US MARKETS

          October CPI rose 0.3%, up mom from up 0.2%, as inflation moves up again.

          October housing starts were 529,000, building permits at 552,000. Starts fell 10.6% to the lowest level in six months.

          Aetna will cut another 1,250 jobs.

          Mortgage applications fell last week, with demand for home purchase loans dropping to a 12-year low even as interest rates fell to their lowest level in six months. Mortgage apps, for purchase and refi loans fell 2.5%.

          The recently extended $8,000 first-time buyer includes those who didn’t own a home in the last three years and added $6,500 for homeowners buying a new residence. They increased income limits as well.

          There is now no question that the Fed is in the process of massively devaluing the dollar, which is an insidious and subtle way for them to tax and confiscate your dollar-based wealth. This will lead to a much higher cost of living and diminish purchasing power as foreign imported goods rise in cost. That means higher inflation. That of course leaves the idiots like Gartman and Prechter wrong yet again. This ongoing deliberate dollar devaluation makes bonds, CDs and money market investments sure losers. That is why they have to be sold and switched into gold and silver related assets.

          The new GCC unified currency may not be pegged to the dollar, but to a basket of currencies said Al-Watan quoting the finance and foreign ministers of Kuwait.

       It turns out the Chinese are kind of curious about how President Barack Obama’s healthcare reform plans would impact America’s huge fiscal deficit. Government officials are using his Asian trip as an opportunity to ask the White House questions.  Detailed questions.

       Boilerplate assurances that America won’t default on its debt or inflate the shortfall away are apparently not cutting it. Nor should they, when one owns nearly $2 trillion in assets denominated in the currency of a country about to double its national debt over the next decade.

       Over the past several weeks, CDS on sovereign debt have rallied sharply.  Investors increasingly fear that the massive amounts of sovereign debt will not be repaid.  The following CDS chart on JGBs is alarming. While the surge in CDS on Japanese debt has retrenched over the past week, the CDS on US and UK debt have rallied…Our guess is the market fears another downturn will lead to more stimulus and more governments absorbing crappy paper and risk from the private sector…The last crisis flamed on fears of bank and major corporate solvency.  The next crisis could be characterized by sovereign solvency fears.

       Saks’ sales at stores open at least a year dropped 10 percent. The retailer reduced its forecast for those sales to a decline in the “high-single digits” in percentage terms for the second half, from a drop of “mid-to-high single digits.” Saks said in a statement it is “cautious about the environment” for next year.

       “The current economic and retail environment remain uncertain,” Saks Chairman and Chief Executive Officer Stephen Sadove said on a conference call with investors and analysts. “It’s a fragile period for everyone in this industry.”

       Mortgage loan delinquency (the ratio of borrowers 60 or more days past due) increased for the 11th straight quarter, hitting an all-time national average high of 6.25 percent for the third quarter of 2009. This statistic is traditionally seen as a precursor to foreclosure and increased 7.57 percent from the previous quarter's 5.81 percent average.

       The Federal Reserve Bank of New York caved in to demands by American International Group Inc.'s trading partners that they be paid in full for complex securities they had insured with the company, saving some of the world's biggest banks from potentially large losses, according to a government audit.

       The audit, which was conducted by the special inspector general for the Troubled Asset Relief Program, faulted the New York Fed for not using its leverage as the regulator of some of these banks to get them to accept lower prices for more than $60 billion in credit-market bets, which were tied to souring mortgage-linked securities that had fallen in value.

       The banks that were paid off in full included Goldman Sachs Group Inc., Merrill Lynch and large French banks Société Générale and Calyon, the investment bank unit of Credit Agricole Group, which were represented by the French bank regulator in negotiations with the New York Fed last November, the report said.

       Goldman Sachs on Tuesday apologized for its role in the financial crisis and pledged $500m – or about 2.3 per cent of its estimated bonus and salary pool for

2009 – over five years to help 10,000 small businesses across the US recover from the recession.

       The moves come as Goldman tries to defuse a political and public backlash at its plans to share billions of dollars among top dealmakers…

       Lloyd Blankfein, Goldman’s chief executive, told a corporate conference in New York that the bank regretted taking part in the cheap credit boom that fuelled the pre-crisis bubble. “We participated in things that were clearly wrong and have reason to regret,” Mr Blankfein said. “We apologize.”

       What was Al Capone’s motivation for staging soup kitchens during The Great Depression?

       Mint calculates that 5% of US taxpayers account for 60.6% of all tax revenue; and 46.9% will pay no federal taxes in 2009. We will eschew social and political commentary on the above tax story because we want to emphasize the point that the concentration of taxpayers means that any economic or financial woes that befall on the small percent of actual taxpayers will have profound budgetary ramifications for the US.

       More than 1 million people will run out of unemployment benefits in January unless Congress quickly extends federal emergency aid, a nonprofit group said Wednesday.

        Congress on Nov. 6 extended coverage for the fourth time since the recession began, granting 14 to 20 more weeks to try to keep about 1.3 million people who have been jobless for well over a year from running out of benefits before the end of 2009.

       About 7 million properties are destined to go into foreclosure, according to a September study by Amherst Securities Group, compared with 1.27 million properties in early 2005.

...

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-- Posted Sunday, 22 November 2009 | Digg This Article