Category: zerohedge

Whether it is ‘cover’ for the all-too-obvious collapse to come (when another round of ratings agency litigation will take place as blame is apportioned) or more likely a ‘fool-me-once…’ perspective on reality, Fitch has a new report blasting the “unsustainable” jump in home prices, adding that “the extreme rate of home price growth is a cause for caution.” While they note, rising prices are a positive indicator for a recovery, Fitch adds that unprecedented home price growth should be paired with economic health that is similarly unprecedented, the evidence for which is lacking in this case.

Based on the historic relationship between home prices and a basket of econometric factors, Fitch considers estimates national prices to be approximately 17% overvalued in real terms (Bay Area home prices to be nearly 30% overvalued, which approximates the environment in 2003, three years into the formation of the previous home price bubble) – as “speculative buying, not increasing demand” is driving the market. Between this ‘speculation’ and interest rates, affordability is “strained.”

Via Fitch:

As a whole, the signs of a strengthening economic recovery are present, with momentum continuing to trend in a positive direction. Fitch expects these trends to continue, although the high rate of home price growth is not considered to be sustainable. Currently, Fitch’s Sustainable Home Price Model estimates national prices to be approximately 17% overvalued in real terms, with individual geographic regions varying widely.

Based on the historic relationship between home price levels and the primary drivers of supply and demand in the market, there is a misalignment. A continuing recovery and exuberant home-buying population could well push prices further for many more quarters, or even years. However, Fitch identifies a bubble risk in continuing price rises and sees several factors which could halt or even reverse recent gains in the market.

Interest rate concerns are rising…

The NRI, which measures the relative default risk of a constant quality loan as compared to average originations of the 1990s, has risen in two consecutive quarters, showing a rise for the first time since 2007.

Currently at 1.14, the NRI implies that the default risk of a loan originated today is 14% higher than the 1990s average. Since the peak in early 2007, risk has been declining for newly originated loans as the bubble unwound and prices reverted towards historic averages. On the back of the abrupt price rises across the country and interest rate rises which are expected to limit prepayment speeds for the next several years, the NRI has now increased.

…the extreme rate of home price growth is a cause for caution. Prices remain below the pre-recession peak, but the region never saw the extent of declines that much of inland California did, and prices never fully unwound the effects of the bubble. In San Francisco, prices hit a bottom in 2009 at nearly 125% above 1995 prices and have grown another 30% from that point. In San Jose, prices are up 48% from their post-crash trough and are now only 11% away from setting new highs.

Of course, rising prices are a positive indicator for a recovery and the growth is encouraging to a region that has seen the largest up- and down-swings in the housing market over the past few decades. However, Fitch expects that unprecedented home price growth should be paired with economic health that is similarly unprecedented, the evidence for which is lacking in this case. Based on the historic relationship between home prices and a basket of econometric factors, Fitch considers Bay Area home prices to be nearly 30% overvalued, which approximates the environment in 2003, three years into the formation of the previous home price bubble.

Most concerning, there is growing evidence that recent gains have been bolstered by an increase in investment sales, both to institutions and local investors.

Cash sales are often indicative of investor behavior and the concern is that housing prices are being driven up more through speculative buying than from an increasing base demand.

Typically, bubble cycles form when an initial catalyst causes prices to rise and the increase in prices drives investment activity to the market, hoping to cash in on the rising prices. As investment activity increases, demand builds artificially, reflecting a level of demand that fluctuates drastically with the growth rate of prices instead of long-term demand based on housing necessity.

Full detailed report here…

---

 

And yes… a rating agency – the same entity that enabled the last housing market crash – just warned of a housing bubble. How the times have changed – maybe it is different this time?

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/PF5wkkQ_Xpo/story01.htm Tyler Durden

Whether it is ‘cover’ for the all-too-obvious collapse to come (when another round of ratings agency litigation will take place as blame is apportioned) or more likely a ‘fool-me-once…’ perspective on reality, Fitch has a new report blasting the “unsustainable” jump in home prices, adding that “the extreme rate of home price growth is a cause for caution.” While they note, rising prices are a positive indicator for a recovery, Fitch adds that unprecedented home price growth should be paired with economic health that is similarly unprecedented, the evidence for which is lacking in this case.

Based on the historic relationship between home prices and a basket of econometric factors, Fitch considers estimates national prices to be approximately 17% overvalued in real terms (Bay Area home prices to be nearly 30% overvalued, which approximates the environment in 2003, three years into the formation of the previous home price bubble) – as “speculative buying, not increasing demand” is driving the market. Between this ‘speculation’ and interest rates, affordability is “strained.”

Via Fitch:

As a whole, the signs of a strengthening economic recovery are present, with momentum continuing to trend in a positive direction. Fitch expects these trends to continue, although the high rate of home price growth is not considered to be sustainable. Currently, Fitch’s Sustainable Home Price Model estimates national prices to be approximately 17% overvalued in real terms, with individual geographic regions varying widely.

Based on the historic relationship between home price levels and the primary drivers of supply and demand in the market, there is a misalignment. A continuing recovery and exuberant home-buying population could well push prices further for many more quarters, or even years. However, Fitch identifies a bubble risk in continuing price rises and sees several factors which could halt or even reverse recent gains in the market.

Interest rate concerns are rising…

The NRI, which measures the relative default risk of a constant quality loan as compared to average originations of the 1990s, has risen in two consecutive quarters, showing a rise for the first time since 2007.

Currently at 1.14, the NRI implies that the default risk of a loan originated today is 14% higher than the 1990s average. Since the peak in early 2007, risk has been declining for newly originated loans as the bubble unwound and prices reverted towards historic averages. On the back of the abrupt price rises across the country and interest rate rises which are expected to limit prepayment speeds for the next several years, the NRI has now increased.

…the extreme rate of home price growth is a cause for caution. Prices remain below the pre-recession peak, but the region never saw the extent of declines that much of inland California did, and prices never fully unwound the effects of the bubble. In San Francisco, prices hit a bottom in 2009 at nearly 125% above 1995 prices and have grown another 30% from that point. In San Jose, prices are up 48% from their post-crash trough and are now only 11% away from setting new highs.

Of course, rising prices are a positive indicator for a recovery and the growth is encouraging to a region that has seen the largest up- and down-swings in the housing market over the past few decades. However, Fitch expects that unprecedented home price growth should be paired with economic health that is similarly unprecedented, the evidence for which is lacking in this case. Based on the historic relationship between home prices and a basket of econometric factors, Fitch considers Bay Area home prices to be nearly 30% overvalued, which approximates the environment in 2003, three years into the formation of the previous home price bubble.

Most concerning, there is growing evidence that recent gains have been bolstered by an increase in investment sales, both to institutions and local investors.

Cash sales are often indicative of investor behavior and the concern is that housing prices are being driven up more through speculative buying than from an increasing base demand.

Typically, bubble cycles form when an initial catalyst causes prices to rise and the increase in prices drives investment activity to the market, hoping to cash in on the rising prices. As investment activity increases, demand builds artificially, reflecting a level of demand that fluctuates drastically with the growth rate of prices instead of long-term demand based on housing necessity.

Full detailed report here…

---

 

And yes… a rating agency – the same entity that enabled the last housing market crash – just warned of a housing bubble. How the times have changed – maybe it is different this time?

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/PF5wkkQ_Xpo/story01.htm Tyler Durden

Ah Silvio, never change or, if possible, resign: the comedic world of Italian politics will never be the same without you. The latest soundbite by the billionaire with a penchant for easy, underage women comes by way of an interview conducted by Italian television journalist Bruno Vespa for his latest book, and summarized by Reuters. To wit: “Former Italian prime minister Silvio Berlusconi said his children feel persecuted just as Jewish families did in Nazi Germany because he is being hounded by the country’s magistrates who want to eliminate him politically.”

Could it be that poor Silvio is only just now realizing how the game of politics is played, and that a country’s “justice” only works in your favor when the judges get an envelope full of cash the day of. Now that Berluconi’s political star has finally set, and the state is dismantling the media magnate’s empire bit by bit, and the probability of such future envelopes is far less, Silvio is finally learning what it means to be on the other side of the “law?” As for Silvio’s privileged children: well they can just take their private jet and move to a country where they are not quite as persecuted – a privilege Jewish families during Nazi Germany hardly had.

From Reuters:

Replying to a question about whether his five children had asked him to sell his media empire and leave Italy to escape his legal troubles, Berlusconi said: “My children say that they feel like Jewish families in Germany under Hitler’s regime. Truly, everyone is against us.”

 

Berlusconi, who protests his innocence in a series of court cases which he blames on left-wing magistrates, is well-known for making controversial remarks, such as calling President Barack Obama “suntanned” after he was first elected in 2008.

 

During a heated 2003 exchange in the European Parliament, Berlusconi compared Martin Schulz, a German Social Democrat who is now president of the assembly, to a Nazi concentration camp guard.

 

Berlusconi, 77, and his family rank among the 200 wealthiest billionaires in the world, with an estimated fortune of 6.2 billion euros ($8.35 billion) according to Forbes magazine.

 

His conviction for tax fraud earlier this year poses a serious threat to his decades-long political career because it comes with a ban from public office, though polls show millions of Italians would still vote for him.

 

Berlusconi is also on trial on charges of having paid for sex with a minor and then abusing the powers of his office to have her released from jail after she was arrested for theft.

The irony in all of this is that Berlusconi is a saint compared to the average US politician. However, as long as the Bernanke welfare-enabling machine works, the danger of any US bought and paid for beltway muppet of Wall Street suffering the same, or worse, “persecution” is hardly worth discussing.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/2ShV4cz6PvU/story01.htm Tyler Durden

Ah Silvio, never change or, if possible, resign: the comedic world of Italian politics will never be the same without you. The latest soundbite by the billionaire with a penchant for easy, underage women comes by way of an interview conducted by Italian television journalist Bruno Vespa for his latest book, and summarized by Reuters. To wit: “Former Italian prime minister Silvio Berlusconi said his children feel persecuted just as Jewish families did in Nazi Germany because he is being hounded by the country’s magistrates who want to eliminate him politically.”

Could it be that poor Silvio is only just now realizing how the game of politics is played, and that a country’s “justice” only works in your favor when the judges get an envelope full of cash the day of. Now that Berluconi’s political star has finally set, and the state is dismantling the media magnate’s empire bit by bit, and the probability of such future envelopes is far less, Silvio is finally learning what it means to be on the other side of the “law?” As for Silvio’s privileged children: well they can just take their private jet and move to a country where they are not quite as persecuted – a privilege Jewish families during Nazi Germany hardly had.

From Reuters:

Replying to a question about whether his five children had asked him to sell his media empire and leave Italy to escape his legal troubles, Berlusconi said: “My children say that they feel like Jewish families in Germany under Hitler’s regime. Truly, everyone is against us.”

 

Berlusconi, who protests his innocence in a series of court cases which he blames on left-wing magistrates, is well-known for making controversial remarks, such as calling President Barack Obama “suntanned” after he was first elected in 2008.

 

During a heated 2003 exchange in the European Parliament, Berlusconi compared Martin Schulz, a German Social Democrat who is now president of the assembly, to a Nazi concentration camp guard.

 

Berlusconi, 77, and his family rank among the 200 wealthiest billionaires in the world, with an estimated fortune of 6.2 billion euros ($8.35 billion) according to Forbes magazine.

 

His conviction for tax fraud earlier this year poses a serious threat to his decades-long political career because it comes with a ban from public office, though polls show millions of Italians would still vote for him.

 

Berlusconi is also on trial on charges of having paid for sex with a minor and then abusing the powers of his office to have her released from jail after she was arrested for theft.

The irony in all of this is that Berlusconi is a saint compared to the average US politician. However, as long as the Bernanke welfare-enabling machine works, the danger of any US bought and paid for beltway muppet of Wall Street suffering the same, or worse, “persecution” is hardly worth discussing.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/2ShV4cz6PvU/story01.htm Tyler Durden

Earlier in the year we unveiled the most ‘epic’ Chinese over-capacity bubble chart. Of course, China bulls shrugged at such inconvenience as demand and supply imbalance (even as Michael Pettis destroyed many of their hopes and dreams as all that debt – to over-build and over-supply – has to be repaid). Fast forward to today, on the eve of the nation’s Third Plenum, and Chinese leaders are facing the music. As AP reports, leaders have ordered local officials to stop expanding industries such as steel and cement in which supply outstrips demand. The call, via video conference, saw planning officials warn local leaders to stop ignoring orders to reduce overcapacity in industries including steel, cement, aluminum and glass, “Those who still violate discipline will be heavily punished.” One chief engineer exclaimed, “the scale of overcapacity is unprecedented.”

 

Via AP,

Chinese leaders have ordered local officials to stop expanding industries such as steel and cement in which supply outstrips demand, a Cabinet statement said Tuesday, in a sign previous orders to cut overcapacity were ignored.

 

…

 

In a video conference on Monday, planning officials warned local leaders to stop ignoring orders to reduce overcapacity in industries including steel, cement, aluminum and glass.

 

“Those who still violate discipline will be heavily punished,” said the deputy director of the Cabinet planning agency

 

…

 

Cement manufacturers use only 71.9 percent of their capacity as of the end of 2012, according to the statement. The steel industry used 72 percent while the rate for glass manufacturers was 73.1 percent.

 

The scale of overcapacity is unprecedented, the China Daily said, citing Zhu Hongren, chief engineer of the Ministry of Industry and Information Technology.

 

…

 

Beijing has tried to prod producers in many industries into mergers to reduce output. But lower-level officials in many areas prop up unprofitable local companies with rent-free land and other aid.

 

The conflict is fed by a political system in which Communist Party officials are judged on their role in economic development.

 

…

 

In some places, the Cabinet statement said, local leaders go through the motions of obeying orders to tear down older steel mills, but then replace them with bigger facilities.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/tyVWdap78lo/story01.htm Tyler Durden

Credit Suisse’s head of US rates, Carl Lantz, is a usual suspect when it comes to dispensing bond market commentary. What we did not expect him to do, is also analyze last night’s off-cycle political results. He does both in the note below.

From Credit Suisse’s Carl Lantz

Last night’s off-off-cycle election results are not quite so easy to draw clear implications from. The media is generally painting the results as an embrace of moderation and confirmation of a generally damaged republican brand.

I think that characterization is more or less true but we had a limited number of elections and each had its own “special factors” at play.

A moderate republican – Chris Christie – won the governorship in New Jersey and a moderate (relative to his competitor at least)  democrat won in Virginia. Interestingly however the Terry McAuliffe victory in Virginia was much narrower than expected versus his hard-right competitor and the results may have gone the other way if the libertarian third-party candidate had note siphoned off circa 7% of the vote.

Back to New Jersey, the results likely would have been tighter – but still a Christie victory had the Governor not moved the Senate election to avoid the Democratic turnout associated with Dem Corey Booker’s big win last month.

Of much interest was the special primary in Alabama for the US House. A moderate republican (Bradley Byrne) backed by the “establishment” and business overcame a strong challenge from a Tea Party insurgent (Dean Young). The general election, to be held later this year will not be of consequence in the heavily republican district. Had Young been victorious it would have added to the already substantial numbers of Tea Party supporters in the house.

Finally there is NYC. The first Democrat – Bill DeBlasio – was elected mayor since 1989 in a town that is 6-1 democratics. In the wake of the crime-ridden 80s, New Yorkers turned to republicans and stayed there post 9/11. Over time Bloomberg of course became less Republican, in name (formally going independent) and policy, but DeBlasio will be a big shift. Now he goes to Albany to seek approval for a tax increase to fund universal pre-K among other progressive policies.

Perhaps this is the start of the Democrat version of the Tea Party – both are reactions in some measure to widening income inequality and a frustration with politics as usual. The proposed solutions couldn’t be more different, however, and it seems that despite talk of a victory for moderates the country remains very polarized.

Enough politics. On to the markets.

The rates market continues to deliver very little “net” volatility as we move into the second month of the fourth quarter. Despite the recent back-up we are not even back to the levels seen before the October 17th debt deal. Gamma has been cheap enough that well timed purchases and delta hedges have been profitable. But no clear trend is in place. Just when it felt as if the 2.47-2.50 level would give way to still lower yields the data came in significantly better than expected  (especially the survey data).

The caveat here is that the survey data have not tracked the “hard data” terribly well in this cycle. Its hard to see the economy falling down to new lows on our data surprise index {NXTW MDSICSUS Index GP <GO>}- or seeing a sharp move to payroll numbers outside the continued range of 120-220 on payrolls that has held about 80% of the time over the past three years.

Given the price action and the non-manufacturing ISM employment component we are inclined to think the market is set up for a stronger than consensus number on Friday. If we cheapen much more, the risks will become more cleary asymmetric.

For now we prefer steepeners into the refunding auctions next week – announcement at 8:30AM today. We wrote this up on Monday and have seen interest in the trade which has moved about 1.5bps in our favor. Steepening during the sell-off yesterday was a reasonable indication that supply is starting to weigh as generally speaking 7s and 10s lead moves to higher yields.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/S0gu6d80HIs/story01.htm Tyler Durden

Credit Suisse’s head of US rates, Carl Lantz, is a usual suspect when it comes to dispensing bond market commentary. What we did not expect him to do, is also analyze last night’s off-cycle political results. He does both in the note below.

From Credit Suisse’s Carl Lantz

Last night’s off-off-cycle election results are not quite so easy to draw clear implications from. The media is generally painting the results as an embrace of moderation and confirmation of a generally damaged republican brand.

I think that characterization is more or less true but we had a limited number of elections and each had its own “special factors” at play.

A moderate republican – Chris Christie – won the governorship in New Jersey and a moderate (relative to his competitor at least)  democrat won in Virginia. Interestingly however the Terry McAuliffe victory in Virginia was much narrower than expected versus his hard-right competitor and the results may have gone the other way if the libertarian third-party candidate had note siphoned off circa 7% of the vote.

Back to New Jersey, the results likely would have been tighter – but still a Christie victory had the Governor not moved the Senate election to avoid the Democratic turnout associated with Dem Corey Booker’s big win last month.

Of much interest was the special primary in Alabama for the US House. A moderate republican (Bradley Byrne) backed by the “establishment” and business overcame a strong challenge from a Tea Party insurgent (Dean Young). The general election, to be held later this year will not be of consequence in the heavily republican district. Had Young been victorious it would have added to the already substantial numbers of Tea Party supporters in the house.

Finally there is NYC. The first Democrat – Bill DeBlasio – was elected mayor since 1989 in a town that is 6-1 democratics. In the wake of the crime-ridden 80s, New Yorkers turned to republicans and stayed there post 9/11. Over time Bloomberg of course became less Republican, in name (formally going independent) and policy, but DeBlasio will be a big shift. Now he goes to Albany to seek approval for a tax increase to fund universal pre-K among other progressive policies.

Perhaps this is the start of the Democrat version of the Tea Party – both are reactions in some measure to widening income inequality and a frustration with politics as usual. The proposed solutions couldn’t be more different, however, and it seems that despite talk of a victory for moderates the country remains very polarized.

Enough politics. On to the markets.

The rates market continues to deliver very little “net” volatility as we move into the second month of the fourth quarter. Despite the recent back-up we are not even back to the levels seen before the October 17th debt deal. Gamma has been cheap enough that well timed purchases and delta hedges have been profitable. But no clear trend is in place. Just when it felt as if the 2.47-2.50 level would give way to still lower yields the data came in significantly better than expected  (especially the survey data).

The caveat here is that the survey data have not tracked the “hard data” terribly well in this cycle. Its hard to see the economy falling down to new lows on our data surprise index {NXTW MDSICSUS Index GP <GO>}- or seeing a sharp move to payroll numbers outside the continued range of 120-220 on payrolls that has held about 80% of the time over the past three years.

Given the price action and the non-manufacturing ISM employment component we are inclined to think the market is set up for a stronger than consensus number on Friday. If we cheapen much more, the risks will become more cleary asymmetric.

For now we prefer steepeners into the refunding auctions next week – announcement at 8:30AM today. We wrote this up on Monday and have seen interest in the trade which has moved about 1.5bps in our favor. Steepening during the sell-off yesterday was a reasonable indication that supply is starting to weigh as generally speaking 7s and 10s lead moves to higher yields.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/S0gu6d80HIs/story01.htm Tyler Durden

And so another conspiracy theory, that Palestinian leader Yasser Arafat was poisoned with Polonium, becomes non-conspiracy fact. From Reuters:

Palestinian leader Yasser Arafat was poisoned to death in 2004 with radioactive polonium, his widow Suha said on Wednesday after receiving the results of Swiss forensic tests on her husband’s corpse.

 

“We are revealing a real crime, a political assassination,” she told Reuters in Paris.

 

A team of experts, including from Lausanne University Hospital’s Institute of Radiation Physics, opened Arafat’s grave in the West Bank city of Ramallah last November, and took samples from his body to seek evidence of alleged poisoning. “This has confirmed all our doubts,” said Suha Arafat, who met members of the Swiss forensic team in Geneva on Tuesday. “It is scientifically proved that he didn’t die a natural death and we have scientific proof that this man was killed.”

 

She did not accuse any country or person, and acknowledged that the historic leader of the Palestine Liberation Organization had many enemies. Arafat signed the 1993 Oslo interim peace accords with Israel and led a subsequent uprising after the failure of talks in 2000 on a comprehensive agreement.

 

Allegations of foul play surfaced immediately. Arafat had foes among his own people, but many Palestinians pointed the finger at Israel, which had besieged him in his Ramallah headquarters for the final two and a half years of his life.

 

The Israeli government has denied any role in his death, noting that he was 75 years old and had an unhealthy lifestyle.

 

An investigation by the Qatar-based Al Jazeera television news channel first reported last year that traces of polonium-210 were found on personal effects of Arafat given to his widow by the French military hospital where he died.

 

That led French prosecutors to open an investigation for suspected murder in August 2012 at the request of Suha Arafat. Forensic experts from Switzerland, Russia and France all took samples from his corpse for testing after the Palestinian Authority agreed to open his mausoleum.

 

“SMOKING GUN”

 

The head of the Russian forensics institute, Vladimir Uiba, was quoted by the Interfax news agency last month as saying no trace of polonium had been found on the body specimens examined in Moscow, but his Federal Medico-Biological Agency later denied he had made any official comment on its findings.

 

The French pathologists have not reported their conclusions publicly, nor have their findings been shared with Suha Arafat’s legal team. A spokeswoman for the French prosecutor’s office said the investigating magistrats had received no expert reports so far.

 

One of her lawyers said the Swiss institute’s report, commissioned by Al Jazeera, would be translated from English into French and handed over to the three magistrates in the Paris suburb of Nanterre who are investigating the case.

…

 

The Al Jazeera investigation was spearheaded by investigative journalist Clayton Swisher, a former U.S. Secret Service bodyguard who became friendly with Arafat and was suspicious of the manner of his death.

 

Hani al-Hassan, a former aide, said in 2003 that he had witnessed 13 assassination attempts on Arafat’s life, dating back to his years on the run as PLO leader. Arafat claimed to have survived 40 attempts on his life.

Now… whoever may have wanted the leader of the Palestinians dead?

He escaped another attempt on his life when Israeli warplanes came close to killing him during the invasion of Beirut when they hit one of the buildings they suspected he was using as his headquarters but he was not there. In December 2001, Arafat was rushed to safety just before Israeli helicopters bombarded his compound in Ramallah with rockets.

Oh wait…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/W-crHkZjDnQ/story01.htm Tyler Durden

Today’s AM fix was USD 1,317.00, EUR 975.05 and GBP 817.66 per ounce.
Yesterday’s AM fix was USD 1,311.25, EUR 971.30 and GBP 817.08 per ounce.

Gold fell $3.40 or 0.26% yesterday, closing at $1,310.80/oz. Silver climbed $0.06 or 0.28% closing at $21.68. Platinum dropped $4.74 or 0.3% to $1,445.00/oz, while palladium rose $0.50 or 0.1% to $747/oz.

Gold gained ground today and is up 0.6% as it tries to shake its longest losing streak in six months and the lowest prices seen in almost three weeks. Gold is range bound between $1,250/oz and $1,450/oz. The fundamentals including the current macroeconomic, systemic, geo-political and monetary conditions are favourable and suggest higher gold prices are likely in the coming months.

Gold in US Dollars, 30 Day – (Bloomberg)

However in the short term, gold looks poor technically and a breakout above $1,360/oz and $1,450/oz will be needed to encourage more nervous buyers.

Gold sales from Australia’s Perth Mint, which refines most of the gold bullion from the world’s second largest producer, rose in October as a drop in prices to a three month low led to increased demand and the mint filled a backlog of orders according to Bloomberg.

Sales of coins and minted Perth Mint gold bars climbed 13% to 77,255 ounces last month from 68,488 ounces in September, according to data from the mint.While demand in October more than doubled from 30,430 ounces in August, sales were 31% lower than this year’s record in April.

“There’d be people buying while the price is low,” said Ron Currie, the Perth Mint’s sales and marketing director.

“We’re getting a lot more product out the door because of previous orders that we hadn’t been able to supply because of capacity,” Currie said.

Gold in USD, 5 Year – (Bloomberg)

The U.S. Mint sold 755,500 ounces of American Eagle coins as of November 1st, compared with 753,000 ounces in all of 2012, according to data on the mint’s website. The mint sold 48,500 ounces in October from 13,000 in September and 11,500 in August.. Coin sales last month were still 77% lower than in April, when they surged to a 40 month high of 209,500 ounces. The Perth Mint sold 112,575 ounces of gold in April.

As bar and coins sales increased, demand waned for ETPs. Holdings tumbled 29% this year to 1,875.04 metric tons on November 4th, according to data compiled by Bloomberg. Assets have shrunk every month this year, the worst run on record.

The Perth Mint, which began operations in 1899, is owned by the Western Australian government and refines between 300 tons and 400 tons each year, including mined and scrap gold. Perth Mint gold bars are rapidly becoming some of the most popular one ounce gold formats in the world.

Australia is the world’s biggest gold producer after China.

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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/og6FlKafIss/story01.htm GoldCore

Having been “on fire” for most of the year – managing a simply remarkable (Venezuela stock market-like) 472% gain from the start of the year to September highs; it appears the momentum stock of the year is ‘running out of gas’. Now down over 22% from its highs, Elon Musk’s experiment in exuberance has entered a bear market. Indices most levred to the momo mayhem are struggling this morning also with NASDAQ leading the ‘charge’ lower. At 3-month lows, TSLA is now up ‘only’ 335% YTD…

 

 

maybe – as @ECantoni noted, replacing ORCL with TSLA in the NASDAQ 100 in July was not such a great idea after all…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/4UA2nCTzveo/story01.htm Tyler Durden