Frontrunning: August 4

• BP Controls Gulf Well That Caused Record Oil Spill (Bloomberg)
• ABC Consumer Comfort index plummet near 2010 low at -50, from -48 week prior (ABC)
• California Democrats Unveil Budget Plan (Reuters)
• Foreclosed on - by the U.S. (WSJ)
• Japan Concerned as Yen Rises Towards 15-year High (Reuters)
• Australia Has Record Trade Surplus on Coal Demand (BusinessWeek)
• Moscow Urged to Ban Grain Exports (FT)
• Bank Rossii Bonds Hit Record $34 Billion in Anti-Inflation Push (BusinessWeek)
• Treasury Secretary Geithner: Unemployment Could Go Up (ABCNews)
• Swiss Currency Fight Pays Off as SNB Outpaces China on Reserves (BusinessWeek)
• Valuing the S&P 500 Using Forward Operating Earnings  (Hussman)

Comments

[LoneStarHog]

Move over Goldilocks, Green Shoots, Jobless Recovery, Etc....and say hello to...PAUSE! Everything is just PAUSING...ya know...kinda like Joe & Josephine Sixpack does to the DVD/VCR when he/she heads to the potty and refrig for another brew (aka Barley Pop).

Finally an exoteric rather than esoteric term.

I am going to PAUSE here...

[Racer]

ABC Consumer Comfort index plummet near 2010 low at -50, from -48 week prior (ABC)

now isn't that a surprise that this is reported out of hours and goes without hardly a mention anywhere

[Pamela Anderson]

On yesterday's GMI Report Raoul Pal wrote on the Yen:

 "We are getting close to the point where Yen strength will run out of steam and weakness will take over, as Japan starts moving closer to a default when the world moves back to recession"

This is very interesting; USD/JPY was @ 85.35 at some point yesterday's night, that is a record multi year low, lots of people want to short the yen based on similar arguments and on the fact that the Japanese society is getting older and ...bla bla bla (I lived there for 3 years and yes is an amazing place but there is not enough young blood).

On Monday, Zero Hedge posted a link (http://www.zerohedge.com/article/frontrunning-august-2) referencing an FP article about  Japan Limiting Forex Trades of ‘Mrs Watanabes’. If you are thinking on shorting the JPY the article is a must read, and the point that they make is exactly the same point that FX Concepts (John Taylor's) made a couple of weeks ago as a big reason of why not to short the Yen... "Japan is going to repatriate a tsunami of yens when the slowdown in the world economies start, those are leveraged trades that Japanese people took in the FX markets with borrowed yens" besides the short squeeze from all the people shorting it. Just to put the trade into perspective FX Concepts is calling for USD/JPY close to 75 (yes is 75) by February or March of next year.

I understand Pal's argument and in the long run JPY is going to have huge issues... the aging population one of the most compelling ones, but for the near term (next couple of months) I think FX Concepts is right.

[E pluribus unum]

I wonder how the Democrats think they are going to win the midterms with skyrocketing crude, wheat and corn prices? The shepple may not give a fuck if you spoonfed the banks trillions of taxpayer dollars but once the price of a gallon of gas hits $3.50 and a loaf of bread doubles, even these indolent, obese chuckleheads may think we need some "Change" in DC.

[glenlloyd]

If a CMBS portfolio goes sour....can you taste it?

Uncle S foreclosing...that's rich. Then again if they don't you get a new level of moral hazard.

[Oh regional Indian]

Yen at 15 year high. Japan cannot withstand that for too long. For all their international diversification and dwindling labour pool, they still have massive in-house robot based manufacturing.

Japan, the next Iceland? Could happen.

ORI

http://aadivaahan.wordpress.com

[goldfreak]

do these idiots at the WSJ not know that the FED is NOT part of the U.S. government? are they really this stupid?

[Miles Kendig]

Maiden Lane now owns a large amount of relatively safe securities guaranteed by government-sponsored mortgage operators Fannie Mae and Freddie Mac. Many were bought over the past two years with cash Maiden Lane received from interest and principal payments on assets in the portfolio, and they have helped make up for some of the value declines from soured assets - WSJ

Call me fool for thinking that Maiden Lane was just a hold to resolution deal rather than another means to cycle even more of the FNM/FRE and whatever whatnot back onto the feds balance sheet.

[Grand Supercycle]

Updated DOW daily chart:

http://stockmarket618.wordpress.com

[senthil456]

There are certainly a lot of details like that to take into consideration.I read and understand the entire article and I really enjoyed it to be honest.
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