Bear Market


The Real Banking Crisis, Part II – Sprott

May 31, 2012 by · Leave a Comment 

Today, a mere two months later, Greece is back up to almost €400 billion in total debt outstanding (more than it had pre-bailout), and its sovereign bond yields are back above 29%. It’s as if the March bailout never happened… and if you remember, that lauded Greek bailout back in March represented the largest sovereign restructuring in history…. We’re now at the point where a bank run in one Eurozone country could quickly seize up the entire system – not just in Greece or Spain, but throughout the entire Eurozone and beyond. Greek and Spanish banks are just like all the others; they operate with leverage ratios averaging 25x their equity capital. They are all so overleveraged that it takes very little in deposit withdrawals to cause instantaneous liquidity issues. This is why we’ll likely see another ECB-induced printing program announced (with a new abbreviation, hopefully) before a broader bank run can take root. …Nothing is really being solved here, and everyone knows it. We’re essentially in the same place we were when the crisis erupted back in 2010, only now there’s more total debt outstanding.

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Lines Drawn over California Homeowner Legislation

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“There is a bit of a dust-up going on over passage of a Homeowner Bills of Rights in California.  The Center for Responsible Lending (CRL) and the Mortgage Bankers Association (MBA) have weighed in on opposite sides of the package consisting of six bills sponsored by Attorney General Kamala Harris. ”

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In China, a New Round of Stimulus

May 31, 2012 by · Leave a Comment 

Spooked by a sharply slowing economy, China’s leaders have begun opening the financial spigots to build still more roads and airports and subsidize consumer purchases, reprising measures that enabled the nation to sail mostly unscathed through the last great global recession. But the leaders are signaling that the latest round of stimulus spending will fall far short of the four trillion renminbi, or $585 billion at the time, that the government poured into the economy in 2008 and 2009. That spurred a torrent of bank lending, part of it for dubious projects that many experts say will wind up having to be written off in coming years.

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May Global PMI Coming in Down

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“These are not the most closely followed data points.  However, the power of the insights is unparalleled.”

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"The End Game: 2012 And 2013 Will Usher In The End" – The Scariest Presentation Ever?

May 31, 2012 by · Leave a Comment 

We don’t know exactly what is to come, but we can all join the very few dots from where weare now, to the collapse of the first major bank.With very limited room for government bailouts, we can very easily join the next dots from the first bank closure to the collapse of the whole European banking system, and then to the bankruptcy of the governments themselves. There are almost no brakes in the system to stop this, and almost no one realises the seriousness of the situation….The problem is not government debt per se. The real problem is that the $70 trillion in G10 debt is collateral for $700 trillion in derivatives….From a timing perspective, I think 2012 and 2013 will usher in an end….The markets are at the frankly terrifying point of realizing that LTRO, EFSF, QE etc are not going to prevent this collapse.

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SunTrust Mortgage settles $21M mortgage discrimination suit

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SunTrust Mortgage, a subsidiary of the nation’s 11th-largest commercial bank, agreed to pay $21 million to resolve a lawsuit by the Department of Justice that it engaged in discriminatory lending practices.

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FHA foreclosures spike 73% in April: LPS

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In April, mortgage servicers started a wave of foreclosures on the massive backlog of FHA loans originated in 2008 and 2009, but is it a trend?

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New data prompts CFPB to reopen comment period on QM

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The proposal’s original comment period closed in July 2011, but the bureau is reopening it until July 9 to seek comments specifically on new data and information obtained during and after the close of the original comment period.

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Capital spending muted as structural employment concerns persist: Pianalto

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The economic recovery that officially began in 2009 has failed to put a significant dent in the nation’s unemployment rate as job growth and capital spending remain muted, the Cleveland Federal Reserve president said.

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Weekly Forex Market Forecast (May 28th – June 1st 2012)

May 31, 2012 by · Leave a Comment 

By Michael Trinkle, ForexTraders

Key Fundamental Forex Events and Forecasts for the Coming Week

The following table lists the key economic data and other events that are due out during the week of May 28th – June 1st, with release times displayed for the GMT time zone.

The list also includes the current market consensus forecast for each event and indicates what sort of deviation might affect the forex market valuation of the indicated currency positively.

Monday, May 28th

  • 12:10am AUD RBA Governor Stevens speaks (hawkish = good for currency)
  • All Day CHF Bank Holiday
  • All Day EUR French Bank Holiday
  • All Day EUR German Bank Holiday
  • All Day USD Bank Holiday

Tuesday, May 29th

  • 3:00pm USD CB Consumer Confidence (69.6, > good for currency)

Wednesday, May 30th

  • 2:30am AUD Retail Sales (0.2%, > good for currency)
  • Tentative EUR Italian 10-y Bond Auction
  • 3:00pm USD Pending Home Sales (0.0%, > good for currency)

Thursday, May 31st

  • 2:00am NZD NBNZ Business Confidence (35.8, > good for currency)
  • 2:30am AUD Building Approvals (0.7%, > good for currency)
  • 2:30am AUD Private Capital Expenditure (4.1%, > good for currency)
  • 1:15pm USD ADP Non-Farm Employment Change (139K, > good for currency)
  • 1:30pm USD Prelim GDP (1.9%, > good for currency)
  • 1:30pm USD Unemployment Claims (369K, > good for currency)
  • All Day EUR Irish Stability Treaty Vote

Friday, June 1st

  • 2:00am CNY Manufacturing PMI (52.1, > good for currency)
  • 8:15am CHF Retail Sales (3.6%, > good for currency)
  • 9:30am GBP Manufacturing PMI (49.7, > good for currency)
  • 1:30pm CAD GDP (0.3%, > good for currency)
  • 1:30pm USD Non-Farm Employment Change (152K, > good for currency)
  • 1:30pm USD Unemployment Rate (8.1%, > good for currency)
  • 3:00pm USD ISM Manufacturing PMI (54.1, > good for currency)
  • Tentative USD Treasury Currency Report (hawkish = good for currency)

Technical Forecast and Levels to Watch for the Majors This Week

EURUSD: Higher

Resistance:
Initial:
1.2588, 1.2623/65, 1.2857/86, 1.2904, 1.2946/94, 1.3000/55, 1.3133/59, 1.3211/24, 1.3251/92, 1.3321, 1.3376/85, 1.3433 and 1.3485/95.
Above:
1.3546/68, 1.3614, 1.3795/98, 1.3836, 1.3969, 1.4000, 1.4246, 1.4500/17, 1.4695 and 1.4939.

Support:
Initial:
1.2496, 1.2456, 1.2329, 1.1938, 1.1876 and 1.1639.
Below:
1.0762, 1.0206, 0.9599/0.9607, 0.9338, 0.8410, 0.8347 and 0.8225.

USDJPY: Lower

Resistance:
Initial:
79.96/80.22, 80.56/61, 80.82, 81.14/46, 81.76/96, 82.01/22, 82.53, 82.64, 83.01/09, 83.17, 83.37, 83.77 and 83.96.
Above:
84.09/17, 84.51, 84.80, 85.51, 85.92, 87.11/13, 87.95, 93.77 and 94.97.

Support:
Initial:
79.40/52, 79.05, 78.99, 78.66, 78.06/28, 77.00/89, 76.73/83 and 76.02/41.
Below:
75.94/98, 75.70 and 75.56.

GBPUSD: Higher

Resistance:
Initial:
1.5668, 1.5685/91, 1.5717, 1.5732, 1.5781, 1.5804/07, 1.5890, 1.5907, 1.5921/27, 1.5983/90, 1.6035, 1.6061/92, 1.6109 and 1.6182/98.
Above:
1.6297, 1.6301, 1.6452/56, 1.6474, 1.6546, 1.6570, 1.6589/98, 1.6616, 1.6741/45 and 1.6876.

Support:
Initial:
1.5643/47, 1.5637, 1.5624/29, 1.5601, 1.5516/85, 1.5465/99, 1.5422 and 1.5410.
Below:
1.5375, 1.5293, 1.5270/77, 1.5232, 1.5123 and 1.5000. 

AUDUSD: Mildly Higher

Resistance:
Initial:
0.9794, 0.9861/63, 0.9900, 0.9925/83, 1.0000/18, 1.0052, 1.0100/16, 1.0216/66, 1.0303/84, 1.0422, 1.0444/51, 1.0474/98, 1.0508, 1.0556, 1.0596, 1.0608, 1.0627/38, 1.0654, 1.0668/70 and 1.0686.
Above:
1.0751/53, 1.0792/98, 1.0842, 1.0854, 1.1010, 1.1064 and 1.1079.

Support:
Initial:
0.9732, 0.9620/89, 0.9536/41, 0.9500 and 0.9486.
Below:
0.9382/86, 0.9341, 0.9329, 0.9221, 0.8915, 0.8734, 0.8578 and 0.8066/81.

USDCAD: Mildly Lower

Resistance:
Initial:
1.0297, 1.0302, 1.0311, 1.0334/37, 1.0415/23, 1.0438, 1.0481 and 1.0500.
Above:
1.0506, 1.0522, 1.0646/56, 1.0669 and 1.0742/85.

Support:
Initial:
1.0262/87, 1.0220/32, 1.0207, 1.0160/99, 1.0105/42, 1.0018/78, 0.9997, 0.9969, 0.9947/54, 0.9924/27, 0.9906, 0.9828/99, 0.9789/99 and 0.9724.
Below:
0.9686, 0.9645, 0.9525, 0.9445 and 0.9405.

NZDUSD: Mildly Higher

Resistance:
Initial:
0.7552/85, 0.7605/76, 0.7723/95, 0.7804/88, 0.7906, 0.7955, 0.7979, 0.7993/96, 0.8057/99, 0.8109/35, 0.8204, 0.8227, 0.8240/62, 0.8279 and 0.8294.
Above:
0.8317/95, 0.8405, 0.8420/27, 0.8504, 0.8571, 0.8764 and 0.8841.

Support:
Initial:
0.7521, 0.7500, 0.7404/67, 0.7369, 0.7342, 0.7321, 0.7189, 0.7115, 0.7099 and 0.7000.
Below:
0.6945/62, 0.6793, 0.6686, 0.6560, 0.5914/28, 0.5012, 0.4890, 0.4485, 0.4451 and 0.3909.

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