The Banking and Strategy Initiative

Chillin' out till it needs to be funded

The Thursday Fed Update: That rate keeps trending down, Budget Surplus and a Dimon induced spiral – US Economy (Thursday EoD Review)

Someone must be happy we are paying only 3% interest on 30 Y US debt but it is all getting too close to call a bad year for 2013 or a year yonder. JP Morgan will survive its losses as its Treasury trade gets a dose for trying to shut out the market scoring a ( punitive) home run) every minute in Europe having put to rest the rumors of losses from the Whale. if this was indeed on European debt losses, it would have been another covering trade that failed off the ground and taken in haste not unlike November and a proverbial traders’ sin for having read or believed their own research maybe.

Europe has not survived yet, but the Euro is back on its feet and six months down the line there is stilla possibility we will be in a position to raise interest rates and get out of a bionic zone that is amenable to global destruction of value for a longer pause. Money supply was a good $57 bln higher in the week and The US Treasury reported a $59 bln surplus for April, wiping out last year’s $198 bln deficit in the same month but keeping the march deficit a large negative. The government’s fiscal deficit is almost miraculously down by almost 20% to $719 bln with 5 more months to go, where only $400 bln was reported in deficit last year. The month’s surplus of course is from Tax receipts, Corporate receipts up 40%

Apparently Corporate receipts are a very small proportion of individual tax receipts in the US!

The US Financial sector gets buzzed again with the current form of Volcker getting approved for the new soup JP Morgan is in if nothing else. Earlier downgrades preceding the announcement will be followed by more and Europe losses on Spain are possible as US banks have probably sold that insurance too. . Spanish CDS spreads are now 6% as the government looks to finance its banks in the currently publicised options. And of course, take it from us there is no more QE coming as even UK puts the existing QE program on hold and Rubin also mentions new QE cannot help Europe.  also keep invested in Natural Gas to keep the habit of making money on the markets.

Risk On, I don’t know I can see sense in Insuring some Spanish exposures now..strictly on a trading repo basis! (Capped on : really you are going to put more good money after bad money!) Oh and in results, San Fran may still nbe good but Cisco se “khisko”

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