Commodity Futures Trading Commission
- FHFA Is Said to Seek at Least $6 Billion From BofA for MBS Sales (BBG)
- Record Pact Is on the Table, But J.P. Morgan Faces Fight (WSJ)
- Magnetar Goes Long Ohio Town While Shorting Its Tax Base (BBG)
- Mini-Wall Street' Rises in Hamptons (WSJ)
- Obama to call healthcare website glitches 'unacceptable' as fix sought (Reuters)
- Starbucks Charges Higher Prices in China, State Media Says (WSJ)
- Cruz Is Unapologetic as Republicans Criticize Shutdown (BBG)
- Berlusconi struggles to keep party united after revolt (Reuters)
- SAC Defections Accelerate as Cohen Approaches Settlement (BBG)
The U.S. is engaged in fiscal and monetary policies that are akin to a Banana Republic.
In addition to electronically creating out of nothing $85 billion every month to buy its own debt in the form of bonds, the U.S. is also borrowing more money than it is authorized to borrow, from itself again.
- Congress Vote Ends Impasse to Be Revisited in January (BBG); Congress Passes Debt, Budget Deal (WSJ)
- House GOP extracts no concessions (Politico)
- Washington becomes the biggest risk to the U.S. economy (Reuters)
- Debt Deal Seen Boosting U.S. Consumers as Holidays Approach (BBG) - only thing missing: disposable income
- Federal Employees Head Back to Work (WSJ)
- Regulator Suggested Shift for Dimon at J.P. Morgan Unit (WSJ)
- Twitter hires Google ad exec ahead of IPO (CNET)
- Teens can now post publicly, but posts are friends-only by default (WaPo)
- Germany Moves to Finalize Coalition Deal (WSJ)
- Draghi Turns Judge on EU Banks as ECB Studies Accounts (BBG)
- UK nuclear deal with China a ‘new dawn’ (FT)
His government has ramped up spending to ward off unrest, helping drive inflation to a 15-year high last year, and pushing Algerians into the currency and real estate markets as they seek to shield savings.
“To protect themselves against inflation, and therefore the devaluation of the dinar, Algerians are investing in property, gold and foreign currencies,” Abderrahmane Mebtoul, a professor of economics at the University of Algiers, said in an interview.
- Troops Forage for Food While Golfers Play On in Shutdown (BBG)
- Police suspect dental hygienist Miriam Carey was behind the wheel of Capitol chase (WaPo)
- Italian Senate committee starts Berlusconi expulsion process (Reuters)
- Swiss Regulator Probing Banks Over Foreign-Exchange Manipulation (WSJ)
- GOP Begins Search for Broad Deal on Budget (WSJ)
- No Jobs Report Means Economists Chew on Football Instead of Data (BBG)
- U.S. default seems unthinkable but investors have options (Reuters)
- Citigroup fined $30 million after analyst sent report to SAC, others (Reuters)
- FBI Snags Silk Road Boss With Own Methods (BBG)
- Recession Warnings Found in Asset Price Falls (BBG)
- Bank of Japan warns of severe global impact from U.S. fiscal standoff (Reuters)
Silver’s fundamentals remain very sound, with a very small finite supply of above ground, investment grade silver coins and bars and robust and increasing industrial and store of value demand - particularly in Asia.
We continue to believe silver will rise to its real record high or inflation adjusted high of $140/oz in the coming years.
It is somehow fitting that on the day when even more undisputed evidence is revealed, surrounding the most brazen market manipulation scheme in history - one involving the "unmanipulable" Libor benchmark rate which serves as the foundation for hundreds of trillions in interest rate sensitive instruments - that the CFTC would also come out moments ago, and announce that in its long-running investigation of alleged manipulation in the silver market... there is absolutely nothing wrong.
Two hours prior to the Federal Open Market Committee (FOMC) release, gold was trading below $1,300/oz but started to gradually tick higher prior to surging higher on heavy volume, minutes prior to the release of the FOMC statement.
FX markets, stock, bond and commodity markets did not see similar large moves.
To say that bonds are under pressure would be an understatement. Over the last few months, sentiment about fixed income has flipped dramatically: from a favored investment destination that is deemed to benefit from exceptional support from central banks, to an asset class experiencing large outflows, negative returns and reduced standing as an anchor of a well-diversified asset allocation. Similar to prior periods, history will regard the ongoing phase of dislocations in the bond market as a transitional period of adjustment triggered by changing expectations about policy, the economy and asset preferences – all of which have been significantly turbocharged by a set of temporary and ultimately reversible technical factors. By contrast, history is unlikely to record a change in the important role that fixed income plays over time in prudent asset allocations and diversified investment portfolios – in generating returns, reducing volatility and lowering the risk of severe capital loss. Understanding well what created this change is critical to how investors may think about the future.
- Obama Holds Fire on Syria, Waits on Russia Plan (WSJ)
- China Shadow Banking Returns as Growth Rebound Adds Risk (Reuters)
- Not one but two: Greece May Need Two More Aid Packages Says ECB’s Coene (WSJ)
- BoJ insider warns of need for wage rises (FT) ... as we have been warning since November, and as has not been happening
- California city backs plan to seize negative equity mortgages (Reuters)
- Home Depot Is Accused of Shaking Down Suspected Shoplifters (BBG)
- Most-Connected Man at Deutsche Bank Favors Lightest Touch (BBG)
- Norway Pledges to Limit Oil Spending (BBG)
- China Shadow Banking Returns as Growth Rebound Adds Risk (BBG)
- Gundlach Says Fed Is Mistaken in How It's Ending Easing (BBG)
"Traditional risk controls and safeguards - that relied on human judgment and speeds - must be reevaluated in light of new markrt structures," are the initial findings from the CFTC regarding the prevalance of high-frequency trading in futures markets. As USA Today reports, efforts to reduce trading order-processing times could "lead to a competitive race to the bottom" where positions outpace risk systems and potentially lead to systemic threats. All the signals are that the top US financial regulator may impose new restrictions to halt breakdowns and to avoid high-speed trading which "could provide opportunities for information advantage." Of course, we've heard this before and with trading volumes at 15-year lows, we suspect the 'industry' will be lobbying hard; but this is a positive step (only 3 years after the CFTC started to look at HFT).
Peak gold has yet to be considered and analysed by the international financial and investment community but there is a risk that it has happened or will happen soon with a consequent impact on the gold mining industry and on gold prices in the 21st Century.
- Lew warns Congress to strike debt ceiling deal (FT)
- Central-Bank Moves Blur the View (WSJ)
- Brazil, Indonesia launch measures to shore up their currencies (FT)
- More mainstream media reminded about Fukushima - Radioactive ground water under Fukushima nears sea (AP)
- Fukushima inspectors 'careless', Japan agency says, as nuclear crisis grows (Reuters)
- New York Banker Arrested on Rape Charges in East Hampton (NYT)
- This time they mean business, for real: CFTC Moves to Rein In High-Speed Traders (WSJ)
- Britain operates secret monitoring station in Middle East (Reuters)
- Moody’s considers downgrading top US banks (FT)
- China's Bo calls wife mad after she testifies against him (Reuters)
- JPMorgan Sub-New Normal Growth Seen Vexing Next Fed Chief (BBG)
- SEC calls for cooling-off period for more staff (Reuters)
Gold traded near a two-month high after holdings in the largest ETP posted the first weekly expansion this year and markets digested the very robust global physical demand data reported last week . Demand from China and India is projected to to soar to 1,000 tonnes each in 2013 and mixed U.S. data has boosted gold’s safe haven appeal. Gold forward offered rates (GOFO), remain negative and are becoming more negative. This shows that physical demand is leading to supply issues in the highly leveraged LBMA gold market. GOFO rates are those which contributors may use to lend gold on a swap for dollars, according to the London Bullion Market Association and the negative gold interest rates show a preference to own gold over dollars by bullion banks. Negative 1, 2 and 3 month GOFO rates mean that bullion banks lent their customers, including other bullion banks, gold to obtain a positive return, thereby increasing the "paper" gold supply. Some may now may be struggling to get their gold back which may explain the significant decline in COMEX gold holdings of certain bullion banks (see commentary). This is creating significant supply demand issues in the physical gold market which should lead to higher gold prices.
- U.S. Regulator Subpoenas Banks Over Long Warehouse Queues (BBG)
- Apple Said to Prepare Holiday Refresh of IPhones to IPads (BBG)
- Fed's Yellen Says Stance on Banks Hardened (WSJ)
- Mexico opens up its energy sector (FT)
- Spin: Greek GDP marks gradual deceleration of recession (FT) ... spin aside, it dropped 4.6%, and in reality, probably over 10%
- Made-in-Canada Solution For BlackBerry Avoids Nortel Fate (BBG)
- America's Farm-Labor Pool Is Graying (WSJ)
- Video of 'lame' cattle stirs new concern over growth drugs (Reuters)
- Paulson Bid for Steinway Trumps Kohlberg Offer (WSJ)
- Egyptian government yet to decide on pro-Mursi vigils (Reuters)