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marți, 11 iunie 2013
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Mish's Global Economic Trend Analysis
Mish's Global Economic Trend Analysis |
Posted: 11 Jun 2013 12:47 PM PDT Curve Watchers Anonymous has been watching the rise in interest rates across much of the yield curve. Yield Curve as of 2013-06-11 click on chart for sharper image As one should suspect, mortgage rates have been rising in conjunction with the rise in treasury rates. Here is a chart from Steen Jakobsen, Chief economist at Saxo Bank in Denmark. Note the annotation "30 Yr mortgages rate is up 76 basis points on the year with no growth increase". the phrase "no growth" pertains to lack of growth in the overall US economy. BankRate notes the following 3-month trends. 30-Year Mortgage Rate 15-Year Mortgage Rate 5/1 ARM Mortgage Rate As one might suspect this rapid rise in mortgage rates will wreak havoc on mortgage refinancing. And it did. I called a couple of my industry contacts and they state refinancings have plunged by 50% or more. One contact says there has been spillover into new home applications, another has not seen that "yet". Word About Convexity As rates rise, three things happen.
Bloomberg discusses convexity hedging in its report Treasury Yield Reaches 14-Month High. Convexity HedgingConvexity hedging "may not" kick in, "as much" but the Fed is buying massive amounts of treasuries, yet treasury yields soared, with mortgage rates up a very significant 76 basis points in little over a month. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. |
Posted: 11 Jun 2013 10:11 AM PDT The German Constitutional Court in Karlsruhe, heard arguments on Tuesday on whether ECB measures to contain the eurozone crisis violate German law. The court does not have the power to block the ECB, but it does have the power to restrict German participation in various funding schemes. The New York Times dramatically states German Court Debates Fate of Euro. Karl Albrecht Schachtschneider, a retired law professor and well-known euro opponent, told the court he hoped that "the euro adventure will be brought to an end for the good of Germany and the good of Europe."Irrelevant Arguments and Outright Lies
There is only one issue in this case that is relevant: Do any ECB actions or proposals violate a German constitutional prohibition against using the euro zone's central bank to finance governments? I am certain they do. Whether the court pushes the line one more time is the only issue in doubt. I suspect they will, again, with still more wishy-washy language regarding where the line in the sand is. You can see a strong hint of that possibility as the Times points out "questions [by the judges] suggest the court might rule on narrow grounds, arguing that at least some aspects of the complaints were premature". Dangerous Game Spiegel Online Guest Commentary by Peter Bofinger says ECB Case at High Court: The Bundesbank Is Playing a Dangerous Game With its opposition to the ECB's bond-buying policy, the German central bank is pursuing a risky strategy that may stem in part from a desire to enhance its own power.Mud Slinging All the euro proponents can do is throw mud and hope some of it sticks. It's quite a stretch of the imagination to propose the Bundesbank purpose is to "enhance its own power". Regardless, "why" Jens Weidmann, president of the Bundesbank, has pursued this action is of course irrelevant. The only question at hand is whether or not ECB actions violate the German constitution. Two-Faced Presentation Finally, I would like to point out the blatant two-faced nature of euro proponent arguments. On one hand they want the court to believe ECB actions will be limited, and on the other hand they want the ECB to do anything and everything (including buying outright junk) in a "whatever it takes" approach, regardless of the risks to German taxpayers, and regardless of constitutional issues. The end clearly justifies the means for euro proponents. And here's the irony: The true "dangerous game" comes when populists seek to ignore constitutional issues for the sake of convenience. Nothing good ever comes from such actions. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. |
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Damn Cool Pics
Damn Cool Pics |
- Philadelphia Orchestra Musicians Perform on Flight Waiting on Beijing Tarmac for 3 Hours [Video]
- Goofy Girls are the Best
- Michele Kobke - German Girl with 16-Inch Waist
- Workout Diagrams You Need To Get In Shape
- Every Hot Dog Has It’s Day [Infographic]
Philadelphia Orchestra Musicians Perform on Flight Waiting on Beijing Tarmac for 3 Hours [Video] Posted: 11 Jun 2013 04:41 PM PDT Thought this was pretty cool. I always like when I see beautiful music being performed in a public setting, but this was especially neat because it wasn't staged like some are and they just wanted to do something cool to keep people happy in a situation where people normally would be anything but happy. It also reminds me that I need to go to the symphony. |
Posted: 11 Jun 2013 04:32 PM PDT |
Michele Kobke - German Girl with 16-Inch Waist Posted: 11 Jun 2013 01:12 PM PDT Michelle Kobke is a 24 year old German girl who has been wearing a corset for three years in order to achieve the goal of having the smallest waist in the world. She is now so used to wearing the restrictive garment that she even sleeps in it and has managed to reduce her waist size from 64 centimeters to 40 centimeters (from 25.2 to 15.7 inches). However, doctors warn that this practice can lead to serious ailments like heart problems… |
Workout Diagrams You Need To Get In Shape Posted: 11 Jun 2013 10:27 AM PDT |
Every Hot Dog Has It’s Day [Infographic] Posted: 11 Jun 2013 08:24 AM PDT The National Hot Dog and Sausage Council – yes there is an official council – estimates that baseball fans will consume more than 20 million hot dogs over the course of the 2013 Major League Baseball season. Hey, we're not here to judge, we can't resist a juicy dog either. Take a look at all the calories, and dollars, that a splurge at the park can cost you. Click on Image to Enlarge. Via CouponCabin |
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