A couple of minor technical problems called “business” and “life” have now intruded on my increasingly bogged down publication schedule that, in the interest...
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Bruce Krasting
Trust in America – Not : Bruce Krasting
I wish I could have been a fly on the wall at the G8 summit at Camp David this weekend. The final communiqué from the global big shots talks about keeping Greece in the Euro and a shift away from austerity and a move towards growth oriented policies....
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On FX and Worst Fears
Two market developments are worthy of note today (so far). Gold is up 2.5% (off a very cheap low) and USDYEN and EURYEN have made very significant 1.3% moves down.
Stuff like this scares me. It looks like acceleration in the flight to quality. The ne...
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Bruce Krasting Gives A Defense of the Morg
Man-o man did the Morg screw up! Let me count some of the ways:
- It announced a $2B loss, but everyone in the market knows its trading book, so the losses have nowhere to go but up.
- Investors took JPM’s stock behind the woodshed and beat it with ...
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Unscrambling the Euro Eggs
On April 17 I wrote about a conversation (link) with an individual who lives in Athens. He had this to say about the coming Greek elections:
“The other parties are communists, radicals and crazies. If they have a hand in the new government, then on...
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Consensus is Wrong, Fed Will Not Ease Till December Says Krasting
A friend sends me the following chart to support his conclusion that another round of QE is coming from the Fed sometime in June. The chart tracks the ten-year bond and the performance of the S&P since 2009.
Some thoughts on the info provided i...
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Treasury Fudges Numbers??
The Treasury Department’s Dr. Janice "Jan" Eberly put together a deck of slides describing the state of the US economy. (Link) This is an impressive presentation with charts on many key economic variables. You can’t blame the good Doctor for ...
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Got an Edge?
The 1st Q reserve numbers for the Swiss National Bank tell an interesting story. For a second quarter in a row, the foreign reserves have declined.
There is only one way that this could have happened; the SNB offloaded a portion of the EURCHF posit...
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On Student Loans, Accounting Gimmicks, Electric Cars, FX and a note on SS
Student Loan Battle
There was a big fight in D.C. this past week over student loans.
The issue is a scheduled increase in interest on new student loans from 3.4% to 6.4% set for July 1. Clearly this is a dumb plan. I don’t see any political opposi...
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On the Social Security 2012 Report to Congress
The Social Security Trust Fund (SSTF) 2012 report to Congress is now out (link). It’s 242 pages and contains a great deal of information. I have reviewed a number of sections in the report that I consider to be key measures of SS’s health. Not one ...
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Is Exim going to flop?
America’s Export-Import Bank (Exim) is tapped out. Its authority runs out on May 31 and Congress has to agree to some form of extension. Exim has $100 billion of borrowing authority, none of which shows up on the federal balance sheet. It may have al...
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On the Swiss, the IMF and the G-20
There will be some drama, and few splashy headlines out of the G-20 meeting in D.C. this weekend. Europe is cracking up (again), and the IMF and big guns of the G-20 will spout about “expanded firewalls” and “global co-ordination” in the final ...
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Down to a Trickle
Some much needed rain is headed to the East Coast for the weekend. The question is, "Will it be enough to end the drought"?
I look after a five-acre pond that’s thirty miles north of NYC. There's not much to it. I keep the sluice clean, maint...
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A Different Buffett Rule – One That Would Work
The Senate torpedoed the Administration’s Buffet Rule.
This was a dumb piece of legislation. The joke was that it would have only raised $5b a year. That’s chump change. It never had a chance of passing. It was a show pony for the November ...
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Yellen Vs. Geithner – Two Views
Janet Yellen, Bernanke's soul mate (and mouthpiece) spoke last week. She argued that the Federal Reserve's Zero Interest Rate Policy (ZIRP) should be maintained for another three years.
Tim Geither, Obama's side kick, had a completely different take ...
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Bruce Krasting: Three Conversations
I’ve had some interesting conversations in the past few days with folks whose opinions I consider important. I'm passing them on:
I
I spoke with my Greek shipper friend from Athens about the upcoming May 6 election. This is an event that shou...
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Houston – We have a problem, in Switzerland
The ‘risk off’ trade is commanding the markets. A subtle, but interesting example is the EURCHF.
For four days the EURCHF has held to 1/8th percent away from the official 1.2000 peg. It sits at 1.2016 as I write.
Wherever you look, from China to...
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Betting on the race to the bottom
On Monday and Tuesday the market’s attention will be on the USA and the negative economic implications of the Nonfarm payroll (NFP) miss. Market eyes will also be focused on the bond markets in Italy and Spain. As of last Thursday, Europe seemed to b...
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A Laugh
I got a chuckle from this article in the Economist: (Link)
For several years I have been pushing against all of the voices saying that it was essential that financial derivatives be banned or that their use be dramatically curtailed.
It isn’t tha...
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On FX
There was a mini flash crash in the EURCHF cross this morning. Two charts on the price move:
(Link and Link)
.
I was watching markets on a screen. When I saw the EURCHF price break I called a lady I know on an FX desk. She picked up t...
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Bernanke – I’m Slowing Down the Ship
A full trading day after the release of the Fed minutes has brought us some reasonably significant changes in market levels. S&P –1.5%, Gold – 3.5%, Crude –1.5%. Apparently, the confirmation that it is on hold surprised the market. (link)
...
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Social Security – Good News, Bad News
.
The Good News
Social Security (SS) has released estimates for both payroll tax revenues and benefits paid for April. The results are adjusted for the 2% payroll tax reduction. (The Treasury pays SS monthly for the shortfall.) The numbers tell a...
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Bernanke – ‘The Fed never makes mistakes’
Everyone makes mistakes. The best thing one can do is face up to the facts and acknowledge the error; fix the problem to the extent possible and do what is necessary to avoid repeating the mistake. Ben Bernanke's inability to admit his (and his pr...
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Pests
Ben B's speech got a big cheer from the stock market. I think Obama was cheering too.
Two views:
*********************************************
Other Pests
If you live in America, you know it has been unusually hot. During the week ...
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Bernanke: "I Want to Bring Back Irrational Exuberance"
On January 25th we got word from the Fed that ZIRP would be extended until at least 2014. Bernanke's guarantee of another two years of cheap-cheap money has lifted the market's animal spirits. Since the Fed announcement (33 trading days), the S&P g...
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Is the Ten-Year going to 3%?
These two articles point in a bad direction:
China’s 2011 total trade surplus was $183B. The surplus with the USA was $270B; the US was 150% of China’s total surplus. China imports lots of “stuff.” Crude oil is high on that list. I...
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On Slime and Water
Slimy
Just saying the words, “Pink Slime” gives me the creeps. I’m not pleased to learn that I’ve been dining on this swill for the past sixty years. The US Department of Agriculture has made an interesting response to the public outcry about s...
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On Sweet Deals and No Deals
I’m sure that everyone will be glad that executive compensation at Fannie and Freddie (F/F) has been cut. These are public companies that exist at the whim of the taxpayers. As such, the compensation for the folks pulling the levers at F/F should con...
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There’s Nothing "Fair" about it
When the federal government guarantees a student loan, that loan is subject to accounting treatment that was established by the 1990 Fair Credit and Reporting Act (FCRA). It should come as no surprise that the FCRA methodology is not “fair” at all....
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On FX and Notes from D.C.
Three weeks ago (Link) I put on a short EURUSD position at 1.3115. It worked for a few hours, and then went south. I sucked wind and damn near got to where I had to cut it at a loss. Today the market got back to where I entered, so I dumped it. While...
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On Politics, Social Security and Spine
Assuming that no white knight (aka NJ Gov. Christie) enters the scene for the Republicans, this fall will be a race between Mitt & “O”. I’ve listened to them discuss their views on a hot button of mine, Social Security.
Not surprisingly, bo...
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