Showing posts with label Foreign Holdings of US debt fall record. Show all posts
Showing posts with label Foreign Holdings of US debt fall record. Show all posts

Friday, May 14, 2010

The Week That was May 10-14, 2010

After about 7 months of dormant market excitement things are heating up once again. Plenty to cover tonight, but I must make way for the fun stuff as it is Friday night after all! Here we go....

Currency Traders Being Played?
It is no secret that the Eurozone would love heir currency to move lower. This will help their exports and give them an edge. Of course no on wants a total run down of their money, but a nice orderly move is good enough.

Back on March 1, 2010 I wrote:
How Can Shorting the Euro Be Wrong; It's Policy For Crying Out Loud
My read has the target for the Euro at 1.20 against the dollar in the very near term. Everyone thinks the Euro is going lower and in fact one could argue (I will) that all the hand wringing over the inevitable Greek bailout is nothing more than a show to weaken the Euro. Devaluation can be helpful at times and Euro 1.6 was not quite the exchange European exporters were looking for.
On March 1 the Euro was at 1.36 on the index. Today it sits at 1.24. It's getting close! Too bad I do not trade Forex!

Anyways, It seems to me that the Euro trouncing is policy and the big backstop package was delivered as a parachute to stall the fall around 1.20. Maybe things will get out of hand, but for now the traders are dancing like the marionettes, who swaying to the symphony of destruction. Thanks Dave Mustaine!

Largest Drop in Foreign Weekly Holdings of US Paper
The blog Housing Doom always runs a weekly check on central bank activity that is well worth a look. This week there seems to have been some serious action:
Foreign Cenbank Holdings of US Obligations Largest Weekly Drop Ever Recorded
The work is good original research so I would point you that way for a full read up. Summary:
BREAKING: for a variety of reasons this can't wait for the overnight post. Twist's just come up with the calculation that the $21.536 billion combined weekly drop in foreign central bank holdings of treasuries plus agencies is the largest one in the decade-long dataset. Charts and additional commentary to follow.

UPDATE (5/14): Here's what's got the Castle in an uproar. This is (if you'll pardon the expression ) uncharted territory. The weekly drop of foreign central bank holdings of US obligations is even bigger than the previous record in mid-August '07 when the world-wide credit crunch suddenly started.
Now I know the $22 Billion number is not a jaw dropper in the scheme of things, but it is still the largest move in over ten years. It is my belief that this is tied to the opening of the SWAP lines, but I am not that sharp in this area. If this becomes a trend we should see direct bidder take downs of new treasury auction continue to move up as US banks borrow from the FED to buy our own bonds. Great catch over there John and Twist!

The Terminator Lowers the Boom in California
In the grips of an all out V shaped recovery (in the low volume ramped up stock market anyway) some how tax revenues continue to miss expectations. I know, must be a mistake! In any case, today California throws out the first in a long conga line of threats by states to prod the FEDs to give them a hand out. This will become the norm very soon. Via Calculated Risk:
From the SacBee: Schwarzenegger budget would eliminate welfare
Gov. Arnold Schwarzenegger asked lawmakers Friday to eliminate the state's welfare program starting in October and dramatically scale back in-home care for elderly and disabled as part of his May budget revision to close a $19.1 billion deficit.

[Schwarzenegger] also proposed cuts to state worker compensation.
...
Schwarzenegger proposed eliminating state-subsidized child care for all but preschoolers ...
From the LA Times: Schwarzenegger unveils austere budget plan
Gov. Arnold Schwarzenegger outlined a stark vision Friday of a California that would no longer lend a helping hand to some of its poorest and neediest citizens, proposing a budget that would eliminate the state's welfare-to-work program and most child care for the poor.

His $83.4-billion plan would freeze funding for local schools, further cut state workers' pay and take away 60% of state money for local mental health programs.'
During the press conference, Schwarzenegger compared California to Greece. Ouch.
Wow. To stave off "human suffering" expect help to be on the way very soon.

Gold is a Crowded Trade on Both Sides
While some think everyone and their brother have a stash of gold and silver coins and bars on hand and that they used leverage to get them, there are still many on the short side of the gold trade as well. Via Zero Hedge:
Gold Commercial Short Positions Hit All Time High, As Gold Spike Protection Team Keeps Very Busy
Maybe I will see the nasty correction I thought would come after all!

Final thought as gold reaches all time highs:
The Press Misleads on a Gold “Record”
In real dollars it’s barely half the 1980 price

In fact, gold only hit a nominal record of $1219 on Tuesday. If you adjust for inflation, which you must, it’s still a whopping 47 percent below the real record, which was hit more than three decades ago at an inflation-adjusted $2309.


Friday Night Entertainment
After a week like this one, we all need a little break!

Comic Relief
You know the funny pictures are good stuff!

Even the cat knows that grilled food is the way to go:
funny pictures of cats with captions
see more Lolcats and funny pictures
No Big Steel Keg, but it will do! On this note I will be attempting a Pastrami cook on the smoker Sunday so wish me luck!

Now I know people love to do EVERYTHING with their kids, but you have to set limits at some point, yes?:

He looks scared!

Film Clips
A few film leads to draw your rental attention.

I love the film "Underworld". I mean Kate Beckinsale is enough, but what a flick! Here is my favorite part, as Lucian tells his tale (watch from 6:00 mark on and Part 10 completes the scene):

"There's no going back. There's no going anywhere."
Nice!

A nice find on YouTube, the full "blood test" scene from the film "The Thing":

Kurt Russell will always be Snake to me!

Rock Blogging
It is time to get ready for the weekend. We will need some tunes. Have no fear, I will deliver!

Inspired by The Illusion of Prosperity here is a sure fire set up to get rocking. Lita Ford and "Kiss Me Deadly":

Darling, you can kiss me anytime!

I had some requests, and I honor requests for the most part!

Lurker would like some Kim Carnes and "Bette Davis Eyes" and I think that works:

I always think of Eddie Murphy when I hear this song.

Besides being a literary genius, reader Gawains KNOWS rock and roll. Try out Ted Nugent and "Stranglehold":

That song is just sick as all get out! Great pick!

RSP submitted:
How about Love is like Oxygen by Sweet, since Greenspan looks like he had a little too much of both in that cover shot.
I will leave it there, good mental picture, but the song is not going to make it on a Friday night! Sorry!

Maybe Billy Squire and "Lonely is the Night" will get you all going?:

Yuppers.

Two more then you are on your own. Oh, that means I am too!

One of my most favorite New Age songs (meaning it's not older than 15 years!) is Evanescene and "My Immortal":

That song just rocks and hurts. I have chills. Good stuff!

Last call! You know the drill! Grab a drink, a girl, or the remote control!

Left to my own devices, I think you can guess what kind of tune will close the show.

When the son by the band "Europe" known as "The Final Countdown" is not embed disabled, I will load it up:

Now that rocks! Close second was a metal song of course!

Addendum:
Lena Horne passed away this week and by request, please see old time talent via "Stormy Weather":


Have a good night.