Wednesday, April 7, 2010

A Debt Level Great Enough To Threaten The Dollar Rating

Stock Assault 2.0 - Artificial Intelligence Stock Market Software
Your purchasing power is less and less with every passing day, changes coming to currencies, no end to corruption in government, Wall Street, and banking, US states on the verge of bankruptcy, economic and financial zombies on the old continent, globalization has brought us to the brink of collapse, Interest rate volatility to come soon, US debt far over GDP, property abandoned.

Almost every day in almost any currency your purchasing power in terms of gold is less and less. Thus, these currencies in which you save the fruits of your labor are cheating you out of your savings.

The US dollar is particularly vulnerable because of its staggering debt even though it is the world reserve currency. In fact the debt is so onerous that we believe the quality rating of the dollar could be lowered by the end of the year. Many other currencies face the same dilemma and in the final analysis only gold will be worth what it is today or in the future.

Unless the US government expropriates Americans’ retirement plans they won’t be able to fund their sovereign debt. This situation is exacerbated by continued fiscal deficits of some $1.8 trillion. The administration and the Democratic Party are bound and determined to destroy America financially. Between government, Wall Street and banking Am erica is being destroyed. This did not just happen that way; it was planned that way. When people discover what has been done to them there will probably be a revolution.

Government spends excessively, as free trade and globalization keeps America under a staggering load of unemployment in what has become a corporatist fascist nation controlled by Wall Street and banking and run by Marxists, who for years have operated in the shadows as bureaucrats.

Many American states are on the edge of bankruptcy. Their only hope is massive layoffs and reduced services adding to the already massive unemployment that plagues our nation. The situation is close presently to resembling the 1930s and that is after trillions of dollars created out of thin air permeated the economy. Worse yet, nothing has been done deliberately to solve the problems. One might think the antics of government; banking and Wall Street were deliberate-unfortunately they are. It won’t be long before everything will be nationalized and corporatist fascism will be in full flower.

Corruption in government, Wall Street and banking knows no end. This in addition to the looting of funds for Social Security and Medicare, that the Treasury now must fund, when they cannot even fund current debt without having the Fed buy it with money created out of thin air. Talk about inflation â€" it is surely on the way. If we use GAAP accounting, not the US government’s cash figures, the deficit is really in the vicinity of $4.5 to $5 trillion, not $1.8 trillion. This, of course, is nothing new and the same lying and secrecy is in force worldwide. All that people have saved worldwide has been stolen from them - they just do not know it yet.

The situation in Europe is so bad that all of Europe is attacking Germany because they save and do not spend enough and their balance of payments surplus is obscene to other spenders n ot only in the euro zone, but in the entire EU as well. Their thought is Germany should be losers like we are. Then there are the PIIGS who care about little or nothing. We know we lived for years in all of these countries and fully understand where they are coming from. They all wanted socialism and it has doomed them, as has the euro zone and the European Union. They are about to discover socialism and debt are about to destroy them. You have made yourselves into economic and financial zombies. There is no one left to bail you out. Subsidizing everything doesn’t work as they are soon to find out. When Europe and America fail unfortunately they are going to in part take the entire world down with them â€" no one is going to be spared.

We have an economy in a state of collapse and part of the reason for that is free trade, globalization, offshoring and outsourcing, which since 2000 has cost America some 8 million good quality jobs. Where are you Smoot-H awley now that we need you? There are many reasons why the American economy is collapsing and free trade, British mercantilism, is one of them.

As we have said for months there is a multilateral change coming in currencies. A massive devaluation of all currencies and a debt settlement between countries. When that happens consumers worldwide will lose 2/3’s of their purchasing power on the final leg down into deflationary depression, which is probably 1-1/2 to 2 years away. Your only protection against such events is holding gold and silver related assets.

Those who have opted for general stock investments since 1998 have come out even if they were lucky and that includes massive market manipulation by our government. Not just failed policies. The creation in August 1988 of the President’s Working Group on Financial Markets” has been a disaster for free markets and a gift to dictators and would be tyrants. The markets are a giant scam and their underpinnings are about to collapse. There has been little or no growth over those years. Real estate bubbles in residential and commercial markets have collapsed and the stock market will soon follow. Hitting you right in the forehead is almost a 4% yield on 10-year T-notes that could well become 5% by yearend, which we predicted late last year. That will put the 30-year fixed rate mortgage at 6-1/4% to 6-1/2%. What do you think that will do to real estate, markets and profits? This is mainly because of sovereign debt that grows exponentially every minute of every day. These pyromaniacs in the White House and Congress add to the conflagration all day every day. The result has been a 25% loss in the S&P since March of 2000, and a loss versus gold of 75%. Gold has risen from $252 to $1,224 and silver from $3.50 to $20.00 with massive government and Fed suppression. Where do you think your money should have been and where your money should be? In gold and si lver bullion, coins and shares. Yes, as usual we were crazy and we were right and we are going to continue to be right, because we understand what the Illuminists are up too.

You live in a bankrupt country, along with 18 other major bankrupts, and you will soon learn how you are going to lose everything you have worked a lifetime for. A rise in interest rates of 5% adds $620 billion annually to the US debt in interest alone and that is rising exponentially. The US, nor any government, can survive such debt service.

We are calling inflation, real inflation, not the official variety of 3%, but at 8%. John Williams says on the things you buy every day it is 10%. We should easily see 14-5/8% inflation by the end of the year just as we did 2-1/2 years ago.

The Fed has ended its $1.25 trillion program of buying toxic debt from lenders. We do not know if that is the correct figure, we do not know from whom they were pu rchased and we do not know what was paid for the MBS, because it is a secret. This purchase has put downward pressure on interest rates for the past 15 months. This is an abnormal procedure and it can be expected that interest rates would move higher. It also means that the fed will now be a seller in the market as the FDIC is attempting to be. If sold these securities will put downward pressure on these bonds and force higher rates in a market that is already subject to crowding out by the treasury. In addition, quantitative easing is being phased out, putting further upward pressure on rates. The Fed if it continues these policies may stem hyperinflation but they run the distinct risk of having deflation run out of control, which could easily drive the economy into deflationary depression. This is a super human feat we do not see being accomplished without major damage, at the least.

Rate volatility is going to increase dramatically, as the Fed works to hold the 10-year T-bill rate below 4%. This is what they did previously at great cost to savers and taxpayers.

As rates climb the dollar carry trade becomes much less attractive and as it is unwound borrowed money is pulled from other investments, such as bonds putting more upward pressure on rates and at the same time downward pressure on stocks, which have been purchased with borrowed money. If the Fed tightens, as they might on Wednesday, yields will move even higher. If that happens those in the carry trade and bonds and shares will see gains evaporate and sales of both bonds and stock will ensue, as the carry trade is unwound. This is what markets are now facing.

This takes us to municipal bonds and particularly California, which has $85 billion in debt, that has to be paid by its citizens, of which about 40% do not pay any taxes. In addition it officially has 12.4% unemployment, which is really about 25% and getting worse dail y. This is a state with $1 trillion to $3.5 trillion in unfunded pensions and the world’s 8th largest economy. This is a state that, via federal subsidy, sold “Build America Bonds”, bonds yielding 6.3%, or 2.4%, higher rates than Treasuries. California is on the edge of bankruptcy and their municipal bonds should be sold, as many from other states should be sold as well. States won’t work out of their problems for years.

Last week the Dow rose 0.7%; S&P 1%, the Russell 2000 0.7% and the Nasdaq was unchanged. Banks rose 0.3%; broker/dealers 0.8%; cyclicals 0.8%; transports 1.2%; consumers 1.2%, as utilities fell 1.8%. High tech fell 0.3% as semis gained 1.1% and Internets fell 0.2%. Biotechs fell 0.2%; gold gained $12.00; the HUI rose 6.2% and the USDX fell 0.6% to 81.17.

Two-year Treasury bills rose 6 bps to 1.02%; the 10-year T-notes rose 10 bps to 3.95% and the 10-year German bund fell 7 bps to 3.08%.

The Freddie Mac 30-year fixed rate mortgage rose 9 bps to 5.08%; the 15’s rose 5 bps to 4.39%; one-year ARMs fell 15 bps to 4.05% and jumbos rose 1 bps to 5.83%.

Fed credit declined $7.4 billion. Fed foreign holdings of Treasury, Agency debt rose $7.2 billion to a record of $3.020 trillion. Custody holdings for foreign central banks increased $64.5 billion just year-to-date, and year-on-year 15.7%.

M2 narrow money supply fell $10 billion.

Total money market fund assets fell $30 billion to $2.983 trillion, the first time below $3 trillion since 10/07. Year-to-date it is off $311 billion and year-on-year it is off 22.2%.

Commercial paper fell $5.2 billion, or 20.8% ytd and 24.9% yoy.

America’s debt is now $31 trillion, or 2-1/2 times US GDP. Americans on average only own 11% of their home the remainder is debt. Home prices are headed lower until 2013, so 20% lower prices a re a certainty. In some areas homes have already fallen 60% to 75%. This situation will feed on itself for years and bankruptcies and inventory for sale will flourish for years. About 45% of homes have mortgages. We wrote five years ago that the government wants to own and nationalize those homes, so they can control the public.

As we wrote earlier we expect another large stimulus plan soon and the Fed to reverse gears and flood the world with money sometime soon. This should be the last rescue and the result will be hyperinflation followed by collapse and a deflationary depression. This is the last chance to buy gold and silver inexpensively.

If you do not think there was inflation in 2007 and 2008 homeowners insurance rose 24%, in 2008 it rose 31% and again in 2009-10 it rose 31%.

Treasury debt is on the ropes and is about to cause the Illuminists real trouble, along with higher interest rates. Later this year o r early next year debt as a percentage will reach 95%. From there on its collapse. How can anyone conceive deficits of more than $10 trillion over the next ten years?

The ISM Non-Manufacturing Index release by the Institute for Supply Management rose in March to 55.4 from 53.0. The index reached the highest level since November of 2007.

The increase to 55.4 was above market expectations of an increase to 53.3. The data shows that the economic activity in the US continues to improve.

More Americans unexpectedly signed contracts in February to buy previously owned homes, signaling government efforts to support the market will start pay off.

The index of purchase agreements, or pending home sales, rose 8.2 percent, the second-biggest gain on record and the largest since October 2001, after a revised 7.8 percent drop in January, the National Association of Realtors announced today in Washington .

Hedge funds that aim to profit from macroeconomic upheavals have had a lacklustre start to 2010, in spite of some of the biggest international monetary crises in more than a decade. - The Greek debt crisis and steep falls in value for both the euro and sterling have failed to translate into noticeable gains for most macro managers, many of whom predicted a stellar year on the back of huge global economic rebalancing.

So-called global macro hedge funds, which specialise in bets on interest rates, sovereign bonds and currencies, have on average lost 1.25 per cent on investments so far this year, according to industry data compiled by Hedge Fund Research, a Chicago-based index compiler.

Many of the hedge fund industry’s big gest names have so far failed to turn market crises to their advantage often in spite of fervent political criticism linking them to damaging market “speculation”.

The 5-foot alligator lurking in the algae-green waters of the community swimming pool was not the worst thing code-enforcement officers have found in recent years at AAA Apartments in Cocoa.

Bathrooms infested with mold. Walls with gaping holes where air conditioners had been ripped out. Garbage and trash strewn about the 52-unit complex. The city began issuing code-violation fines in 2007, back at the beginning of the housing slump, and the apartments' co-owners soon owed the city $1.8 million more than three times the current list price of the property, and enough money to motivate the now-former co-owners to try bribing a code-enforcement officer.

AAA Apartments, now bank-owned, may be an example of things to come. As home foreclosures continue to mount throughout Central Florida, code-enforcement officers say apartments, condominiums and other commercial buildings are being abandoned by their owners and repossessed by banks in growing numbers.

A surprise Fed announcement eclipsed the disappointing March Employment Report on Friday. Yes, it is a disappointment despite the media and permabull spin, because the Street expected March NFP to exceed 200k. One forecast had the job gain at 400k. But only 48k temporary Census workers were recorded. So only 162k NFP were reported.

Birth Death Model jobs are 81k, even though ADP, who actually does a count, showed small business lost 112k jobs. Professional services gained 11,000 jobs, but 40,000 were part-time jobs.

Review and determination by the Board of Governors of the advance and discount rates to be charged by Federal Reserve Banks.

Traders quickly surmised that i f the Fed is going to allow public access to an emergency meeting to discuss a possible discount rate hike, the probability is very high that a discount rate will occur soon.

The probable reason for the public airing is to disabuse the notion that the Fed’s secrecy keeps the public in the dark about its operations while it tips coming policy to insiders who profit on the inside info.

Most of the financial media ignored the Fed notice and reported the dollar surged because the jobs report indicated the economy had turned the corner. How is this possible when the number of jobs were below the consensus forecast?

Other financial media types spun the disappointing NFP as good news because it means the Fed cannot hike rates. But the dollar rally contradicts this notion…If anything, SPMs jumped on asset allocation, which will be a temporary boost for stocks. Perhaps the past months’ upward revisions were a factor.< /p>

The change in total nonfarm payroll employment for January was revised from -26,000 to +14,000, and the change for February was revised from -36,000 to -14,000.

Once again we see chicanery in the March Employment because the Household Survey shows a gain of 264k jobs but ‘Men 20 years & over’ accounted for a 290k job gain. ‘Women 20 years & over’ LOST 42k jobs. This is absurd.

You might recall that we noted that the January Employment Report recorded a 541k jobs increase in the Household Survey due to an increase of 529k of jobs for ‘Women 20 years & over’, while ‘Men 20 years & over’ LOST 1k jobs. This is impossible!

Now we see the opposite scheme ‘Men 20 years & over’ gained 290k jobs; women lost 42k jobs.

The Household Survey shows an increase of 308,000 jobs, but the BLS did not report this in the preamble to the rep ort. Most of the gain is due to 233,000 gain in ‘Men 20 years and older’. ‘Men 16 year and older’ account for 297,000 of the 308,000 jobs gain in the Household Survey! For February, ‘Women 20 years of age and older’ increased only 11,000.

Wages fell 0.1% (+0.2% expected), a record for the data series; but it only goes back to 2006. Wages should increase before employment increases due to the high cost of benefits.

U6, comprehensive unemployment, increase 0.1 to 16.9% in March. ‘Unemployed for 27 weeks or more’ hit a record 44.1%. Per Alan Abelson, the odds of finding a job sank to 18.7% from Feb’s 20.1%. The Exhaust Rate (people that have exhausted unemployment benefits) hit 54.01% for February.

Gallup Daily tracking finds that 20.3% of the U.S. workforce was underemployed in March. [The 149,268 consumer bankruptcies filed in March represented the highest monthly consumer filing to tal since Congress overhauled the Bankruptcy Code in 2005.]

For the week ended Wednesday, the Fed’s balance contracted $5.992B due to the sale of $5.103B of MBS. The Fed monetized $1.5B of agencies.

US banks earned $2.5bn last year from an accounting rule that enables them to book gains â€" known as “Christmas capital” by buying assets at a discount, a new study shows. More than half of all acquisitions of failed banks last year resulted in such gains, according to SNL Financial, which compiled the data.

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Indications: U.S. futures drift before Bernanke speech, auction

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By Steve Goldstein, MarketWatch

LONDON (MarketWatch) -- U.S. stock futures drifted lower Wednesday ahead of a speech on economic challenges from Federal Reserve Chairman Ben Bernanke, as Treasury Secretary Timothy Geithner headed to Beijing to possibly address one of those challenges: the weak Chinese yuan.

S&P 500 futures fell 4.8 points to 1,180.80 and Nasdaq 100 futures fell 5.25 points to 1,973.50. Futures on the Dow Jones Industrial Average lost 33 points.

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U.S. stocks ended with little movement Tuesday, with the blue chip Dow Jones Industrial Average falling 3 points while the S&P 500 and Nasdaq Composite made small advances.

Minutes from the last Federal Reserve meeting showed that the central bank doesn't interpret a promise to keep rates at ultralow levels for an "extended period" to mean six months, and a report that Greece was trying to avoid International Monetary Fund involvement in a backstop sent bond yields in that country surging.

While Greek bond yields are surging, those of the U.S. 10-year /quotes/comstock/20m!i:tnx (TNX 39.51, -0.17, -0.43%) are flirting around the 4% mark, leading the market to debate whether the rise is due to an improving economy or bond investors struggling to cope with surging supply, which on Wednesday includes $21 billion of 10-year notes.

Ahead of the auction, 10-year yields were 3.95%.

Patrik Schowitz, an equity strategist at Bank of America Merrill Lynch, points out that U.S. yields have advanced more quickly than most European nations.


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"So unless you think that government funding worries are far worse in the U.S., growth looks to be the main driver for yields," he said in a note to clients.

Bernanke will be speaking about economic challenges in a speech due for delivery at 1:30 p.m. Eastern, while speculation around the yuan will also be in the spotlight as a spokesman announced Geithner is heading to Beijing to meet Vice Premier Wang Qishan, who is responsible for economic affairs.

Geithner over the weekend delayed a report on whether China is a currency manipulator. There is speculation that China may extend the band in which the yuan can move against the dollar from plus or minus 0.3% a day to plus or minus 0.5%. See related story.

Goldman Sachs /quotes/comstock/13*!gs/quotes/nls/gs (GS 172.90, -0.26, -0.15%) will be in the spotlight as the bank is expected to say in its annual letter to shareholders that it didn't put its own interests ahead of its clients. The New York firm reiterated that it didn't bet against clients by using short positions that it took on before the residential real estate market crashed, The Wall Street Journal reported.

Daimler /quotes/comstock/13*!dai/quotes/nls/dai (DAI 47.70, -0.27, -0.56%) , Nissan /quotes/comstock/11i!nsan.y (NSAN.Y 17.65, -0.03, -0.17%) and Renault announced a long-expected alliance on small cars that includes buying minority stakes in each other. See story.

Family Dollar /quotes/comstock/13*!fdo/quotes/nls/fdo (FDO 37.79, +0.30, +0.80%) rose over 4% after reporting a 33% quarterly profit rise. Monsanto /quotes/comstock/13*!mon/quotes/nls/mon (MON 69.80, -0.64, -0.91%) edged 0.2% lower after seeing 2010 adjusted earnings at the low end of a previously announced range and saying it's unlikely 2012 gross profit will be double its 2007 result.

Fears of tighter Chinese policy dragged the Shanghai Composite down 0.3%, but most other Asian stock markets rose Wednesday, with the Hang Seng up 1.8% in a catch-up rally. European stocks meanwhile sported modest losses in early afternoon trade.

Ahead of weekly energy supplies data, oil futures fell 95 cents to $85.89 a barrel.

Steve Goldstein is MarketWatch's London bureau chief.

NYSE Arca Morning Update - 08:30:00 ET

NYSE Arca Morning Update for Wednesday, Apr 7, 2010 :


Stock Tuesday's Close Current Price Pct Change Current NYSE ARCA Vol
SID $40.97 $20.60 (49.7%) 1,200
PURE $2.03 $2.50 23.4% 25,881


Stock $ Volume Price PctChg | Stock Share Vol Price PctChg
SPY $48,304,285 $118.49 ( 0.4%) | CKR 440,525 $11.80 6.7%
MON $19,473,959 $69.17 ( 1.0%) | SPY 407,270 $118.49 ( 0.4%)
GLD $8,786,451 $111.15 0.1% | C 315,651 $4.26 ( 0.7%)
BHP $5,340,037 $81.25 ( 1.4%) | MON 279,562 $69.17 ( 1.0%)
CKR $5,181,874 $11.80 6.7% | BBI 265,816 $0.32 26.7%
BBL $4,338,287 $69.60 ( 1.8%) | AIB 233,546 $3.77 3.0%
USO $4,044,514 $41.58 ( 1.1%) | BAC 164,546 $18.45 ( 0.2%)
FDO $3,597,487 $39.60 4.8% | CTIC 151,352 $0.59 8.8%
EOG $3,511,744 $100.79 3.5% | NOK 144,500 $15.61 0.4%
AAPL $3,257,405 $239.14 ( 0.2%) | LVS 122,081 $22.98 ( 1.8%)

Price changes may be affected by symbol splits and dividends.

Consolidated close price is the last print (excluding prints with trade
conditions) prior to 4PM ET.

This information is also updated on our web page every morning at 8:35ET:

This material is for informational purposes only.
NYSE Euronext and its affiliates ("NYSE Arca") are not soliciting any action based upon it.
This material is not to be construed as an offer to buy or sell any security in any jurisdiction where such an offer or solicitation would be illegal.
Any opinions expressed in this material are NYSE Arca opinions only.
NYSE Arca undertakes no obligation to update any of the information contained in this material in light of new information or future events.

Copyright [2010] by NYSE Euronext. All rights reserved. Reproduction and redistribution prohibited without prior express consent.

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