Monday, November 29, 2010
Tuesday, November 16, 2010
German ZEW and 5/10 Swap curve
White- ZEW current conditions
Red- 5/10 Swap curve (inverted)
Doesn't 5/10 look too steep?
Chinese CSI300...Down 11% in 3 trading days...
FYI....Not a healthy sign for US and European equity markets...
Monday, November 15, 2010
10 year Spanish Govies versus Pfandbriefe... 1993 - 2010
from...
Sovereign vs High Yield Chart
This chart shows the current trend channel where High yield trades in comparison to AAA US Treasuries!
Obviously High yield had its run and trades near the September 2007 levels.
Might be time to leave the party a bit earlier....
Greek PM on the wires....embarrassing statements!!!
12:00 15Nov10 RTRS-GREEK PM SAYS GERMAN POSITION ON DEBT RESOLUTION LED TO INTEREST RATE SPIRAL FOR IRELAND, PORTUGAL
12:03 15Nov10 RTRS-GREEK PM SAYS OF GERMAN POSITION ON DEBT:"THIS COULD BREAK BACKS, FORCE COUNTRIES TOWARD BANKRUPTCY"
12:03 15Nov10 RTRS-GREEK PM SAYS OF GERMAN POSITION ON DEBT:"THIS COULD BREAK BACKS, FORCE COUNTRIES TOWARD BANKRUPTCY"
Friday, November 12, 2010
Thinking out loud...
Given the unconfirmed rumour of a 80 bln € bailout next week for Ireland I think that there's much more going on behind the politic curtains! The € currency gets more and more to a 100% political currency where every rule gets broken (by politicians and Central bankers) in short time! I'm convinced that a €-joint bond will come in not too distant future. Additionally the EU will mutate into a transfer union. As a sidenote: In Germany we have a "Laenderfinanzausgleich" which means "Federal state equalization fund" where the "rich" states transfer money to the "poor" ones....Exactly this will happen in Euroland soon! By the way: From 16 states in Germany 13 of them receive money from the 3 wealthy ones.... Does not look too bullish in the long term for Bunds and the €-currency... Feedback welcome!
Britain's Trillion Pound Horror Story!!!
There was a program on TV here last night; "Britain's trillion pound horror story". Here are a few of the facts it quoted:
* The govt now accounts for 53% of economic activity.
* In Scotland it is 65%, Northeast 70%, Wales 77% and N.Ireland over 80%. Once you get above 70%, you're in Communist Eastern Europe territory.
* The UK currently has 7.5mio public sector workers but only c2mio of these are actual "front-line" (i.e doctors, firemen, teachers etc).
* Nearly 1 in 5 households is jobless
http://www.channel4.com/programmes/britains-trillion-pound-horror-story/4od#3139408
* The govt now accounts for 53% of economic activity.
* In Scotland it is 65%, Northeast 70%, Wales 77% and N.Ireland over 80%. Once you get above 70%, you're in Communist Eastern Europe territory.
* The UK currently has 7.5mio public sector workers but only c2mio of these are actual "front-line" (i.e doctors, firemen, teachers etc).
* Nearly 1 in 5 households is jobless
http://www.channel4.com/programmes/britains-trillion-pound-horror-story/4od#3139408
Thursday, November 11, 2010
Don't flush away cash on an overpriced toilet.
*STARK SAYS ECB EXIT WILL PROCEED AS MARKETS NORMALIZE
That means never!
Here you go Europe- *GREECE'S LAST DEFICIT MAY BE REVISED
Here you go Europe- *GREECE'S LAST DEFICIT MAY BE REVISED
HIGHER, OFFICIAL TELLS WSJ
HIGHER, OFFICIAL TELLS WSJ
US 5Yr yield weekly RSI was in oversold territory!
Have a look at the last few oversold weekly RSIs....
Euroland....Spreads wider
This a.m. we see continued pressure in Ireland (+15 bsp), Spain (+8 bps), Portugal (+12 bps) and Greece (+20 bps)! Even if there's no liquidity/turnover it's for sure that there are no buyers. ECB has to step in again today and that will be a done thing.... Bunds had a choppy session yesterday and we look to sell again at our prefered sell level in Bunds at 130.75/85. EUR/USD seems to have topped at 1.39/40sh and with the peripheral disaster there's no argument at the moment to get long Euros. Germany and France (only today!!!) are still supporters of sovereign debt restructurings and that is currently the reason esp. for bond holders of Irish issues to sell their holdings (Portuguese and Greek as well...). Nevertheless make no mistake and keep G20 meeting at the weekend in mind- Euroland does not have a reason for a strong Euro currency. By coincidence I am born as a German and my experience with German politics/behaviour or call it feeling is that Germany will swallow much much more (means bailing out the rest of Euroland) than most of the street guys think! German taxpayers (not Germany itself) guarantee for approx. 150 bln € and why not moving it up to 250 bln € for the sake of the One currency dream????
Wednesday, November 10, 2010
Looks vulnerable to the downside....just trade the chart!
Silver was oversold on intraday basis yesterday late. Recovery
target 28.41.
Tuesday, November 9, 2010
Greek stock market disaster...
China downgraded the U.S. to A from AA.
Nov. 9 (Bloomberg) -- China's Dagong Global Credit Rating Co. downgraded the U.S. to A from AA, with a negative outlook, because of quantitative easing, Xinhua News Agency said, citing a report from the company. The U.S. has deteriorating debt repayment capability and the government's intention to repay debt has had a "drastic" decline, Dagong said, as cited by the news agency. Quantitative easing will further depreciate the U.S. dollar and is against the interests of creditors, the company said. **at some level, and with the Volcker article effectively questioning the USD as a reserve currency, it's starting to move beyond pre-G20 rhetoric
Heads up...Gold/Silver ratio at oversold levels!!!
SCARY!!!!!! CRB Index vs CRB spot raw materials...Interesting!!!
Gold targets 1470 USD soon.........
Copper vs US Treasuries....
Monday, November 8, 2010
Friday, November 5, 2010
EUR versus IBEX/DAX
Wednesday, November 3, 2010
Monday, November 1, 2010
Gold versus 10 Yr US Yields!
Friday, October 29, 2010
Spanish Risk Bonds & Equities; ECB buying peripherals
interesting chart. It shows 10yr Spanish Govies versus Bunds and a Ratio of
IBEX versus DAX.
Thursday, October 28, 2010
Tuesday, October 26, 2010
A new analysis by Jan Hatzius
Turns out, even we were optimistic. A new analysis by Jan Hatzius, which performs a top down look at how much monetary stimulus is needed to fill the estimated 300 bps hole between the -7% Taylor Implied Funds Rate (of which, Hatzius believes, various other Federal interventions have already filled roughly 400 bps of differential) and the existing 0.2% FF rate. Using some back of the envelope math, the Goldman strategist concludes that every $1 trillion in new LSAP (large scale asset purchases) is the equivalent of a 75 bps rate cut (much less than comparable estimates by Dudley, 100-150bps, and Rudebusch, 130bps).
In other words: the Fed will need to print $4 trillion in new money to close the Taylor gap. And here we were thinking the economy is in shambles. Incidentally, $4 trillion in crisp new dollar bills (stored in bank excess reserve vaults) will create just a tad of buying interest in commodities such as gold and oil...
In other words: the Fed will need to print $4 trillion in new money to close the Taylor gap. And here we were thinking the economy is in shambles. Incidentally, $4 trillion in crisp new dollar bills (stored in bank excess reserve vaults) will create just a tad of buying interest in commodities such as gold and oil...
Liquidity Trap Bennie!
Very relevant Note from David Rosenberg last night:
"Zero interest rates and quantitative easing pushes the cost of debt to
historic lows. And investor portfolio preferences shifted post crisis towards
debt and away from equities. The result: the largest gap between earnings
yields and (after tax) debt yields. That means investors overvalue debt and
undervalue equity. And the coming corporate finance response means issuers have
historic incentive to issue debt and buy back equity. The gap in valuation
relative to history suggests a potential 50% increase in debt funded buyback
activity over the next year"
Industrial Production vs M1 / CPI Update 10/2010
That is why the FED has to print Money out of nothing!
That Money they use to generate Output on cost of Inflation!
That Money they use to generate Output on cost of Inflation!
Monday, October 25, 2010
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