On those repo markets, that not many understand, but still talk of. Remember Lehman and Bear Sterns?
We have heard all day long on Bill Gross and PIMCO’s big bet gone wrong as there seems no other stories CNBC could report on. Anyway, even the best, can make a bad Trade every now and then. Meanwhile, Bill Gross’ latest report;
- Liquidity concerns may affect all European peripheral bond markets unless the European Central Bank counters the rush for the exits with an enlarged daily checkbook.
- In the U.S., discord between rich and poor has led to lower, not higher, Treasury yields as approaching recessionary winds force the Fed and private investors to favor bonds.
- We prefer investing in the “cleaner” dirty shirt countries of Canada, Australia, Mexico and Brazil, along with non-dollar currencies that have strong trade ties with the Asian continent.
Full report, by PIMCO.
Somehow we are getting that deja vú again, when ES futures trade “mysteriously” strong. Remember, buying ES futures on margin is much more effective than throwing money at the falling Economy, at least if you wish to ramp up the Equities Market. From last year;
Dax futures takes out yesterday’s lows after Consumer Confidence comes in at lowest since 2009. All those bargain hunters will soon be selling out their “long term” positions from yesterday. ES futures still too rich compared to other risk measures. Dax flash crash deja vú, but we need another knee jerk reaction first.
New York, August 30, 2011 – Data through June 2011, released today by S&P Indices for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, show that the U.S. National Home Price Index increased by 3.6% in the second quarter of 2011, after having fallen 4.1% in the first quarter of 2011. With the second quarter’s data, the National Index recovered from its first quarter low, but still posted an annual decline of 5.9% versus the second quarter of 2010. Nationally, home prices are back to their early 2003 levels.
As of June 2011, 19 of the 20 MSAs covered by S&P/Case-Shiller Home Price Indices and both monthly composites were up versus May – Portland was flat. However, they were all down compared to June 2010. Twelve of the 20 MSAs and both Composites have now increased for three consecutive months, a sign of the seasonal strength in the housing market. None of the markets posted new lows with June’s report. Minneapolis posted a double-digit 10.8% annual decline; Portland is not far behind at -9.6%. Thirteen of the cities and both composites saw improvements in their annual rates; however; they all are in negative territory and have been so for three consecutive months.
And for the Long Term Investor, we suggest studying the long term Shiller Chart.
Full report, click here.
The mooted German proposal to use periphery nations’ gold reserves as collateral was back on the agenda in Germany yesterday.
The Irish Times reports that in an interview with Der Spiegel in Berlin, influential senior minister Dr. Von der Leyen called for a guarantee system to secure loans issued until the permanent rescue fund ESM, with its inbuilt guarantee mechanisms, comes into effect in 2013. “The task of my generation is to create a united Europe. The problem is that, after the introduction of the euro, we simply stood still,” she said.
“For the labour minister, an ad-hoc collateral system on gold reserves or state assets would discipline national governments and prevent the current bailout regime going the way of the stability pact.”
Fastest Money Supply Growth in 52 Years Supports Gold’s Surge
Yesterday’s no volume melt up confused many. The Dax is once again showing us the way down. Many of our risk markets are reversing into negative territory during the last hour. People bought yesterday’s rally in panic, and will soon be forced to sell those positions out. Greed and fear major driver, once again.
Markets threading water. No conviction in early European trading. European markets underperforming the US market as of yesterday afternoon. SPX is 10 points higher compared to yesterday afternoon, while the DAX and Stoxx slowly flirting with support levels. USD getting some support here. Don’t forget yesterday’s rally was on poor volume. Dax to lead us lower again?