I think it is important for investors to understand the role of gold as an insurance against a systemic failure and not necessarily as a hedge against inflation. I should add that I own gold for both reasons, believing that it will perform well in both an inflationary and deflationary environment. In addition, I am not selling any gold but traders should realise the gold price is extremely overbought and that it could easily drop toward the 200-day moving average – that is, between $1,500 and $1,600 (not a prediction). As I just said, I am not selling my gold because I expect much higher prices in future. But, near term, both T-bonds and gold appear vulnerable to a more serious correction

Nouriel Roubini : If you are looking at the Chinese banks they have a huge amount of exposure to state and local government to state owned enterprise and to these special purpose vehicles that have done the financing of the local investment , has been several trillion Yuans , now we estimate that about 30 percent of these loans are going to go into default and becoming non performing , so the aid is going to be certainly on the Chinese banks some of them are going to be back stopped by the local government if the local government cannot do the job it is going to be the central government , at the end of the day the banking crisis are going to be losses of some agents of the government either state owned banks or the provincial government or the central government and that's why the official debt of China is 17% of he GDP at the central level but when you add the banks the state and local government and all the other liabilities we are already estimating that the public debt of China is already 80% of GDP , so you are going to have an MPL problem , you'll have a public debt and deficit problem then you'll going to have an investment boom going bust problem and that's why we are going to have a hard landing in China by 2013 at the latest

Nouriel Roubini : In August 0% jobs & retail sales growth. September looks worse based on initl unemp claims & other indicators. We are entering a recession

At this point the question is not double dip or not but rather how deep the recession will be: answer depends on policy response & EZ crisis

reece agreed in March this year to lay off 80,000 public-sector workers by 2015. But the government has also hired around 25,000 new workers in the past two years to fill shortages in select areas of the public sector.

The Greek 2 year yield declined to 55%. The Greek 1 year yield is at 110%. Both significantly off the highs.

The FOMC statement will be released around 2:15 PM ET on Wednesday

Ben Bernanke reiterated that another round of monetary accommodation (aka QE3) would depend on both a further deteriorating in the economic outlook and the renewed threat of deflation The recent inflation reports indicated an uptick in the core measures of inflation at just above the Fed's target. That would seem to argue against QE3.

Greek Prime Minister George Papandreou canceled a U.S. visit that was to begin tomorrow, saying he needed to remain in the country for a “critical” seven days in its effort to avert a bond default.

Greek borrowing went beyond the sensible: at its peak, in one year Greece borrowed an amount equal to nearly 15 percent of GDP, so that more than one euro in seven spent locally was borrowed from abroad. By 2009, the country’s eleven million people owed more than $500 billion to foreigners, more than the foreign debts of Argentina, Brazil, and Mexico combined

If Bank of America was too big to fail, then so was Greece. If Bank of America was too big to fail, then so was Greece.

For a decade, Germany’s growth has come almost exclusively from its exports;

However household mortgage debt, as a percent of GDP, is still historically very high, suggesting more deleveraging ahead for households.

http://www.tradingfloor.com/blogs/commodity-weekly/stronger-dollar-eroding-support-for-commodities-345967689?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Trading-Floor+%28TradingFloor%29&utm_content=Google+Reader

CHINA

New home prices rose 4.1 percent in August from a year earlier, down from an annual rise of 4.3 percent in July

US Most people said they wanted to live in a modest, but respectable home that was between 1,400-2,000 square feet

Cele mai mari 10 bănci germane au nevoie de capital suplimentar de 127 miliarde de euro

http://www.zerohedge.com/news/interactive-infographic-doomed-european-financial-system

http://www.zerohedge.com/news/euro-oversold-shorts-surge-highest-june-2010

Black women significantly outperform black men in high school and college. As a result, the black middle class is disproportionately female and the black poor are disproportionately male, and the gap is widening.

Banks cites data showing that black children with married parents fare no better academically or economically in the long run than their born-out-of-­wedlock counterparts.

anks argues that to their detriment, black women will marry “down” but not “out” — they’re more likely to marry less-educated and lower-earning black men than to marry interracially

ust in the years 2007 to 2009, for every barrel of oil produced in the world, 1.6 barrels of new reserves were added. And other developments—from more efficient cars and advances in batteries, to shale gas and wind power—have provided reasons for greater confidence in our energy resiliency. Yet the fear of peak oil maintains its powerful grip.

While Italy has not followed Greece, Ireland and Portugal in seeking emergency aid, it has faced higher borrowing costs as debt worries have spurred investors to demand higher returns to buy its government bonds

Greece defauls:

            - increase of interest for PIIS

            - French banks hit

            - EUR increase vs $

            -

Drahma = 50% fall

China is well equipped to produce technological goods without U.S. help, and if Japan is inducted into ASEAN (as I believe they soon will be), they will be even more capable.

We continue to view scenarios involving a break-up of the Euro area as extreme

If break-up is unthinkable, it has been argued that the only alternative is full fiscal union. Definitions of what such a fiscal union entails are scarce. One characterisation would be a unitary, centralised fiscal authority with the power to issue Eurobonds and intervene in fiscal matters at the national level.

In the limit, Germany would then be faced with the following choices:

• Recapitalisation of the ECB: In line with its Treaty obligations, the German government could recapitalise the ECB. Such a move would make explicit the transfer of resources—from core countries to the periphery via the ECB’s balance sheet—that are inherent in the quasi-fiscal support provided by the ECB to those countries through its assumption of credit risk via asset purchases and unlimited repos. The political impediments to such recapitalisation mimic those to any other explicit transfer, as discussed above. Any move in this direction would appear to require a greater formal role for Germany in the Euro area’s decision making, for example by increasing its representation on the key decision-making bodies. Such an outcome would obviously be controversial with other participants.
• Exit: The German government could refuse to recapitalise, and exit from the Euro area. Such a decision would mark a sharp reversal of the process of European integration, to which Germany has subscribed over the past half century. As already noted, the costs of exit would be formidable.
• Acquiesce on chronically higher inflation, potentially subverting the ECB’s mandate: The ECB could continue to provide financial support to the periphery through ‘resorting to the printing press’. Unable to cover losses through its capital and flow of monetary income consistent with price stability, only drawing on the inflation tax offers scope to plug the fiscal gap. Such a scenario need not entail a collapse into hyperinflation, but would likely lead to sustained inflation at levels higher than the ECB (or German public opinion) deems consistent with price stability. The threat to the ECB’s primary objective is immediate.