Daily Highlights: 12.7.09

• Asia currencies fall, led by Rupiah, on bets US rates to rise.
• China’s top leaders pledged to maintain a “moderately” loose monetary policy stance.
• European stock markets fell as the dollar jumped to a five week high against the euro.
• Nikkei hits 6-week high on weaker yen.
• Sales at US retailers probably rose as consumer spending fuelled economy.
• Treasury Dept to earn $146.5M from its auction of 12.7M Capital One Fincl warrants.

Guest Post: Why The Big Drop In Gold?

Gold prices plunged $80 or 6.5% in less than two trading sessions on the strong and unexpected indication
that the US job market was stabilizing. What was that about? So that prompted an inquiry from a client who
asked me on Friday, why the big drop in gold prices? Why indeed. Here I am reminded of two snail jokes.

The Next Shoes To Drop In Commerial Real Estate - Part 1

Everyone is now well aware of the plight of Stuy Town, which has become a set fixture on the front page of the daily press, and is expected to default on its underlying borrowings within a few months at the most. What will happen to the controlling equity, and the tenants at the multiapartment complex, is unknown. It is no surprise that this will be yet another epic failure for the existing owner, Tishman Speyer, which after gobbling up property after property at the peak of the housing market, is all too aware that it is only a matter of time before control is wrested from it not only in the case of Stuy Town but many of its other properties.

And even though everyone "knows" the state of commercial real estate is in free fall, few have been able to pin it down to specific buildings, as property-level data is still very expensive and more often than not, proprietary. In order to bring the full degree of CRE collapse closer to home, and to provide some leads to our MSM-originating readers, we present a detailed analysis of some of the most impacted CRE properties that have yet to make headline news. For that purpose we combed through BarCap's CMBS remittance data for CMBX 4 (2007 vintage), which is broadly considered the peak year for commercial real estate deals and also the very peak of the housing bubble. We expected to find some of the juiciest CRE failures to be in this loan set. We were not disappointed.

Guest Post: Dollar Closes About 50 Day Average On Dubai, Japan Emergency Meeting, And A Strong NFP Report

On Wednesday Nov 25 2008, the dollar kissed its 2 year Nov 21 2007 two year anniversary low at 7450. 7450 was the 2007 year low, btw. I quickly scanned the headlines that day and sent a email memo detailing the uber-bearish headlines on the US dollar. The dollar was posting 14 yr lows in the yen. Russia was diversifying into Canadian Loonie, the Suissie rallied on news their CB would remove stimulus, the pound rallied on news the UK GDP was stronger than expected, the Aussie rallied too on news of a their reserve banks 3rd rate hike.

Guest Post: Dividends Are Still Trending Worse Than The Great Depression

Yields are much lower today and are trending down again despite the significant upward yield trend back then. So is this a genuine early economic recovery, or a sign that the modern stock market tends to be a capital-gain seeking momentum machine with little regard for underlying fundamentals? Yes, interest rates are low, but they were back then too, and David Rosenberg suggests most current corporate bond yields are a lot more attractive than yields of the same companies' stocks.

Mary Schapiro Must Immediately Investigate The FDIC's Confidential Information Leak In Another Blatant Insider Trading Case, Then Resign

The degree of insider trading in this market is getting ridiculous. And the strangest thing is those who are executing on blatantly obvious material, non-public insider information, are no longer concerned the least bit about getting caught as they realize that the "mighty" SEC will do nothing against them, courtesy of the example the SEC has set by finding absolutely nobody "responsible" (except, of course, the regulator's own future employers who thus get immunity from prosecution) for the greatest market heist in history in which over $5 trillion has been transferred from the middle class to the Wall Street oligarchy (future providers of paychecks for SEC staffers).

Today's grotesque example of the SEC's futility to act as even a modest deterrent to insider trading activity: New York Community Bancorp (which, just so happens, is a $602 million recipient of TLGP debt), whose stock surged in the final minutes of trading for reasons (then) unknown. As reader QevolveQ pointed out at 5:30 pm, the activity in both the stock and the calls of the company was many standard deviations away from average and raised major red flags. Those questions were quickly put to rest when it became known at 6:33 pm that NYB would in fact receive FDIC subsidies to acquire newly failed AmTrust Bank in a transaction that would be "immediately accretive to earnings."