Archive - Oct 26, 2010 - Blog entry

Add in the cost of our military presence in the Middle East and the true, fully costed price for Saudi crude is a staggering $219/barrel! We are literally spending $100 billion extra to buy $60 billion worth of oil a year. Bail on Afghanistan and Iraq, and oil prices would fall, our military budget would plunge, the federal budget deficit would shrink, and our taxes would likely get cut. Please don’t tell ExxonMobile or BP I told you this.

The market was quiet today as it digested marginal macro news and even more marginal earnings news while it continues to wait for next week's QE2 which promises to be a worse proposed sequel than Amistad II: The Return Trip Home.

Australia’s CPI data was released this evening at 0.6% with expectations of 0.7% disappointing the computers which instantly sold off the AUD/USD 50pips. …expect ES to follow AUDJPY

Sovereign wealth funds are a force to be reckoned with. Some like Singapore's GIC have started to selectively take on more risk while others, loading up on domestic debt, are in for a nasty surprise...

Here is my latest article in the October issue of Institutional Investor. But first I want to bring to your attention two articles from the NY Times.

The pension turmoil is not limited to France either. US pension funds are underfunded by nearly $3 trillion. Will US workers be as willing as their French counterparts to face the beatings (to defend "what's theirs") or will they throw up their hands and appeal to Obama for help?

Wall Street responds to my missive on the potential of concentrated derivatives risk blowing up the banking system. Traders, salesman and financial engineers chimed in, and made some cogent points. Of course, I must rebut. It is the actual rebuttals that are probably more stinging than the original article - particularly the one concerning hedge funds. Please read on and feel free to chime in. Don't forget to bring the "Fiery Sword of Truth!"

The conference itself does not take itself too seriously. Even Nassim Taleb was able to make a few jokes while explaining to us why the financial system is irrevocably screwed up unless we give it a major overhaul.

Two simple charts tell it all. Bonus: at the end, we explain how to make Paul Krugman squirm.

After all, if the Fed DOES announce such a program, then we are undoubtedly heading into outright trade wars, tariffs, and even MORE currency intervention.True, Bernanke has ultimately got his sights set on destroying the US Dollar. But with global tensions growing, he’s got to walk a fine line between saving Wall Street and pissing off the US’s biggest creditor (and the only country that still owns more US debt than the Fed).

That is how Transparency International defines corruption...

Here is another fine piece by Hugo Salinas Price in which he argues for the return of the use of the silver coin in American currency. Mr. Salinas Price argues that the US Government must recognize at some point that it is indispensable to the health and continuing existence of the US as we have known it, to restore silver coin into circulation

Retail traders are notoriously wrong at picking market direction/tops and bottoms. Most retail traders very naturally seem to adopt a counter-trend stance and this offers very accurate signals for individuals looking to trade against this group. This daily report is designed to help traders focus their efforts on higher probability pairs. So what are the signals?

Who ya gonna call?

L. Randall Wray (economics professor), Christopher Whalen (banking expert with Institutional Risk Analytics), and William K. Black (professor of economics and law, and the senior regulator during the S & L crisis) explain ...