Archive - Dec 1, 2009 - Story

And another attempt to present a massive drop in consumer end demand for cars into something positive: “Consumer interest in our launch vehicles remains solid,” [we would hate to see what flacid interest looks like] said Susan Docherty, GM vice president, U.S. Sales. “We’re working to strengthen our Chevrolet, Buick, GMC and Cadillac brands by providing cars, crossovers and trucks with the sales and service experience that our customers deserve. We have more to do, but we’re committed to earning consideration and future sales by delivering great products in every segment.” The company reported total U.S. deliveries of 151,427 vehicles in November, a decline of 2 percent compared with November 2008. Total sales for Chevrolet, Buick, GMC and Cadillac were up 6 percent vs. the prior year.

In a note earlier, JPMorgan expressed its concerns at the burgeoning cash balances held by banks which anticipate major writedowns in the future, and are fortifying themselves appropriately. "Key changes seen thus far in 4Q for large banks are the slowdown in growth in securities and the large 28%qoq increase in cash, while loans continue to decline at a little faster rate led mainly by C&I loans and also to some extent residential mortgages. We expect this shift will hurt net interest income into 2010." When the worm turns, look for this cash to evaporate promptly as massive upcoming losses need to be funded, and as equity raises will be out of the question, banks better pray they have enough cash in store for the really rainy days.Also, somehow the term "Too Big To Fail" was lost in translation, and according to JPM is now defined as " Flight To Quality."

Some indicative Chrysler-Fiat car sales in November 2009:

Sebring 3,044 (5%)

300 1,918 (-44%)

PT Cruiser 310 (-91%)

Cherokee 3,085 (-41%)

Viper 43 (-30%)

Durango 29 (-98%)

And so the political wrangling over the Fed's role (and utility) is spilling over in the form of internal dissent. Earlier, Philly Fed President Charles Plossner became the first Fed member to call for interest rates hike "before unemployment or other measures of resource slack have diminished to acceptable levels." His full speech, which humorously compares monetary policy to the philosophy of hockey great Wayne Gretzky, is attached. The first shot in the bow of internal monetary policy disagreements has been fired: will the other Fed presidents, and ultimately the Chairman himself, stop the folly of their excess liquidity ways before it is truly too late?

David Rosenberg shares his response to Raymond James' Jeffrey Saut

$1,200 - Check. Sideshow gold preparing to turn the lights out at the printers.

The Obama administration, one-upping Helicopter Ben, will next start "accidentally" paradropping worthless $100 trillion denominated dollars out C5 Galaxy planes. At this point any pretense of fiscal responsibility is dead and buried. The administration is dead set on subsidizing every single part of the economy until the bubble pops. Next up on the agenda Cash For Revolutions/Pitchforks.

A blueprint for "Central Bank Suicide," courtesy of Zero Hedge commenter "mikla."

Some notable tidbits from Rosie's am piece: "We just came across a Bloomberg News article quoting an official from the state-owned Assets Supervision and Administration Commission (Ji Xiaonan, the Chief) as saying “we recommend China increase its gold reserves to 6,000 metric tons within three-to-five years and possibly to 10,000 tons in eight to 10 years.” China’s reserves, after a 76% buildup since 2003, currently stand at 1,054 tons, so we are talking here about the prospect of some pretty heaving buying in coming years." You have one guess what 9,000 incremental tons of gold demand will do to price: here is a hint "If China moves towards 10,000 tonnes, well, that would end up taking the gold price to $2,623/ounce if our calculations are in the ball-park."

RANsquawk 1st December US Morning Briefing - Stocks, Bonds, FX etc.

ISM survey respondents claim the collapse in the dollar is their number one concern; others see hope in more Cash For Clunker programs. Please address your complaints to TheMonetaryTigerWoods@treasury.gov

SocGen report highlights:

We have just had the worst decade’s performance for equity investors on record

On a ten year view, equities may indeed prove to be a good investment

The lesson from Japan is that while de-leveraging plays itself out, the global economy will
remain extremely vulnerable

US equity valuations did not reach revulsion levels in March this year

Government bonds are now an extremely poor investment

Gold hits $1,199.43 overnight, a whisper away from the limit cover orders at $1,200 that will take gold to the stratosphere and will prove to Sideshow Fred that gold is the real deal, and that the Fed has lost control of excess liquidity.

• No QE yet - Japan to provide more cheap loans, Y10 trillion worth (Bloomberg, AP)
• AIG reduces government borrowings by $25 billion, by giving gov't more preferred shares (AP)
• Support best podcaster on the web and vote for The Disciplined Investor (TDI)
• In wake of Dubai, trying to predict the next blowup (NYT)
• Sultan Sooud Al Qassemi: This is not the end of the road for Dubai (FT)
• Gross: The Lehman Brothers of the Persian Gulf (Slate)

RANsquawk 1st December Morning Briefing - Stocks, Bonds, FX etc.