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Monthly Archives: June 2011

Dollar Expected To Soften

“The dollar’s best monthly performance since November may prove fleeting as a slowing U.S. economy and falling short-term interest ratesencourage investors to use the currency to fund investments in higher-yielding assets.

The U.S. currency’s value will be unchanged from current levels by year-end, down from last month’s predicted 2 percent appreciation, according to analyst forecasts compiled by Bloomberg. Bets remain tilted against the greenback even after last month’s 2.3 percent gain in IntercontinentalExchange Inc.’s Dollar Index, Commodity Futures Trading Commission data show.

While the dollar gained against 14 of the 16 most-traded currencies in May, it fell last week after weaker-than-forecast reports on manufacturing, employment and consumer confidence led traders to raise bets that the Federal Reserve will keep rates near zero. Traders also found less reason to seek shelter in the currency as European officials agreed to provide more financial aid to Greece and GermanChancellor Angela Merkel said the European Union is committed to keeping the euro intact.

“The dollar’s rebound is not a turning point in the bear trend,” said John Normand, head of currency strategy in London at JPMorgan Chase & Co., the world’s fifth-biggest currency trader according to Euromoney Institutional Investor Plc. “A sustained dollar rally requires a Greek default, a global recession or aggressive Fed tightening, and those are not likely to happen this year.”

Full article

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Oil Falls Again on Demand Prospects

“Oil dropped for a second day in New York, extending last week’s 0.4 percent decline, on signs of a slowdown in demand as OPEC ministers arrived in Vienna to discuss production quotas.

Futures fell as much as 1.1 percent as the highest U.S. jobless rate this year fueled concern that the recovery in the world’s largest economy is faltering. The Organization of Petroleum Exporting Countries is unlikely to change targets when it meets June 8, according to a Bloomberg News survey of 30 analysts conducted in the week to May 31.

“We have been stuck in a range for a long time now with Libyan pressures seemingly passing away,” said Alexander Ridgers, London-based head of commodities at CMC Markets. “Around $99 seems like the right price. The current data coming out suggests a falloff in economic activity and a decrease in demand, but if this happens OPEC will tighten their supply.”

Crude for July delivery dropped as much as $1.10 to $99.12 a barrel in electronic trading on theNew York Mercantile Exchange and was at $99.41 at 11:05 a.m. London time. Prices are 39 percent higher the past year.

Brent crude for July delivery lost as much as $1.38, or 1.2 percent, to $114.46 a barrel on the London-based ICE Futures Europe exchange, and traded at $114.93 after climbing 30 cents, or 0.3 percent, on June 3. Prices are 59 percent higher in the past year.”

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Mother Nature Has Wheat Fields Wilting Across The Planet; Could Push Prices Higher by 20%

“The worst droughts in decades are wilting wheat fields from China to the U.S. to the U.K., overwhelming Russia’s return to grain markets and driving prices to the highest levels since 2008.

Parts of China, the biggest grower, had the least rain in a century, some European regions are the driest in 50 years and almost half the winter-wheat crop in the U.S., the largest exporter, is rated poor or worse. Inventory is dropping 8.8 percent, the most in five years, Rabobank International says. Prices will advance 20 percent to as high as $9.25 a bushel by Dec. 31, a Bloomberg survey of 14 analysts and traders shows.”

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World Bank To Propose CO2 Levy on Jets and Jet Fuel

BONN, Germany, June 5 (Reuters) – The World Bank will suggest a global levy on jet and shipping fuel in recommendations to G20 governments later this year on raising climate finance, a senior official said on Sunday.

Developed countries have already written off chances of agreement on a new binding deal at a U.N. conference in Durban this year, placing a new focus on piecemeal efforts including fund-raising.

“Binding targets under the Kyoto Protocol cap the greenhouse gas emissions of nearly 40 industrialised countries but expire in 2012 and now look unlikely to be extended in time.

The World Bank is focusing on a levy on shipping and jet fuels in a report to G20 finance minister in October, among other efforts to keep climate action on track.

“We are looking at carbon emissions-based sources … including bunker (shipping) fuels and aviation fuels, that would be internationally coordinated albeit nationally collected,” said Andrew Steer, World Bank special envoy for climate change.”

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Saudis To Push Production at This Weeks OPEC Meeting

“Gulf Arab OPEC members led by Saudi Arabia will push for an increase in supplies at a meeting of the oil cartel this week in an effort to support flagging world economic growth by bringing crude prices back below $100 a barrel.

Data indicating that economic recovery may be stalling in the West is worrying OPEC’s core Gulf members Saudi Arabia, Kuwait and the United Arab Emirates.

Saudi and its fellow Gulf producers will argue that oil prices are undermining the economic growth that fuels demand for OPEC crude and that more supply is needed to balance demand in the second half of the year.

But Riyadh is not prepared to force-feed crude on to the market to push prices aggressively lower.”

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Flash: TEPCO Shares Plunge

On news of a record and staggering loss, shares of TEPCO are down more than 25%.

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FAST TIMES AT HUGH HENDRY HIGH: IT’S COOL TO “DO THE HUGH” AGAIN

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With noted bond bull and Western economic bear Hugh Hendry (based out of London, by way of Scotland) all of a sudden back in style, dentists are apparently embracing Hendry’s style by “Doing the Hugh.”

From the AP:

Karen Butler has a British-sounding accent, but she’s never been to Europe. She woke up from dental surgery one day talking funny.

A year and a half later her “foreign” accent remains, and her story has traveled around the world.

The 56-year-old tax consultant from Toledo, Ore., has found her life transformed by the dental procedure, which left her with dentures, and – depending on whom you ask – an Eastern European, Swedish or British accent.

Full Story Here

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Worst Performers (3 months)

Min market cap: $1 billion

No. Ticker 3-month Return Industry Market Cap Sector
1 FNSR -51.04 Networking & Communication Devices 1,900,000,000 TECHNOLOGY
2 NOG -46.19 Oil & Gas Drilling & Exploration 1,080,000,000 BASIC MATERIALS
3 DMD -42.24 Internet Software & Services 1,180,000,000 TECHNOLOGY
4 RIMM -41.37 Communication Equipment 20,310,000,000 TECHNOLOGY
5 FRO -38.19 Shipping 1,310,000,000 SERVICES
6 CRUS -36.69 Semiconductor – Specialized 1,030,000,000 TECHNOLOGY
7 NAK -36.52 Gold 1,100,000,000 BASIC MATERIALS
8 LFT -35.66 Chinese Burritos 1,080,000,000 TECHNOLOGY
9 CYH -35.23 Hospitals 2,450,000,000 HEALTHCARE
10 SWKS -33.59 Semiconductor – Integrated Circuits 4,290,000,000 TECHNOLOGY
11 LOGI -33.37 Computer Peripherals 2,330,000,000 TECHNOLOGY
12 JDSU -32.33 Communication Equipment 4,210,000,000 TECHNOLOGY
13 RMBS -31.84 Semiconductor- Memory Chips 1,430,000,000 TECHNOLOGY
14 IL -30.86 Security Software & Services 1,070,000,000 TECHNOLOGY
15 CCJ -30.51 Industrial Metals & Minerals 11,110,000,000 BASIC MATERIALS
16 ARO -29.96 Apparel Stores 1,470,000,000 SERVICES
17 SVM -29.74 Silver 1,780,000,000 SERVICES
18 GTE -28.32 Independent Oil & Gas 1,890,000,000 BASIC MATERIALS
19 ODP -27.85 Specialty Retail, Other 1,070,000,000 SERVICES
20 IRE -27.83 Foreign Regional Banks 2,040,000,000 FINANCIAL
21 JNS -27.03 Asset Management 1,770,000,000 FINANCIAL
22 CDE -26.97 Silver 2,270,000,000 BASIC MATERIALS
23 OSK -26.84 Trucks & Other Vehicles 2,410,000,000 CONSUMER GOODS
24 JNPR -26.68 Networking & Communication Devices 17,230,000,000 TECHNOLOGY
25 SNE -26.65 Electronic Equipment 26,470,000,000 CONSUMER GOODS
26 MFG -26.34 Foreign Money Center Banks 32,880,000,000 FINANCIAL
27 AIG -26.34 Property & Casualty Insurance 49,680,000,000 FINANCIAL
28 YGE -26.27 Solar 1,300,000,000 TECHNOLOGY
29 JOE -26.15 Real Estate Development 1,870,000,000 FINANCIAL
30 GDOT -26.12 Business Services 1,470,000,000 FINANCIAL
31 IO -25.80 Scientific & Technical 1,470,000,000 TECHNOLOGY
32 WFR -25.64 Solar 2,220,000,000 TECHNOLOGY
33 CAM -25.33 Oil & Gas Equipment & Services 11,340,000,000 BASIC MATERIALS
34 GHL -25.32 Investment Brokerage – Regional 1,530,000,000 FINANCIAL
35 AIB -25.21 Foreign Money Center Banks 3,260,000,000 FINANCIAL
36 LPS -24.80 Business Services 2,210,000,000 FINANCIAL
37 SF -24.45 Investment Brokerage – Regional 1,950,000,000 FINANCIAL
38 UIS -24.43 Information Technology Services 1,130,000,000 TECHNOLOGY
39 LAMR -24.25 Marketing Services 2,630,000,000 SERVICES
40 URBN -24.23 Apparel Stores 4,660,000,000 SERVICES
41 ACI -24.15 Industrial Metals & Minerals 4,490,000,000 BASIC MATERIALS
42 HNI -24.10 Business Equipment 1,040,000,000 CONSUMER GOODS
43 SEMG -23.61 Oil & Gas Pipelines 1,050,000,000 BASIC MATERIALS
44 ASIA -23.42 Chinese Burritos 1,140,000,000 TECHNOLOGY
45 SWC -23.25 Industrial Metals & Minerals 2,020,000,000 BASIC MATERIALS
46 TEX -23.24 Farm & Construction Machinery 2,940,000,000 INDUSTRIAL GOODS
47 OAS -22.97 Oil & Gas Drilling & Exploration 2,510,000,000 BASIC MATERIALS
48 TBL -22.95 Textile – Apparel Footwear & Accessories 1,560,000,000 CONSUMER GOODS
49 LXK -22.78 Computer Peripherals 2,230,000,000 TECHNOLOGY
50 ACXM -22.70 Information Technology Services 1,030,000,000 TECHNOLOGY

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Monthly BLS Data, 1939 to Date

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
1939 177 180 -186 206 202 -83 243 370 376 61 70
1940 64 112 111 -127 181 98 -36 410 458 455 403 504
1941 308 364 250 374 714 469 486 407 292 112 76 80
1942 244 165 423 415 421 256 442 518 266 260 159 242
1943 259 221 158 93 -50 185 -80 -155 -62 191 144 -72
1944 -86 -118 -252 -229 -77 -38 -43 -56 -177 37 3 150
1945 42 0 -108 -352 -139 -156 -275 -407 -1966 98 398 115
1946 728 -589 942 716 440 384 421 489 266 186 302 -17
1947 166 18 42 -114 146 171 -66 216 243 214 71 92
1948 108 -149 143 -311 426 237 128 15 119 -44 -56 -166
1949 -353 -175 -262 -8 -248 -243 -209 91 163 -834 294 272
1950 14 -232 654 424 341 367 369 734 255 270 66 77
1951 434 288 294 -15 96 115 -6 -53 -53 54 140 159
1952 -9 223 -18 112 29 -359 -142 778 397 279 218 348
1953 -19 194 135 -42 59 31 14 -49 -122 -123 -336 -204
1954 -235 -86 -223 19 -212 -69 -62 -9 56 63 235 152
1955 166 147 319 283 266 278 195 127 150 169 161 213
1956 170 192 128 80 131 77 -629 678 -32 181 41 108
1957 -42 210 58 82 -89 -83 56 6 -196 -167 -208 -172
1958 -308 -501 -276 -274 -113 -1 125 196 273 -21 458 145
1959 393 206 329 304 229 129 125 -466 91 -69 276 540
1960 99 239 -55 354 -340 -125 -44 -31 -44 -84 -182 -219
1961 -60 -127 106 -36 157 194 147 175 88 134 222 128
1962 20 296 89 325 25 18 102 92 139 64 14 -28
1963 89 115 91 258 36 42 137 115 168 206 -29 105
1964 127 265 146 25 166 132 191 208 283 -109 423 203
1965 163 217 203 255 234 198 273 265 262 228 279 324
1966 207 268 395 245 275 399 191 206 138 209 165 180
1967 208 20 103 -63 151 132 137 255 21 62 478 197
1968 -95 409 82 259 97 252 222 202 159 233 265 260
1969 193 260 208 166 256 308 94 275 -87 201 -31 152
1970 -64 126 151 -105 -226 -94 27 -123 17 -430 -110 381
1971 76 -61 54 178 210 6 63 52 252 22 202 264
1972 337 207 293 218 304 293 -51 428 131 404 293 305
1973 350 397 269 170 190 240 25 255 115 324 304 126
1974 69 149 42 89 163 55 32 -15 -5 13 -368 -602
1975 -360 -378 -270 -186 160 -104 249 386 78 303 144 338
1976 489 311 232 244 18 65 170 158 188 13 332 211
1977 244 295 404 339 359 399 348 238 458 262 379 235
1978 187 353 513 702 346 442 254 276 137 336 437 283
1979 137 243 426 -62 372 318 106 82 27 157 94 95
1980 131 79 112 -145 -431 -320 -263 260 113 280 256 195
1981 95 67 104 74 10 196 112 -36 -87 -100 -209 -278
1982 -327 -6 -129 -281 -45 -243 -343 -158 -181 -277 -124 -14
1983 225 -78 173 276 277 378 418 -308 1114 271 352 356
1984 447 479 275 363 308 379 312 241 311 286 349 127
1985 266 124 346 195 274 145 189 193 204 187 209 168
1986 123 107 93 188 125 -93 318 113 346 187 186 204
1987 171 232 249 338 227 171 346 170 229 492 231 294
1988 94 452 276 245 227 363 223 121 340 268 339 289
1989 262 258 192 173 118 117 39 47 249 111 277 95
1990 342 245 215 40 149 17 -42 -208 -82 -161 -144 -60
1991 -119 -306 -160 -211 -128 87 -47 15 35 12 -58 23
1992 49 -66 50 158 126 60 71 141 35 177 140 211
1993 310 242 -51 309 265 173 295 161 241 277 261 308
1994 268 201 462 353 331 315 363 300 354 207 423 274
1995 321 209 222 162 -16 231 79 271 245 147 148 131
1996 -19 434 263 161 323 278 232 196 220 243 296 167
1997 230 301 312 291 256 253 283 -18 508 339 303 299
1998 270 189 144 277 401 212 119 352 218 193 284 342
1999 121 410 106 376 213 266 291 192 202 408 294 294
2000 249 121 472 286 225 -46 163 3 122 -11 231 138
2001 -16 61 -30 -281 -44 -128 -125 -160 -244 -325 -292 -178
2002 -132 -147 -24 -85 -7 45 -97 -16 -55 126 8 -156
2003 83 -158 -212 -49 -6 -2 25 -42 103 203 18 124
2004 150 43 338 250 310 81 47 121 160 351 64 132
2005 136 240 142 360 169 246 369 195 63 84 334 158
2006 281 317 287 182 11 80 202 185 156 -8 205 180
2007 203 88 218 79 141 67 -49 -26 69 91 127 84
2008 13 -83 -72 -185 -233 -178 -231 -267 -434 -509 -802 -619
2009 -820 -726 -796 -660 -386 -502 -300 -231 -236 -221 -55 -130
2010 -39 -35 192 277 458 -192 -49 -59 -29 171 93 152
2011 68 235 194 232(P) 54(P)
P : preliminary

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Chartology for Silver Bugs

“Chart pattern analogs have long been a popular way to get an insight into future price structures.  When you see a structure in the current market that looks a lot like a structure in a previous period, then you can use the data from that previous period to look ahead to what current prices might do, assuming that the pattern resemblance continues.It is a standard principle of science that experiments should be repeatable. The rules of physics should operate the same way everywhere.  So if you drop a brand new tennis ball in New York, it should bounce the same way that a brand new tennis ball bounces in Melbourne. The rules of market physics are a lot different and often more variable than the rules for the physical world, but the presumption behind chart pattern analogs is that if you are seeing the same behavior, then the same sorts of inputs and rules of motion are at work.”

Full article and charts

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Trading in Bank Stocks Suggest, For The Past Few Weeks, an Increase in Capital Requirements was Expected

[tarullo0603]Bloomberg News“Daniel Tarullo, governor of the U.S. Federal Reserve speaks during a Senate Banking hearing earlier this year.

Large U.S. financial institutions might be forced to sharply increase their capital cushions as part of a plan discussed by the Federal Reserve to help prevent another financial crisis.

In a speech on Friday, Federal Reserve governor Daniel Tarullo suggested institutions could be ordered to hold capital ranging from 8% to 14% of assets, adjusted for the amount of risk they pose.

No decision has been made, but in some extreme cases that would be twice as high as the 7% agreed to last year by global policy makers in Basel, Switzerland.

“The regulatory structure…should discourage systemically consequential growth or mergers unless the benefits to society are clearly significant,” Mr. Tarullo said at the Peterson Institute for International Economics. “No one wants another TARP,” he said, referring to the Troubled Asset Relief Program, the $700 billion government bailout that became necessary as financial institutions teetered on the brink of insolvency in 2008.”

Full article

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Ron Paul Counters Boehner’s Austerity Plans

“Republican presidential candidate Ron Paul dismissed House SpeakerJohn Boehner’s call for spending cuts to match any increase in the federal debt ceiling. A fiscal catastrophe is coming whether or not the country exhausts its borrowing power, he said.

“I don’t take it seriously,” the Texas congressman said of Boehner’s demand. Paul predicted Congress would “go up to the last minute” before the Aug. 2 deadline and then raise the nation’s $14.3 trillion legal debt limit, yet fail to solve the problems underlying the nation’s soaring deficits.

“The catastrophe comes regardless, because as long as they encourage more spending, then we go over a cliff,” Paul said in an interview for “Political Capital with Al Hunt,” airing this weekend. “So I want to stop us,” said Paul, who said he will vote against raising the limit.

He dismissed discussion of a cap on future spending, saying it would be “too little, too late.”

“Do you think the American people are going to believe that we’re going to cut in the future?” added Paul, 75. He said any reductions promised beyond this year’s budget amount to “pie-in-the-sky talking.”

On presidential politics, Paul said that while other Republican candidates seeking to take on President Barack Obama in 2012 are echoing his themes on spending and debt, he is the only one who has a record that matches the rhetoric.

‘Credibility Gap’ “

Full article

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EU to Put Humpty Greedumpty Back Together Again

“European Union officials will focus on preparing a new aid package forGreece that includes a “voluntary” role for investors after the EU and the International Monetary Fund approved the fifth installment of Greece’s 110 billion-euro ($161 billion) bailout.

“I expect the euro group to agree to additional financing to be provided to Greece under strict conditionality,” Luxembourg Prime Minister Jean-Claude Juncker said after meeting with Greek Prime Minister George Papandreou in Luxembourg yesterday. “This conditionality will include private-sector involvement on a voluntary basis.”

Papandreou agreed to 78 billion euros in additional austerity measures and asset sales through 2015 to secure the 12 billion euro bailout payment and meet conditions for receiving an additional rescue package. He agreed to make “significant” cuts in public-sector employment and establish an agency to manage accelerated asset sales, according to a statement released in Athens yesterday. The plan is fueling popular opposition and protests across Greece.

Greek bonds gained on the prospect of a new aid plan, with the yield on the country’s two-year notes falling 172 basis points yesterday to 22.8 percent, the lowest since April 20. The agreements came at the end of a week when Greece’s fiscal crisis worsened enough for Moody’s Investors Service to raise the probability of a default to 50 percent.”

Full article

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