EurAnalysis

With thousand apologies

and just for FUN

Happy APRIL Fool's Day. You have great charts. They are fun to look at.

Winning in forex involves having fun and having a positive mental attitude. Fundamentals, technicals, a good trade plan. Risk management and discipline all are important.

Thanks for the chart and keep on posting here.

Have a good trading week. The truth can be funny at times.

Thanks man

FROM WWW.JSMINSET.COM

April 1, 2012, at 12:15 pm

by Jim Sinclair in the category Jim's Mailbox |

Eric,,
This is the best precursor of QE to infinity.
Regard,
Jim

Bullish Setup In Bonds Implies Official QE3?
CIGA Eric

The bullish movement of money, i.e. bullish setups in the 30- and 10-year, supports Gross’s suggestion that the Fed will hint at QE3 in April’s policy meeting. The spike in the bond market diffusion index (DI), a measure of cumulative money flows across the yield curve, suggests something’s up. Follow the message of the market and leave the experts to debate their opinions.

Chart: US Treasury Bond 20YR+ (TLT) And Bond Diffusion Index (DI)
http://www.jsmineset.com/wp-content/...p_image002.gif
Headline: UPDATE 1-PIMCO’s Gross sees Fed QE3 hints in April-Twitter

(Reuters) – Bill Gross, who runs the world’s biggest bond fund at PIMCO, said the U.S. Federal Reserve will likely hint at a third round of bond purchases, better known as "quantitative easing," at its April policy meeting. Gross issued his view on Fed policy on social media platform Twitter on Sunday. "#Fed likely to hint @ QE3 in April meeting," said Gross, co-chief investment officer at PIMCO. It wasn’t Gross’s first time tweeting on QE3. In June, Gross said the Fed would signal a third round of bond purchases in a bid to boost sluggish economic growth at the closely watched Jackson Hole annual global central banking conference, led by the Fed, which takes place in Wyoming.
Source: reuters.com
More…


Kno's Comments: This needs to be watched carefully. The next FED meeting following NFP on April 6, 2012 could be another game changer only in terms of confirmation of QE3 which it appears is being done without official confirmation.

From reuters.com

Bill Gross

On March 12, Gross said the U.S. central bank "must keep buying bonds that the market doesn't want."

That statement was made prior to the last Federal Open Market Committee (FOMC) meeting on March 13, when policymakers modestly upgraded their outlook on the U.S. economy.

The recent FOMC statement partly fueled the biggest weekly selloff in Treasuries since last summer, which some analysts saw as the start of a prolonged bear market for bonds.

Ben Bernanke, chairman of the Fed, on Monday suggested the central bank would continue supportive monetary policies even as the unemployment rate improves.

"The continued weakness in aggregate demand is likely the predominant factor. Consequently, the Federal Reserve's accommodative monetary policies, by providing support for demand and for the recovery, should help, over time, to reduce long-term unemployment as well," he said.

Even so, the yield on the benchmark 10-year note rose to 2.27 percent on Monday from 2.24 percent last Friday and 1.79 percent at the end of January.

Kno's Comments: Follow The US Bond Yields on the 2 Year, 10 Year and 30 Year US Bonds. The FED CANNOT allow US Bond Yields to go up as happened in Greece and now Spain. That is the TRAP that they are in and there is no way out other than a collapse. They can delay it until after the US election during November 2012. A Black Swan Event however can change things in minutes.

Have A Good Week Trading and trade intelligently. Pick your spots and be aware of things such as this if you want to avoid surprises. Even then with a good Trade Plan and Excellent Risk Management there are risks. The markets are not free markets so other information needs to be looked at in order to determine where the interventions are happening and why.

http://www.businessinsider.com/ameri...to-37-2012-3?s

America's Savings Rate Has Collapsed

Joe Weisenthal | Mar. 30, 2012, 8:50 AM |

1. 
   From the just released personal income and spending report:

Personal saving -- DPI less personal outlays -- was $438.7 billion in February, compared with $509.5 billion in January. The personal saving rate -- personal saving as a percentage of disposable income -- was 3.7 percent in February, compared with 4.3 percent in January.

For some context, here's a look at the personal savings rate going back a few years.

It doesn't have this latest month updated yet, but as you can see, we're getting back towards pre-crisis levels.
http://static8.businessinsider.com/i...0043/chart.jpg
A possible interpretation is that Americans are spending more money on gasoline, but not yet cutting back elsewhere.

Read more: http://www.businessinsider.com/ameri...#ixzz1qohJAuDw

http://www.financialsense.com/node/7968

Consumer Spending Better Than Expected



By Sheraz Mian
03/30/2012

Kno's Comments:

This is entirely true based on on the numbers. However looking at the above graph in the post I did before this one it is clear that expenditures are coming out of saving which is NOT GOOD for the future.

This morning’s better than expected read on consumer spending in February provides plenty of evidence of resilience in the U.S. economy. Importantly, the data improves the odds of positive revisions to current quarter GDP growth expectations.

The monthly Personal Income & Outlays report showed that both Personal Incomes and spending grew at better than expected rates in February. Consumer spending increased at a 0.8% pace, compared to January’s 0.4% growth pace. The January gain was revised upwards from the original 0.2% pace.

Since consumer spending accounts for more than two-thirds of the GDP, this morning’s favorable consumption data will likely prompt positive revisions to current growth expectations of about 2% for the first quarter. This is particularly welcome given lack of positive revision in Thursdays final read on fourth quarter 2011 GDP.

The Personal Income component of today’s report showed a 0.2% increase, roughly in-line with expectations. Income gains have been fairly modest lately, despite the strong recent payroll gains. As a result, the personal savings rate has been coming down, reaching its lowest level in more than two years to 3.7% in February from 4.3% in January.

Bottom line, this is a positive report, But it may not be enough to decisively push stocks higher all by itself today. The favorable news out of Europe this morning on the permanent bailout fund should also help. But I feel that stocks will remain in a wait-and-see mode, though with a modestly positive bias, ahead of next week’s reports.

What do you think?

Kno's Comments: I think the more important item is the one on personal savings. The next NFP number on Friday April 6, 2012 might give some clues followed by the next FED meeting in April 2012. See the Bill Gross comments posted earlier. Things taken out of context without understanding the overall issues leads to faulty conclusions.

Some follow the price.

Some make the price follow them.

http://www.kitconet.com/charts/metal..._en_usoz_2.gif
http://www.kitconet.com/charts/metal..._en_usoz_2.gif
http://www.weblinks247.com/indexes/idx24_usd_en_2.gif

I got the following in my email. In case anyone is interested I will post the item here with links to slides included.

Enjoy !!!

Joe B., Oliver Wendell Holmes, Sr. & Mike Dooley
April 1, 2012

Dear reader: My friend Joe B. has experienced some of the world’s exigencies. He thinks about them in the context of being a former Bostonian, and he said a few things at our last lunch together. His words caused me to reflect on the teaching of an earlier Bostonian. I originally sought a quote from the famous son, but as readers will see, I ended up with the father. We will dedicate this commentary to Joe B., who set me on the course for today’s comments.

“The mind, once expanded to the dimensions of larger ideas, never returns to its original size.” Oliver Wendell Holmes, Sr.

Holmes, Sr. lived in the century before World War I. He preceded central banks like the Federal Reserve and European Central Bank. He didn’t know there would be an International Monetary Fund. In his time, he was a thinker, author, physician, poet. His son was the famous Supreme Court Justice.

Fast forward. The new idea is to take the government-institutional official sector coalition and empower it when there is a financial crisis.

This approach is at work in the Eurozone, the UK, the US, and a growing number of other venues. The new idea is to crush the private sector and to keep the official sector in the game for a prolonged period.

This “idea shift” is a distinguishing feature of the recent crisis period that started in 2007-2008. The old idea was that the official sector would intervene, rebalance the system, and then exit.

The old idea was to get the private sector back in the game quickly. The old idea was to recover the official money and then let the market resume its functions of pricing and clearing and providing capital.

The old idea is dead.

At our GIC conference in Paris, during the second-day roundtable, Mike Dooley brilliantly demonstrated the difference between the new idea and the old idea. He dissected the transaction in the Greece restructuring. His slides are available on the GIC website, www.interdependence.org .

We pause for slide viewing.

Please note: The rest of this commentary will assume that the reader spent ten minutes on those slides and has now returned to our reflections. If you haven’t done so, you will have missed one great learning opportunity.

We resume.

“The official sector seems to be the clear winner,” says Mike Dooley. In our view, that is the triumph of the new idea over the old idea. The lesson from Oliver Wendell Holmes, Sr. is that the minds of officialdom have now been expanded and cannot return to their original boundaries.

Investors who look at the post-Lehman world through the lenses of the private sector-oriented old idea are puzzled. They expect outcomes that do not occur. They measure risk by the size of the official response. They anticipate that the huge sums mentioned by officialdom will yield the results of higher interest rates and more inflation and weakening currency values. In fact, that may eventually come to pass, but it will take a while. The new idea has to run its course before those things will happen. Inflation, weak currency, spiking interest rates are the outcomes of the old-idea framework.

In the new-idea realm, officialdom is in the game for a long time. This is true for Greece. It will need more subsidies. It will be offered that assistance through negotiations under strenuous terms. Such is the power of officialdom. Greece will have little choice, since the alternative of leaving the Eurozone will always appear to be worse. That process will continue for years unless a new Greek government repudiates the decisions of the previous ones and a new political crisis undermines the official European coalition.

Notice how there is no room in this process for a rapid return to the private sector. The private sector is limited and will remain so until the new idea has completed its development phase. Then and only then can a newer version of the old idea commence. Private-sector expansion in Greece requires officialdom to permit it. To do that the political forces must change from the present ones.

We expect the same new-idea process to unfold in Portugal and Spain. The sequence that leads to it is already underway. There is ongoing debate about Italy, since it is in the “too big to fail” category. So far the Monti-led technocrats have maintained power while implementing a changeover to the new idea.

In the US we have experience with the new idea in housing finance. GSE-based mortgages have been the result. It is nearly five years since the first ripple appeared in the Fannie-Freddie mortgage pond. Where are we with officialdom? You take the inventory and be the judge.

In the US, the new-idea framework is now focused on our national healthcare policy. The successors to Justice Oliver Wendell Holmes, Jr. are deliberating. For a perspective, consider that housing is a large part of the United States in economic terms. Now consider that healthcare is bigger. It is about 18% of our GDP. This Supreme Court decision is monumental. It comes down to the debate over officialdom vs. private domain.

“The great thing in the world is not so much where we stand, as in what direction we are moving,” said Holmes, Sr.

In the mature economies of the world, movement is away from the private sector. Movement is toward global and regional officialdom. The players are known by their acronyms, like ESM, EFSF. IMF, or GSE. We live with a consortium of acronyms, funded by central banks and governments. They represent the power of the new idea as it becomes institutionalized.

What does this bode for investors?

We think there is a good period and then a bad period. We are currently in the good period, which is defined by massive liquidity injection from officialdom. $4 trillion of global (G-4 countries) excess reserves in the banking system is a marvelous tonic.

The bad period will evolve as officialdom begins to confront resistance from the citizenry and when the old idea outcomes start to appear. That lies ahead. Signs of it are visible in the civil strife in countries where the new idea is being deployed.

Holmes Sr. warned us: “Beware how you take away hope from another human being.” Investors must carefully observe when officialdom suppresses hope with power. Investors’ capital spent on hope in this uphill fight to preserve hope will be lost. Ask the private holders of Greek debt if you need proof. Ask the holders of Fannie preferred.

The new idea of officialdom is operation and control by a central group of people. They are quite different from the old-idea folks, who are dispersed and whose time is ending. Holmes Sr. warned of the risks implied by this tension. He said, “Between two groups of people who want to make inconsistent kinds of worlds, I see no remedy but force.”

We discussed this when I visited with the Tuesday lunch group. The debate was friendly and intense. Varied viewpoints let to no conclusion other than to continue the debate.

Then my Tuesday lunch-group friend and client, Joe B., reminded me that I must always end with an investment policy statement. “What does this mean for my portfolio?” he asks. So, Joe, we will dedicate these closing thoughts to you.

Joe, we are still fully invested in the US stock market ETF accounts. And we have positions in the energy sector and believe they must be maintained for all the strategic reasons we know. Believe it or not, we are overweight healthcare. And regional banks. And homebuilders. Our new book, Bear to Bull with ETFs, is soon to be released. It will describe some of these sector decisions and how we made them.

We expect a mild, single-digit percent correction and then a higher level of stock prices by the end of the year. The bull market started on October 3, 2011. It is probably only half over.

We are gradually reducing durations in the bond arena, and we are tactically hedging spreads where we can do it. We expect officialdom’s commitment to very low interest rates to persist for a while. That is part of new-idea application.

Joe, enjoy the tonic of liquidity as long as it lasts. And enjoy the libation that accompanied lunch. We are monitoring the punchbowl. We are prepared to change this strategic direction at any time.

David R. Kotok, Chairman and Chief Investment Officer

http://www.gata.org/themes/gata/imag...r-dispatch.gif
GATA figures prominently in 'America's Book of Secrets' episode on Fort Knox

http://www.gata.org/themes/gata/imag...ting_small.gif
Submitted by cpowell on 07:32PM ET Sunday, April 1, 2012. Section: Daily Dispatches 10:25p ET Sunday, April 1, 2012
Dear Friend of GATA and Gold:
The latest episode of the History Channel program "America's Book of Secrets" was broadcast last night and GATA and your secretary/treasurer play a big part at its beginning and toward its end, separated by a lot of odd tangents that, while they do not involve GATA's work, may keep the lay viewer engaged until GATA's main points are pressed emphatically: market rigging and the likely encumbrances on the U.S. gold reserve. The program is 44 minutes long and, for the time being, at least, full video of it is posted at Hulu here --
http://www.hulu.com/watch/329727/ame...rets-fort-knox
-- and at the Independent Movie Database here:
http://www.imdb.com/video/hulu/vi1225957657/
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

What ? ? ?

This video is not available in your country. Why Not ? ? < I Live In Canada !!!

http://news.goldseek.com/Internation...1333294260.php

You have to ask yourself how can there possibility be a recovery? The stock market may be approaching old highs due to the Fed manipulating money, but there is no recovery on Main Street, nor will there be. We do not know if you noticed, but the Dow has just gotten back to even after its 57% plunge of March 2009. In that correction we recommended sale of 14,200 with a bottom at 6,600. The actual bottom was 6,550.

The Fed also has to continue zero interest rates. As rates rise more money is needed to fund debt and that means the Fed has to print more money to offset the cost of borrowing at higher levels.

As far as building over 600,000 new homes a year we have been asking for more than five years how can builders be building with an enormous for sale inventory hanging over the market. Construction payrolls are at a 16-year low and quite frankly we do not know why there is any construction at all?

Every time we look at US policy we cringe. We try to figure out all aspects of what the US is up too and come out with zeros, other then what is the obvious. Two moves against Iran that are dumber then dumb. Negotiations have been going on for weeks between Iran and India for oil delivery and payment. This week the US says to India if you barter or use gold or other currencies we are going to sanction and embargo you as well. One thing this statement has done is put the world on notice that if you do not do what we tell you to do we will destroy you. That is a sad commentary for a once great country. Threatening India was a mistake – a step too far. If settlement is in a form of non-US dollars that means countries do not have to print their own currencies to buy dollars to pay for the oil. Those are the dollars that have been buying US treasuries with, and funding the US deficit. Such conditions will cause nations to continue to sell dollars for other currencies and gold. About 60% of reserves of nations are in the form of US dollars. That could cause a stampede out of the US dollar, but we believe the sale of dollars will be somewhat orderly, as will be the inflationary build up caused by the return of these dollars. Eventually the return of dollars will reach epic proportions, the dollar is devalued and then collapses and we are presented with other wars or WWIII. The time period of dollar failure is being accelerated. We do not have a time table – no one does, but it is coming. That is why we tell you to prepare now while you can. Your food and defense cannot be left to be bought in the future. All your extra assets should be in the form of gold and silver coins, bullion and shares.

In the EU we find some surprising facts – that $1.4 trillion in loans to 800 banks is not being lent out to any great extent. Year-on-year bank lending has fallen in February to 0.7% from 0.8%, while lending to companies fell 0.4% from0.7% and lending to householders fell to 1.2% from 1.3%. overall banks are not doing enough to strengthen the economy.

Austerity cuts in Greece are not enough for S&P and the creditors, so there will be requests for further cuts. If they continue such tactics default will be on the horizon.

Moody’s has downgraded five major Portuguese banks. Their 10-year bonds are still yielding more than 11%, which is terrible.
...

THE INTERNATIONAL FORECASTER

SATURDAY, MARCH 31, 2012

Times in GMT

12:00EUR NATO's Rasmussen Holds Monthly Press Conference
14:00USD Fed's Bullard Speaks at Tsinghua University
15:30USD U.S. to Sell 3-Month Bills
15:30USD U.S. to Sell 6-Month Bills
16:15CAD "Bank of Canada's Carney Speaks in Waterloo, Ontario"
16:35USD "Fed's Pianalto Speaks on Monetary Policy in Marietta, Ohio"
EUR "ESMA, Regulatory Technical Standards"
EUR "EBA, Regulatory Technical Standards"

By oanda order book it appears that todays range is between 1.33-1.34.

Oh good so that means we will break out of the 3310-3384 range

But that is the range which is between 1.33 and 1.34...

How was your weekend?

Just curious ... no offence! Is there a promotional job / summar job kind of thing going on?

Swiss retail sales 0.8% vs 3.2% expected... No reaction.