-- Posted Sunday, 20 May 2007 | Digg This Article
The following are some snippets from the most recent issue of the International Forecaster. For the full 21 page issue, please see subscription information below. SATURDAY, MAY 19, 2007THE INTERNATIONAL FORECASTER P. O. Box 510518, Punta Gorda, FL 33951-0518 An international financial, economic, political and social commentary. Published and Edited by: Bob Chapman E-mail Address International_forecaster@yahoo.com CHECK OUT OUR WEBSITE www.theinternationalforecaster.com SUBSCRIPTION and RENEWAL INFORMATION: 1-YEAR $129.95 U.S. Funds. Make check payable to ROBERT CHAPMAN (NOT International Forecaster), and mail to P.O. Box 510518, Punta Gorda, FL 33951-0518. Please include name, address, telephone number and e-mail address. We accept Visa and MasterCard charges. Provide us with your card number and expiration date. We will charge your card US$129.95 for a one-year subscription. Foreigners please use foreign U.S. dollar denominated checks or Money Orders. Note: We publish twice a month by surface mail or twice a week by E-mail. international_forecaster@yahoo.com US MARKETS In Las Vegas, in April, 1,568 new home sales were recorded, a 40.7% decline yoy. Existing home sales fell 36.6% to 2,353, the second-lowest monthly total in the past six years. New building permits fell 38.3% yoy and about 40% of the 22,000 homes on the Multiple Listing service are vacant, obviously owned by speculators. The April median price fell 3.1% yoy to $318,346. These figures have been cited as bogus as the number of listed on the MLS for less than $270,000 has increased substantially in the past year. Luxury homes, $1 million or more, declined 18% in the first quarter to 132, but April sales jumped to 53, two more than a year ago. The Fed of Philadelphia’s general economic index rose to 4.2 in May from 0.2 in April. The index averaged 8.1 last year. We expect a lower number in June because inventory affected the numbers positively and that was a one off event. Head of the Bank of England, Mervyn King, made it clear that former central bankers, such as Sir Alan Greenspan, have a responsibility not to offer views on the state of the economy. Greenspan gets $150,000 each time he speaks and has received an $8 million advance on a book covering his 18-years as Fed Chairman. These are your rewards when you sell out your fellow Americans for the Illuminati. The Conference Board’s index of leading economic indicators fell 0.5%, higher than the 0.1 decline experts were expecting in forecasting economic activity over the next 3 to 6 months. That means the recession will deepen. This almost reverses the 0.6% climb in March. The negatives were building permits, unemployment claims, manufacturers new orders for non-defense capital goods, consumer expectations, vendor performance, average weekly working hours and interest rate spreads. Credit scores continue to deteriorate so let’s change a basic tool that lenders use: the credit score FICO, Fair Isaac Corp formula that credit bureaus use to determine credit scores, to gauge a borrower’s ability to repay debt and helps creditors determine the terms of a loan. We will have a new calculation in September for those being considered for subprime loans. They won’t say what the changes are as yet, but we are sure the 11,000 foreclosures in California in the first quarter, up 800% yoy, had something to do with it. The worst housing slump since the Great Depression is driving Ohio and 200 other states to propose consumer protection laws and bond sales that would help homeowners stem the escalating defaults. Ohio, with the third highest foreclosure total last month, is raising $100 million to help homeowners refinance mortgages they should have never had in the first place. New York, New Jersey and Pennsylvania are considering similar sales. This means the solvent members of society have to subsidize borrowers who are unable to make their payments. Karl Marx would be very proud of these legislators. Most of these state governments are on the edge of insolvency already. This kind of legislation could throw them over the edge as our recession deepens. This is as dumb as it gets. 2.2 million Americans will lose their homes and they should lose them. These very same homes are falling in value and in time will decline further. In typical fascist style our president has decreed that he is immune from whistle blower complaints filed by federal workers under the Superfund Law and the Safe Drinking Water Act. As a result of this decree from on high that the “King Can Do No Wrong” sovereign immunity is an absolute defense to any legal action. Can you believe this is happening in our republic? This bold assertion of immunity is both legally unsupported and the precise opposite of the direction in which we as a nation should be heading - Caligula rules. In order to change this all Congress has to do is clarify the law. The reason these whistle blower provisions are so important is that they protect federal scientists and other specialists against retaliation for doing their jobs. BBC News says Iraq faces the distinct possibility of collapse and fragmentation and they are quoting the Royal Institute at Chatham House, which is the organization that the Council on Foreign Relations was modeled on. Iraq’s government is powerless and irrelevant in many parts of the country. There are many local civil wars that can only be solved by getting help from Iran and Syria. This is as we predicted almost a year ago. The Reuters/University of Michigan preliminary index of consumer sentiment increased to 88.7 from 87.1 in April. The measure has averaged 88.1 since monthly data were first compiled in 1978. The expectations index rose to 79 from 75 and current conditions, a perception of their financial situation and whether it is a good time to buy big ticket items like cars, fell to 103.8 from 104.6. The average price of gasoline on Thursday rose to a record $3.13 a gallon or $0.30 more than the average for April. Demand remains quite strong. When California sells taxable bonds to foreigners, Moody’s says the state’s credit is Aaa, the highest possible. When the state sells tax-free debt to US citizens, its creditworthiness is four levels lower. The discrepancy may cost taxpayers $3.6 billion in extra interest on bonds sold in 2006. This exists even though Moody’s own data shows a corporation is about 97 times more likely than a municipality to default over a 10-year period. We expect changes are finally on the way. The new amnesty plan for illegal aliens rewards those who have already entered the US illegally, while shutting out those who stayed home hoping to gain legal passage. Those who went to the US for the last ten years to work on contracts are shut out. America needs those who worked legally in the guest worker program. The new amnesty plan is a disaster for foreigners and for Americans. The only ones who profit are those who have broken the law. This is a terrible example of American stupidity. You don’t hear much about it from the media, but the downturn in the housing market has put hundreds of small and midsized builders into bankruptcy in the last six months. There has been Kara Homes in New Jersey and Turner Dunn in Phoenix. Those that are hanging on are so desperate that they are running into the arms of hedge funds to bail them out with fresh loans at high rates and onerous terms. Over the nest two years there will be a massive amount of failures. New home sales will fall 30% to 40% this year and next and from the peak the number of new homes built will fall 60% to 70%. Second homes are becoming a primary problem in the housing market. We are starting to see the subprime problem and the ALT-A problem percolate upward. Many of the second homes had these exotic mortgages. Lenders are saying that over the past six months almost 100% of bad loans are investor loans in the ALT-A category. Investment-home sales fell 28.9% in 2006. In 2005 investment and second homes accounted for 40% of sales and in 2006 they were 36%. The FICO’s on these loans for the most part are 650 and lower. On the week the Dow rose 1.7%, the S&P 1.1%, Nasdaq was about unchanged. The 2-year Treasuries jumped 11 bps to 4.81% and the 10’s rose 13 bps to 4.80%. Issuance in US capital markets rose 13% in the first quarter to $1.8 trillion, with mergers and acquisition and leveraged buyout financing driving corporate bond issuance to a record $308 billion, up 23.6% yoy. Municipal bond issuance grew 50.8% yoy to $112.8 billion. Total equity underwriting reached $61.4 billion, 42.6% higher yoy. The MBA Applications Index slipped 1.4% for the week. Purchase apps rose 1.4% yoy, while dollar volume was 4.7% higher. Refi apps were about unchanged with dollar volume up 42% yoy. The average new purchase mortgage increased to $239,600, up 7% yoy, while the average ARM rose to $403,800, up 16.5% yoy. Bank credit jumped $29.1 billion to a record $8.509 trillion. Securities credit increased $13.8 billion. Loans and leases jumped $15.3 billion for a three-week gain of $53 billion. C&I loans increased $5.3 billion and real estate loans added $3.7 billion. Securities loans leaped $17.2 billion. M2, the narrow money supply, rose $17.8 billion to $7.229 trillion. Narrow money expanded $186 billion ytd or 7.2% annualized and 6.9% yoy. Total commercial paper grew $4.5 billion last week to a record $2.087 trillion with a ytd 14.8% gain. Year-on-year it has expanded 18.1%. Assets backed securities - ABS issuance surged to $22 billion. Year-to-date it’s $206 billion in line with last year. At $137 billion ytd home equity ABS sales are 26% below last year’s pace. YTD, CDO issuance of $132 billion is running 20% ahead of 2006 sales. Fed foreign holdings of Treasury, Agency debt increased $8.8 billion to a record $1.940 trillion, with a ytd gain 28%. Custody holdings for foreign central banks expanded $316 billion yoy or 19.4%. On the week the dollar was up .10 to 82.11. Gold fell 1.4% to $661.45 and silver dropped 2.3% to $13.00. Copper sank 7.8%. Crude rose $2.57 to $64.94. Gasoline gained another 2% and natural gas added 0.6%. The CRB rose 0.7%, up 1.9% ytd and the GSCI rose 3%, up 10.3% ytd. In what could be a crippling blow to down payment-assistance programs, HUD is proposing that homebuyers using certain government-insured loans be prohibited from accepting down payment gifts that are directly funded by the home seller. This threatens dozens of non-profit groups, including Nehemiah Corp., that have doled out hundreds of millions of dollars of payment assistance to mostly low income home buyers across the country. Builders have included the cost of the gift in the price of the house, which inflates values and that is why prices haven’t come down more steeply. They also lead to higher than normal foreclosure rates. An auction of nearly 100 foreclosed loans in San Diego showed that mortgage lenders are having to accept huge discounts to unload properties – a surge of foreclosures over the past year has left lenders struggling to sell a growing backlog of homes. Rather than going through real estate agents they are using auctions to speed up the sales process. Houses and condos are sold for about 30% below the previous sale or appraisal process, some went for 50% off. In Florida, the statewide existing home median sales price was $237,000 in the first quarter, a decrease of 3%. In the San Francisco Bay Area house and condos sales fell 18% to the lowest level in 12 years. Mergers and acquisitions, fueled by corporate deals in Europe and US buyouts, reached $2 trillion, 60% ahead of last year’s record pace. Hedge funds manage $2.4 trillion, adding an estimated $250 billion or 11.5% in the first quarter, the largest increase on record. ...
GOLD, SILVER, PLATINUM, PALADIUM AND DIAMONDS Silver open interest fell 593 contracts to 108,698. Last week one ECB central bank sold 22 million euros of gold or 1.37 tons. On Wednesday, our sources tell us there was no less than six central bank sellers and leasers in the market along with the naked shorts. The Bank of Japan and the US Treasury pounded the yen. We saw a close at 120.76, -.68 after it ventured down to 121. The Fed and Treasury want the world safe for the yen carry trade, so they will put all those leveraged funds into the US stock market and drive it higher. That is so people will forget the carnage and failure in Iraq and Afghanistan. It is called misdirection or psywar. The euro fell .0073 to $1.3515, the pound fell .0091 to $1.9764; the Canadian dollar fell .38 to 90.63 and the dollar index closed back up above 82. They bombed the precious metal stocks as well. The 2-year Treasury yield was 4.73% and the 10’s were 4.71%. Oil was off $0.64 to $62.53, gas up $0.03 to $2.33 and natural gas was up $0.06 to $7.92. The Dow was up 104 to 13,488 on terrible housing starts and future permits’ news. S&P rose 117 and Nasdaq 233 Dow points. Gold fell $12.60 to $660.10 and silver fell $0.36 to $12.83. Gold open interest rose 1,702 contracts to 408,936. On Tuesday, the big Tocom shorts increased their shorts by 1,671 contracts to 98,474. Goldman increased its shorts by 280 to 20,535 contracts. The same group reduced silver shorts by 284 contracts to 5,921. The XAU fell 1.35 to 136.15 and the HUI fell 3.95 to 325.44. Emperor Mines of Brisbane, Australia has closed out its hedge book at $670 on 145,695 ounces, or for $34.2 million. The early Thursday markets were mixed. The Dow was -10, S&P -15 and Nasdaq -20 Dow points. The FTSE was +29 Dow points, the CAC +36 and the DAX +16. The yen was -43, the euro -.13 and the pound-.23. The 2-year Treasury yielded 4.73% and the 10’s 4.71%. Oil was +$0.48 and gas +$0.02. Gold was up $1.20, silver was +0.03 and copper was -$0.04. Volume of gold demand in Saudi Arabia rose 6.9% to 26 tons in the first quarter. Demand in the UAE rose 5.7% to 29.7 tons, while sales rose 23.9% to $741 million. In Egypt demand grew 15.4% to 15.7 tons as sales rose to $392 million. The South African Union Solidarity has demanded an 18% wage increase from the world’s biggest platinum producer Angloplat. The official consumer inflation rate is 5.5%. Angloplat employs 42,600 workers. As we have said over and over you cannot deal with Marxists and any South African investment is doomed. Gold demand in India leaped 50% to 211 tons in the first quarter, up from 140.7 tons yoy. In rupee terms demand rose 75%. The pressure was on gold from the get go. It ended up down $4.00 at $656.10 and silver lost $0.07 to $12.76. It is incredible how our media and professionals in the brokerage industry refuse to admit all markets are being rigged. Gold open interest fell 6,000 contracts to 405,000. Silver open interest rose 1,658 contracts to 110,356. On Wednesday, the big Tocom shorts increased their shorts by 2,439 contracts to 100,913. Goldman increased shorts by 811 contracts to 21,346. The silver shorts increased by 114 to 6,035 contracts. The XAU lost 1.11 to 135.02 and the HUI fell 2.85 to 322.59. The Dow closed -11 and S&P -13 Dow points. The yen was down as well as the euro -.0028 and the Canadian dollar -.09 at 90.93. The dollar index rose .18 to 82.23. The 2-year yield was 4.79% and the 10’s were 4.75%. Oil rose $2.31 to $64.86, gas was 2.43 and natural gas rose +0.04 to $8.11. Early Friday got off to a good start all around. The Dow was up 18, S&P up 24 and Nasdaq up 24 Dow points. FTSE was up 64 Dow points and the CAC in Paris was +47 and the DAX in Frankfurt was +67. The yen was +.42, the euro -.0013 and the pound -.0032. The 2-year Treasury yield was up to 4.78% and the 10’s were 4.74%. Oil was +$0.13, gas +$0.05 and natural gas up $0.05. Gold was up $2.40, silver +$0.07 and copper -$0.03. The elitists desperately want to keep the dollar from testing 80 on the USDX and in that process gold and silver had to be attacked. All sense of propriety has been thrown out since last May. Stagflation is well upon us and it’s progressively getting worse. The numbers being released in every quarter are dreadful, but due to a sea of liquidity, the stock market hits new highs. The economy disparately needs lower interest rates and this is what the elitists could well be shooting for. Push the dollar up to 86 to give it a cushion and push gold back to $650, so that when the cut is announced the dollar fall won’t go down thru 80 and gold will have to start upward again from a lower unnatural base. The earmarks are all there. Oil is high and the yen is lower. The oil producers are generally standing aside waiting for a bottom in gold to buy again and the yen carry trade hedge funds and banks are delighted to see the soft yen so they are free to assume greater leverage, and greater risk to drive the Dow ever higher. While all this transpires, the central banks have bought the dollar and pounded most every other currency. This in spite of the fact that the ECB and the Bank of England continue to raise interest rates. It is like the rational of the world has been turned upside down and when you have that you have manipulation. The one bright spot is the exploration stocks have held up reasonably well and the producers have not really given up much ground. If they start bounding ahead today or next week we could be in for a strong whiplash rally. Friday finally was a solid day for gold, silver and commodities. Gold ended the day up $4.50 at $660.60 and silver rose $0.13 to $12.89. In the June gold contract gold was up $4.80 to $662.00, silver rose $0.12 to $13.00 and copper overcame early losses to tack on $0.02 to $3.32. There is no question gold does not want to go lower and the only reason gold faltered was that the central banks did lots of selling. You use these corrections to make new buys. Gold open interest fell 2,803 contracts to 402,600. Silver open interest dropped 58 to 110,298 contracts. The move by China to raise interest rates and increase reserves means a strong yuan; higher export prices and higher US inflation. This is excellent for gold, silver and commodities. The large Tocom shorts on Thursday increased their shorts again by 6,645 to total 107,558. The same group increased their net silver short by 137 contracts to net 6,172. Goldman increased 1,608 gold contracts to total 22,995. It’s of interest that Harmony Gold spent A$75.8 million buying back forward gold contracts. This is Africa’s third largest producer. In US funds that is $62.4 million. The contract covered 230,000 ounces of gold to be sold at $425.69 an ounce. What a group of geniuses. The Illuminati not only wants to suppress the gold price, but they want to erase gold from the human mind. They truly want to label in the public’s mind that gold is a barbaric relic. They want gold eliminated in total. They want a world currency without competition. On Thursday, 8.6 tons of gold was sold by GLD or 16.6 tons in two days or 31.6 tons over the month. This is shorting with no up tick at its finest. This is the enemy doing this. Do not buy into the gold and silver ETF’s, you are just cutting your own throat. The sea of liquidity continues to propel the Dow. It closed at 13,557, up 80; S&P rose 90, Nasdaq was +114 Dow points. The yen closed up .19 to 121.06, the euro was +.0014 at $1.3509, the pound was unchanged at $1.9746 and the Canadian dollar hit another high, up .77 to 91.79. Oil was up $0.08 to $64.94, gas fell $0.03 to $2.41 and natural gas fell $0.13 to $7.94. One of the big stories is a breakout in 2 and 10-year yields on T-bills and T-notes. The 2-year Treasury bills were yielding 4.82% and the 10’s 4.81%. This means mortgage rates will climb 5 to 10 bps next week and that will cause further pain in the real estate market. We see these yields at 5.10% with no problem. ... SUBSCRIPTION and RENEWAL INFORMATION: 1-YEAR $129.95 U.S. Funds. Make check payable to ROBERT CHAPMAN (NOT International Forecaster), and mail to P.O. Box 510518, Punta Gorda, FL 33951-0518. Please include name, address, telephone number and e-mail address. We accept Visa and MasterCard charges. Provide us with your card number and expiration date. We will charge your card US$129.95 for a one-year subscription. Foreigners please use foreign U.S. dollar denominated checks or Money Orders. Note: We publish twice a month by surface mail or twice a week by E-mail. international_forecaster@yahoo.com
-- Posted Sunday, 20 May 2007 | Digg This Article
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