Good morning Ladies and Gentlemen:
Yesterday, we learned that the 1 month treasury bill rate sank to 1/10%. That is correct 1/10% annualized for a year.
The 10 year bond price sank with the yield rising to 3.96%. The long bond plummeted in value to 112.90 setting the stage for a stock market debacle after the election.
The TED spread which measures bankers risk after falling these past 2 weeks, reverted upward. The Libor 3 month rate basis
Gold closed down by 17.00 to 717.70 and silver fell by 3 cents. The open interest on gold rose by 3000 contracts to 306000 but the silver Oi fell another 400 contracts to rest at 94400. Silver continues to trade at the comex in backwardation signalling trouble for our CFTC regulators.
We expect, that in November over 7.0 million oz of silver options will stand for delivery and then in December probably 60-70 million oz will stand which will break the comex.
However, on Nov 15.08 the Group of 20 nations meet to discuss currency alignment. If they adopt a new currency backed by silver, gold and oil, then that might avert a comex default. However the
The Group of 20 wish to have a new Bretton Woods agreement with a metal backing.
Commodity countries will do quite well in this arrangement. The
The IMF has now loaned out greater than 70 billion dollars. It’s gold backing of 3200 tonnes is worth about 70 billion dollars so all of the backing is loaned out. The world is awash in paper.
In economic news, the following items are important:
NYC economic downturn continued in October-NY-NAPM
NEW YORK, Oct 31 (Reuters) - Business activity in New York City shrank in October, contracting for the ninth time in 10 months, according to an industry report released on Friday.
The National Association of Purchasing Management-
Its index of local business activity fell to the lowest level of the year, slipping to 396.8 in October from 404.0 in September.
Future pessimism diminished, with the six-month outlook index bouncing back to 51.6 in October from 39.3 in September.
Still, "the choppiness in the outlook index in recent months makes purchasing managers appear uncertain about the near-term direction of the regional economy," said Jonathan Basile, the Credit Suisse economist who compiles the report.
Cost pressures fell for the first time in a year and purchasing volume plunged to a five-year low, the report said.
The prices paid index showed some easing cost pressures, falling to 47.8 in October from 68.1 in September…
NY economic activity sank again badly in Oct.
Then we got two reports: the Chicago Purchasing Managers report and the
Sep reading was 56.7.
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Preliminary Oct figure was 57.5
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US consumers' mood posts record drop in Oct-survey
The Reuters/University of
That was just slightly below economists' expectations for a reading of 57.8, according to the
"Consumers reported the most dismal assessments of their current financial situation ever recorded," the report said.
The index was its lowest since a reading of 56.4 in June of this year.
The report said there have previously only been four surveys that posted double-digit declines, "and all resulted from severe economic dislocations, with the losses accelerated by fear and panic."
Both show dismal confidence in the economy.
I would like all of you to read this: click on the blue
Submitted by cpowell on 02:52PM ET Thursday, October 30, 2008. Section: Daily Dispatches
By Ambrose Evans-Pritchard
Thursday, October 30, 3008
Japan is to give emergency cash handouts to every household in the country regardless of whether they are rich or poor as a part of $260 billion (L159 billion) blitz to kick-start the world's second-largest economy and prevent a slide back into deflation.
The raft of measures comes amid reports in the Japanese press that the Bank of Japan is mulling a cut in interest rates from 0.5 percent to 0.25 percent as soon as today, chiefly aimed at curbing any further rise in the yen exchange rate after its spectacular increase since the summer. The futures markets are pricing in a 50 percent chance of a cut.
"A harsh storm seen only once in 100 years is raging," said
The package includes payments of $600 for a typical family of four, as well as tax relief on mortgages, in the raft of measures worth $50 billion, or roughly 1.2 percent of
Speak to you on Monday.