Quick Notes

I am pressed for time because I have paperwork to do as well as the Christmas card merry go round to try and make some headway on. Just a few notes on things I found interesting today.

Banking Issues Not Going Away
Edward Harrison (writing at TBP) notes that the Austrian banking crisis is big in a relative sense:

The Austrian government has nationalized the insolvent bank Hypo Group Alpe Adria (HGAA). The financial institution, which has 40 billion Euros in assets, is the country’s sixth largest bank. But, in relative terms, this is a very large bankruptcy – using GDP at purchasing power parity, an American HGAA would have assets of $2.5 trillion, larger than any of the American banks. So, this is a very big deal and it speaks to the size of Austrian banks’ international exposure, renewed risks in banking and the possibility of contagion.

Again, nothing to worry about to sell banking stocks over; another government has already picked up the backstop. Move along.

How about another 400 Billion for Freddie and Fannie? Mish fleshes out the never ending black hole.

The Automatic Earth explains some of the problems with thinking China will replace the US anytime soon.

How many jobs programs are there anyway? No wonder Steve Liesman does not know all the names! Next up, another 150 Billion for various support programs (think keeping state employees at work) and 50 Billion for the usual stuff that never gets done: Schools, highways and more housing junk.

I had a discussion with The Illusion of Prosperity about leverage in the metals markets. Jesse so happened to have this post up today about that very thing. Snippet (from Ted Butler's piece):

JPMorgan, now holds 200 million ounces net short in COMEX silver futures, fully 40% of the entire net short position on the COMEX (minus spreads). As I have previously written, JPMorgan accounted for 100% of all new short selling in COMEX silver futures for September and October, some 50 million additional ounces. As extreme as JPMorgan’s position is, there is a total true net short position of 500 million ounces (100,000 contracts) in COMEX silver futures. Try to put that 500 million ounce short position in perspective. It equals 75% of world annual mine production, much higher than seen in any other commodity.

Strange indeed.

Have a good night.

Tuesday Notes

I am home a bit late and i have a ton of errands to do, so just a few notes for the evening.

Bernanke Reappointed
The gushing praise for Bernanke "saving the world" was out in force. Even Calculated Risk praised Ben's response to the crisis, once he figured out things were really bad. I for one cannot see how bailing out everything under the sun can be seen as genius, anyone can do that.

Throwing a bit of cold water on the Bernanke news, a New York district judge rules in favor of Bloomberg news and states the FED must disclose terms and names of institutions that received support in the early panic of the credit crisis. A few thoughts:
-No way this happens in 5 days, so stop dreaming
-I am more interested in what the FED took as collateral for loans more than names of recipients (we know everyone was in on this); the collateral question could be a debt sale killer if it is known the FED has reams of bad mortgage paper (not triple A!) on the books. Still, I am of the mind we never get this information.

Fannie, Freddie Shares Soar, Puzzling Analysts
It seems day traders and momentum riders are playing craps with these stocks. Why are they even listed again? Good job Bernanke!

I am no expert in oil, but I do share the opinion that oil supplies have a limit and that extraction eventually will become too hard. Clusterstock had a dueling run at "Peak Oil" today prompted by a New York Times article;
View 1:
Peak Oil Is Totally Bogus
View 2:
Here's Why Peak Oil Is NOT Bogus
Food for thought.

For the first time since 1987, Central Banks are net BUYERS of gold. If you have followed by gold ramblings over time you understand that even small demand changes can really have an effect gold price dynamics.

Have a good night.