Archive - Feb 1, 2011

Phoenix Capital Research's picture

The US Dollar is MAJOR Trouble





Inflation is already exploding worldwide, which means paper money in general is going to be worth less and less on its way to worthless. If you think the US is immune to this situation, you're in for a very RUDE surprise in the coming months. Indeed, the Fed’s Hoenic just announced there might even be QE 3… and he’s supposed to be one of the Fed HAWKS!

 

Leo Kolivakis's picture

Canadians Want Expanded CPP





Canadians have voiced their opinion. They're worried about their retirement and rightfully so. They're expected to manage their own investments in schizoid wolf markets that are battering professional money managers. The time for reforming the Canada Pension Plan (CPP) has come...

 

Tyler Durden's picture

Guest Post: Oil Price Could Doom Obama





There are left-wing blogs that maintain that the price of oil and its occasional spikes are created by elaborate speculative plays on the futures markets in New York and London. The left is traditionally paranoid about oil and oil companies, but who is to say they are not right this time? The memory of Enron is still fresh. The chances are that the summer driving season will put pressure on gasoline prices this year, after an extremely cold winter all over the Northern Hemisphere. The conservative (10-percent chance of happening) scenario by the Energy Information Administration says $4-a-gallon gas would come at the end of the summer. The second reality is that the world thirst for oil has not been slaked; as the world prospers, the greater that thirst. In 1974, the heads of 23 democracies lost their jobs because of surging energy prices. Obama, beware.

 

Tyler Durden's picture

Gold Market Commentary: Buyer Of 2,000 December 1,800 Calls Emerges





Skew firmed up today with calls being bought in December and August. Puts were sold in April, June, August and October. Volatility was roughly unchanged on the day but there is a definite change in tenor in risk reversal trading. This was in large part a reaction to a fund buying December 1800 Cs live, approx. 2000 times. Moving forward, nothing about today’s action gives a directional hint except that December calls are being bought once again.

 

Tyler Durden's picture

Daily Oil Market Summary: 2.1.2011





Oil prices dropped on Tuesday in a volatile session that saw the market pass through all its different personalities. At first, it was a safe haven, and traders were kicking out long positions in oil, gold and in the dollar. After as while, though, oil prices rallied – on a weaker dollar and on a strengthening stock market. Then, finally, oil prices returned to negative territory as it was sold as yesterday’s safe haven. Traders were also selling WTI and buying Brent, as the safe haven function seemingly ended and as traders looked forward to US refinery maintenance. - Cameron Hanover

 

Tyler Durden's picture

Guest Post: The Mathematics Of Hyper-Inflation





There is a simple reason why monetary inflation becomes an exponential phenomenon. As currency is debased, an increasing quantity of money is required to achieve the same real-money effect. For example, if the quantity of money is increased 25%, the initial benefit to the issuer is a tax of that amount on the holders of previously-existing money stock. To achieve the same tax in real terms for a second time requires a further expansion of 31.25% of the original monetary units, and continuing with subsequent 25% expansions on increasing totals we obtain our exponential series of monetary inflation...The only way the exponential loss of purchasing power that results from monetary inflation ends is through the complete collapse of fiat currencies. Whether this is brought on by a financial crisis or through hyperinflation is irrelevant: the result is the same. Furthermore, quantitative easing programmes have merely accelerated the trend. Particularly worrying is the dramatic expansion of the monetary base in the US, which has greatly exceeded our theoretical example of 25% by increasing 168% over the last two years. While this is routinely explained as a policy response to the banking crisis, it has the likely effect of accelerating future government demand for printed money even more, speeding up its inevitable demise.

 

Bruce Krasting's picture

NFP – SSA & Ben





A guess at the NFP and what it might mean if I'm right.

 

Tyler Durden's picture

US Mint Sells Absolute Record 6.4 Million Ounces Of Silver In January, 50% More Than Previous Highest Month





As the topic of US Mint silver sales is not new to our readers, after we first brought attention to the record January sales by the Mint, we will not dwell much on it, suffice to say that the final January tally is in. And at 6,472,000 ounces, this is nearly 50% higher than any prior month in the Mint's 26 years of published sales history. This has occurred, despite supposed profit taking in the paper silver market in January. And just today, another 50k, were sold. It seems that physical buyers continue to enjoy the dip in paper silver that is providing them with an attractive entry point.

 

Tyler Durden's picture

Ivory Coast Defaults On $2.3 Billion In Bonds, Bonds Rise, Cocoa Drops





Another confirmation of just how insane everything is comes from West Africa. The London Club announces that the Ivory Coast is now in default after the January 31, 30 day grace period expires, and bonds jump. And with former president Gbagbo now out of negotiating options, and likely to resort to violence, resulting in further destruction of cocoa supplies, cocoa futures... drop.

 

Cognitive Dissonance's picture

The Flim-Flam Men - With Artwork by Banzai7 Labs





There simply cannot be a con without two opposing but cooperative parties involved. And both sides need to expect to get something out of the deal, regardless of whether it happens or not and despite all the facts not being known by one or more of the parties.

 

Tyler Durden's picture

Knight Capital's European Macro Notes - Why the Rally?





The talk regarding the EFSF having the potential to buy bonds raises more questions than answers to us. For one, at what price will they be purchased? Banks that hold the sov debt are reticent to sell below par since that would make them realize a loss. The EFSF can ill afford to purchase bonds from banks at par when they are trading in the open market at prices well below that, and such a subsidy does not seem to make economic sense either. The aforementioned voters will soon recognize that this debt purchasing is a transfer and represents taxation on core country’s citizens to support periphery debt. Also, who might sell? The ECB’s program has a scant €76.5B to sell into such a scheme against an aggregate periphery debt load of over €3.2T. Direct issuance is a possibility, but then the EFSF becomes an even bigger CDO performing funding arb – at an unknown cost. With only €440B available, it seems that the funding for only a portion of the periphery would be achieved. Further, the AAA rating on the bond issuance out of the EFSF has a participant element to it. If a country needs funding, it is prohibited from contributing to the facility and whatever it draws comes out of the facility. Would a purchase of a particular country’s bonds by the facility constitute a drawdown per the facility’s rating requirements? It would seem so, though details are sketchy right now. Either way, this would seem to impact the ratings that were so important they took five months to obtain last year.

 

RANSquawk Video's picture

RANsquawk Market Wrap Up - Stocks, Bonds, FX etc. – 01/02/11





RANsquawk Market Wrap Up - Stocks, Bonds, FX etc. – 01/02/11

 

Tyler Durden's picture

Rice Two Cents Away From "Limit Up" For Second Day In A Row, At Highest Price In Over A Year





After for most of the day, grains traders were pretending they have no interest in gobbling up every available pound of rice, the end of trading was like an Ebay auction where everybody submitted their bid in the last possible instant, sending rice from $15.60 to $15.99 in seconds. And since Rice previously closed at $15.51, we were literally two cents away from a second limit up day in the world's most popular food. Since we speculated that rice is the next commodity bubble on Monday morning, the grain has surged nearly 7%. Incidentally, this is the highest price for rice in the last twelve month period. Lastly, if Hoenig is indeed telegraphin QE3 as we suspect, look for rice to double six months from now. It is now only a matter of time before some momo chasing idiot on CNBC "discovers" what a great investment rice is, and the thing trades limit up for the indefinite future.

 

Tyler Durden's picture

Here Comes QE3: Hoenig Says "More Quantitatve Easing May Be Discussed"





We thought Jon Hilsenrath would break the news of QE3. To our shock, it comes from the only sensible man at the Fed, Kansas Fed's Tom Hoenig. Per Reuters: "The Federal Reserve could
debate extending its bond-buying program beyond June if U.S.
economic data prove weaker than policymakers expect
, Kansas
City Fed President Thomas Hoenig said. Another round of bond buying "may get discussed" if the
numbers look "disappointing," Hoenig told Market News
International in an interview published on Tuesday." May we suggest in that case that Joe LaVorgna stop blaming every herpes outbreak in the US on snow and instead indicate that shit is once again hitting the fan. Obviously, this is merely a scheme to keep the market well bid no matter how violent the revolutionary images on TV, brought upon precisely by this genocidal policy. Even more obviously, it means that oil is going to $200 on short notice.

 
Do NOT follow this link or you will be banned from the site!