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Interest Rates Through The Floor

With the arrivals of the holidays, it’s important that you not worry about an adequate supply of money available. Keeping that in mind, the FED issued this statement

In response to heightened pressures in money markets for funding through the year-end, the Federal Reserve Bank of New York’s Open Market Trading Desk plans to conduct a series of term repurchase agreements that will extend into the new year.

The first such operation will be arranged and settle on Wednesday, November 28, and mature on January 10, 2008, for an amount of about $8 billion. The timing and amounts of subsequent term operations spanning the year-end will be influenced by market and reserve developments.

In addition, the Desk plans to provide sufficient reserves to resist upward pressures on the federal funds rate above the FOMC’s target rate around year-end.

In addition, the FED executed two TOMOs this week:

Monday $10.25 Billion
Tuesday $14.75 Billion.

The Fed Funds target is 4.50%. The TOMOs had rates as low as 3.90%. You are looking at another FED rate decrease at the next meeting. Yesterday the 2-year treasury broke the 3% level, that’s a 1.5% spread with Fed Funds and the 10-year treasury broke 4%, the 11th largest fall in the 10-year T-bond rate in one day since 1962! Clearly, there is a move to buy safety.

Is it time to refinance again?

10-Year Treasury 2-Year Treasury TOMOs

Katie Couric Interviews Sen. Hillary Clinton

For all of you Hillary Clinton supporters out there, and that means most men are not and only older women are, here’s the Katie Couric interview with Sen. Hillary Clinton;


Couric clinton
Uploaded by dollarsandsense123

It is important to note for all you Oprah fans, Sen Clinton has just equated Bill Clinton with Oprah. Bev was struck by the arrogance of Sen. Clinton’s insistence that she will be the Democrat’s nominee.

One more thing. Sen. Hillary gets up every day. That also means she is not a vampire or blood sucking beast that many of you out there think she is. Oh, you know who you are!

Sen. Hillary Clinton Katie Couric Mover Mike

Into The Alley Rode The 45,000!

The real news from Citigroup is not the Arab savior that showed up to buy a 4.9% interest in the bank for $7.5 Billion and receive an interest rate of 11%. No the real story is Citigroup may lay off 45,000 people! CNNMoney didn’t report it. The International Herald Tribune didn’t report it. Reuters didn’t report it. No report in this WSJ story. Likewise from the Guardian. The Deal Book at the NYT didn’t say a word.

Guess who reported that 45,000 people may lose their jobs at Cirigroup? Xinhua News: Citigroup reported to layoff 45,000 employees. Even the Drudge report touted in big red headlines: ABU DHABI RESCUES CITI FOR 11% RETURN, but nothing about the expected job loss. It is comforting to know that the last bailout of Citigroup came in 1991. Prince Alwaleed bin Talal invested $590 Million in the company’s predecessor, Citicorp and that investment is worth something like 10 times what he paid for it. I don’t believe the shareholders have fared as well and certainly those 45,000 employees expected to be laid off may not have fared quite so well, But the stock is up on the news!

Update:

If a loss of 45,000 jobs and $7.5 Billion is what it takes to get healthy, how many more “Citigroups” are there out there?

Blogs For Borders Video Blogburst

In this weeks episode:

A “virtual fence?”  When the president utilizes one around the White House we’ll believe him.

The Deportation Joke!  Previously deported criminal aliens just keep coming, American citizens just keep dying!

And 100% Preventable!

This has been the Blogs For Borders Video Blogburst.

The Blogs For Borders Blogroll is dedicated to American sovereignty, border security and a sane immigration policy. If you’d like to join find out how right here.

Technorati Tags: illegal immigration, the deportation joke, mexico, murder, rape, criminal aliens, border fence, border security, sanctuary city, border patrol, manhunt,

Apparently Oregon Has No SIVs

On Nov. 21st, I asked Has Oregon Caught The SIVs?, meaning does our Local Government Investment Pool (OSTF) have any exposure to Asset Backed Commercial Paper (ABCP). As of June, 2007, The State of Oregon in its 10 Billion short term fund had 1,765,313 or about 16.8% in ABCP from these firms

Alpine Securitization Corporation
Barton Capital Corporation
Bavaria Universal Funding
CAFCO, LLC
Ciesco Inc.
Daimler Chrysler Revolving Auto
FCAR Owner Trust 1
FCAR Owner Trust II
Gemini Securities
Giro Balanced Funding
Jupiter Securitization
Ranger Funding
Sheffield Receivables Corporation
Yorktown Capital LLC

I emailed Ley Garnett, Press liason from the Office of the State Treasury asking “Can you assure me that Oregon has no exposure to SIV? If it does, what percent and how big of a problem are we looking at.”

I received an email from him today with this two page letter as an attachment, In the letter it states

Over the past four months staff has revised the “Approved CP List” on numerous occasions, with a vigilant eye on the ABCP sector. Liquidity has substantially improved for many of the ABCP programs, but not so for those programs with any hint of exposure to subprime debt and CDOs. Although staff believes that the programs on our approved list merit inclusion in the OSTF – we feel we have separated the good apples from the bad – staff is also cognizant of the headline risk in the current environment associated with ABCP and have put these programs on HOLD until further notice.

As of November 15, 2007 ABCP exposure is 1.249% of the total OSTF. Staff does not have direct exposure to any subprime or CDO asset classes. The longest of the four ABCP holdings will mature on December 14, 2007. Here is a summary of ABCP exposure in the OSTF as of November 15, assuming no change in total OSTF assets:

Maturity Date Issue Current Ratings Administrator Program Type Par Amount % OSTF* Total ABCP, % OSTF*
November 21 CIESCO A1+/P1/F1+ Citibank Multi-Seller $50,000,000 0.425% 0.824%
December 4 FCAR Owner Trust I A1+/P1 Ford Motor Credit Company Single-Seller $15,000,000 0.127% 0.697%
December 5 FCAR Owner Trust I A1+/P1 Ford Motor Credit Company Single-Seller $32,010,000 0.272% 0.425%
December 14 FCAR Owner Trust I A1+/P1 Ford Motor Credit Company Single-Seller $50,000,000 0.425% 0.000%

It appears OSTF has reduced its ABCP exposure from 16.8% to 1.249% since the June report. How come we were so smart and so many others were caught and had huge losses?

Guess it ‘s time for a follow-up email to Ley Garnett.
Oregon Short-Term Fund Comments Regarding Current Market Conditions

Asset Backed Commercial Paper Oregon Short Term Fund Mover Mike

Brookstreet Securities Follow-up

Back in June of 2007, I posted about CDOs and CMOs Bring Street Terror

Hammered by exposure to a risky type of mortgage-backed security, Brookstreet Securities Corp. of Irvine, Calif., yesterday told its 500 or so affiliated reps and advisers that “disaster” had struck, and that the firm could close if it doesn’t come up with at least $5 million.

I checked back to see if they had raised the necessary money. Sadly, Brookstreet closed its doors.

The firm’s 650 independent contractor brokers have been terminated, says Stanley Brooks, President of the firm. Brookstreet clients are left in limbo, many with huge losses in their accounts.

Some of Brookstreet’s clients report that their accounts continued to fall in value this week. Yet, if they attempted to do anything NFS (Fidelity’s National Financial Services (NFS), which cleared trades and maintained accounts for Brookstreet.) told them they must talk to their (Brookstreet) broker, but their broker was not answering the phone. Meanwhile, Some of these clients’ margin accounts slipped into the “red”, meaning not only have these investors’ funds disappeared but NFS now claims the investors owe it money!

The son of Brookstreet Securities founder, joined Wedbush Morgan and invited Brookstreet brokers to join him at that firm.

Recently, a group on nuns, who claim they were led to believe they were making safe investments, apparently had their funds invested by Wedbush into mortgage-backed CMO securities which were just pools of mobile home loans. They soon lost $1 million, according to a complaint filed by The Sisters of St. Joseph of Carondelet in California against Wedbush Morgan in arbitration through the National Association of Securities Dealers.

Wedbush has been named in over 40 complaints over CMO products.

Brookstreet Securities Corp. Wedbush Morgan Mover Mike

“Bleed The Rumor”

The Borderline Report notices that the Times of London

states that the American political “blogs” have been rife with rumors of a lesbian relationship between Hillary and Huma.

Is this a way for the Times of London to “bleed the rumor” into the mainstream media – and all the while hiding behind and blaming the blogs?

The Borderline Report suggests we watch the New York Post and Fox News Channel for evidence that the alleged lesbians are going mainstream.

The New York Post on November 23rd, had a story titled Palmetto Bugs about anonymous e-mails and letters claiming that Hillary Rodham Clinton was having a lesbian affair with Huma Abedin, her aide.

Hillary Rodham Clinton — with Police Commissioner Ray Kelly and her aide, Huma Abedin — has been accused of a lesbian affair with the staffer in scurrilous e-mails sent to South Carolina primary voters.

A search of the Fox News site for Huma Abedin comes up blank. The New York Sun is blank for Huma, but does feature Hillary Clinton in a story about Bill and Hillary living together in Berkeley titled HILLARY CLINTON’S RADICAL SUMMER

Senator Clinton’s clerkship at a left-wing law firm is surprising to some of her supporters. To her opponents, it is another indication that radical ideology lurks below the surface of her moderate public image.

Sen. Hillary Clinton Huma Abedin Mover Mike

Where’s Jeffrey Christian When You Need Him?

I caught up with Jeffrey Christian today. Not literally, but with Gold at $821.60, I wanted the famous CNBC regular to tell me what to expect now. I have commented a number of times on the almost ESP capabilities of the founder of the CPM Group and 1986 spin-off from Goldman Sachs. The last time here.

I spent almost an hour listening to him speak with with Jim Puplava on July 22, 2006, when his book Commodities Rising came out. He wasn’t asked to make any precious metal predictions, but a couple of things he said stood out:

First, prices of commodities in general have risen since 2003-2004 due to an investor shift in demand for commodities, mainly as a way to diversify from equities.

Second, there has been an overall upward shift in the demand curve by consumers. But, talk of a super-cycle in commodities lasting 17 years, give or take, is hype as is the hype about Chinese consumers.

Third, this market is long in the tooth. Bull markets in commodities generally last 34 to 39 months. At the time of the interview, the current bull market is about 55 months old.

Fourth, bull markets in commodities don’t occur except in cases of wars; the Civil War, WWI and WWII. The rises in those markets began prior to an outbreak of hostilities.

I found it odd that he pooh-pooh the idea of a bull super-cycle in commodities, yet didn’t say anything about the super-cycle bear market in Gold that went on for 25 years and ended in 2001.

On June 12, 2007, Jeffrey Christian delivered a talk, The Future of Precious Metals Markets at International Precious Metals Conference. He said:

The most obvious consequence of the growth in the world economy due to globalization and
economic liberalization has been a sharp increase in the demand for most commodities, including
precious metals, as increasing numbers of people become consumers financially capable of
purchasing a wide range of manufactured goods, and services. This is a trend that already has had
tremendous effects on commodities demand over the past decade. More importantly, if these trends are not reversed by any of the counter-vailing influences, the movement of more people into the consuming classes should continue for decades to come, with the effect of steadily increasing demand for precious metals and other commodities at a faster pace than has been the case over the past four decades. (emphasis added)

That sounds to me like a super-cycle! He also said:

Financial market commentators still complain about the practices of the Federal Reserve Board and other monetary authorities, but the truth is that monetary policy management in the United States, Europe, Japan, and many Asian nations has been extremely successful at protecting world economic trends since the early 1980s. It seems that monetary authorities have learned a great deal about how to do their job, which is to preserve long-term price stability insofar as possible.

I believe the speech was delivered prior to the sub-prime blow-up. I quoted Michael Shedlock when he said: The Fed caused the credit crunch by slashing interest rates to 1% to bail out its banking buddies in the wake of a dotcom bubble collapse. All the Fed did was create a bigger bubble.

Jeffrey Christian continues:

This suggests that both the hyper-inflation and the deep recessions of the 1970s may be avoided in
the near future, barring major economic changes on a worldwide scale. It does not mean that
inflation and recession have been banished from the economic system, nor that worldwide economic
cycles are a thing of the past. It means that the cycles may be more muted and less destructive than they were prior to 1985. (emphasis added)

Jeffrey Christian nowhere suggests that demand and supply of gold are out of synch. In fact demand for Gold is estiamted to be somewhere around 3792 tonnes of gold and as you can see supply equals less than 2500 tonnes. The higher prices are not bringing on new supply.

Despite high prices, global gold mine production is actually falling. South Africa, the world’s largest producer is at levels not seen since the early 1930s with production at roughly one quarter the level seen in 1970.

When I last visited Jeffrey Christian he said

Christian is on record saying that yes Gold could pop, but over the long term, gold is over valued and should average $500. Now he is calling for a seasonal AND cyclical peak of somewhere between $700 and $1,000 (why no precision here, I wonder) by April of 2007

Again, I ask, why does anyone pay any attention to this man?

Jeffrey Christian Gold Mover Mike

Another Week Of Upsets

Thursday:

#6 Arizona State 24, #11 USC 44

Friday:

#1 LSU 48, Arkansas 50 in Triple OT


#13 Texas 30, Texas A&M 38


Saturday:

#9 Oregon 0, UCLA 16


#2 Kansas 28, #4 Missouri 36

Next Saturday, you will see the Duck offense once again chewed up by a ferocious defense, as the Ducks fall to the Oregon State Beavers and both finish with identical records. I would much rather watch the Beavers in a bowl game.

Update:


What English Speaking Country Are You?


You Belong in the USA


Sweet!
People either love you or hate you
And you really don’t care what anyone thinks
Big and bold, you do things your way
What English Speaking Country Are You?

Hat tip Gus Van Horn

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