Archive - Dec 2009

Late last week it was reported that Goldman made its first commitment to Community Reinvestment Act (CRA) lending. For the uninitiated, this may seem like a good thing. Indeed, the papers pointed to the benefits of an additional $500 million in small business loans in today’s economy. But to those experienced in the industry, something more sinister may be afoot. Such commitments rarely mean anything, and are usually merely the publicly-visible component of a successful community organizer holdup scheme.

A blueprint for "Central Bank Suicide," courtesy of Zero Hedge commenter "mikla."

Some notable tidbits from Rosie's am piece: "We just came across a Bloomberg News article quoting an official from the state-owned Assets Supervision and Administration Commission (Ji Xiaonan, the Chief) as saying “we recommend China increase its gold reserves to 6,000 metric tons within three-to-five years and possibly to 10,000 tons in eight to 10 years.” China’s reserves, after a 76% buildup since 2003, currently stand at 1,054 tons, so we are talking here about the prospect of some pretty heaving buying in coming years." You have one guess what 9,000 incremental tons of gold demand will do to price: here is a hint "If China moves towards 10,000 tonnes, well, that would end up taking the gold price to $2,623/ounce if our calculations are in the ball-park."

RANsquawk 1st December US Morning Briefing - Stocks, Bonds, FX etc.

ISM survey respondents claim the collapse in the dollar is their number one concern; others see hope in more Cash For Clunker programs. Please address your complaints to TheMonetaryTigerWoods@treasury.gov

SocGen report highlights:

We have just had the worst decade’s performance for equity investors on record

On a ten year view, equities may indeed prove to be a good investment

The lesson from Japan is that while de-leveraging plays itself out, the global economy will
remain extremely vulnerable

US equity valuations did not reach revulsion levels in March this year

Government bonds are now an extremely poor investment

Gold hits $1,199.43 overnight, a whisper away from the limit cover orders at $1,200 that will take gold to the stratosphere and will prove to Sideshow Fred that gold is the real deal, and that the Fed has lost control of excess liquidity.

• No QE yet - Japan to provide more cheap loans, Y10 trillion worth (Bloomberg, AP)
• AIG reduces government borrowings by $25 billion, by giving gov't more preferred shares (AP)
• Support best podcaster on the web and vote for The Disciplined Investor (TDI)
• In wake of Dubai, trying to predict the next blowup (NYT)
• Sultan Sooud Al Qassemi: This is not the end of the road for Dubai (FT)
• Gross: The Lehman Brothers of the Persian Gulf (Slate)

1-4 Family First Lien portfolios for the Top 4 lenders deteriorate in the 3rd Quarter. Early Stage delinquencies climb noticeably.

RANsquawk 1st December Morning Briefing - Stocks, Bonds, FX etc.

The man who singlehandedly destroyed Iceland, will not rest until he keeps repeating the same failed Keynesian experiment hoping for a different outcome, thus defining, as Einstein would say, insanity. Being a former Fed member, we would expect nothing less of Mr. Mishkin.

• Australia raises interest rates by 25 bps to 3.75% as economy rebounds.
• Auto loan delinquency rate rises in 3Q but some states improve, hinting at recovery.
• Bank of Japan leaves benchmark interest rate at 0.1%.
• Bank of Japan said it will provide 10 trillion yen in short-term loans to commercial banks.
• China’s manufacturing grew last month at the fastest pace since April 2004- HSBC survey.
• Dubai, Abu Dhabi exchanges fall for 2nd day after Dubai World debt bombshell announcement.

Gold futures rally $25 in overnight trading up to $1200.50 -- exceeding PM end-of-year target of $1200 -- before retreating to $1195. How many gold bugs does it take to change a light bulb?

Rating agencies are now getting kudos for actually doing their job? What's the mainstream media world coming to?

RANsquawk 1st December Morning Briefing - Stocks, Bonds, FX etc.