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Go to the source: Mish’s Global Economic Trend Analysis

Trichet and the ECB may have calmed the waters on CDS sovereign debt spreads, but the same cannot be said for the corporate bond market or bank-to-bank lending.

Please consider ‘Lack of Trust’ Pummels Bank Lending in Europe.

Money markets are showing rising levels of mistrust between Europe’s banks on concern an almost $1 trillion bailout package won’t prevent a sovereign debt default that might trigger a breakup of the euro.

Royal Bank of Scotland Group Plc and Barclays Plc led financial firms punished by rising borrowing costs, British Bankers’ Association data show. The cost to hedge against losses on European bank bonds is 62 percent higher than a month ago. Investment-grade corporate debt sales in the region plummeted 88 percent last week to $1.2 billion from the previous period, according to data compiled by Bloomberg.

The rate banks say they charge each other for three-month loans in dollars rose to a nine-month high, even after a government-led rescue designed to prevent Greece from defaulting, and a new financial crisis. The euro fell to its weakest against the dollar since 2006.

Bank lending “conveys a lack of trust in the system,” said Robert Baur, chief global economist at Des Moines, Iowa- based Principal Global Investors, which manages $222 billion. “Banks are a little reluctant to lend overnight as they don’t know the full extent of what is on the bank balance sheets.”

The extra yield investors demand to own…

Go to the source: The Market Ticker ®

We all hear about “police brutality” and other similar incidents.

Then there are incidents that aren’t so clear.

Or are they?

DETROIT – Seven-year-old Aiyana Jones was asleep on the living room sofa in her family’s apartment when Detroit police searching for a homicide suspect burst in and an officer’s gun went off, fatally striking the girl in the neck, family members say.

Her father, 25-year-old Charles Jones, told The Detroit News he had just gone to bed early Sunday after covering his daughter with her favorite Disney princess blanket when he heard a flash grenade followed by a gunshot. When he rushed into the living room, he said, police forced him to lie on the ground, with his face in his daughter’s blood.

This isn’t a case where the cops barged into the wrong house: The suspect they were looking for, who was wanted for murder, was in the house and was arrested – on a lawful warrant drawn for the property they entered.

“This is any parent’s worst nightmare. It also is any police officer’s worst nightmare,” Godbee said.

Really?

Then perhaps you might consider your tactics in serving such warrants.

Let’s remember that while a suspected murderer that was being sought, the key word here is suspected.  Until tried and…

Go to the source: Market Skeptics

Go to the source: Mish’s Global Economic Trend Analysis

Homebuilder confidence is up again, but the headline does not tell the real story. Please consider Homebuilder confidence at 2-1/2 year high in May

The NAHB/Wells Fargo Housing Market index increased three points to 22, the highest since August 2007, the group said in a statement. It was the second straight month of gains in the index. In addition to the tax credit, builders were also cheered by growing evidence that economy’s recovery from the longest and deepest recession since the 1930s was gaining momentum.

All three subindexes of the Housing Market Index, including a measure of future homebuilding activity, saw decent gains this month.

“This means builders are more comfortable that the market is truly beginning to recover, and that positive factors for buying a new home are taking the place of tax incentives to generate buyer demand,” said NAHB chief economist David Crowe.

The current sales conditions gauge rose three points to 23, the highest since July 2007. The sales expectations measure for the next six months also gained three points to 28, the highest in six months. The traffic of prospective buyers index increased three points to 16, the highest since September.

Traffic is up to 16 and David Crowe is excited? The only thing that remotely looks like it is headed up is “sales expectations” sitting at 28.

Even still, on the diffusion index, 50 is the break even point.

Huckster Hype in Las Vegas…

Go to the source: Notes from the bunker…

I received an order from the folks at Mountain House last week. They’ve had some menu changes for 2010 with the addition of a couple new flavors in the pouches and the retirement of a couple others. In the somewhat more germane  #10 cans there have been no changes. Im the kind of guy who doesn’t mind eating the same thing over and over if it’s something I like so I have some pretty strong preferences. If you find yourself in a position to purchase some #10 cans of the Mountain House, I recommend the Spaghetti, Chicken w/ Rice, Chicken Teriyaki and Lasagna. The other flavors are okay, but those four are my favorites. Whats nice is that those flavors are also available in the pouches as well as the cans, so a fella can simply buy a pouch to try for a couple bucks before dropping the larger coin for the #10 cans.

Although the freeze-drieds are the ultimate in long-term storage (although some would deride them as ‘yuppie survival food’ where ‘yuppie’ is code for ‘makes more money than me’) they really are mostly a luxury. They are, however, an excellent ‘force multiplier’ to help you make the most out of your other food storage. What I mean by that is that the freeze drieds enable me to do more versatile things with the non-FD storage food. Most of us stock up on canned goods (vegetables, fruits, etc) and…

Go to the source: The Market Ticker ®

An interesting pair of opinion pieces on Bloomberg today…..

First the realist perspective:

But the story doesn’t end here. The fatal flaw in the plan is that the European nations bailing out Greece — even Germany, where government debt has risen to about 80 percent of gross domestic product — have similar budget problems and even less political will to take similar medicine.

Their plan appears to rest on the hope that lenders won’t notice. Eventually they will, and when that happens, a worldwide loss of faith in government debt markets is a virtual certainty.

Right.  Bailing out a bankrupt nation by even more bankrupt nations, where nobody actually has any money but all believe that if they sing “Kumbaya” around the fire someone (China?) will magically rise to give them money on “attractive” lending terms.

Why would you do that if you have basically no chance of ever being paid? 

The argument for years has been that lending to bankrupt nations is a good idea as it is effectively nothing more than a “discount” on the face price of various products.  That’s a nice premise but at the extremes it falls flat on it’s face of course, as one cannot continue to pull this game forever without consequence, irrespective of what the pump monkeys would have you believe.

Of course we need balance in the media, which is why Bloomberg presents this right…

Go to the source: The Market Ticker ®

Amazing stuff:

Papandreou criticised financial markets for overreacting to Greek’s debt crisis and accused speculators of helping to provoke panic reactions.

Panic reactions?

Overreacting?

So you mean that lying for years – a decade or so in fact – had nothing to do with it?  Getting caught with your hands in the cookie jar wasn’t the primary problem?  Promising that which you can’t possibly deliver on a fiscal basis wasn’t responsible?

Balderdash.

Papandreou also said that he had written a letter to U.S. President Barack Obama jointly with German Chancellor Angela Merkel, French President Nicolas Sarkozy and Eurogroup chairman Jean-Claude Juncker on whether the market in credit default swaps should be closed.

Simply remove the federal preemption of state bucket shop and gambling laws.  End of problem.

You can write an insurance policy for someone who has an insurable interest, provided you comply with state laws on capitalization and other metrics.

But you can’t write naked swaps (including to create synthetic CDOs!) and you can’t trade these things without formal capital support and proof that you hold capital sufficient to pay your bets.

Don’t expect this any time soon, by the way.  Destabilizing the global economy and placing bets with no capital behind them is how the banksters rip us all off.  I don’t see it ending until governments get tired enough of it to define what they’ve been…

Go to the source: Totally Ready

First, thank you to all who have sent me survival stories. Please keep them coming. It is great to learn of all the things you have discovered through real life experience. I will compile them and share them in a newsletter in July. If you haven’t already shared your survival tale please do so. Thank you to all who have let me know about the can organizers you have purchased. For any who may have missed my requests last week, I need to know if you have purchased can organizers after clicking on the link on the blog. If so, when and how many, thanks, it’s important and I appreciate your help.

I have often wondered why we don’t just do our water bath canning in our large stock pots. The water gets just as hot and will cover the entire jar. Now Ball has done it. The Canning discovery kit includes a polypropylene rack and jar lifter combo designed to hold 3 pint jars and fit in a stockpot, and also includes 8 simple recipes and  canning instructions. I think this is a great way for those who have never canned to get an idea of what is involved, and just how much fun it is, without all the expense. It would be a great gift for anyone you are…

Go to the source: The Market Ticker ®

Greece, the Euro, The Pound, China’s market collapsing, the “gun on the table” in Europe that in fact is a water pistol and more.  You can’t fix a drunk with a bottle of whiskey, and you can’t solve a debt problem with more debt.  What may be on the menu for the next few years, and how you can deal with it.

3:30 Central today at http://blogtalkradio.com/marketticker, or join us by phone at 718-664-6286.