Archive - Sep 9, 2011

Gold managed to get back to unchanged from last Friday's close and has now last over $50 in the last 45 minutes. Interestingly dropping like a stone to exactly the levels pre-spike on that day. Few rumors of margin calls out of Europe but nothing specific to drive this other than the levels and the opportunity for the QE3-hopers to cover their weak longs from Friday? Or perhaps the rumor that the ECB did not rule out using gold-backing for EuroBonds is off the table now that Greece looks unlikely to meet its necessary debt exchange participation rates?

Peripheral country bond yields (and CDS) continue to rise unwaveringly towards the endgame where European leaders are forced to actually do something as opposed to paper over gaping cracks with piecemeal solutions that are seen through by market participants within hours of release. Greece 5Y CDS rose 210bps to 3235bps (running equiv.) Portugal 5Y CDS rose 50bps to 1110bps. Perhaps more worryingly Germany 5Y CDS rose 3bps to 81bps as we see similar risk transfer transmissions as were evident during the US (private to public) crisis three years ago. EUR just broke through the mid-July lows of 1.3837, taking it back to mid-March lows.

All you need to read and some more.

This post doesn't get into whether 9/11 was caused by incompetence, criminal negilgence or something more sinister ... It focuses only the fact that high-level whistleblowers want to tell us what happened, but no one in Washington or the flapping jaw media wants to hear about it

Our hats off to JP Morgan for a creative depiction of the current European debt crisis, although we typically take a dim view of any investment vehicle that's associated with the word "leveraged" as recommended by JPM.

This is the Japanese approach to economic recovery. They spent trillions and have a first class wasteful infrastructure and a stagnant economy. Why hasn't the $830 billion Recovery Act spending worked to create jobs? This speech is another liberal fantasy by President Obama. He is clueless and apparently desperate because he cannot come up with anything that works. We are witnesses the failure of Keynesian economics on a grand scale.