Archive - Dec 5, 2010

Weak US jobs data results in inflation-trade positioning while news from Merkel & Bernanke spur action in respective currencies

November US nonfarm payrolls missed big, with a +39k print vs +150k expected and even higher whisper numbers, sending the unemployment rate to 9.8%, above the 9.6% consensus estimates. US stocks & USD sold off in tandem on the news, while Tsys were bid; however, bonds and equities reversed sharply from there, while the USD remained depressed. The x-factor was gold, up over 2% on Friday, which again shows signs of trading more as a rates/FX product than a commodity.

Phoenix Capital Research's picture

Last week’s explosive rally was due to three factors:

1) Stocks came perilously close to breaking down so the PPT stepped in
2) A bullish falling wedge pattern in stocks
3) Euro options expiration/ ECB intervention

Regarding #1, stocks came right on the verge of breaking below their 50-DMA. Given the technical nature of the stock market rally (the market hasn’t traded based on fundamentals in months) this would have heralded a major decline.

Goldman Issues Apology #3 For Its Economic Renaissance Call

Just released - apology #3 from Jan Hatzius on his ill-timed "golden age" call. We expect many more. We almost feel sorry for the German strategist and the replacement of FRBNY's Bill Dudley. "Nice timing on our GDP forecast upgrade! The November employment report was a disappointment, and there weren’t a lot of redeeming features buried underneath the headlines. Private sector payroll growth fell back to +50k, the slowest pace since January 2010. The household survey was also weak, with a rise in the unemployment rate to 9.82% and a drop in the employment/population ratio to 58.18%, just a hair above the cycle low seen in December 2009. The jobs report followed higher initial jobless claims on Thursday and a soft manufacturing ISM survey on Wednesday."

Cash4Gold - The Other (And Far More Hilarious) Side Of The Story

By now, everyone has heard accusations that Cash4Gold is nothing but a predatory site, seeking to "steal" the gold of people in distress for a painfully low price. Often times these stories involve Glenn Beck in some capacity. Of course, there is always "the other side" to every story. Below we provide just one such "other" side. It just so happens that the side is about as funny as it gets.

Jack H Barnes's picture

Got Gold?

The gold market for physical gold is getting warmer every day. I don’t mean gold coins or gold measured in grams. I am talking about Gold measured in oz. per ton.

There are more ways to be exposed to gold besides buying the shiny metal in its finished refined state. There is also a way to own physical gold reserves in the ground. I call it Natural Gold. It’s still trapped in the rock. There is no reason the gold you own, has to be refined and shiny.

Ben Bernanke: Economic Recovery May Not Be Self-Sustaining, May Buy More Bonds Depending On Inflation

Bernanke: Economic Recovery 'May Not Be' Self-Sustaining

Bernanke: Could Buy More Bonds Depending On Inflation, 'How Economy Looks'

Bernanke: Getting 'Awfully Close' To Range Where Prices Start Falling

Bernanke: Could Be 4-5 Years Before US Sees 'More Normal' Unemployment Rate

Bernanke: Defends Plan To Buy Treasury Securities

Bernanke: High Unemployment Rate 'Primary Source Of Risk' To Economy

Bernanke: Double-Dip Recession 'Doesn't Seem Likely'

Assange Calls For Obama's Resignation If Confirmed President Approved UN Spy Ring

When we first heard of the latest Wikileaks "cablegate" fiasco, we speculated that Hillary Clinton may be forced to resign for what is rapidly becoming the biggest crisis for US foreign policy since the Bay of Pigs. Today, in an interview with Spanish El Pais, Julian Assange goes one better and says that if it is proven that he approved the spying on UN officials, then Obama should resign. As a reminder as per one of the released cables, US Secretary of State Hillary Clinton asked for UN personnel's telephones, emails, credit card details and frequent flier numbers. Let's recall that Nixon resigned to avoid impeachment under somewhat comparable circumstances. The only difference is that back then Woodward and Berstein were not on the receiving end of what is becoming an endless barrage of death threats for doing their journalistic duty. This time around, the "deep throat" is the target of an international witch hunt, where however is moot: the early attempt by the like of Joe Lieberman to censor the internet is doomed from the beginning. However, it does show that in the past 40 years little has changed at the top echelons of power when the sordid truth of "Standard Operating Procedures" are revealed. And, unfortunately, things have only gotten worse. Also, keep in mind that Wikileaks has so far released only a small fraction of the 250,000 cables that will ultimately be declassified by Wiki. One wonders just how long the world can maintain the damage control before foreign relations between both friends and enemies are terminally frayed.

Weekly Recap, And Upcoming Calendar - All Eyes On December 7 And The Irish Budget/European Bank Run

The European / IMF bail-out package for Ireland – announced one week ago – was somewhat smaller than expected at €85 bn and failed to calm market jitters spreading to other Euro zone periphery countries early in the week, most alarmingly to Spain and Italy. It was only with the ECB’s announcement that full allotment liquidity operations would continue through Q1 2011 and with a jump in ECB purchases of Portuguese government bonds on Thursday that stress in the Euro zone periphery abated somewhat...Following last week’s turbulence on the periphery, this week’s key event will be the Irish parliament vote on the 2011 budget, which is scheduled for Dec 7. A failure to pass the budget could quickly exacerbate tensions across the Euro zone periphery, by highlighting the political costs of needed budget cuts.

Guest Post: The Twin Pillars Of Civilization

Without money, there can be little in the way of economic specialization, or what is commonly known as the division of labor. And without the division of labor, there can be little in the way of civilization. In pre-agricultural hunter-gatherer society, labor is primarily limited to these two endeavors, the hunting generally done by men and the gathering by women. So, too, is labor limited in early agricultural society, the men generally doing the farming and women the domestic work. And while proto-money might be involved, economic exchange is generally limited to barter, which requires a coincidence of wants that is far too inelastic to allow for the manifold exchange of goods and services that is the lifeblood of civil society.

Guest Post: Will 2012 Be As Critical As 1860?

We are approximately five years into The Fourth Turning Crisis. Every previous Fourth Turning had an economic dimension that eventually led to a do or die all out war. The mainstream linear thinkers see a recovery and a return to their concept of normality. They will be shocked and flabbergasted when they realize that this is only the beginning of a 20 year period of turmoil, chaos and war. It seems that some study of history would benefit the mainstream talking media heads pretending to know what is happening and political hacks in Washington D.C. who pretend to administer the affairs of state. The cycles of history are not identical, but the alignment of generations is always the same. The cycles are consistent because a long human life is always between 80 and 100 years. The previous Fourth Turnings in U.S. history were the American Revolution, the Civil War and the Great Depression/World War II.