Archive - Mar 2011 - Blog entry

The fundamental and technical pictures are now supporting a higher move in bond prices.

The real price of crude oil really topped out at $120/barrel last week. Anyone in the oil industry will tell you that, considering only the true supply and demand for oil, the price should be about $70/barrel. All of the $23, or 27% increase in the price of oil in the last four weeks has been about fear. We are going to see $90/barrel before we see $150. Saudi Arabia is not Tunisia, Algeria, Egypt, or Libya. The Saudi’s had a lot more money to spread around to keep everyone loyal. This is why Al Qaida has made absolutely no inroads there for the past 10 years.

In yesterdays session we saw some very 2 sided action especially in the Euro, we initially saw a EURUSD sell off as a flight to the safety took hold due to a sell of in far eastern equities. In the early part of the NY session this fear reversed and strong buying took us back the levels at which we started the day. this show of strength has pushed GBPUSD and EURGBP in the long zone and edges EURUSD into the strong long zone.

Holy fucking shit. It is not often Money McBags wakes up to such a far reaching news story...

Board members of the nation's largest public pension fund have rejected a proposal to reduce the fund's estimated future investment returns.

A small story in the midst of a very big story.

The following is a follow-up to the article I wrote titled "We've Broken All the Trendlines" which was featured on Glenn Beck's show earlier tonight. In it, I present the implications of those charts, and what they mean for the financial system going forward.

All Hail the Quantitative Easer!

Japan is back in recession. The incoming tide just brought in 2,000 bodies. Most major companies, including Toyota, Nissan, Honda, and Sony have shut down all domestic production. Tokyo’s subway system is closed, stranding 25 million residents there. Electric power shortages are a huge problem. Half the country’s nuclear generating capacity is now down. 20,000 expatriates waiting at Tokyo’s Narita airport as foreign companies evacuate staff to avoid a nuclear meltdown. $187 billion worth of credit intervention to “save Japan.”

Shouldn’t average profit margins be higher now, as the U.S. economy has transitioned from an industrial (low-margin) economy to a service (higher-margin) economy?

In plain terms, the financial system is RED ALERT. The question now is if additional liquidity can prop this giant house of cards up anymore. We’re about to find out.

There are simply too many balls being juggled in the air to hope that none of them - not one of them - will fall.

"The level has come down to the level to cause no harm to human health, according to the report I have received," Chief Cabinet Secretary Yukio Edano--

Some big moving news events today with the release of the German ZEW Eco Sentiment at 06:00 EST which is likely to have an impact on all EUR crosses if we have a deviation from consensus. Out of the US we have the TIC report released at 09:00 EST and the big one is the FOMC Statement at 14:15 EST.

Even the government is now saying high levels ...