created a major slush fund for the Obama administration because they removed the caps on losses for the two lending giants.The congressional Democrats are in serious trouble and the Obama team is trying to help them in any way they can. Forget the economics; this is all about politics. We have warned that the Obama administration was going to panic as the polls disintegrated. The question we have: Is the FED, the holder of more than one trillion dollars in MBSs, going to be the biggest loser, or will it be foreign central banks with a huge pile of GSEs? We are having a hard time thinking how this could be good for the DOLLAR? As Professor Backwards would say: PLEH, PLEH, PLEH! player 2: other than gold and the dollar, i cannot imagine what social bomb that will unleash, but surely it is one last chance to buy the election in november....... two birds with one purchase.... does that mean fannie will guarantee all the mbs written on those 15 million worthless mortgages? player 3: a major problem for the Fed is that its vast MBS portfolio is in reality a huge dud - inasmuch as the issuers of the bonds are de facto, if not de iure, bankrupt. up until now the Fed has assumed it will one day be able to either sell these securities back into the marketplace or get paid as they mature, but what if the government's guarantee for GSE debt - which officially runs out in 2012 - is withdrawn? then the Fed would have issued $1,15 in bank reserves (i.e. cash assets, or 'money') in return for paper that actually deserves a 60 or 70% haircut (if not more...who knows what can be recovered if the GSE's are wound up?). it would be a case of instant inflation on a pretty large scale, since these MBS are not subject to repurchase agreements. So this means the tax payer will likely remain on the hook, no matter what, otherwise the monetary system itself could come to be doubted (this will eventually happen anyway, but this is a factor that could accelerate the process markedly).