Archive - Nov 2010 - Blog entry

There is a strong financial incentive for at least some (ex. Citi) mortgage servicers to foreclose in lieu of working the mortgage out. That incentive comes in the form of getting up to a full 1/4 of the foreclosure proceeds - quite possibly causing HAMP and other loan mod programs to fail. After all, the lending business ain't so hot these days, but risk free foreclosure proceeds... You can't beat that!

Fat cats talk about QE. Did Treasury listen? Did Ben?

This is part 4 of the 5 part interview with Warren Buffett's biographer Alice Schroeder. It includes insight into what makes the Oracle of Omaha tick that you will not find anywhere else.

A more in depth look at Morgan Stanley’s returns on equity reveal an even uglier snapshot of performance than the unimpressive, cursory annual overview illustrated in our quarterly analysis released yesterday. Bubblicious credit, QE x 2, and regulators that look the other way from rotting assets still result in piss poor economic performance. What do you think will happen when rates resume their upward move?

Back on May 17, 2010, I granted an interview to Lars Schall of MMNews Germany, in which I stated, “if U.S. regulators stepped in and said Goldman Sachs, HSBC and JPMorgan couldn’t participate in the gold and silver futures market for three weeks, I really think you would see the gold and silver price more than double in that time.” The last seven trading days in the silver markets, in which the price of silver has risen 11.93%, has provided a window into just how much Central Banks and their puppet bullion banks have suppressed gold and silver prices over the past decade.

"I thought we could mark this November the 5th, a day that is sadly no longer remembered...to sit down and have a little chat..."

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

QEII has suddenly made this paper appear a bargain. Treasury bond investors are not being compensated for their risk at current yields, but muni bond investors are. If the Bush tax cuts are not extended, the effective taxable yield pops up to 4.27% for top earners. That’s a lot in this zero yield world we live in. And let’s face it, taxes are going up a lot, no matter who won the election, making these bonds even more valuable in the future. The risk of an outright default on this paper has been vastly overblown by the media. (NCP), (NVX).

The late night (daily) decoupling is here.

Michael Sabia, President and CEO of the Caisse de dépôt et placement du Québec, Canada's biggest pension fund, was the guest speaker at the the Board of Trade of Metropolitan Montreal's Desjardins business luncheon - Business Voices. He talked about the many facets of the Caisse's contribution to the economic development of Quebec, mainly in the context of a changing world, which both the Caisse and Quebec need to adapt to in order to achieve their full potential.

For the visually-oriented ...

Well, it’s official, Ben Bernanke has officially gone “all in” regarding currency devaluation in the name of pumping the stock market. I have to admit, even though I knew this was going to happen, I’m still in shock. After all, it’s not every day that you see a superpower collapse and lose its reserve currency status courtesy of a deranged mad man.

Regardless of your feelings on the matter, these are the cards the Fed has dealt us, so rather than devote space to critiquing our insane and corrupt Fed Chairman, I thought it better to devote today’s article to detailing what is to come as a result of the Fed’s policies.

FX Bottom-line: Heading into 2011, USD/CAD is facing a divergence in US-Canadian policy rates reminiscent of the 2002/03 period. Although USD/CAD declined by 15% during that period, we do not envision a similar demise in USD/CAD but diverging policy stances will keep USD/CAD under downward pressure throughout 2011. However, should the growth decoupling between the global and the US recoveries continue at the same pace as seen during the last 12 months, the 2002/03 scenario could well repeat itself in the currency market, leaving the trend in CAD against USD looking increasingly similar to the most recent rally in AUD/USD.

What about you?

After putting over $2Tn into our Dead Parrot Economy since the crash and getting no response, Bernanke is upping the ante with another $600Bn round of Quantitative Easing ON TOP OF the ongoing $250-$300Bn round of POMO commitments for a total of about $110Bn per month dumped into the economy... This represents a 10% increase in the money supply over 8 months and, therefore, a planned 10% decrease in the purchasing power of your dollar-denominated assets - a 10% tax on everything you own.