That will all change beginning today with the Nonfarm Productivity report for the 2nd QTR… Long time readers know my dislike for this data, as I believe it simply shows that one person works longer hours! The Fed Heads used to be all over this data like a cheap suit, and probably still trip over themselves to see the data when it prints… But to me, it’s not what Big Al Greenspan made it out to be…

Tomorrow is the big data day this week with both the Trade & Monthly Budget Balances printing for July… The Trade Deficit should tick up some, as Oil prices have gained in recent weeks, and the Monthly Budget Deficit? Oh my! It is forecast to be $180 Billion in the red! Which annualized would be more than $2.1 Trillion! But don’t worry about it folks, no biggie according to the folks in Washington D.C. The Treasury will just issue more bonds, and the Fed will buy up any that don’t get bought, and pay for them with money they printed up fresh that day!

You know that I’m be facetious with the “don’t worry” talk… I’ve been talking about this deficit spending for quite a few years now… I like the fact that others have joined in now that the numbers have gotten so large they are as obvious as a man with a hatchet in his forehead, but at least they’ve joined the “stop the deficit spending movement”…

Speaking of The Treasury issuing Bonds… This week alone the Treasury will auction $37 Billion of 3-year Notes, $23 Billion of 10-year notes, and $15 Billion of 30-year bonds… Even using “new math” that brings this week’s issuance to $75 Billion! That sound? That sound you hear is foreigners choking on all this issuance! Does anyone know how to apply the Heimlich maneuver?

The “got yield” scenario I talked about yesterday, didn’t play out yesterday, as stocks came back… The A$ saw some selling along with kiwi, reals, and any other “high yielder”… The selling wasn’t bad, so we can probably put it down to profit taking.

I’m doing some research on the years around the depression, looking at market movements, and confidence levels… It’s amazing the things that were being said right up and to the stock market crash about how everything was fine… Then skip ahead to the 80’s and you had the same things going on with lofty praises for the S&L industry, especially one by Big Al Greenspan, and then the S&L industry circled the bowl… Makes you wonder, and I’m not talking about wondering who wrote the book of love… No, I’m talking about how this should make you wonder, or question, what’s being said about how great stocks are right now… When the President makes comments about “a good time to buy stocks”, you’ve got to stop and think folks… Just stop!

OK… I wanted to give everyone an update on the popularity of the BRIC MarketSafe CD we introduced last month… With over a week to go until we reach the funding deadline, this CD has received a ton of newsletter writer coverage, and interest… The funding has gone quite well, and we expect to open this CD with a very large amount of cash… That’s exciting for me, as I saw this as an opportunity to deal in “speculative” investments, without market risk, and jumped on getting this available to our customers…

I also wanted to follow up on the Jobs Jamboree data we talked about yesterday morning… I had a very nice reader tell me that I “hadn’t fallen off turnip truck” as the participation rate fell! That’s right! As she said to me… “So, all those poor men and women that were hit at the beginning of the recession have the great pleasure of no longer being counted as either employed or unemployed.”

I also wanted to follow up on last week’s talk on the Weekly Initial Jobless Claims that fell for the previous week… I had a reader who recently became unemployed in California tell me the problems with trying to file as unemployed! Let’s listen in to him explain his attempt to file as unemployed…

“Filled out the unemployment application on-line the day I was laid off.
About four days latter they send you another form to fill out and return. If not returned immediately, you lose your benefits.

Received a letter indicating they would call me 7 weeks after applying, to determine eligibility. It is scheduled for September 27th at 1 PM to
3 PM.

About two weeks afterwards, found there is no way to reach a human. The only way to reach them is EMAIL, which takes a couple of days to respond. EMAIL has a canned response, we will contact you on Sept 27th.”

OK… Enough of that! China came out with some data today… While exports continue to suffer the stimulus that the Gov’t put into the economy, which made sense due to the fact that the Gov’t had a war chest of cash to put into the economy, which is the exact opposite of the situation in most countries including the U.S. Chinese Industrial Production growth was strong, marking three consecutive months of improvement in Industrial Production. The ongoing recovery of domestic demand is good, while consumer demand keeps holding up well with July retail sales growth up 15.2% year-on-year…

Now, I fully understand how there can be questions about the validity of Chinese data… But come on! We don’t live there, we have no idea! And they don’t have a John Williams (Shadow Stats) to show everyone that the Gov’t’s official data prints are misleading and most times inaccurate!

I saw this report on the Bloomie this morning from Zillow… “Almost one-quarter of U.S. mortgage holders owed more than their homes were worth in the second quarter and that figure may rise to as much as 30 percent by mid-2010 as job losses and foreclosures climb.”

That’s depressing stuff… Very depressing… So! Before I go to the Big Finish, I’ve got to find a “feel good” story… Of course if I were the Gov’t I would have a pocket full of those, to pull out whenever the consumers needed one! HA! But, I’m not the Gov’t! thank goodness! Whenever I think of the Gov’t, I think of those words that Ronald Reagan spoke regarding the scariest words a person can hear… “I’m from the Gov’t and I’m here to help”

OK… The euro looks to be catching some wind in its sails this morning, as it has gained 1/4 euro since I came in… I know that’s chicken feed, but Hey! You’ve got to start somewhere, and after Friday’s bloodletting, the tourniquet was applied on Monday, and today maybe we’ll see it gain back lost ground… For… It is “Turn-around Tuesday!” (well hopefully it will be!)

And if the risk assets (like stocks) are rebounding, Gold and Silver should be on the docket to rally too… And a quick look at the Bloomie tells me they are indeed, rebounding… So, now, let’s go to the Big Finish!

Currencies today 8/11/09: A$ .8365, kiwi .6715, C$ .9125, euro 1.4170, sterling 1.6475, Swiss .9250, rand 8.13, krone 6.2125, SEK 7.28, forint 191.80, zloty 2.9370, koruna 18.19, yen 96.50, sing 1.4460, HKD 7.7505, INR 48.02, China 6.8350, pesos 12.96, BRL 1.84, dollar index 79.12, Oil $70.73, 10-yr 3.78%, Silver $14.43, and Gold… $947.60

That’s it for today… I barely mentioned it yesterday, and have been remiss in not mentioning it before, but next week I head to San Francisco Money Show. San Francisco has always been one of my fave cities to visit, and last year I had a blast there, except for that red-eye I had to take home so I could be on the desk Monday morning! I played in San Francisco when I was a young man playing my guitar… Right there in the Cannery… Last year, we went across the peninsula to an awesome restaurant named the Cliff House… I hope to make it back there this year! But, the real reason I go there is to talk to audiences about diversifying, and what I see going on, and or happening in the future… It’s just my thoughts, but I seem to fill the rooms, so that’s a good thing! Nice win by my beloved Cardinals last night. I was in bed by the 6th inning when they scored all their runs! UGH! Time to go… Try to make your Tuesday Terrific!

Source: $75 Billion in New Treasuries this Week

We’ve got a lot of catching up to do, eh? Mike and Chris did a Fantastico job of taking the conn on the Pfennig in my absence… So thanks to them… But it’s back to me, and besides a couple of days in San Francisco later this month, I’m all yours! (I bet that just makes you smile like a Cheshire Cat… NOT!)

OK… Rather than beat around the bush this morning, Chris left me this note from Friday’s price action, so let’s go to the Friday round up and then onto today! Here’s Chris!

The currency markets were fairly calm Friday morning, but at around 9:00 the dollar index fell off a cliff! The big data released this morning was 2nd Quarter GDP which showed only a 1% contraction vs. an expected 1.5% contraction. But the 1st quarters number was revised down to 6.4% from the original report of 5.5%. I guess traders needed some time to digest the information, as the report came out at 7:30 but the dollar didn’t start its freefall until just after 9:00. But when they finally decided to take the dollar lower, the move was pretty dramatic with the Euro moving up a 1.5 cents in about 2 1/2 hours. The markets settled down around noon, and traded sideways until the close.

So… My time away was much like the “old days” that you could almost make trades on the trading pattern of when Chuck was away, the currencies rallied…

OK… So as I turn on the currency screens this morning, I see that the euro is trading up towards 1.43, and the Aussie dollar is trading with an 84-cent handle! So, those are some good looking numbers for the currencies. The GDP data that Chris talks about above, was interesting in that it gives the risk takers some rope… Yes, that old saying about getting enough rope to hang yourself, comes to mind here. Not that the risk takers will hang themselves, but to illustrate that they have some room to take risk assets higher.

When you look at the proxy currency for commodities and global growth, the Aussie dollar, and it’s trading at the highest level we’ve seen this year, you’ve got to think that the traders, and others are thinking that the worst of the global recession is in the rear view mirror. Now, I think that’s putting a little like putting the horse before the cart, as we just don’t have enough data that hasn’t been massaged and cooked to prove that we’re coming out of the global recession… But hey! If the traders, hedge funds dudes, and currency participants want to play Sly Stone, and take currencies higher, then I suggest we not stand in front of that bus!

One of my fave economists, Nouriel Roubini, believes that “there is now potentially light a the end of the tunnel.” And… That “Commodity prices may extend their rally into 2010 as the global recession abates.”

Now… That’s a horse of a different color, eh? When someone like Nouriel Roubini, who was one of the first to call out the collapse of the global economies, sees a potential light, then the markets sit up and take notes… And begin to buy at cheaper levels, just in case that light is the sun… And not the light of a run-away train heading straight for us!

Well… Somehow, U.S. stocks essentially made it through the earnings reports season unscathed. Pretty amazing if you ask me, but I never claimed to be a stock jockey, so that pretty much explains my inaccurate prognostications that 2nd QTR earnings would be a real drag on stock values… Which scared the bejeebers out of me, for stocks, currencies and commodities have been all rolled up in a great big “risk assets” ball for months now, and if stock values were going to get taken to the woodshed then so would currencies and commodities… But that didn’t happen… Hmmmm….

OK, with the earnings season basically over, we can get back to watching regular data that makes more sense to me… And this WILL be a week that’s cock-full-o-data, beginning with the ISM Index (manufacturing) for July today, along with Vehicle Sales. Tomorrow we’ll see the color of two of my faves, Personal Income and Spending. Wednesday is the ADP Challenger employment report for July… Thursday, we’ll get Central Banks meetings in the U.K. and Eurozone. And Friday is the BIG KAHUNA, as the Jobs Jamboree for July gets printed. Right now, the economists surveyed are looking for a HUGE drop in job losses for July. June’s BLS massaged number of 467,000 job losses is being forecast to drop to 325,000..

I’ll believe that when I see it, although it would be nice if that was the “real” number, eh?

If job losses drop by that much in July, it would certainly keep the fire burning for thought that the global recession is recovering, and that would certainly keep the fire burning for currencies and commodities!

Well… Don’t look now (made you look, made you look! HA) but pound sterling is the best performing currency overnight! The pound is 1.6840, with a bullet! (yes, it had a good beat, and was easy to dance to) Stranger things have happened in currencies over the years, but this is one that really moves to the top 10… The U.K. with all their problems, and sterling posting a better than 15% gain VS the dollar in 2009… Like I said, stranger things have happened, but this one really is a puzzle… Riddle me this Batman… How can a currency from a country that is deep in debt, has interest rates near zero, has a housing problem not unlike that in the U.S., has political problems, and has implemented Quantitative Easing, post a +15% gain?

Ours is not to question why or how… Just know that the calls for the greater use of SDR’s (Special Drawing Rights) by China is probably a good reason, for the SDR’s would contain sterling….

Speaking of SDR’s, and the IMF issuing them… And recall when the current President called for greater authority for the IMF? Well, I’m reading a book right now, that will put shivers down your spine regarding all of this, and it was written about 10 years ago! The name of the book is: The Creature From Jekyll Island… The Creature is the Federal Reserve System, and what it was created to do… Not the stuff you learn in economics 101… What it was “really” created to do… This book is over 500 pages, so it’s a long one… But well worth the read, especially to those that don’t believe we’re being driven to socialism…

OK… Enough of that! I’m really trying to steer clear of that stuff, for I’ve had to deal with quite a few people that just want to shove stuff in front of me that I’m not going to read! Of course this in response to my direction before I went on vacation… But that’s all behind me now… It’s on to the perils of Deficit Spending, and… How to protect yourself from the eventual devaluing of the dollar due to the Deficit Spending!

Back to Australia… The Reserve Bank of Australia (RBA) meets tonight, and while I don’t expect the RBA to raise rates… I do expect them to move from an easing bias to neutral, which in essence would be very much like a rate hike! And… Would really stoke the fire burning for the A$… Especially if in their Monetary Policy statement, the RBA upgrades their growth forecasts… For if they do that, that’s just like telling the markets that rates are going higher here before they go back down…

I heard, but did not see obviously since I was not around any TV’s, laptops, or cell phones last week, that there was a woman that finally took the media to the wood shed for their mamby pamby ways of dealing with the news, and playing patsy with the politicians, etc. Michelle Malkin is her name… And I give her kudos for calling into question the credibility of the media and in this case NBC… (yes, I hold a grudge, BIG TIME, and NBC / CNBC)

I saw the euro hit 1.43 a minute or so ago, but immediately fall back below the figure… I would suspect this to repeat itself a few times before finally moving over 1.43… If not, then look for a fall back… But right now, the bias seems to be to sell dollars…

Currencies today 8/3/09: A$ .8390, kiwi .6655, C$ .9340, euro 1.4290, sterling 1.6826, Swiss .9375, rand 7.7415, krone 6.0825, SEK 7.20, forint 185.60, zloty 2.8725, koruna 17.93, yen 95, sing 1.4340, HKD 7.75, INR 47.67, China 6.8308, pesos 13.18, BRL 1.8645, dollar index 78.12, Oil $70.81, 10-year 3.55%, Silver $14.31, and Gold… $956.60

That’s it for today… Vancouver was great… The Agora Financial Wealth Symposium was very well attended, and I thought my presentation to them went quite well. The attendees were so kind to me, coming up and asking how my health was… And then asking to see a picture of Delaney Grace! Then on to vacation! A great time was had by all, but especially me, as I was surrounded by my kids all week. I know it will be difficult for me to not have little Delaney Grace around me all day this week! I just loved when I would ask, where’s Delaney, and she would pat her chest and say “I right here!” So cute! We dropped my little buddy, Alex, off at Camp where he’ll be the next two weeks. His Camp is just across the lake from our campsite! This will be a long week, settling back into the saddle and all, so I had better get this out the door and to your computer screens! I hope you have a Marvelous Monday!

Source: Data Cupboard Gets a Work out This Week

Overnight, the euro climbed as high as 1.4140, only to sit at the cusp of 1.41 as I begin to write this morning. Of course 1.41 certainly looks a lot different from the 1.35-1.40 range we’ve seen in recent days. But then, we’ve seen these probes above 1.40 before only end with the euro falling back to the 1.35-1.40 range again…

I would imagine that the thing weighing heavily on the euro to bring it back to 1.41 and now a little below that figure is the news that the European Central Bank (ECB) had allocated EURO 300 Billion in 12 month funds for liquidity… I think any sell off from this announcement is strictly a knee-jerk reaction to the announcement. But when the dust settles and the traders / investors realize that EU 300 Billion is far less than the numbers that were rumored (some as high as 1 Trillion euros), this knee-jerk reaction will slow…

One of these times it will shake the cobwebs off, and proceed to either move higher, or lower than the established range… For now, I would have to think that given the sentiment in the market that’s growing toward anger with the U.S. deficit spending tactics, the move would look to go higher… But, who knows? I can only look at things from a fundamentals viewpoint and from 17 years experience trading currencies…

Once the euro got going, or the Big Dog got off the porch, the other currencies (little dogs) were also on the rise VS the dollar… And Commodities, after spending Monday circling the bowl, came back with a vengeance! And we all know that when the Commodities rally, so do the Commodity currencies of Aussie, kiwi, Canada, Brazil, and South Africa!

Speaking of Brazil… Recall when I told you that this currency can give you whiplash? The volatile, wild swings in the currency are enough to make someone request oxygen! So, after a day (Monday) that saw the Brazilian real move back above “2″, it was posted the best performance of any currency on earth, on Tuesday!

Brazil’s real had its biggest gain in more than a month, as Commodities rallied, and… The currency also bounced back after investors “overreacted” yesterday to speculation the Central Bank will intervene to keep the real at “2″… The real gained 2.7 percent, the best performer in the world and its biggest gain since May 4, to 1.9794 per U.S. dollar.

The real has gained 17 percent this year, the best performance among the 16 most-traded currencies, as commodities rallied.

One thing that helped the Commodities rally yesterday was the fact that it finally “occurred” to traders and investors that the Fed’s FOMC meets today, and will probably signal that interest rates will be held to near zero in the U.S. for the rest of the year.

Now… Why would that be a feather in Commodities’ hat? Ahhh, grasshopper… You have to remember that the underlying fear in the markets is that the Fed will NOT be pro-active in removing their stimulus when inflation begins to knock at the door… And making a statement that interest rates will remain near zero for the rest of the year, simply makes those fears even stronger… And what will people flock to when inflation is racing toward double digits?… Commodities…

Of course, tomorrow will be a different story should the Fed not make an interest statement like that!

I listening to the radio, while I write… And the song that’s playing is Elton John’s “Friends”, which was the theme song of my senior prom! Now, that’s a really old song!

OK, I’m back now… See how my fat fingers decide to start typing things that pop into my mind?

So, the Fed’s FOMC is today… I just can’t see them doing anything but trying to calm the markets’ fears about inflation, while keeping rates Steady Eddie. You all know that I’m not a fan of the Fed… I just don’t see how a entity, who’s main job is to protect the value of our currency, could keep their job, given the fact that the dollar has lost over 90% of its value since they took over! I mean, the Fed is NOT a Gov’t Agency, folks… It’s supposed to be an independent entity… But now, it’s got it’s hands in all kinds of things that aren’t on their job description, and they are in cahoots with the U.S. Treasury, and before we know it they will be regulating all the banks and financial institutions… All, from doing such a good job at protecting the value of the dollar! I shake my head in disgust… And I should NOT be the only one doing so!

So… While I’m on my soapbox, and ranting at the Fed, and the people making the decisions… Big Ben Bernanke is up for reappointment… I think the thing I would like to see from Big Ben before I would reappoint him is for Big Ben to come out and say… “I’m in favor of Ron Paul’s Bill to audit the Fed” Now, that would cause me to fall out of my chair from the shock of disbelief!

Speaking of the bill to “audit the Fed” I believe every voting citizen should contact their representative and let them know you support the bill to “audit the Fed”…

And… While I’m up here on the soapbox, I might as well get this rant off my chest too… Well folks… I think we’re in for yet another stimulus package… yesterday, during a press conference the president was asked about that very thing, and his reply was not a resounding “NO”… it was a “not yet”…

Now you know me… I said after the first $150 Billion in the spring of 2008, that there would be more… and I said after the $787 Billion this past winter, that there would be more… and does a “not yet” from the Gov’t that loves to spend money, give you a warm and fuzzy that there won’t be another one? I didn’t think so!

Yesterday, the data cupboard gave us Existing Home Sales data… For the second consecutive month, sales of previously owned homes in the U.S. increased, but the improvement was less than expected, further fueling fears of a slow, weak recovery for the economy as a whole… And the most important thing from the report is that the Home Sales were driven by two things… A drop in home prices… The median price for an existing home last month was $173,000, down 16.8% from $207,900 in May 2008. And… The low mortgage rates that existed up until about 3 weeks ago… Mortgage rates have climbed back above 5% (remember when we thought that was a low rate?) and the message that I’m getting is that mortgage lending is drying up once again… Most of the lending had centered on re-fi’s any way, not Home Sales…

Hey! Remember earlier this month when the Jobs Jamboree number printed and everyone (except those that knew better because of the BLS) was celebrating? Well… I saw a piece on Reuters last night that caught my attention… Mass layoffs — at least 50 job losses by a single employer — grew to 2,933 last month, from April’s 2,712, the U.S. Labor Department reported. That is practically a tie with March’s figure, which set a record. Hmmm… That certainly paints a different picture of the labor market than the BLS Jobs Jamboree now doesn’t it?

The Data cupboard will also give us the latest readings on Durable Goods (don’t expect miracles here!) New Home Sales (no miracles here either!) and then the FOMC… The U.S. Treasury will also be auctioning $37 Billion of 5-year Notes today… Good luck!

Down in New Zealand… Consumer Confidence surprised to the upside, and is helping to boost the kiwi performance this morning… These are “index” numbers so they probably don’t make much sense on the outside… Just look at them as “better”… New Zealand Consumer Confidence rose to an 18 month high in 2nd QTR from 96.0 to 106. Optimism about near term prospects improved from -57 to -28.

And finally… Gold and Silver have taken some tough shots to their respective mid-sections this week… I even said to Chris Gaffney yesterday… “Silver sure is tempting below $14, isn’t it?” I’m reminded of an old saying we use to have on the Margin Desk in my early years in the brokerage business… Just input the asset and price to make this saying work… For instance, we’ll use Silver… “Hey! If you liked Silver enough to buy it at $15, you’ll Love it at $13.98!”

Of course, I personally don’t expect Gold and Silver to remain at these bargain basement prices too long, but then that’s just my opinion, and according to the Legal Beagles, I have to say that I could be wrong!

Currencies today 6/24/09: A$ .8010, kiwi .6435, C$ .8740, euro 1.4085, sterling 1.6585, Swiss .9320, rand 8.0830, krone 6.4120, SEK 7.85, forint 197.30, zloty 3.2180, koruna 18.56, yen 95, sing 1.4525, HKD 7.75, INR 48.52, China 6.8330, pesos 13.28, BRL 1.9790, dollar index 78.75, Oil $68.77, 10-year 3.64%, Silver $13.92, and Gold… $928.40

That’s it for today… The Heat Wave continues here… But, like I told someone yesterday… Hey! It’s summer, it’s supposed to be hot! When I was a young man playing my guitar around the country out of VW micro-bus, I built in-ground swimming pools as a day job. In Oklahoma! Now talk about a HOT job! YIKES! I know there are hotter jobs, but that was the worst for me! Nice game last night for my beloved Cardinals… And, my little buddy, Alex, has his last baseball game of the year tonight. At least it is an 8:15 game! Well, the doctor visit yesterday was interesting… He’s happy that I’ve done so well… But the honeymoon on the weight is over according to him! Of course, I have no idea what’s he’s talking about! HAHAHAHAHA! Let’s get this going… I hope you have a Wonderful Wednesday!

Source: More Stimulus On The Way?

The debate over economic policy has taken a predictable yet ominous turn: the crisis seems to be easing, and a chorus of critics is already demanding that the Federal Reserve and the Obama administration abandon their rescue efforts. For those who know their history, it’s déjà vu all over again — literally.

For this is the third time in history that a major economy has found itself in a liquidity trap [...]

The first example of policy in a liquidity trap comes from the 1930s. The US economy grew rapidly from 1933 to 1937, helped along by New Deal policies. America, however, remained well short of full employment.

Yet policy makers stopped worrying about depression and started worrying about inflation. The Federal Reserve tightened monetary policy, while FDR tried to balance the federal budget. Sure enough, the economy slumped again, and full recovery had to wait for World War II.

The second example is Japan in the 1990s. After slumping early in the decade, Japan experienced a partial recovery, with the economy growing almost 3 percent in 1996. Policy makers responded by shifting their focus to the budget deficit, raising taxes and cutting spending. Japan proceeded to slide back into recession.

And here we go again. […]

To sum up: A few months ago the US economy was in danger of falling into depression. Aggressive monetary policy and deficit spending have, for the time being, averted that danger. And suddenly critics are demanding that we call the whole thing off, and revert to business as usual.

Those demands should be ignored. It’s much too soon to give up on policies that have, at most, pulled us a few inches back from the edge of the abyss.

Although we’re are on the other side of the economic divide from Krugman (we don’t believe the government can borrow and spend its way out of a debt crisis), he makes an interesting point about the difficulty of reversing course once the government puts an entire economy on fiscal and monetary life support.

Now that the feds have become such large players in the economy (backstopping over 80% of GDP and pouring trillions of dollars of liquidity into the system), the next challenge is for them to exit the market without causing another severe leg-down.

Considering the government mucks up everything it gets its fingers on, this “grand exit” should be no different. The feds will either pull liquidity out too fast, pushing the economy into protracted slowdown, or they will fail to reabsorb liquidity fast enough, triggering a great inflation. Here at Notes, our hunch is it will be the latter…

Good day… And a Happy Friday to one and all! Let’s make it a Fantastico Friday, eh? Why not! It’s the Friday to kick off Mother’s Day weekend! More on that later, but first, let’s talk about the Stress Tests.

Personally I could just as easily forget about them, because as I’ve said over and over again, The Gov’t wasn’t going to “spook” the markets with “true results”… This whole “exercise” is a just another effort to make us all “feel good”…

OK, the rumor mill has finally been shut down, and the facts, as the Gov’t would let us know them to be, are out… Let’s take a gander at the results!

The Wall Street Journal (WSJ) reported it like this: 10 of the 19 largest U.S. Financial Institutions will be required to raise a combined $75 Billion in new capital.

The Washington Post (WP) reported it like this: Nine of the 19 banks do not need any new capital at all.

It’s all in the way you word it… Both of them are correct… The WSJ tells it like I think most people would want to hear it, while the WP, is for the Polly Annas of the world!

When it’s all said and done… This feel good circus is now over, and we can get back to dealing with the financial meltdown, deficit spending, China, and other things that are easier for us to deal with, like the story that came across the screens yesterday regarding credit card charge offs, than a feel good circus! Yes, the credit card charge offs are up 44% VS last year… Now, isn’t that one of those things that make you go, oooooooohhhhhh nooooooooo!

The currencies drifted most of the day yesterday waiting for the stress tests results, and then rallied at the end of the day with the euro pushing past 1.34 once again. The euro has fallen back below that figure again this morning, but remains close to the 1.34 figure.

Yesterday, the European Central Bank (ECB) did what I said would be the prudent thing to do, if you “had” to do it, and cut rates only 25 BPS, instead of the 50 BPS the markets were expecting. The euro had to deal with the dolts that think larger rate cuts are what values a currency… But, as I said before, the ECB wants to be able to come back to the rate cut table, if needed, and cut rates again.

Unfortunately for the euro going forward is the fact that ECB President Trichet, finally gave in to the “weak links” in the European Union, and announced that the ECB would begin to buy bonds to support the credit markets. This move was fiercely opposed by Germany’s Central Bank, the Bundesbank and it’s President, Axel Weber. I’m with the Bundesbank on this one… To bad Trichet “gave in”… This move now throws the European Union on the roster of nations employing Quantitative Easing… And you know where I stand with that!

Well… Today is the Jobs Jamboree for April… Yesterday, the Initial Jobless Claims fell from 635K the previous week to 601K… And, just like I said they would… The media was all over this move, pointing out that this is mostly likely an indication that the recession is coming to an end. Well… Today’s Jobs Jamboree is expected to show a fall in jobs lost too… I guess they haven’t polled Chrysler and GM workers… But any way, the “experts” believe April’s figure will be right at 600,000, down from last month’s 663,000… That’s quite a ride down the slippery slope don’t you think? I’m going to say that 600,000 is too “pie in the sky” and actual number will be disappointing compared to 600K. But, if it shows a figure below last month’s 663K, then again, we’ll hear about how all is right on the night, and happy days are here again…

That should boost risk assets… Should…

OK… About two months ago, I wrote to you all, and said I wanted to hear from the people that owned or worked at businesses that were doing well… I called them feel good stories, and this time “feel good” had a good connotation! First I was gone for March, then in April I kept forgetting to deal with it on a Friday… But not today! Today, I give you the first feel good story during this recession… A company that’s doing well, despite all the rot on the vine in the economy…

So, here’s how it will work… After the currency round-up, and final sign off, I’ll tell you about this week’s choice… So… Let’s go to the Big Finish, and get this Fantastico Friday started!

Currencies today 5/8/09: A$ .7590, kiwi .5965, C$ .8610, euro 1.3405, sterling 1.5050, Swiss .8860, rand 8.4075, krone 6.4675, SEK 7.85, forint 208, zloty 3.25, koruna 19.88, yen 99.40, sing 1.4650, HKD 7.75, INR 49.34, China 6.8217, pesos 13.10, BRL 2.110, dollar index 83.78, Oil $57.71, Silver $13.96, and Gold… $916.80
>>>>>> St. Louis based Coolfire Media (www.coolfiremedia.com ) has survived and even prospered in the recession. Companies are now looking for new outlets to reach potential clients – it is here where we have found our niche. From late 2007 to 2009, we have doubled in size and expanded our list of services to better serve our clients. We produce ideas, strategy, commercials, branded videos, websites, branded applications, radio spots, meetings and more. We have become an integrated digital media company. We collaborate with advertising agencies, corporations, organizations and entrepreneurs. Our work garners results, and when our clients do well we collaborate on future projects. We have a fun job and we have a good time doing it.

We are optimistic about the prospects for the US and for our place in the economy. With a steady stream of new clients, the addition of some new team members, and beginning the construction of our studio expansion, we feel fortunate and confident knowing things are moving in the right direction.

>>>>> hope you liked it!

Source: A Jobs Jamboree Friday!

So I was taken aback when Addison Wiggin of Agora Financial wrote, “$7.2 trillion is a lot of money. That’s what D.C. has poured into ‘our’ bailout so far.” Wow!

Trying to keep from peeing my pants in horror, I think to myself, “Hell yeah, that’s a lot of money… Because it is roughly half of everything this country makes in a year! Half of American GDP!” which, unfortunately, ended in “P”, which sounds like “pee”, which was just enough of a subliminal suggestion that… Well, never mind.

But if creating that much money is not enough to scare the piss out of you, too, then consider it just a Mogambo Warm-Up Test (MWUT) to see if your heart is strong enough to take the news behind the New York Post headline “The Fed’s Futile Move” – an article by Dick Morris and Eileen McGann, who report, “the money supply has already expanded by 271 percent in the past five months”! Gaaahhhh! That comes out to a money supply expanding by 650% in a year!

I immediately see that I made a mistake in worrying about YOUR heart, when I just noticed that my own has taken the news very badly, and as I am laying here on the floor, wondering if the newspaper reporter will report whether I am “laying” or “lying” on the floor where I have been killed by the news of the complete suicidal stupidity of Congress and the Federal Reserve, when it occurs to me as I was either laying or lying on the floor that the thing that makes it all so surreal, and which proves that everyone involved in this whole Federal Reserve/Congressional irresponsibility is both insane AND stupid, is that the whole ridiculous idea behind all of this “stimulus” money is the laughable belief that all of this excessive new money and insane amounts of deficit-spending can be removed once the economy “recovers”! Hahaha!

After nervously laughing at such idiocy to hopefully forestall puking up blood in terror, or at least screaming in sheer outrage, my lips curl into a snarling sneer, and with a voice dripping with venomous contempt, I ask, “Recover from what, morons? Hell, the wildly distorted economy has been a walking zombie for decades, animated only by the constant infusions of new money and credit from the Federal Reserve to finance more and more deficit-spending of government, so that the entire economy gradually evolved into a cancerous, warped, mal-invested, misshapen, bloated, disgusting socialist/collectivist monstrosity, built upon the insane economic pillars of government spending for constantly-increasing entitlements, trading financial assets to each other, providing health services to each other, and building huge houses and lots of Starbucks coffee shops! Hahaha!”

In case anybody asked (which they didn’t) I would have ended with, “Everything else that we used, we imported! We stuck ourselves with a trade deficit that regularly exceeded $800 billion a year” which means that $800 billion a year left this country and became the wealth of somebody in some foreign country, who appears to not be very happy to get those $800 billion dollars because he is saying disparaging things about them, which sounds like, “Wong cho wo hubba bubba go down crapper?” which means, “What in the hell am I supposed to do with all these American dollars that get more worthless every damned day because the stupid American Federal Reserve is creating insanely more of them every damned day and the stupid American government is insanely deficit-spending more of them every day, too?”

I admit that eavesdropping on foreigners whining about the dollar is pretty far from my original complaint, which was that all of this stimulus money will never, ever be withdrawn from the economy because that would mean that the money supply would go down, which is the definition of deflation, and this deflation is what has the Fed and the Congress in such a frightened panic that they are deliberately creating inflation and risking hyperinflation with their unbelievably massive explosions of new fiat money and government spending, which are guaranteed to destroy us a dozen times over, just to make sure that deflation, and the attendant drop in inflated asset prices, doesn’t happen! Hahaha! We’re freaking doomed!

And yet (notice the way my eyes comically roll around in my head) I am supposed to believe that maybe one day, perhaps after a decade of the government deficit-spending another $40 trillion or so, they will allow deflation to happen and let all the prices of assets collapse then? Hahaha!

No, no, my darling Junior Mogambo Rangers (JMRs); all that money, and yet still more money from other countries and other sources, will be with us for the rest of our lives, and the inflation in the money supply will show up as higher and higher inflation in consumer prices, which is what will cause rioting when the people realize that they are bankrupted and starving to death because they did not buy gold, silver and oil when their own stupid government started acting irresponsibly, which is, I am sure you will agree, bad news.

The good news is two-fold in that that 1). I will be a shining exemplar of the fat, piggish, conceited, self-absorbed, obnoxiously gluttonous rich guy whose gold, silver and oil have obviously served him well enough to indulge every gutter-level salacious appetite, no matter how revolting, and 2). It will be a lesson everyone else will, hopefully, not forget the next time their government acts like a moron.

Whee! This investing stuff is easy!

Source: Zombie Economy Feeds on New Money and Credit

…since it is concerned primarily with providing information and news about stocks and bonds so that you will be motivated to constantly buy and sell stocks and bonds.

So I was surprised to read where it starts out with, “Large investors, including some who anticipated deep troubles for the housing and financial sectors, have been buying gold, concerned that moves by governments world-wide to shovel money at problem areas could cripple leading currencies.”

This is exactly true! That is exactly why I am buying gold, and why smart people are buying gold and why large investors are buying gold!

Well, since the WSJ is traditionally concerned with stocks and bonds and so is historically unconcerned and disdainful of gold, I figure that Mr. Zuckerman will follow that “gold bug” news with some disparaging remark like “which only proves how stupid large investors are, since everyone knows that gold is for morons and raving lunatics like, for instance, The Mogambo, who is forever wailing about how you should be buying gold, silver and oil with your very waking breath because the Federal Reserve, which caused all of the world’s problems by their decades-old regimen of constantly over-creating money and credit which produced massive inflations in the prices of stocks, bonds, houses and size of government, is now going to make the money supply go Freaking Super-Nova (FSN) with even MORE excess creation of money and credit to accommodate the panicky, unbelievable, desperate deficit-spending plans measured in the multi-trillions of dollars by the incompetent, brain-damaged Congress and the ridiculous Obama administration comprising, as it does, the worst of the worst, and that means consumer prices are going to explode one day – say people like The Mogambo, within a year or so, and for a long, long time afterward, too.”

Although Mr, Zuckerman does not mention me directly, he says, “For years, big gold fans were fast-moving traders and so-called gold bugs, a crowd of bears ever-convinced that the underpinnings of global economies and markets were set to crumble” which not only describes me to a freaking T, but is exactly what happened!

He also describes me pretty well, too, when he says, “Gold has disappointed some investors because it hasn’t been a home-run investment despite continuing financial ills” which is also the fault of the Federal Reserve, which is on record as saying that “the Fed stands ready” to dump as much gold onto the market as is needed to keep its price from rising.

And the reason they are openly manipulating the price of gold, which is the advice of former Fed chairman Paul Volcker, is because they are concerned about the price of gold rising, which is a clear signal that inflation is raging because the Fed is a bunch of money-maddened morons and the economy is in Big Freaking Inflationary Trouble (BFIT) because of them and their mismanagement of monetary policy with their ridiculous neo-Keynesian econometric stupidities! Hahahaha!

And it is going to get worse, as Junior Mogambo Ranger (JMR) Wayne T. sent a clip from ft.com that announced that “Barack Obama’s top economic adviser has urged world leaders to pump more public money into the economy in a coordinated effort to boost demand and lift the world out of recession.”

And how are we going to do this amazing feat? By engineering a “global demand-led recovery” where everybody starts buying! Buying! Buying!

And in fact, Laughable Larry Summers thinks, “There’s no place that should be reducing its contribution to global demand right now. It is really the universal demand agenda.”

I cannot believe what I am reading! Perhaps in a feeble attempt to make me shut up my screaming in outrage at the inflation in prices that such irresponsible economic stupidity will cause, he does allow that, as ft.com terms it, “While the US and other western nations should return to living within their means in the medium term, everyone should raise spending sharply now.” Hahaha! Unbelievable!

And why in the hell would anyone in their right mind say such a bizarre thing that is directly contraindicated by the entire stinking corpus of world economic history for the last 4,500 years which proves that, 100% percent of the time, increasing the money supply of a fiat currency with government deficit-spending has been what we in the economics biz officially call a Big, Big, Bad, Bad, Bankrupting Bust (BBBBBB).

Well, don’t look at me for an answer as to why someone would say such a ridiculous thing and make us laugh with scorn and contempt, but, “In an interview with the Financial Times, Lawrence Summers said the urgent need for a short-term increase in spending by governments temporarily overrode the longer-term goal of tackling the global imbalances many economists believe caused the financial crisis.” Hahahaha!

“Temporarily overrode”! Hahaha! This is the economics of Larry Summers? Hahahaha! No wonder he wound up in the Obama administration! Hahaha! No wonder we are so freaking doomed!

I am struggling to contain my laughter, as I want to make sure that I write this down because people in the future are not going to be satisfied with me merely recalling the moment and laughing and guffawing all over again, but probably drooling more than I do now.

So I officially make note that Larry Summers, “Barack Obama’s top economic adviser” thinks that things will be better by having the government spend more money! Hahahaha!

This is after, I assume, getting it from the Federal Reserve, which can merely push a button to create all the money and credit one can even imagine, at perpetually low interest rates, so that untold trillions of dollars of new money can be borrowed from banks so that untold trillions of dollars in new Treasury bonds can be bought, worsening horrific imbalances that are already so staggering that they could only have been produced during rampant government corruption and/or pandemic stupidity! Hahaha!

I knew I could not get into the interview itself, and, as usual, am stopped long before I can even get near, although sometimes I can break free of the grasp of security guards long enough so that you can barely hear me in the background yelling, “We’re freaking doomed, you morons! The damned increase in the money supply by government deficit-spending will increase prices and produce Really, Really Weird (RRW) economic distortions!”

Well, this is not one of those times, and I couldn’t hear a thing they were saying, and thus they could not hear me, and I had to read in the Financial Times article that Mr. Summers says, in another of those things that must be written down because nobody is going to believe it, that “The US administration had no choice but to take strong public action to ‘save the market system from its own excesses.’” Hahahaha!

“Save the system from its own excesses” with more excesses! Hahahaha!

But this is not about how much disrespect I have for Mr. Summers’ opinion (because, as Milton Berle said, “Never trust the opinion of a man in trouble” as to the necessity of more governmental deficit-spending to correct the bankrupting imbalances of previous governmental deficit-spending until fully half – half! – of the economy is now composed of local, state and federal government spending, which is not even to mention all the borrowing by the local and state governments floating bonds to pay for sewers and fire houses and playgrounds where most of the “children” are probably drug-addled adolescent criminals and brain-damaged mutants, judging by the way they look, dress and act.

No, this is about how you should buy gold; but perhaps the best reason to buy gold is provided by Mr. Zuckerman himself, who says, “Since 1971, the dollar has been backed not by gold but by faith in the U.S. government”! Hahaha! Faith in the U.S. government! Hahahaha!

If anybody has any faith whatsoever in the U.S. government, then they have not been paying attention and deserve to lose their money, as the price of freedom, they say, is eternal vigilance, but that is not exactly true. It looks like the saying should be “The price of freedom is either eternal vigilance or all your money.”

The good news is that the real, lazy man’s secret is that gold is “eternal vigilance” in a handy, compact yellow metal, and sometimes, like now, you will actually get richer in terms of fiat money due to the depreciation of the over-produced fiat money!

Whee! This investing stuff is easy!

Source: There’s No Place Like Gold

I now spend an inordinate amount of time alternately whimpering in fear and bellowing in outrage, especially after being told of the laughable lineup of the new Obama team of appointments and posts, every one of whom is promising vigorous intervention and deficit-spending of one kind or another, which is the exact last thing that is needed since government intervention and deficit-spending are the reasons that we are in the dire straits that we are, unfortunately, in!

But these moronic people are the same as moronic people everywhere these days, and to show you the kind of corruption, lying and general stupidity that pervades everything in some grotesque leveraged web of interconnected financial stupidities financed by Federal Reserve excesses of money and credit creation and governmental malfeasance in controlling it, Junior Mogambo Ranger (JMR) Richard R. forwarded an article from the Euromoney newsletter that reported that another bunch of scumbags were lying, this time about their pledged U.S. Treasury assets as collateral for debts and bets, and when it came time to make good on their losses, they could not deliver the pledged collateral!

Thus, “fails to deliver among the 17 primary dealers in the US treasury market have rocketed to more than $2 trillion over a period of weeks and still lie above $1.3 trillion. Broker/dealers have stopped delivering bonds.” Yikes!

One of the most frustrating things in the world is winning your speculative bet but being cheated out of the money because the creep on the other side of your bet won’t pay off, like when I charmingly bet my wife a thousand bucks after the honeymoon was over that our marriage wouldn’t last another six months, and she laughed and said, “I’ll take that bet, because if you think I am going to let you off that easy, you don’t know squat about revenge, you Creepy Little Weirdo Bastard From Hell (CLWBFH)!”

Now, after 30 years of marriage, she is still hounding me to pay her the thousand bucks I owe her, and all the other thousands I owe her when I pressed the bet, even though I always have to tell her that I don’t (pause) have (pause) any (pause) money.  So you see, I am somewhat of an expert on “fails to deliver”! Hahaha!

The worse news, from the standpoint of a whole cornucopia of governments and taxing authorities that have sprung into being over the last 40 years, is that these kinds of “fails to deliver” things are losses, and losses are deductible against taxable gains, and even against some income sometimes, which means there are no taxes to be paid, potentially, on trillions of dollars of losses!

And not only that, but as far as federal income tax is concerned, losses that exceed taxable gains can be carried forward indefinitely until they are finally written off either by netting against all future taxable gains (again, paying no taxes on the gains!) and/or $3,000 a year of ordinary income, further reducing tax revenue.

So you can see the government’s interest in preventing deflation, and why they are doing the desperate, doomed crap that they are doing.

Perhaps this has something to do with the commotion in corporate bonds, as Mark Lundeen, an independent market analyst, noted that the Barron’s Confidence Index has plummeted to lows not seen since the late ’30s and early ’40s, at the height of the Great Depression! Yikes!

Barron’s Confidence Index, in case you were wondering, is just a simple ratio of investor demand for different kinds of bonds, presumably because of the perceived risks of each bond (like the possibility of default), duration, yield and blah blah blah, which is all plotted out using the precise probabilities of the bell curve, which I say has now been shown to be a complete load of crap for assessing long-term risk by Nassim Taleb’s Black Swan hypothesis, which shows that unexpected catastrophic events will happen and everything will be wiped out, and it looks to me like it always happens long before the “long-term” investment horizon is reached, which explains the complete lack of people in history who successfully invested “for the long term”! Hahaha!

If you are not satisfied with my glib-yet-stupid explanation, Barron’s defines their Confidence Index as the product of dividing the “High grade index (bond yield)” by the “intermediate grade index”.

They say that a “decline in latter”, which are theoretically crappier bonds, “vs former”, which are the higher grade bonds, would be a number that was going up as the denominator went down, “generally indicates rising confidence, pointing to higher stocks”, which makes sense when you realize that you have to be pretty confident to prefer buying risky bonds over safe bonds!

And so while none of this really makes any sense to me, I cleverly hide my stupidity and nod my head like I agree that it makes sense that the Confidence Index is now falling, meaning that people are rushing to buy Treasury bonds (”high grade bonds”) and are shunning other kinds of bonds (”intermediate grade bonds”) because they are less confident.

Mr. Lundeen then looks at me like I am supposed to, oh, I dunno, say, “Aha!” and come to some marvelous conclusion or something. But I don’t. I just sit there because I have no idea what in the hell is going on anymore, and I am feeling like a frightened rat in a trap, ready to fight my way out in a snarling whirlwind of panic and snapping teeth.

Finally, with a tone of exasperation in his voice, he says that the important point is that now we see that the “Barron’s Best Grade Bond Yield is about double that of Long US Treasury Bond”, which he says is significant in that “Since 1952 this spread has never been this wide.” Never! Wow!

And since there is no end to the problems that are caused by a lack of confidence by the consuming public to incur more debt with which to buy more goods and services, I will cut, as they say, to the chase, and tell you that the historical record says to buy gold, silver, and commodities with every dime you have.

And with the constant references to building and infrastructure, I gotta also go with cement and oil, as it is going to take a lot of energy to move all those tons around!

Source: Tax Revenue Fails to Deliver

Then the article gets right in our American faces and keeps hammering at us: “Statistics show that America’s internal and external debt exceeds $60 trillion, over 400% of the country’s annual GDP of a bit over $14 trillion. Of that total, family debt (including mortgages), financial and non-financial firms’ debt, and municipal and national debt come to about $15 trillion, $17 trillion, $22 trillion, $3.5 trillion, and $11 trillion, respectively, though it is hard to tell how these debts have been split up among foreign governments, financial firms, companies, and individuals.”

Naturally, as a proud American, I take the aggressive approach and sneer, saying, “So? Tell us something that we don’t know! Hahaha!” ??

In an apparent response, he goes on, “To relieve the crisis, the US must repay its debts, and to do that it needs to live a more frugal life instead of asking others to continue lending it the money to maintain its over-consumption.”

So, still being a smug American, I say, “Says who? You? Hahaha! We’re Americans, and we have a fiat currency, and we can just print up all the money to pay you off! And everybody else, too, suckers! How do you like them apples? Hahaha!”

Apparently, Xiang is unimpressed with my typically American solution to the debt problem, as with all problems, and continues, “The first thing the government needs to do is reduce spending and the deficit. Correspondingly, the US needs to cut military disbursement, stop its global expansion and the robbing of oil resources from other countries.”

Again, I am instantly indignant, and my anger shows through when I say, “Hey! Deficit spending like profligate morons while running around the world taking what we want and killing anybody that gets in our way characterizes The American Way! You are proposing to destroy our native culture, you insensitive, genocidal, racist bastards! I’ll sue you all!”?

Apparently, even Chinese people know that I am just a big blowhard, and instead of insulting me and calling my bluff, we are given some sinisterly interesting advice – namely, “Families and individuals should stop anticipating their income to buy houses and travel globally. Instead, they should warmly welcome foreigners to travel to and spend money in the US. “

Boinggggg! Proving once again that being a paranoid lunatic has its upside, I am able to instantly decipher this to mean that the “Secret Chinese Plan” is for us to sell them everything we have to pay our debts, and then act as courteous hosts and hostesses as they travel the country, inspecting their vast holdings and indulging in various, ummm, indulgences involving our women-folk and enslaving us all on vast rice and pig farms where we will be given pork-fried rice to eat, as much as we want, which is the only upside to this whole mess, as far as I can see.

And these Chinese may be onto something with this commodities thing, because I am betting that commodities will be soaring from here on out, as Dailytech.com reports that “All four major global temperature tracking outlets (Hadley, NASA’s GISS, UAH, RSS) have released updated data. All show that over the past year, global temperatures have dropped precipitously.”

The article goes on with the specifics, namely that “The total amount of cooling ranges from 0.65C up to 0.75C – a value large enough to wipe out most of the warming recorded over the past 100 years. All in one year’s time. For all four sources, it’s the single fastest temperature change ever recorded, either up or down.”

This explains the subhead: “Twelve-month long drop in world temperatures wipes out a century of warming”, although it does not explain why such a momentous piece of news does not have at least one exclamation point! Hell, I’d give it two, and I don’t know anything about it!

The Bad, Bad News (BBN) is not just that this kind of poor punctuation is rampant, but that this abrupt dropping of global temperature has a nasty habit of portending “little ice ages”, and this, along with the mysterious and ominous disappearance of sunspots, has me running outside, yelling at some kids playing down the block, “Hey! You stupid kids! Run home and tell your parents that they should be buying gold, silver, oil and commodities of all kinds because crop yields in the future will be catastrophically low, and if they don’t, then they are stupid! And when they don’t follow your advice, you can remind them a few years from now about how you warned them, but they were too stupid to listen to you, which is what all parents like to hear from their teenage children! Hahahaha!”

Well, I hope they do, not that it will do any good, but at least I made their children a little more obnoxious, which makes me smile in smug satisfaction.

And I bought some more commodity plays, which made me smile ditto! Whee! This investing stuff is easy!

Source: Finance…the American Way