From MS
Existing home sales were surprisingly weak in June, plunging 5.4% to 4.37 million, an eight-month low. This was a major divergence from the pending home sales index, which surged 5.9% in June to a two-year high.
TED WIESEMAN makes a good point that the implication is that a rising number of home sales are falling through before closing, which has been a persistent problem that these data suggest may be worsening. All things considered however as MINACK wrote in his recent note, housing is small (2.3% of GDP) and while potential GDP gain from stronger housing could easily be swamped by slowdown elsewhere given business investment & exports are slowing and the key macro issue – the fiscal cliff, remains unresolved.
Thursday, July 19, 2012
Sunday, March 22, 2009
This article has just sailed through the radar with very little attention paid to it.
March 20 (Bloomberg) -- China's gold industry, the world's largest by output, will seek to boost its bullion stockpiles by 800 metric tons and increase production to 290 tons this year, the Ministry of Industry and Information Technology said.
The government aims to encourage industry mergers so the top 10 gold producers account for more than half the nation's output, according to a statement on the ministry's Web site, citing Deputy Minister Miao Yu. The statement did not elaborate on how the industry would increase its inventories.
China's gold output was 282 tons last year, the statement said. The country has the world's biggest foreign-exchange reserves at $1.95 trillion, with about 600 tons of gold, according to data compiled by Bloomberg.
Gold demand in China, the second-largest consumer, may stay at a similar level this year to last, at around 360 tons as industrial usage drops on the economic slowdown, the China Gold Association said in December.
March 20 (Bloomberg) -- China's gold industry, the world's largest by output, will seek to boost its bullion stockpiles by 800 metric tons and increase production to 290 tons this year, the Ministry of Industry and Information Technology said.
The government aims to encourage industry mergers so the top 10 gold producers account for more than half the nation's output, according to a statement on the ministry's Web site, citing Deputy Minister Miao Yu. The statement did not elaborate on how the industry would increase its inventories.
China's gold output was 282 tons last year, the statement said. The country has the world's biggest foreign-exchange reserves at $1.95 trillion, with about 600 tons of gold, according to data compiled by Bloomberg.
Gold demand in China, the second-largest consumer, may stay at a similar level this year to last, at around 360 tons as industrial usage drops on the economic slowdown, the China Gold Association said in December.
Wednesday, March 18, 2009
THE FED CROSSES THE RUBICON, PASSES THE DOLLAR GOING THE OTHER WAY AND THE GOLD BUBBLE BEGINS.
Todays FOMC statement surely is the writing on the wall for my Dollar Top call from March 2nd. Also I believe it will mark the beginning of a new phase for Gold, the 'bubble' phase. It's price move was relatively muted after the news and I don't expect it to breakout now. Bull markets climb a wall of worry and Gold is certainly beset with it's share with talk of IMF and World Bank selling top of the list of worries. Just I think that when we look back from 2012 we will talk about the 19 th March 2009 as the day it all began and ended or begun to end, oh whatever...
An article related to both caught my eye yesterday
LUXEMBOURG, March 18, (Reuters) - A United Nations panel of experts will recommend next week that the world move away from using the dollar as a reserve currency and adopt a shared basket of currencies instead, one of its members said on Wednesday. Avinash Persaud, chairman of consultants Intelligence Capital and a former currency chief at JPMorgan, said the proposal was to create something like the old Ecu, or European currency unit, that was a hard-traded, weighted basket. "It is a good moment to move to a shared reserve currency," he told the Reuters Funds Summit in Luxembourg. The United States, he said, was finding it hard to manage policy while remaining the reserve currency and the rest of world was also unhappy with the generally declining dollar. Persaud said the recommendation would be one of a number delivered to the United Nations on March 25 by the U.N. Commission of Experts on International Financial Reform.
Todays FOMC statement surely is the writing on the wall for my Dollar Top call from March 2nd. Also I believe it will mark the beginning of a new phase for Gold, the 'bubble' phase. It's price move was relatively muted after the news and I don't expect it to breakout now. Bull markets climb a wall of worry and Gold is certainly beset with it's share with talk of IMF and World Bank selling top of the list of worries. Just I think that when we look back from 2012 we will talk about the 19 th March 2009 as the day it all began and ended or begun to end, oh whatever...
An article related to both caught my eye yesterday
LUXEMBOURG, March 18, (Reuters) - A United Nations panel of experts will recommend next week that the world move away from using the dollar as a reserve currency and adopt a shared basket of currencies instead, one of its members said on Wednesday. Avinash Persaud, chairman of consultants Intelligence Capital and a former currency chief at JPMorgan, said the proposal was to create something like the old Ecu, or European currency unit, that was a hard-traded, weighted basket. "It is a good moment to move to a shared reserve currency," he told the Reuters Funds Summit in Luxembourg. The United States, he said, was finding it hard to manage policy while remaining the reserve currency and the rest of world was also unhappy with the generally declining dollar. Persaud said the recommendation would be one of a number delivered to the United Nations on March 25 by the U.N. Commission of Experts on International Financial Reform.
Thursday, March 12, 2009
SNB action supports the Gold play.
The Swiss National Bank announced today that it will monetize government and private sector debt and that it will intervene in FX market to weaken the CHF.
Gold immediately rallied.
Headlines such as:
"Swiss action sparks talk of 'currency war' " from FT, "Gold rises as SNB currency sale spooks market" from Globe Mail and "Stay short the Franc, buy Gold" from the National Post" highlight the point that Gold is a substitute for fiat money. It should at the margin add to investors contemplation of Gold as a necessary part of an investment portfolio.
The Swiss National Bank announced today that it will monetize government and private sector debt and that it will intervene in FX market to weaken the CHF.
Gold immediately rallied.
Headlines such as:
"Swiss action sparks talk of 'currency war' " from FT, "Gold rises as SNB currency sale spooks market" from Globe Mail and "Stay short the Franc, buy Gold" from the National Post" highlight the point that Gold is a substitute for fiat money. It should at the margin add to investors contemplation of Gold as a necessary part of an investment portfolio.
Tuesday, March 10, 2009
GOLD MANIA
I promised to write about Gold and just have not had the time. I have a great deal to say but not a lot of time today so I just want to put down they key points and then add the meat later.
Why?
1. Gold production is declining.
2. Forget inflation or deflation, the key is the fiat money system is bust.
3. Central banks no longer selling because of fear of counterparty risk in financial markets.
4. Relative to global wealth, albeit much reduced, it is massively under-owned in portfolios, so excessive bullish sentiment, which is present for sure, is not a significant issue.
5. This one I really like. For the first time in my career I believe (and have heard) that central bankers want a higher gold price because they are terrified of deflation and want to curb deflationary expectations.
6. Lets face it, we need another bubble don't we?
Stay tuned.
I promised to write about Gold and just have not had the time. I have a great deal to say but not a lot of time today so I just want to put down they key points and then add the meat later.
Why?
1. Gold production is declining.
2. Forget inflation or deflation, the key is the fiat money system is bust.
3. Central banks no longer selling because of fear of counterparty risk in financial markets.
4. Relative to global wealth, albeit much reduced, it is massively under-owned in portfolios, so excessive bullish sentiment, which is present for sure, is not a significant issue.
5. This one I really like. For the first time in my career I believe (and have heard) that central bankers want a higher gold price because they are terrified of deflation and want to curb deflationary expectations.
6. Lets face it, we need another bubble don't we?
Stay tuned.
Wednesday, March 4, 2009
JAPANESE MARGIN TRADERS ON THE WRONG SIDE OF THE YEN TREND
I you look at recent data from the Tokyo Financial Exchange http://www.tfx.co.jp/en/mkinfo/sikyo_forex_e.shtml
$YEN and £YEN shorts climbed to all-time highs. Click 365 shows $YEN shorts now at 51,008 contract, £YN short at 19,057. They flipped to USD short since 5Feb, and continue to add to short $YN. £YEN since 16Jan. $YN was at 90 handle, £YEN was at 133.63 (down to 122 handle after that) back then. Considering Click 365 has abt 1/10 of mkt share, Japnese margin traders have about $5bn of $YEN short, £2bn of £YN shorts. On a NET basis they have 17,169 in USDJPY and 5,362 in GBPJPY equating to around USD1.7bn and GBP550mill, respectively. That is a chunky short position in this thin market environment.
Can you say SQUEEZE?
Their positions have caught media attention also:
TOKYO (Nikkei)--Retail investors are bucking the yen's decline in the foreign exchange market by shorting the dollar, with such positions accounting for a record 60%-plus of yen-dollar margin trading. Considering that short dollar positions are taken to pocket profits when the yen strengthens, these transactions reflect retail traders' skepticism that the Japanese currency will continue to depreciate. According to the Tokyo Financial Exchange, short dollar positions accounted for more than 60% of all yen-dollar margin transactions for the first time on Feb. 18, up from 50% at the end of last year. With the yen weakening about 10 yen against the greenback in just one month -- it was hovering in the upper-80s in early February -- individuals appear to be betting that the Japanese currency will soon regain ground. Retail investors are selling other currencies on margin as well. The percentages of short euro and pound positions have risen to roughly 60% and about 70%, respectively. "The investment style of retail investors is changing," says an official at FX Zero Inc. Until last March, most individual investors sought to secure a yield spread between Japan and other countries by boosting long positions on foreign currencies. But yield spreads have since narrowed in the wake of interest rate cuts around the globe, while the market has grown more volatile. This is leading a growing number of individuals to engage in transactions based on their market predictions, even at the cost of some negative spreads.
I you look at recent data from the Tokyo Financial Exchange http://www.tfx.co.jp/en/mkinfo/sikyo_forex_e.shtml
$YEN and £YEN shorts climbed to all-time highs. Click 365 shows $YEN shorts now at 51,008 contract, £YN short at 19,057. They flipped to USD short since 5Feb, and continue to add to short $YN. £YEN since 16Jan. $YN was at 90 handle, £YEN was at 133.63 (down to 122 handle after that) back then. Considering Click 365 has abt 1/10 of mkt share, Japnese margin traders have about $5bn of $YEN short, £2bn of £YN shorts. On a NET basis they have 17,169 in USDJPY and 5,362 in GBPJPY equating to around USD1.7bn and GBP550mill, respectively. That is a chunky short position in this thin market environment.
Can you say SQUEEZE?
Their positions have caught media attention also:
TOKYO (Nikkei)--Retail investors are bucking the yen's decline in the foreign exchange market by shorting the dollar, with such positions accounting for a record 60%-plus of yen-dollar margin trading. Considering that short dollar positions are taken to pocket profits when the yen strengthens, these transactions reflect retail traders' skepticism that the Japanese currency will continue to depreciate. According to the Tokyo Financial Exchange, short dollar positions accounted for more than 60% of all yen-dollar margin transactions for the first time on Feb. 18, up from 50% at the end of last year. With the yen weakening about 10 yen against the greenback in just one month -- it was hovering in the upper-80s in early February -- individuals appear to be betting that the Japanese currency will soon regain ground. Retail investors are selling other currencies on margin as well. The percentages of short euro and pound positions have risen to roughly 60% and about 70%, respectively. "The investment style of retail investors is changing," says an official at FX Zero Inc. Until last March, most individual investors sought to secure a yield spread between Japan and other countries by boosting long positions on foreign currencies. But yield spreads have since narrowed in the wake of interest rate cuts around the globe, while the market has grown more volatile. This is leading a growing number of individuals to engage in transactions based on their market predictions, even at the cost of some negative spreads.
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