Welcome to the weekly roundup of great articles, facts and figures. These are the weekly finds that made our eyes pop.
Strange and Unusual Curious Events at the Federal Reserve
Zerohedge saw something interesting. The Federal Reserve injected a cash account with an $88 billion one day jump while you all were eating Turkey.
Something more troubling has just been spotted. In today's one-day delayed issue of the Fed's H.4.1, literally the very last number on the very last subpage in the weekly update reveals something quite disturbing. Namely the Fed's "other" non-reserve based factors absorbing liquidity. And specifically, the actual number, which rose by an unprecedented $88 billion in one week to an all time high of $115 billion for the week ended November 23!
Why is this troubling? Because unlike reserves, this number is effectively not defined, and there is no clear transposition between assets and liabilities, not to mention that "other" could mean virtually anything.
The definition of this other account, one of many from the H.4.1: Factors Affecting Reserve Balances, statistical report, is:
Other deposits at Federal Reserve Banks include balances of international and multilateral organizations with accounts at FRBNY, such as the International Monetary Fund, United Nations, International Bank for Reconstruction and Development (World Bank); the special checking account of the ESF (where deposits from monetizing SDRs would be placed); and balances of a few U.S. government agencies, such as the Fannie Mae and Freddie Mac.
The ESF is for emergency foreign currency exchange intervention, used during 2008 and the Mexico 1994 crisis. Hmmm....beyond conjecture, we have to agree with Zerohedge these funds are simply not Freddie and Fannie and agree, an all time record of $88 billion being dumped into this account on November 23rd is most interesting.
The phrase it's too late is popping up in Europe's never ending financial crisis. Naked Capitalism is no exception:
It seems almost as if the European leadership has successfully faked its way through so many past crunches that they are unable to perceive that the same old tricks are no longer working. And it is increasingly looking as if their dulled reaction times are so out of line with market events that even if they were to snap our of their stupor now, it would be too late.
The latest Euro buzz is sovereign bilateral loans are the new cure. No, it's not groundhog day ...yet.
S&P 500 Worse Thanksgiving Since 1932
This headline is somewhat apocalyptic, yet gives a good overview of the recent stock market carnage. Macro factors include Europe.
The market’s not trying to distinguish between stocks right now, it’s focused almost exclusively on macro factors,” John Linehan, director of U.S. equities and a portfolio manager at T. Rowe Price Associates Inc., said at a press briefing Nov. 22 in New York. “ There’s a tremendous amount of volatility in the marketplace. The market’s on the gas pedal and the tires are spinning, but we’re really actually not going anywhere.”
U.K. Prepare for Riots & Euro Collapse
This is nice, the Telegraph is claiming the U.K. is preparing for riots in the streets when the Euro collapses. Lovely. So glad we funded all of that police state technology and weapons in the face of 9/11.
British embassies in the eurozone have been told to draw up plans to help British expats through the collapse of the single currency, amid new fears for Italy and Spain.
The gold bugs should be scurrying over this story. Due to Europe, gold hording is hitting an all time high.
Gold traders are more bullish after investors accumulated the biggest-ever hoard of the metal, with Europe’s deepening debt crisis driving them to protect their wealth with this year’s second-best performing commodity.
Eighteen of 26 surveyed by Bloomberg expect bullion to rise next week. Holdings in exchange-traded products backed by gold reached a record 2,350.8 metric tons on Nov. 23, now valued at $127.6 billion.
Riots & Pepper Spray Over....an Xbox?
There is nothing more despairing than watching people turn into animals over $7 dollar thread bare sheets, $2 dollar waffle irons and $50 buck discounts on overpriced machines. Think about it. We have riots over products while other nations riot over economic screw jobs. How embarrassing to be an American.
If there was ever an example of how screwed up America is, this is it.
Credit Ratings are not Free Speech
A Judge hands down a blow to the credit rating agencies in a new ruling. Surprise, labeling trash as AAA is not free speech:
A federal judge has said credit ratings are not always protected opinion under the First Amendment, a defeat for credit rating agencies in a lawsuit brought by investors who lost money on mortgage-backed securities.
The November 12 decision was a little-noticed setback for McGraw-Hill Cos' Standard & Poor's, Moody's Corp's Moody's Investors Service and Fimalac SA's Fitch Ratings, which have long invoked First Amendment free speech protection to defend against lawsuits over their ratings.
These agencies had argued that the Constitution protected them from claims they issued inflated ratings on more than $5 billion of securities issued in 2006 and 2007, and backed by loans from former Thornburg Mortgage Inc and other lenders.
Buddy Roemer Makes It to Bloomberg
Roemer Calls Republican Rival Gingrich a ‘Lobbyist Writ Large’
H-1 Visas are a notorious labor arbitraging tool of professionals. The U.S. Chamber of Commerce and multinationals demand all sorts of guest worker Visas or corporate controlled immigration for technology transfer out of the country. Of course our publicly visible GOP candidates promote them as a result. There is no STEM labor shortage and no, these will not help the U.S. economy. Watch out for spin when it comes to anything immigration related, for it's almost always about global labor arbitrage, whether the spin is amnesty o no.