Sunday, 14 October 2012

Daily Reading Material Compilation 6.0

Let's start off the day with some US Treasury Bill news! The past few days have seen bond auctions taking place on 3-year, 10-year and 30-year US Treasuries. Three-year and 10-year bonds saw a strong showing, with $32 billion sold for three-year bonds and $21 billion for 10-year bonds

U.S. Treasury Prices Jump After Strong 10-Year Note Sale

Investors took 1.70% yield on the 10-year bonds. This is seen as a good thing? The investors willingly took a pathetic yield - although I suppose that comparatively, it's higher than the past few years have allowed for. Still, terrible yields and risk of losing money if interest rates rise (admittedly not very likely) - plus more people are flocking to bonds and out of equity markets due to hugely increased volatility.

Then there's the whole US debt crisis thing...

In a nervous investment environment people still see bonds as the place to store their money for safety's sake. This, of course, is in spite of the fact that Moody's is set to cut the US debt rating next year.

U.S. Downgrade Seen as Upgrade as U.S. Debt Dissolved 

Moody's is looking at following in the footsteps of S&P and Egan-Jones Rating Co., who dropped their US debt rating last year to AA+ (S&P, Aug. 5, 2011), and AA- (Egan-Jones, 3 times since July 2011). The US's $1.2 trillion "fiscal cliff" looms ever-so-steep - now more than ever. Perhaps investors will, at this point, start rethinking their position on US government debt and instead begin to see the added luster (as if it were needed) of precious metals.

As a side note, so many of the statistics in this article are way off-base, especially according to the IMF:

IMF Sees ‘Alarmingly High’ Risk of Deeper Global Slump

The world is not in good shape economically - especially considering most of the world is in deep recession. Particularly of note is the contraction of the UK economy, which shrank 0.4% in Q2 of this year. While it saw a bounce-back in the Q3, it seems to be momentary, as projections for the coming quarters have the UK slipping back into recession. 

Also of note, Spanish and Italian bonds dropped after the ECB's bond-buying plan was announced. Oliver Blanchard, IMF Chief Economist said it was possible for the bonds to rebound if the countries didn't request a bailout, but rumors and inside sources have led everyone to believe that another round of bailouts is all but inevitable at this point. Spanish PM Mariano Rajoy maintains that they will not request another bailout; however, the virtual black hole in their budget - with banks requiring a whopping €72 billion of injected capital to stay afloat - coupled with their history of propping up the banksters at all costs (can they really stop this far down the line?) speaks volumes to the contrary.

Finally, one must also wonder, after so many revisions towards the downside in the past few months from analysts in various major institutions and international bodies, just how many more revisions are in store in the coming months. Can we really trust the numbers to continue on the same trend? After all, econometric models tend to fail to account for variance in human behaviour. We oft forget this in modern-day economics, as Mr Aziz aptly points out in this superb - and brief - opinion piece, The Mathematicization of Economics

On to Europe...

Gold, Molotov Cocktails, Rubber Bullets, And Teargas: A Rift In Greece - Hard to say where I stand on this. I think the extraction of gold can be done ethically, but it is up to the company to do that. Sure, it could bring hundreds of millions of dollars to the Greek economy, but what good will that really do? The money would, at this point, simply be used to repay their massive debts to the Troika - unless they decide to boot them out, and do a referendum to approve a denial-of-payment. Somehow I don't see this happening with the current political landscape in the country.

Spain Foreclosures Spread to Once Wealthy: Mortgages - Spain continues to face ever-growing trouble, as the foreclosures in the country are now spreading to the upper-middle-class - with 60% of foreclosures now being accounted for by this particular class. Also, loan guarantors - often parents who use their homes as collateral to help their children buy homes - now account for one-fifth of the foreclosures in the country.

No wonder we're seeing increased social unrest, as people who thought they may be relatively safe from the abyss of debt burden are now starting to take the hit. Inevitably, this will continue to spread to the upper class of the country as well, until all that is left is the elite/ruling class sitting with massive piles of wealth while the rest of the peasants fight for scraps in the streets. Isn't this reminiscent of medieval Europe in the times of serfdom and feudalism? Something, I might add, that I've been signalling (as well as many others more adept than I) for quite some time now.

I Vote For Shooting Bankers - Fantastic short little piece about how it's OK to shoot a criminal who enters your home to steal your belongings, but when people steal your money it is suddenly taboo to suggest similar forms of dealing with the problem. I don't necessarily agree that shooting the bankers will solve the problem in the long-term, but I do understand the sentiment behind what is being said.

Coca-Cola Hellenic quits Greece and seeks refuge in London - Greece is also losing one of it's most important businesses - Coca Cola Hellenic - due to the ever-worsening Greek economy, and incredibly high corporate tax rates. They are moving to Switzerland, and pulling out of the Athens Stock Exchange in favour of re-listing on the London counterpart.

And Miscellaneous...

This is a huge blow to the Athens Stock Exchange, as CCH accounts for one fifth (20%) of the Athens Stock Exchange.

Half of Wall Street Employees Expect Bigger Bonuses - Wall St. employees are expecting bigger bonuses this year, in spite of this year's first-half disappointment from most of the major firms of Wall St.

Two dead in fresh South African platinum violence - Strikes still continue to plague mines throughout South Africa, and a few days ago there was the most recent bout of violence in the seemingly endless protests - with 75,000 miners taking part across the nation.

Iran Low on Options as Hyperinflation Concerns Spark Gold Dash - Iranians flock to gold in order to protect savings - including the government. Hyperinflation is occurring, with real inflation rates between 60-70% per month. Sanctions are hurting the people of Iran, and in my opinion they (US globalist terrorists) are purposely attempting to foment revolution in the country by decimating the savings and buying power of Iranians. Typical US imperialistic ways - hurt the people of the country so they blame their government, instead of the people who are actually causing them the pain and suffering. Then, declare a "humanitarian" war. I can't wait 'til the US falls - just like Rome burned, so, too will the US farcical empire.

I'll cap this here for now, but there's plenty more to come in the next installment. The next few weeks will see me quite busy, and less able to dedicate time to reading current events; however, I will do my best to get these things up and get some info out to those who read my posts!

Cheers, ladies and gents! Also, stay tuned for an upcoming ZeroHedge compilation. I loves me some in-your-face ZeroHedge news and analysis!

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