World economy talk

[tidus1203]

I always say. The FREE MARKETS ALWAYS PREVAIL.

[uls]

the price of the US 10 year is also falling/yield rising to almost 3%

same thing happening

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which call center kaya ang affected?

Sallie Mae to shift 2,000 jobs to U.S. from overseas
http://www.reuters.com/article/ousiv...5352TH20090406

NEW YORK (Reuters) - Student loan company Sallie Mae plans to move its overseas operations back to the United States, creating 2,000 domestic jobs, in what analysts called an attempt to curry favor with the Obama administration.

SLM Corp, as the company is legally known, said on Monday it plans to add staff over the next 18 months in call centers, information technology and operations support across the United States. A spokeswoman said the company will pull jobs from India, Mexico and the Philippines.

[uls]

++++++++++++++++++++

[uls]

last night's slight stock drop was caused by an analyst's ratings downgrade on US banks

there's another bank slayer in town (the other one is Meredith Whitney)

http://online.wsj.com/article/BT-CO-...06-707995.html

NEW YORK (Dow Jones)--Recent actions by the U.S. government to support the banking sector won't stop loan loss levels from exceeding those reached during the Great Depression, banking analyst Mike Mayo of Calyon Securities said Monday.

underweight, sell

Mayo put "underweight" ratings on Bank of America Corp. (BAC), Citigroup Inc. (C) , JPMorgan Chase & Co. (JPM), Comerica Inc. (CMA), PNC Financial Services Group Inc. (PNC) and Wells Fargo & Co. (WFC). He assigned more- bearish "sell" ratings on BB&T Corp. (BBT), SunTrust Banks Inc. (STI), U.S. Bancorp (USB), Fifth Third Bancorp (FITB) and KeyCorp (KEY).

and a few hours ago, this came out from the Times:

Toxic debts could reach $4 trillion, IMF to warn
http://business.timesonline.co.uk/to...cle6047929.ece

Toxic debts racked up by banks and insurers could spiral to $4 trillion (£2.7 trillion), new forecasts from the International Monetary Fund (IMF) are set to suggest.

The IMF said in January that it expected the deterioration in US-originated assets to reach $2.2 trillion by the end of next year, but it is understood to be looking at raising that to $3.1 trillion in its next assessment of the global economy, due to be published on April 21. In addition, it is likely to boost that total by $900 billion for toxic assets originated in Europe and Asia.

Banks and insurers, which so far have owned up to $1.29 trillion in toxic assets, are facing increasing losses as the deepening recession takes a toll, adding to the debts racked up from sub-prime mortgages. The IMF's new forecast, which could be revised again before the end of the month, will come as a blow to governments that have already pumped billions into the banking system.

and yesterday, George Soros says...

US Recovery Is Far Off, Banks Are 'Basically Insolvent': Soros
http://www.cnbc.com/id/30069223

The U.S. economy is in for a "lasting slowdown" and could face a Japan-style period of relatively low growth coupled with high inflation, billionaire investor George Soros said on Monday.

Soros, speaking to Reuters Financial Television, also warned that rescuing U.S. banks could turn them into "zombies" that draw the lifeblood of the economy, prolonging the economic slowdown.

The healing of the banking system and housing markets is crucial to recovery. "The banking system, as a whole, is basically insolvent," Soros said.

worst is over?

on the road to recovery?

yeah right

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How can you tell if investors are expecting inflation?

look at demand for a type of treasury called TIPS (Treasury Inflation-Protected Securities)

http://www.bloomberg.com/apps/news?p...UXQ&refer=home

strong demand

Investors at the prior sale of 10-year Treasury Inflation Protected Securities on Jan. 6 bid for 2.48 times the amount of debt on offer. The average for the past 10 auctions is 2.02.

lumalaki ang spread

The difference between rates on 10-year notes and TIPS, which reflects the outlook among traders for consumer prices, was 1.46 percentage points. An increase of another three basis points would bring it to the most since October.

The figure, which has averaged 2.26 percentage points in the past five years, has widened from 29 basis points on Jan. 6.

investors are betting on inflation

[Monseratto]

The cycle of bad sales and continous job cuts is still going on...
The conservative press wants everyone to believe that everything is going well. Their trumpetting the stock rally during the pass few weeks, even though its just a bear market rally.

Bernanke ‘Green Shoots’ May Signal False Spring Amid Job Losses

April 6 (Bloomberg) -- It will be months before it’s clear whether what Federal Reserve Chairman Ben S. Bernanke calls the U.S. economy’s “green shoots” represent the early onset of recovery, or a false spring.

[uls]

Consumer borrowing and spending is the lifeblood of the US economy

guess what...

the US has anemia

U.S. Consumer Credit Drops by $7.5 Billion
http://online.wsj.com/article/SB123913125063097913.html

WASHINGTON – American consumers cut borrowing in February, shying away from credit cards, a Federal Reserve report said.

bigger than expected

The February credit drop of $7.5 billion was bigger than what Wall Street expected, which was a $1 billion decline. It was the fourth decline in six months.

Revolving debt, which mostly reflects credit-card financing, retreated by $7.8 billion to $955.7 billion in February, or 9.7%. Credit in January had increased $2 billion.

dami nawawalan ng trabaho e...

People are wary of taking on debt. Government data last week said nonfarm payrolls plunged 663,000 in March. The economy has shed 5.1 million jobs since the recession started in December 2007.

this is called household deleveraging

The latest Fed quarterly "flow of funds" data showed U.S. households' wealth shrank a sixth quarter in a row at the end of 2008, and their borrowing dropped, too. The total net worth of households fell 9% to $51.48 trillion in the fourth quarter from $56.59 trillion in the third quarter. U.S. household debt decreased at a 2% annual rate in the fourth quarter, down from a 0.2% increase in the third quarter.

[uls]

remember the Fed's TALF program?

it's the program that's suppose to revive the securitization market

investors applied for only $1.7B this time, lower than the first round in March

Investors Request $1.7 Billion in TALF Loans
http://www.cnbc.com/id/30094425/

Investors requested $1.7 billion in loans for the second round of the Federal Reserve's program to revive consumer lending, the New York Fed said on Tuesday, signaling that managers remain wary of taking part.

Investors requested about $0.8 billion of loans for securities backed by auto loans and about $0.9 billion of loans for credit card asset-backed securities in the Term Asset-Backed Securities Loan Facility, known by its acronym TALF, the New York Fed said.

Even though the list of eligible securities had been expanded in the April round, investors requested even less than in the first round.

In March, investors requested $4.7 billion in loans from the Fed.

The Fed has pledged to lend $200 billion in the first phase of the TALF and has said the program could be expanded to $1 trillion.

it's a $200B program... well, a $1T program

at the rate it's going, it's gonna take forever

[tidus1203]

That is what happens when you rely on CREDIT and not on your OWN MONEY. Bubbles are created and then POP we can't accept the fact of reality we are actually much poorer than we were already used to...

[allanctan]

US kasi mahilig sa credit. Prestige pa yung mataas ang credit line... what?!?

Buti pa Intsik, no credit, we want cash.

[userfriendly]

Any tips on how to and where to buy physical gold and silver in the Phils? I mean bullion coins or bars not jewelry.

[tidus1203]

Since vacation mode ata si uls Ako muna maglalagay ng mga news for the day...
Today is a shortened trading day. Hangang 1PM lang equity markets.

The big market mover today is Well Fargo's surprise earnings. It beat the bear's senseless

NEW YORK (AP) -- Wall Street is opening higher after banking giant Wells Fargo & Co. issued a surprise profit announcement that was far above analysts' estimates.

The Wells Fargo news Thursday is a welcome sign for investors who have been looking for indications that the credit and lending markets are improving.
The market is looking past uneven monthly sales reports from retailers and mixed economic news and sending banks and other shares sharply higher.
In the early going, the Dow Jones industrial average is up 145 at 7,982. The Standard & Poor's 500 index is up 18 to 844, and the Nasdaq composite is up 28 at 1,619.

http://finance.yahoo.com/news/Stocks...-14891117.html


Across the Atlantic, the Bank of England kept their interest rates at 0.5%. That is the lowest in the bank's history since 1650's...

http://www.cnbc.com/id/30129851

Hehehe it dosen't matter anyway they are already implementing the printing press. As always stay out of the British Pound unless your goal is to lose purchasing power in the long run

[tidus1203]

Any tips on how to and where to buy physical gold and silver in the Phils? I mean bullion coins or bars not jewelry.

Di ka makakabili dito, I have tried. Unless may mahanap ka tip naman...

Ako I buy abroad. Try the Perth Mint (http://www.perthmint.com.au/) or Kitco (https://online.kitco.com/).

[frenchtower]

Any tips on how to and where to buy physical gold and silver in the Phils? I mean bullion coins or bars not jewelry.

I buy my Eagles and Buffalos direct from the US Mint (www.usmint.gov).

Just open an account with them and you're set.

They accept credit cards as payment. Make sure yours is the international kind.

I also think they deliver to the Philippines for a fee. Contact their customer service just to be sure.

If you're like me who collects gold from different countries, there are many different online sources just like where Tidus is getting his. My other source is www.monex.com and www.goldline.com (goldline international).

You can start with American Gold Eagles first. They are the most recognizeable gold coin in the world. Make sure you buy yours from reputable sources. That is why I always get mine direct from the US mint.

I'm not sure if there are Philippine dealers of gold coins? Maybe local coin shops?

Consider also investing in pure silver coins.

[tidus1203]

Yep silver is a good alternative given that gold is much more expensive...

[userfriendly]

Thanks for the tips on gold and silver. Is it safe to buy online and have it shipped to the Phils? Baka mawala. Also, insurance, shipping charges, custom duties, vat and brokerage charges will make it expensive. Baka di na competitive after adding these.

[tidus1203]

Well buying GOLD and SILVER is a long term investment to maintain your purchasing power as central banks inflate their paper money. Yes buying them is more expensive than buying GOLD or SILVER futures but those are just papers. You want the real thing!

[frenchtower]

Thanks for the tips on gold and silver. Is it safe to buy online and have it shipped to the Phils? Baka mawala. Also, insurance, shipping charges, custom duties, vat and brokerage charges will make it expensive. Baka di na competitive after adding these.

In my experience, once the goods I ordered already arrived at my local post office (USPS), they will send me notification to actually get it directly from them with signature confirmation.

Well, I'm not exactly sure how it's going to be handled by PhilPost?

If you have a trustworthy friend or relative who are about to take a vacation in RP, you can perhaps request to drop ship the item to their US address and let them hand carry the goods to you. Of course, you will still use your CC to pay for the cost upon ordering.

Shipping cost is not that expensive since the item is not that big or heavy. Unless you are going to buy in bulk. A pure gold or silver coin is only 0.999 ounces. Insurance cost is always optional except in certain cases.

If purchasing an actual gold is going to be a huge pain, might also want to consider GOLD ETFs as an alternative investment?

You know what? It really is a great feeling to actually hold pure gold in your hands and be part of your investment mix rather than fiat money alone.

[uls]

vacation mode hehe

nagtampisaw sa dagat

Dow up over 200 pts. last night

like tidus said, the big news is Wells Fargo's earnings report

http://www.businesswire.com/portal/s...57&newsLang=en

SAN FRANCISCO--(BUSINESS WIRE)--Wells Fargo & Company (NYSE:WFC) said today it expects to report record net income of approximately $3 billion for first quarter 2009, or approximately $0.55 per common share after preferred dividends, including $372 million in dividends paid to U.S. taxpayers on the U.S. Treasury’s Capital Purchase Program investment. The Company will report its financial results on April 22, 2009.

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people are convinced the bottom has been hit in March and nobody wants to miss the chance of a lifetime to buy cheap stocks

a lot of money has flowed back into into equity mutual funds

From Trimtabs:

Sausalito, CA - April 9th, 2009 - TrimTabs Investment Research estimates that all equity mutual funds posted an inflow of $11.9 billion in the week ended Wednesday, April 8th, versus a revised inflow of $3.0 billion in the previous week.

Equity funds that invest primarily in U.S. stocks posted an inflow of $11.1 billion, versus a revised inflow of $2.7 billion in the previous week. Equity funds that invest primarily in non-U.S. stocks had an inflow of $844 million, versus a revised inflow of $287 million in the previous week. In addition, bond funds had an inflow of $1.7 billion, versus a revised inflow of $6.8 billion in the previous week, and hybrid funds had an inflow of $361 million, versus a revised inflow of $409 million in the previous week.

[tidus1203]

I am one of the people who believes the bottom was hit on March. But that's for the stock market. For here on expect tepid moves and volatility. But overall a sideways move.

[uls]

it's not really surprising banks are reporting profits

the Fed is holding interest rates at almost zero (.2%)

the 30 year mortgage rate has now fallen below 5%, which has encouraged homeowners to refinance, and first time home buyers to buy homes

banks borrow from the Fed at .2% and lend out at 4.8% (for a 30 year mortgage)

no wonder banks are profitting

add to that the TARP money they received from the USG

what's surprising is the low losses reported by Wells Fargo

from the link i posted above:

Combined net charge-offs of $3.3 billion, compared with fourth quarter net charge-offs totaling $2.8 billion at legacy Wells Fargo and $3.3 billion at legacy Wachovia;

they written off only $3.3B of uncollectibles (that's combined Wells and Wachovia, compared to $6.1B in Q4 2008)

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Tidus:

Hehehe it dosen't matter anyway they are already implementing the printing press. As always stay out of the British Pound unless your goal is to lose purchasing power in the long run

this is what Tidus is talking about... it's already happening in the UK

Weak pound heaps food price inflation on poorest households
http://www.independent.co.uk/life-st...s-1666124.html

The collapse of the pound on the foreign exchanges is keeping food price inflation at painful levels, with the heaviest impact falling on poorer households and pensioners.

The British Retail Consortium (BRC), which represents most major shop chains, reported yesterday a 9 per cent rise in the price of food in the shops in the year to March, against a fall in the prices of non-food items of 1.5 per cent. Prices were up 0.4 per cent month-on-month. Despite a general fall in inflation – the annual rise in the Retail Prices Index (RPI) hit zero last month – food prices remain stubbornly high, and rising.

sa lagay na yan the UK has only 3.2% inflation

wait till BoE's QE to have full effect