Another telling chart via Ron Griess of The Chart Store:
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click for larger chart
"While money doesn't buy love, it puts you in a great bargaining position." —Anonymous
Asian currencies continue to sell off vs the $ on the heels of the news yesterday that South Korea said they will look into hot money inflows stemming from the $ carry trade and the Bank of Indonesia said they are looking into the foreign buying of bills. This follows the news a few weeks ago that Taiwan was limiting foreign deposit holdings and Brazil was taxing foreign inflow transactions. As I mentioned yesterday, we may have reached a short term pain threshold in terms of $ weakness and foreign countries are fighting back as they certainly won't wait for...
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July 6th, 2009 at 11:43 am
Finally…literally green shoots
July 6th, 2009 at 11:44 am
@SB
LOL – any way they can manufacture them!
July 6th, 2009 at 11:47 am
Looking forward to when this list includes GS.
July 6th, 2009 at 12:22 pm
Nice Barry, but hasn’t there been 20 some odd bank failures in Georgia???
July 6th, 2009 at 12:31 pm
http://www.minyanville.com/articles/WMT-bac-wfc/index/a/23410
A Brand-New Arbitrage Market for California’s IOUs
“California says the IOUs are “rock solid,” and both Wells Fargo (WFC) and Bank of America (BAC) say they’ll accept them as deposits. That should keep folks in cheese and crackers at Wal-Mart (WMT).
But don’t sneer: California’s problems may be a preview of the colossal crackup coming to Washington.
President Obama’s proposed health care plan will cost an estimated $1.6 trillion. This has about quadrupled the national debt, raising the pressing question: Where will the money to pay for yet another huge federal program — one that’s bound to be more expensive than anticipated — come from?
The answer may be federal IOUs.
Keep in mind that the federal deficit’s now almost 70 times larger than California’s. President Bush appeared indifferent to the government’s growing red ink, but President Obama seems intent on setting a new world record for spending.
The ballooning deficit’s bad news for the dollar, and it appears everyone knows it except Washington.
But cheer up: Would you rather have an IOU signed by the Governator — or by the President?
Then again, either may be suitable for framing and hanging in your bathroom. ”
…Ok…I think the author of this article in Minyville didn’t think it all the way through…people are offering immediate money after a big discount for your current California IOU….why couldn’t we arbitrage the California IOU’s against the National IOU’s? Sort of like trade the Euro against the Yen? Lefty, Karen, I-Man? Can we make some money here?
July 6th, 2009 at 12:42 pm
We have a long way to go to even begin to approach the failure level in the late 1980s …
http://www.calculatedriskblog.com/2009/07/fdic-bank-failures-by-week.html
… and I think that in the fullness of time we will approach those levels, with banks in jeopardy masked by the fraudulent “mark-to-fantasy” accounting rule until they finally run out of rope and go ker-plop!
There is a similar picture unfolding with corporate bond defaults …
http://www.reuters.com/article/bondsNews/idUSN2550615220080925
July 6th, 2009 at 12:42 pm
Bruce: Got it ….how about trading the Sac-Wash default spread? Already exists in the CDS market somewhere.
July 6th, 2009 at 12:45 pm
Six Banks….all controlled by one family…shouldn’t that count as one bank? After all, its not like 6 independent BoD and CEOs effed up.
July 6th, 2009 at 12:46 pm
@constant: Corporate and muni defaults are the only reason to buy Treasuries.
Because when the sh*t hits the fan, this is the way the credit markets work, people are always trying to trade the spread between Treasuries and other instruments, so when a flight to quality begins, govies are the beneficiaries. Cue more government spending, Tsys sell off again, green shoots etc.. rinse and repeat.
July 6th, 2009 at 1:04 pm
@LB:
re: 12:46, agree with that. Muni’s are going to have a lot of problems in the next 12 months.
We should be noting, that while the media spins green shoots and “better than expected” talking points from weak but not as weak as before economic data these things (52 banks go down in 09 vs. 25 in 2008) are going on which will help drive the next major shift in social mood.
This shift in social mood will lead the stock market, and I don’t think the shift in mood will be for the better, no, that’s what’s been going on since March.
ZSL opens above $10 today! Still like the $$ here as well. Might look to pick up a few energy names here and there for a trade due to the beatdown many have been taking lately. Might look at something like CHK as an example.
July 6th, 2009 at 1:52 pm
@Bruce — you would enjoy the cover of this week’s Economist …
http://www.economist.com/images/covers/currentcoverus_large.jpg
July 6th, 2009 at 2:07 pm
@constant:
Yep, that is pretty much how I see this trip too. As a fiscal conservative, I won’t ever be in favor of these policies..but he won fair and square…I wish he’d postponed this trip until he’d had another year in office…but he didn’t and here’s hoping he does ok…my posts this morning are basically this seems like deja vu…and Roosevelt was much more seasoned when he took on Stalin and look how well he made out…
July 6th, 2009 at 2:07 pm
If you want apples to apples, rate the failures by dollar amount and inflation adjust it. With tthe debt load we have now, this is just the beginning.
July 6th, 2009 at 2:36 pm
By October peep will have remembered that stocks are not backed by the full faith and credit of the US government.
Not even GS.
July 6th, 2009 at 2:48 pm
@leftback: I’m with you on The Fall in the fall part deux (or “The Hunt for Red October” if you will). In the meantime, more boring stuff today. Off to run some errands and get a workout in.
Need to go out and buy some boxing gloves and wraps for my ultimate boxing class (no joke). A very therapeutic way of relieving stress!
July 6th, 2009 at 3:09 pm
Manny, try to do extra work on the Blankfein bag.
July 6th, 2009 at 5:08 pm
Record 7 banks closed on Thursday by FDIC.
77 banks failed since 2008, 25 in 2008 and 52 in 2009 till now.
6 banks were closed only in Illinois.
Today Illinois has most number of bank failures with 12 bank failures till now this year.
This follows by Georgia with 9 and California with 6 banks failures.
Check the list of all the failed banks at :
http://portalseven.com/Failed-Banks-2009
And on google map see where the banks are failing at :
http://portalseven.com/finance/Failed_Banks_Map_2009.jsp
July 6th, 2009 at 6:32 pm
@leftback:
I’d like to kick Blankfein in the bag.