Not sure how a drop in the participation rate is a gain in unemployment, but never the less some call this a win for improving unemployment.
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Joined Nov 11, 2007
31,929 Blog Posts
U.S. Futures Point to Another Record High
DOW and S&P futures are indicating a higher open. Markets will make the final decision after initial claims at 8:30am. Last week intitial claims and employment data suggested a shift in momentum.
Currently NASDAQ futures look not so good, but yesterday the NASDAQ put in the best upside performance.
Comments »Expectations for Inflation Climb to 4.5 Year Highs in the U.K.
“The U.K. 10-year break-even rate, an index of annual inflation expectations, climbed to the highest level in more than 4 1/2 years after the nation sold index-linked securities at an auction today.
The 30-year break-even rate was close to the highest in almost two years as the Debt Management Office sold 1.6 billion pounds ($2.5 billion) of inflation-linked gilts maturing in 2024 in the second bond sale of the fiscal year starting this month. The pound advanced to the highest level in seven weeks against the dollar. U.K. 10-year government bonds were little changed.
“There is ongoing demand for inflation-protected securities,” said Simon Peck, a fixed-income strategist at Royal Bank of Scotland Group Plc in London. “There’s more room to go in the 30-year area. Longer-term break-even rates can move higher.”
The 10-year break-even rate, derived from the difference in yield between gilts and index-linked securities, rose four basis points, or 0.04 percentage point, to 3.38 percentage points as of 10:52 a.m. London time, after reaching 3.39, the most since September 2008. The 30-year break-even rate was little changed at 3.47 percentage point after touching 3.51 on Feb. 14, the most since August 2011.
The U.K. sold index-linked gilts due in March 2024 at a so- called real yield of minus 1.262 percent, the debt office said on its website. Investors bid for 1.86 times the amount of securities allotted.
Gilt Yields….”
Comments »Italy Kicks Off a Successful Bond Auction With Lower Yields
“Italian borrowing costs dropped at an auction of 7.17 billion euros ($9.38 billion) of bonds today as investors shrug off risks tied to the country’s political crisis.
Italy sold 4 billion euros of a new 2.25% 2016 bond at 2.29 percent, down from the 2.48 percent on similar maturing debt March 13. Investors bid 1.40 times the amount of the new three- year bond offered, up from 1.28 times last month.
The Rome-based treasury also sold longer-term debt, placing 1.67 billion euros of 4.75% 2028 bonds and 1.5 billion euros of floating-rate 2017 bonds to yield respectively 4.68 percent and 2.74 percent. Italy sold a total of 7.17 billion euros of debt, near the 7.5 billion-euro maximum target.
“The auction was smoothly absorbed,” Annalisa Piazza…”
Comments »Slovenia Must Scramble to Solve Impending Debt Crisis
“Slovenian political leaders face mounting pressure to solve the nation’s banking woes and avert a fiscal crisis after the European Union’s sternest warning yet that action is needed.
Parliament in the capital, Ljubljana, may debate a plan to place a legal limit on debt as early as today, while a vote may be hastened in the coming days. Prime Minister Alenka Bratusek pledged to continue talks with party leaders to reach a consensus after failing to cobble together a plan last night.
Slovenia’s ailing banks have made it a target for financial markets, with shrinking demand at a debt auction this week signaling investor expectations that the country may be the next domino to fall in the 17-nation euro area. Cyprus became the region’s fifth bailout victim last month when it agreed to a 10 billion-euro ($13.1 billion) rescue.
“It’s time to act in order to break a current devastating cycle,” Saso Stanovnik and Matej Simnic, economists at Alta Invest d.d. in Ljubljana, wrote in a report today. “It’s the new government’s turn to regain confidence by proposing its own scheme to salvage Slovenia, but it has to be concrete and credible and since time for refinancing is short, it also has to be efficient and quickly implemented.”
Bad Loans
Slovenia, whose 35 billion-euro economy is the fourth smallest in the euro area, fell into the crossfire after European creditors and the International Monetary Fund forced losses on bank depositors in the aid package for Cyprus….”
Comments »Deutsche Telekom Sweetens MetroPCS Bid by Cutting Debt
“Deutsche Telekom AG (DTE) sweetened the debt terms of an October proposal to merge its T-Mobile USA unit with MetroPCS Communications Inc. (PCS) to placate shareholders.
Under what it called a “best and final offer,” Deutsche Telekom cut the amount of debt it’s imposing on the combined company by $3.8 billion, according to a statement from the Bonn- based company yesterday. The carrier also lowered the interest rate it plans to charge on the loan by half a percentage point.
The transaction has faced opposition from investor-advisory firms and some of MetroPCS’s largest shareholders, who were concerned the new company would be loaded with too much debt, threatening to scuttle Deutsche Telekom’s second attempt to sell T-Mobile in as many years. MetroPCS agreed to delay a shareholder vote to April 24 on the new terms, which would cut the loans to $11.2 billion from $15 billion.
“This puts the new company under less pressure and gives them more strategic flexibility,” said Jonathan Chaplin, an analyst with New Street Research LLP in New York. With less of a debt burden, the new company can more easily afford to make network investments and acquire more wireless airwaves, he said.
Deutsche Telekom also extended the lockup period during which it’s barred from publicly selling shares in the combined company. The time frame will now be 18 months, up from six. That may reassure investors that the German company doesn’t plan to cut and run….”
Comments »Central Bank Activity Drives Another Day of Green Equities in Europe
“European (SXXP) stocks advanced for a fourth day, as retailers and household-goods makers rallied, before a report that may show American unemployment claims fell. U.S. index futures and Asian shares also rose.
Marks & Spencer (MKS) Group Plc climbed the most in three weeks after posting sales growth that exceeded projections. Ashmore Group Plc jumped the most in four years as its assets under management increased. Eurasian Natural Resources Corp. dropped 5.1 percent after a report that its chairman has threatened to quit. Evraz (EVR) Plc declined the most since November 2011 as it refrained from announcing a final dividend for 2012.
The Stoxx Europe 600 Index added 0.5 percent to 294.77 at 10:25 a.m. in London, for the longest winning streak since Jan. 4. The gauge has erased its losses so far this month, after rallying for 10 successive months. Futures on the Standard & Poor’s 500 Index rose 0.2 percent, while the MSCI Asia Pacific Index gained 1.5 percent to a 20-month high.
“We’ve clearly got the equity markets underpinned by the continuation of quantitative easing in the States and the aggressive easing of monetary policy in Japan,” Bob Parker, who helps oversee about $400 billion as senior adviser at Credit Suisse Asset Management in London, told Francine Lacqua on Bloomberg Television. “I think the next move will be some form of easing by the European Central Bank. If we do have a correction — and I use the word ‘if’ — it’s going to be very minor indeed.”
The volume of shares changing hands in companies on the Stoxx 600 was 18 percent greater than the average of the past 30 days, according to data compiled by Bloomberg.
American Jobs…”
Comments »The Yen Takes a Rest From Free Fall to 100
“The yen halted a decline that took it to within 0.1 percent of 100 per dollar after official data showed Japanese investors sold foreign bonds.
The yen was supported as a technical indicator signaled the currency may pare its 6.6 percent loss against the greenback since the Bank of Japan (8301) expanded monetary easing last week. Australia’s dollar halted a five-day gain versus the yen after the nation’s unemployment rate unexpectedly rose. South Korea’s won appreciated for a third day after the central bank kept its key rate unchanged….”
Comments »$TM Joins Recall With $HMC & $NSANY on Faulty Airbags
“Takata Corp. (7312) faces its biggest recall crisis in almost two decades after defective airbag inflators led Toyota Motor Corp. (7203), Honda Motor Co. (7267) and Nissan Motor Co. to call back more than 3 million vehicles.
The Japanese safety-gear producer made the products from 2000 to 2002, Takata spokesman Hideyuki Matsumoto said, declining to comment on its customers, who identified the supplier. According to Toyota, malfunctioning inflators could cause the airbag to deploy abnormally during a crash.
Takata tumbled as much as 15 percent in Tokyo trading after Japan’s three biggest carmakers made the announcements. It’s the biggest recall involving Takata since 1995, when several automakers called back almost 9 million vehicles to replace faulty seat belts made by the Japanese company — a record for the auto industry at the time.
“It looks like the cost of the recalls may be pretty big,” saidSatoru Takada, a Tokyo-based analyst at Toward the Infinite World Inc., referring to Takata. “It doesn’t seem like something that would be easy to identify and fix. But if the cause is clear, it shouldn’t have a lasting effect.”
Takata, which says it’s the second-biggest maker of automotive safety parts, fell 9 percent to close at 1,819 yen in Tokyo, the biggest drop in two months. Autoliv Inc. (ALV), the world’s biggest maker of airbags, rose as much as 1.6 percent in Stockholm.
Toyota rose 5.8 percent to 5,640 yen, Nissan gained 4.4 percent and Honda rose 3.1 percent in Tokyo. The benchmark Nikkei 225 (NKY) Stock Average climbed 2 percent.
Other Recalls…”
Comments »China Walks a Fine Line as Money Supply and Risks of Tight Credit Grow
“China’s new yuan loans and money supply exceeded analyst estimates last month, aiding the nation’s recovery from the slowest growth in 13 years while adding to financial risks that may presage tighter credit.
New local-currency lending in March was 1.06 trillion yuan ($171 billion), the People’s Bank of China said today in Beijing. That compares with the 900 billion yuan median estimate in a Bloomberg News survey of 34 economists and 620 billion yuan in February. M2, China’s broadest measure of money supply, rose 15.7 percent, compared with the median forecast for 14.6 percent.
New Premier Li Keqiang is trying to keep credit flowing to sustain an economic rebound without creating asset bubbles or excessive risks in the banking system. While inflation eased more than forecast last month, Fitch Ratings Ltd. cut the nation’s long-term local-currency debt rating this week, citing dangers to financial stability.
“China’s monetary policy makers are in a tough position to balance short-term growth stability, market worries and long- term economic health,” said Lu Ting, Hong Kong-based chief economist for Greater China at Bank of America Corp.
While growth momentum is “not strong” and “external conditions are still volatile,” the data “could once again trigger fears on CPI inflation, property bubbles, government debt, shadow banking and then monetary tightening,” Lu said in a note today, referring to the consumer price index. (SHCOMP)
Financial Stocks…”
Comments »New Mines Threaten to Continue a Bear Market in Iron Ore
“The world’s biggest iron-ore producers are planning $250 billion of new mines, threatening to deepen a price slump for the commodity already forecast to drop for at least the next three years.
Mining companies are facing growing investor pressure to defer or cancel projects to stem price declines. Rio Tinto Group (RIO), the second-largest iron ore exporter, will decide on one of the biggest industry expansions in Western Australia in the second half. A decision to delay would boost its earnings in 2015 by $3.7 billion, according to Liberum Capital Ltd.
The price of iron ore, the most shipped commodity after oil, more than tripled in the past decade, encouraging the biggest mining companies to boost output. That was before a surge in Chinese steel output that drove the bull market through 2011 started to wane. Given iron ore operations made up 78 percent of Rio’s earnings last year and more than 90 percent at Brazil’sVale SA (VALE5), producers are being forced to review plans.
“It’s the most important issue the mining industry is facing today — whether or not to collectively act to destroy the single greatest source of value generation,” said Paul Gait, a London-based analyst at Sanford C. Bernstein & Co. “Getting this right and not repeating the mistakes of the past is absolutely key.”
Investors should be concerned. According to Credit Suisse Group AG, over the last three years, 80 percent of the time iron ore prices have fallen European mining companies have underperformed.
Over-Enthusiastic Investing….”
Comments »The Aussie Dollar Falls as Unemployment Unexpectedly Hits a 3 Year High
“Australia’s dollar slid versus its major peers after data showed the nation’s unemployment rate climbed to a three-year high, fanning speculation the Reserve Bank will lower borrowing costs to support growth.
The yield on Australia’s benchmark three-year note fell, snapping a two-day gain. The New Zealand dollar touched 86 U.S. cents for the first time in 1 1/2 years after reports showed the nation’s manufacturing industry expanded last month and a gauge of home prices advanced to a record.
“We’ll probably see weakness on the crosses for the next couple of days, as the view on a recovery in the Australian labor market remains challenged, and also the RBA retains its easing bias,” said Andrew Salter, a Sydney-based foreign- exchange strategist at Australia & New Zealand Banking Group Ltd. (ANZ), referring to Australia’s dollar against its peers.
The Australian dollar lost 0.2 percent to $1.0520 as of 4:57 p.m. in Sydney. The New Zealand dollar, known as the kiwi, rose 0.2 percent to 85.91. The climb to 86 was the first time for the currency since August 2011.
Australia’s three-year note yield fell two basis points, or 0.02 percentage point, to 2.81 percent. It slid to 2.75 percent on April 8, a level unseen since March 5.
The nation’s jobless rate rose to 5.6 percent last month, the highest since 2009, from 5.4 percent in February, the statistics bureau said in Sydney today. The number of people employed dropped by 36,100, compared with the 7,500 decline estimated by economists in a Bloomberg News survey.
RBA Outlook
Swaps traders see a 61 percent chance that the Reserve Bank of Australia will cut the benchmark rate from 3 percent by October, according to data compiled by Bloomberg on overnight- index swaps. The probability was 57 percent yesterday.
New Zealand’s Performance of Manufacturing Index was 53.4 in March, remaining above the 50 level which indicates expansion for a sixth month, Bank of New Zealand and Business New Zealand reported….”
Comments »Global Markets Rally, U.S. Futures Feel Good Before Jobless Claims
The Secret FDIC Rule That Puts Your Savings At Risk
“April 8, 2013
What happened in Cyprus isn’t a “one off” event.
The financial media and elite have been trying to convince the world that Cyprus was a unique situation… a “one time” deal… and that our money is safe in the banks.
This is untrue.
Spain, Canada, and New Zealand have already proposed similar measures through which individuals’ SAVINGS accounts would be used to prop up the banks during times of Crisis.
It’s called a “bail-in,” but really it’s “THEFT” plain and simple. The banks made the terrible mistakes that rendered them insolvent. They (the banks) should simply fail. But instead of failing, the regulators want to keep the banks in business… using YOUR money.
Why is this?
Two reasons:
1) The regulators don’t have the money to actually insure deposits that they claim.
2) Politicians realize that people are fed up with the public funding bank bailouts… so they’re targeting individual savers in the banks that are in trouble.
It’s a simple question of math regarding #1. Banking deposits are in the trillions of Dollars and most deposit insurance entities only have a few billion Dollars in funds. Obviously, if a large bank were to fail under these circumstances there wouldn’t be the funds to cover deposits…
Regarding #2, politicians have begun to realize that the public simply won’t stomach another Federal bailout of the banks. So instead of getting everyone and their children to chip in by using the public’s funds… they’re going after the deposits of a select few people who have their funds IN the troubled bank.
Their thinking is that if you can’t steal a little from everyone, you might as well try to steal a lot from a few people.
Could this happen in the US?
You better believe it. In fact, the FDIC has already put forth a proposal to do EXACTLY this in the event of a Crisis.
Just four months ago, the FDIC drafted a formal strategy in which it suggested that during the next Crisis, it can…
1) Decide WHAT banks are systemically important.
2) Take control of any “systemically important” bank that it deems at risk of default.
3) Once in control of the bank, YOUR savings deposits can be “written down” in value (meaning you LOSE money you thought was yours) as part of the bank bailout.
Less than 99% of Americans realize this is the case, but the legislation allowing this is already IN PLACE and the FDIC has already written out the rules for what will happen…..”
Civil Asset Forfeiture, Much Bigger Than You Think
[youtube://http://www.youtube.com/watch?v=NXuLkVg6HXs 450 300]
Comments »OPEC Lowers 2013 Global Oil Consumption
High stock piles, new discoveries, and lower consumption…..why do we hover around $95-$100 per barrel?
Comments »The FHA May Require a $943 Million Bailout
“WASHINGTON, April 8 (Reuters) – The cash-strapped Federal Housing Administration will likely require a $943 million taxpayer bailout to cover expected losses from loans it insured as the U.S. housing bubble was deflating, the Obama administration said on Wednesday.
It would be the first bailout of the government’s mortgage insurer in its nearly 80-year history.
The FHA, which has struggled to manage a glut of delinquent mortgages, will likely need the funds given a shortfall in its reserves, the administration said in President Barack Obama’s fiscal 2014 budget proposal.
FHA Commissioner Carol Galante said the agency might still be able to avoid taking aid from the U.S. Treasury despite the projected budget hole. The agency has until Sept. 30 to decide whether it needs a cash infusion.
“FHA, while still under stress from legacy loans, has made significant progress and is on a sound fiscal path forward,” Galante told reporters on a conference call. “We are continuing to act and do everything possible to ensure that the impact of these legacy loans … are corrected as soon as possible.” …”
Comments »The Fed Admits Student Debt is a Huge Risk to Recovery
“Policy makers on the Federal Reserve’s interest-rate setting panel have for the first time identified high student debt burdens as a risk to economic growth, adding to a growing chorus of government officials concerned about households’ education borrowings.
At $1.1 trillion, according to the Consumer Financial Protection Bureau, outstanding student loan debt is the largest consumer debt class after home mortgages. Financial regulators, the U.S. Treasury and the New York Fed have all warned about the possible danger student loans pose to financial stability and the broader economy.
But prior to its March meeting, the Federal Open Market Committee, which sets interest rates that affect trillions of dollars of loans and securities, had never before mentioned student loans as a possible downside risk to the economy, according to a review of past meeting minutes.
According to newly released minutes from the March meeting, some members of the panel mentioned “the high level of student debt” as a risk to aggregate household spending over the next three years.
“There is increasing consensus that student loan debt is having a broader impact on the economy than we think,” Rohit Chopra, the CFPB official responsible for the student loan marketplace, said in an interview.
The committee’s mention of student debt burdens is likely to further discussion in Washington over what, if anything, policy makers should do to rein in what has been diagnosed as a growing problem….”
Comments »Shorts Run for Cover in the Solar Sector
$FSLR helped to crush short interest in the last two days of trade. Expect more covering….
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