Archive - Oct 7, 2010 - Story

• Greenspan Op-Ed: Fear undermines America’s recovery (FT)
• Revision season begins: job losses in 2009 likely bigger than thought (Reuters)
• The Mutual Fund in the 'Flash Crash' (WSJ)
• Yen at fresh high amid intervention talk (FT)
• Japan Says It Won't Join Currency Devaluation Race (Bloomberg)
• Geithner Calls for Currency Cooperation Amid Rush to Weaken (Bloomberg)
• Jonathan Weil debunks another government lie: why AIG's numbers are much worse than presented (Bloomberg)
• Fed is banking on phony wealth effect (Reuters)
• Fed Officials Mull Inflation as a Fix (WSJ)
• NY Fed takes $180m hit on Hilton debt restructuring (FT)
• Greek Services Paralyzed as Public Workers Strike Over Austerity (Bloomberg)

It is getting scary out there. The LBMA has now lost all control over the gold market, even as the Fed now has the entire bond market in the palm of its hand. A little earlier spot gold passed a new record price of $1,364, which as the chart below shows, demonstrates a parabolic blow off or something in the precious metal, while in bond land the 2 Year has collapsed to 0.37%, an unprecedented low yield. There is a possibility gold will take out $1,400 within days. Not to be left alone, the 10 Year has also surged and is now touching 2.39%, bringing it to within 11 bps of the Bund, the tightest spread since December 2009. In other news, today will be another day in which both deflation and inflation win at the same time, leading to major confusion for everyone in the prediction game. And with gold already up 1% on the day, stocks will continue to be down in real terms.

• Bank of England may step away from stimulus exit as UK economy stumbles.
• China hardens opposition to calls for stronger Yuan, tells EU to back off.
• EU backs the introduction of an EU-wide tax on bank profits and pay packages.
• Euro nears $1.40 as dollar plunges on expected Fed move to boost economy.
• Geithner says Japan intervention not to blame for global currency tension.
• IMF lifts Euro-zone growth f'casts to 1.7% this year and expects 2011 growth at 1.5%.
• IMF raises India 2010 economic growth forecast to 9.7% on consumer demand.

The day starts with more data on the job market; we then see retailers’ reports, listen to a couple of Fed speeches, and wind up with consumer credit and the Fed’s balance sheet.

RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 07/10/10

There is a Part 2 to the story of Consumer Deleveraging that will play out over the next decade. Consumers will deleverage because they must. They have no choice. Boomers have come to the shocking realization that you can’t get wealthy or retire by borrowing and spending. As consumers buy $500 billion less stuff per year, retailers across the land will suffer. To give some perspective on our consumer society, here are a few facts...