We'll see what happens in March 2013...
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| Chart 1: Deposits Eurozone |
zondag 31 maart 2013
Bank Deposits Update
Latest data shows no deposit flight yet in February 2013. Greece did decline together with Portugal, Ireland and Cyprus. But Italy and Spain had deposit increases.
zaterdag 30 maart 2013
Correlation: Recession Vs. Yield Spread
I came across an interesting article that gives an empirical correlation between the yield spread between the 10 year and 3 month treasuries/bill and the probability of a recession when that yield spread narrows.
The key is to monitor that the 10 year yield is always higher than the 3 month yield. If the 10 year yield starts to go closer to the 3 month yield and even goes below it, then we have a high probability of a recession.
That correlation can be witnessed on chart 1. Each time the blue line goes below zero, we have a recession.
The last recession was in 2008. A few years before, the yield spread went to zero. Today we're in pretty safe territory (Chart 2). The green line minus the black line is 2%. If we see the black line go up again or the green line go down, we are in trouble. That's why the Federal Reserve never will increase the fed funds rate. Otherwise the black line will spike upwards.
No problems today. But it pays off to watch the yield spread each month or so.
The key is to monitor that the 10 year yield is always higher than the 3 month yield. If the 10 year yield starts to go closer to the 3 month yield and even goes below it, then we have a high probability of a recession.
That correlation can be witnessed on chart 1. Each time the blue line goes below zero, we have a recession.
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| Chart 1: Recession Vs. Yield Spread |
The last recession was in 2008. A few years before, the yield spread went to zero. Today we're in pretty safe territory (Chart 2). The green line minus the black line is 2%. If we see the black line go up again or the green line go down, we are in trouble. That's why the Federal Reserve never will increase the fed funds rate. Otherwise the black line will spike upwards.
No problems today. But it pays off to watch the yield spread each month or so.
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| Chart 2: U.S. bond yields |
This theory is applicable to every country. I analyzed Spain for example in this article.
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| Chart 3: Spanish Bond Yields (10 year vs 2 year) |
donderdag 28 maart 2013
Belgium the next country to fall
As I said before here and here, Belgium is the next domino to fall after Greece.
If you don't believe me, believe Zerohedge. As you can see on chart 1, the countries on the left have the least equity/capital reserves as a percent of deposits.
So to avert insolvency of Belgian banks, depositors need to be thrown into the fire eventually. But luckily, Greece will be first...
Prepare yourself.
If you don't believe me, believe Zerohedge. As you can see on chart 1, the countries on the left have the least equity/capital reserves as a percent of deposits.
So to avert insolvency of Belgian banks, depositors need to be thrown into the fire eventually. But luckily, Greece will be first...
Prepare yourself.
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| Chart 1: % bad debt that can be impaired before deposit haircuts |
Shanghai precious metals premiums fall to zero
Bad news, gold premium in Shanghai has reached 0%. It is not the time to buy gold right now.
dinsdag 26 maart 2013
Copper Contango Update
I have the feeling that we are going to make a bottom in copper soon, the contango will at one point begin to reverse. We are at 1.4% contango to price ratio now, it will go up to about 2-5% before it will reverse. Even when we have a copper surplus and record copper stocks in China.
The CFTC data shows that copper will most likely go up because large commercials are long.
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| Chart 1: Copper Contango Vs. Copper Price |
The CFTC data shows that copper will most likely go up because large commercials are long.
maandag 25 maart 2013
Bank Reserve Requirements in the Eurozone
Following the crisis in Cyprus of which I talked about here, there has been a question on how much stress the banks can have during a bank run, before their liquidity is at stake.
A typical bank balance sheet looks like this (Figure 1). If the deposits get drained on the right side, the cash gets drained on the left side. The question is, how high is the limit of a drain on deposits?
Let's analyze the bank reserve requirements first.
Then we look at the capital and reserves of the banks. The capital and reserves are given in the last column (Table 1).
A typical bank balance sheet looks like this (Figure 1). If the deposits get drained on the right side, the cash gets drained on the left side. The question is, how high is the limit of a drain on deposits?
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| Figure 1: Balance Sheet |
Let's analyze the bank reserve requirements first.
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| Chart 1: Reserve Requirements |
Then we look at the capital and reserves of the banks. The capital and reserves are given in the last column (Table 1).
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| Table 1: Bank Statistics |
zondag 24 maart 2013
Belgium deposits are not safe
I happen to live in Belgium and there are some people there arguing with me about gold. I keep telling them to buy gold but they insist not to buy it.
What they don't take in account is that Belgium is the next in line of the PIIGS. Belgium has one of the largest debts in the Eurozone and has the highest taxes. As a result I don't think that higher taxes will be an option.
So the only other option is to take your deposits like in Cyprus. Belgium happens to have a lot of uninsured deposits ready for the taking (Chart 1).
With this chart I will have another argument up my sleeve. Of course I already prepared myself by taking all my money out of the bank.
vrijdag 22 maart 2013
Correlation: 30 Yr. Treasury Yield Vs. 30 Yr. Mortgage Rates
Just wanted to add another couple of correlations to my collection. We will learn about fixed and adjustable rate mortgages. These are correlated against treasury yields and fed funds rate respectively.
1) Conventional (Fixed) Mortgage Rate Vs. Treasury Yields
As you can see mortgage rates are always higher than treasury yields because U.S. treasuries are considered much safer than mortgages.
2) Adjustable Mortgage Rate Vs. Fed Funds Rate
Adjustable Rate Mortgages on the other hand are linked to the Fed Funds Rate.
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| Chart 1: 30 Yr. Treasury Yield Vs. 30 Yr. Mortgage Rate |
Adjustable Rate Mortgages on the other hand are linked to the Fed Funds Rate.
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| Chart 2: 1 Yr. Adjustable Rate Mortgage Vs. Fed Funds Rate |
Correlation: Disposable Income Vs. Housing Prices: Is there a housing bubble?
Peter talked a lot about housing on the radio show of 21 March 2013. He said that house prices could drop a lot from here, but I don't agree with that.
To see where housing prices will go we need to look at 3 fundamentals. The most important one is wages and income. If your monthly disposable income doesn't match with the house you are buying, you will not be able to pay off your house. The second factor is mortgage rates. If you need to pay an ever increasing higher interest, you will have difficulties to pay off your house (at an adjustable rate mortgage). The last factor is savings. If you don't have a pool of savings, you can't make an adequate down payment for your house.
Let's analyze these 3 fundamentals in this article.
To see where housing prices will go we need to look at 3 fundamentals. The most important one is wages and income. If your monthly disposable income doesn't match with the house you are buying, you will not be able to pay off your house. The second factor is mortgage rates. If you need to pay an ever increasing higher interest, you will have difficulties to pay off your house (at an adjustable rate mortgage). The last factor is savings. If you don't have a pool of savings, you can't make an adequate down payment for your house.
Let's analyze these 3 fundamentals in this article.
donderdag 21 maart 2013
COMEX Gold Data Update
This is what incomplete COMEX gold stock data looks like after a laptop crash.
Nevertheless you can see that total gold stock is declining very rapidly and the most important of all, it is a real trend changer. Look at how soft the curve was before and suddenly everyone takes their gold back starting from 2013.
I think we are in for a rally. Especiallly in silver, where open interest is still very high.
List of All Discovered Correlations
Once in a while I need to post an update on all discovered correlations, we're getting a huge list already. If I only had some software to get automatic updates of these charts...
Positive correlations mean that if one goes up, the other goes up too. Negative correlations mean that if one goes up, the other goes down.
Positive correlations:
1) Silver/Gold premium Vs. Silver/Gold Price (link 2)
2) Baltic Dry Vs. Industrial Commodities
3) Baltic Dry Vs. Copper
4) Copper Vs. S&P
5) Oil Vs. Dow Jones
6) Agriculture Price Vs. Health of Economy
7) Agriculture/Food (leading indicator) Vs. Fertilizer Price (link 2)
8) CRB Index Vs. Commodity prices (oil, agriculture, metals)
9) MZM velocity Vs. Inflation
10) MZM velocity Vs. 10 year U.S. treasury yield
11) Case-Shiller Index Vs. Housing Market Index
12) Capacity Utilization Vs. Inflation
13) Rhodium Price Vs. Automotive Industry
14) Housing Price Vs. Rise of Wages
15) O-metrix Score Vs. Stock Value
16) Outlay Spending Vs. Hyperinflation
17) Gold Money Index Vs. Gold Price
18) Stock Dividend to Bond Yield ratio Vs. Stock Price
19) War Vs. Silver Price
20) Exchange Rate Vs. Treasury Bond Valuation
21) PMI Vs. GDP Growth Rate
22) Gold Lease Rate Vs. Gold Price (link2) (link3) (link4)
23) Economy of Australia/Canada Vs. Industrial Commodities
24) Jim Sinclair's Fed Custodials Vs. Gold Price
25) LCNS silver net short positions Vs. Silver Price
26) ECB Deposit Rate Vs. Euribor and Deposit Facility (Deposit ECB)
27) China Gold Imports from Hong Kong Vs. Gold Price
28) AUD/USD Vs. Iron Ore
29) Chinese yoy GDP growth Vs. Chinese yoy Power Consumption (link 2)
30) Chinese yoy Power Consumption Vs. Chinese yoy Power Production
31) M1 and Gold
32) Obesity Vs. Debt
33) Global Equity Prices Vs. Global EPS revisions
34) Total Public Debt Vs. Interest Payment on Debt
35) U.S. Bond Yields Vs. Interest Payment on Debt
36) Federal Reserve Balance Sheet Vs. S&P
37) Federal Reserve Balance Sheet Vs. Gold Price
38) Balance Sheet Ratio Fed/ECB Vs. EUR/USD
39) China Manufacturing PMI Vs. Base Metal Prices
40) COMEX stock level Vs. CFTC Open Interest
41) Manufacturing component of Industrial Production Vs. CRB Metals Index
42) Net Short Interest Gold Vs. Gold Price
43) Central Bank Net Gold Buying Vs. Gold Price
44) LCNS silver Vs. Silver Open Interest
45) Bond Yields Vs. Gold Price
46) Gold Miners Bullish Percent Index Vs. GDX
47) Daily Sentiment Index Gold Vs. Gold Price
48) Commercial Net Short Interest Vs. Silver Price
49) Food Stamp Participation Rate Vs. Unemployment Rate
50) Bitcoin Price Vs. Gold Price
51) Credit Expansion Vs. Economic Health (second link)
52) Gold Volatility Vs. Gold Price
53) Total Stock Market Index Vs. GDP
54) Brent Crude Oil Vs. WTI Crude Oil
55) EPS revisions Vs. P/E Ratio
56) Citigroup Surprise Index (CESI) Vs. S&P
57) EPS revisions Vs. S&P
58) Dow Theory: Dow Jones Transportation Average Vs. Dow Jones Industrial Average
59) Margin Balance Vs. S&P
60) Federal Debt Growth Vs. 10 Year Treasury Yields
61) Fed Funds Rate Vs. 10 Year Treasury Yields
62) Total Central Bank Balance Sheet Vs. Gold Price
63) Large Commercial Short in Copper Vs. Copper Price
64) Bond Yields (<3%) Vs. P/E Ratio
65) ECB Lending (LTRO) Vs. Deposits at Banks
66) Disposable Income Vs. Housing Prices
67) Fixed (conventional) Mortgage Rate Vs. Treasury Yields
68) Adjustable Mortgage Rate Vs. Federal Funds Rate
69) Silver Vs. Bitcoin
70) Open Interest Trend Vs. Price Trend
71) Wage Inflation Vs. Consumer Price Index (CPI)
72) Marginal Cost of Gold Suppliers Vs. Gold Price (link 2)
73) Durable Goods Orders Vs. S&P
74) Gold ETF Trust (GLD) Vs. Gold Price
75) PMI (leading indicator) Vs. S&P Revenues
76) Federal Funds Rate Vs. LIBOR Rate
77) Lumber Price (leading indicator) Vs. Housing
78) Building Permits (leading indicator) Vs. Housing
79) Pending Home Sales Vs. Mortgage Applications
80) Employment-Population Ratio Vs. Real GDP per Capita
81) Trade Surplus/Deficit (leading indicator) Vs. Currency Strength/Weakness
82) German Treasury Yields Vs. U.S. Treasury Yields
83) Consumer Sentiment Index (leading indicator) Vs. S&P 500
84) Bitcoin Price Vs. Bitcoin Users
85) Potemkin Rally Vs. Employment to Population Ratio
86) LME Copper Warehouse Stock Level Vs. Copper Contango
87) Art Price (leading indicator) Vs. CPI
88) Total Credit Market Debt Vs. Dow Jones
89) SGE gold deliveries (leading indicator) Vs. China Gold Imports from Hong Kong (link 2)
90) Retail Sales Vs. Disposable Personal Income Per Capita
91) CRB Index Vs. Emerging Markets
92) Non Farm Payrolls Vs. Job Hires
93) Currency Debasement Vs. High Yielding Assets (Carry Trade)
94) Deposits over Loans: Excess Reserves
95) Food Price (leading indicator) Vs. Fertilizer Price
100) Federal Funds Rate Vs. CPI
101) Full-time Vs. Part-time Workers (Recession)
102) GLD ETF Vs. COMEX Stock
103) GDP Growth Rate Vs. 10 Year Bond Yield
104) Depletion Curve Vs. Price Movement (silver, oil)
105) Managed Money Long and Short Positions (gold and silver) Vs. Gold and Silver Price (link)
106) GDP Vs. Trade Balance
107) Smart Money Flow Index (leading indicator) Vs. Dow Jones
108) Bank Deposits Vs. Deposit Rates
109) GOFO rate Vs. Gold Price (link 2)
110) Federal Reserve Asset Purchases Vs. Bond Yields
111) Currency Vs. Bonds
112) Retail Sales (leading indicator) Vs. Consumer Price Index (CPI)
113) Stock Buyback Vs. S&P
114) Yen USD/JPY Carry Trade Vs. Gold (link 2)
115) Yen USD/JPY Carry Trade Vs. Stocks
116) Leading/Coincident/Lagging Indicator Vs. Recession
117) Gold per Capita Vs. Income per Capita
118) GLD ETF Stock Vs. Total U.S. ETF gold Stock
119) Gold Repatriation Vs. Recession
120) Dividend Yield Vs. Bond Yield
121) Misery Index Vs. Gold
122) Palm Oil (leading indicator) Vs. Soybean Oil Vs. Crude Oil
123) Junk Bonds Vs. Stock Market
124) Junk Bonds Vs. Energy Junk Bonds Vs. Oil
125) P/E Ratio Vs. M/O Age Ratio
126) Tax Revenues Vs. Stock Markets
127) Employment to Population Ratio (leading indicator) Vs. Wage Growth
128) Equity Valuation and Annualized Return Vs. Q Ratio (James Tobin)
129) Chapwood Index Vs. CPI
130) Working Age Population (15-24) Vs. CPI
131) ISM Manufacturing PMI (leading indicator) Vs. ISM Services PMI
132) Global FX Reserves Vs. Global Equities
133) Corporate Loan Charge-Offs and Delinquencies Vs. Federal Funds Rate (leading indicator)
134) Breadth Advance-Decline Line (leading indicator) Vs. Stocks
135) USD/CNY Vs. Crude Oil
136) USD/CNY (leading indicator) Vs. S&P
137) Corporate Profits (leading indicator) Vs. Employment
138) Debt to GDP (leading indicator) Vs. Default Rate
139) African Rand Vs. Silver
140) GDP Output Gap (leading indicator) Vs. Inflation
141) Yield Curve (leading indicator) Vs. Coincident Indicator
142) GDP (leading indicator) Vs. Oil
143) Credit Risk: LIBOR (leading indicator) Vs. Fed Funds Rate
144) Cross-Asset Correlation Vs. Gold
145) Quits Rate (leading indicator) Vs. Wage Inflation
146) Rig Count (leading indicator) Vs. Oil Production
147) U.S. Dollar Liquidity Vs. Emerging Market Stocks
148) Loan Growth Vs. Interest Rates
149) Copper/Gold Ratio Vs. 10 Year Bond Yield
150) Bond Yields Vs. Unrealized Losses Federal Reserve (central bank solvency)
151) Trade War Vs. Inflation Vs. GDP
152) Gold/Silver Minus Oil Vs. HUI
153) Silver Depletion Vs. Silver Production
154) Yield Curve Vs. Net Interest Margin
155) PPI (leading indicator) Vs. CPI
156) LIBOR Vs. Jumbo CD
157) Initial Jobless Claims (leading indicator) Vs. Unemployment Rate
158) Yield Curve Vs. Net Interest Margin
159) 3-2 Year Yield (leading indicator) Vs. 2-1 Year Yield
160) Open Interest Vs. Gold Price (link 2)
161) 2 Year Yield (leading indicator) Vs. Fed Funds Rate
162) Gold Vs. Negative Yielding Debt
163) AAA Credit Spread (leading indicator) Vs. Real GDP
164) Maturity of Debt Vs. Debt to GDP
165) SHFE Silver Warehouse (leading indicator) Vs. Silver Price
166) Freights Vs. Real GDP
167) PSLV Vs. Silver Price
168) Chinese Yuan Vs. Chinese Foreign Exchange Reserves
169) OECD Leading Index (leading indicator) Vs. S&P Revenue
170) China Credit Impulse (leading indicator) Vs. China GDP
171) Credit Card Interest Rate Vs. 10 Year Bond Yield
172) SOFR Vs. LIBOR
173) QE Vs. Yield Curve
174) Suicide Rate Vs. Unemployment Rate
175) Germany IFO Index (leading indicator) Vs. Germany GDP
176) Chinese Yuan Vs. China Errors and Omissions in Balance of Payments
177) NVT/RVT Vs. Bitcoin
178) Yardeni FSMI Vs. S&P
179) Gold Open Interest Vs. Gold Price
180) QE (leading indicator) Vs. PMI
181) Monetary Base/Money Supply Vs. Gold Reserves
182) China GDP Vs. Gold Price
183) New Home Price (leading indicator) Vs. Rent CPI
184) Delinquencies (leading indicator) Vs. Unemployment Rate
185) Taylor Rule Rate (leading indicator) Vs. Gold Price
186) Commercial Paper Rates Vs. Repo
187) Cass Freight Index Vs. Real GDP
188) PCE Vs. CPI
189) Profits Before Tax (leading indicator) Vs. Stock Market
190) Disposable Income Vs. Housing
191) VIX Vs. Margin Debt Gold Selling
192) LBMA Spot Gold/Silver Vs. COMEX Gold/Silver Futures
193) Net International Investment Position (NIIP) Vs. Current Account
194) Debt to GDP Vs. Stagflation
195) Air Traffic Vs. Oil Vs. Stocks
196) Air Freight Vs. Trade Balance
197) Conceptions Vs. GDP
198) Mexican Peso Vs. Silver Price
199) PCE Vs. GDP
200) AUD (leading indicator) Vs. CNY
201) Gold Miner Hedging Vs. Gold Lease Rate
202) Budget Deficit Vs. Gold Price
203) Backwardation in Lease Rate (leading indicator) Vs. Silver Price
204) Silver Margin Hike Vs. Silver Volatility
205) COMEX Deliveries Vs. Gold Price
206) Rhodium (leading indicator) Vs. Palladium
Positive correlations mean that if one goes up, the other goes up too. Negative correlations mean that if one goes up, the other goes down.
Positive correlations:
1) Silver/Gold premium Vs. Silver/Gold Price (link 2)
2) Baltic Dry Vs. Industrial Commodities
3) Baltic Dry Vs. Copper
4) Copper Vs. S&P
5) Oil Vs. Dow Jones
6) Agriculture Price Vs. Health of Economy
7) Agriculture/Food (leading indicator) Vs. Fertilizer Price (link 2)
8) CRB Index Vs. Commodity prices (oil, agriculture, metals)
9) MZM velocity Vs. Inflation
10) MZM velocity Vs. 10 year U.S. treasury yield
11) Case-Shiller Index Vs. Housing Market Index
12) Capacity Utilization Vs. Inflation
13) Rhodium Price Vs. Automotive Industry
14) Housing Price Vs. Rise of Wages
15) O-metrix Score Vs. Stock Value
16) Outlay Spending Vs. Hyperinflation
17) Gold Money Index Vs. Gold Price
18) Stock Dividend to Bond Yield ratio Vs. Stock Price
19) War Vs. Silver Price
20) Exchange Rate Vs. Treasury Bond Valuation
21) PMI Vs. GDP Growth Rate
22) Gold Lease Rate Vs. Gold Price (link2) (link3) (link4)
23) Economy of Australia/Canada Vs. Industrial Commodities
24) Jim Sinclair's Fed Custodials Vs. Gold Price
25) LCNS silver net short positions Vs. Silver Price
26) ECB Deposit Rate Vs. Euribor and Deposit Facility (Deposit ECB)
27) China Gold Imports from Hong Kong Vs. Gold Price
28) AUD/USD Vs. Iron Ore
29) Chinese yoy GDP growth Vs. Chinese yoy Power Consumption (link 2)
30) Chinese yoy Power Consumption Vs. Chinese yoy Power Production
31) M1 and Gold
32) Obesity Vs. Debt
33) Global Equity Prices Vs. Global EPS revisions
34) Total Public Debt Vs. Interest Payment on Debt
35) U.S. Bond Yields Vs. Interest Payment on Debt
36) Federal Reserve Balance Sheet Vs. S&P
37) Federal Reserve Balance Sheet Vs. Gold Price
38) Balance Sheet Ratio Fed/ECB Vs. EUR/USD
39) China Manufacturing PMI Vs. Base Metal Prices
40) COMEX stock level Vs. CFTC Open Interest
41) Manufacturing component of Industrial Production Vs. CRB Metals Index
42) Net Short Interest Gold Vs. Gold Price
43) Central Bank Net Gold Buying Vs. Gold Price
44) LCNS silver Vs. Silver Open Interest
45) Bond Yields Vs. Gold Price
46) Gold Miners Bullish Percent Index Vs. GDX
47) Daily Sentiment Index Gold Vs. Gold Price
48) Commercial Net Short Interest Vs. Silver Price
49) Food Stamp Participation Rate Vs. Unemployment Rate
50) Bitcoin Price Vs. Gold Price
51) Credit Expansion Vs. Economic Health (second link)
52) Gold Volatility Vs. Gold Price
53) Total Stock Market Index Vs. GDP
54) Brent Crude Oil Vs. WTI Crude Oil
55) EPS revisions Vs. P/E Ratio
56) Citigroup Surprise Index (CESI) Vs. S&P
57) EPS revisions Vs. S&P
58) Dow Theory: Dow Jones Transportation Average Vs. Dow Jones Industrial Average
59) Margin Balance Vs. S&P
60) Federal Debt Growth Vs. 10 Year Treasury Yields
61) Fed Funds Rate Vs. 10 Year Treasury Yields
62) Total Central Bank Balance Sheet Vs. Gold Price
63) Large Commercial Short in Copper Vs. Copper Price
64) Bond Yields (<3%) Vs. P/E Ratio
65) ECB Lending (LTRO) Vs. Deposits at Banks
66) Disposable Income Vs. Housing Prices
67) Fixed (conventional) Mortgage Rate Vs. Treasury Yields
68) Adjustable Mortgage Rate Vs. Federal Funds Rate
69) Silver Vs. Bitcoin
70) Open Interest Trend Vs. Price Trend
71) Wage Inflation Vs. Consumer Price Index (CPI)
72) Marginal Cost of Gold Suppliers Vs. Gold Price (link 2)
73) Durable Goods Orders Vs. S&P
74) Gold ETF Trust (GLD) Vs. Gold Price
75) PMI (leading indicator) Vs. S&P Revenues
76) Federal Funds Rate Vs. LIBOR Rate
77) Lumber Price (leading indicator) Vs. Housing
78) Building Permits (leading indicator) Vs. Housing
79) Pending Home Sales Vs. Mortgage Applications
80) Employment-Population Ratio Vs. Real GDP per Capita
81) Trade Surplus/Deficit (leading indicator) Vs. Currency Strength/Weakness
82) German Treasury Yields Vs. U.S. Treasury Yields
83) Consumer Sentiment Index (leading indicator) Vs. S&P 500
84) Bitcoin Price Vs. Bitcoin Users
85) Potemkin Rally Vs. Employment to Population Ratio
86) LME Copper Warehouse Stock Level Vs. Copper Contango
87) Art Price (leading indicator) Vs. CPI
88) Total Credit Market Debt Vs. Dow Jones
89) SGE gold deliveries (leading indicator) Vs. China Gold Imports from Hong Kong (link 2)
90) Retail Sales Vs. Disposable Personal Income Per Capita
91) CRB Index Vs. Emerging Markets
92) Non Farm Payrolls Vs. Job Hires
93) Currency Debasement Vs. High Yielding Assets (Carry Trade)
94) Deposits over Loans: Excess Reserves
95) Food Price (leading indicator) Vs. Fertilizer Price
100) Federal Funds Rate Vs. CPI
101) Full-time Vs. Part-time Workers (Recession)
102) GLD ETF Vs. COMEX Stock
103) GDP Growth Rate Vs. 10 Year Bond Yield
104) Depletion Curve Vs. Price Movement (silver, oil)
105) Managed Money Long and Short Positions (gold and silver) Vs. Gold and Silver Price (link)
106) GDP Vs. Trade Balance
107) Smart Money Flow Index (leading indicator) Vs. Dow Jones
108) Bank Deposits Vs. Deposit Rates
109) GOFO rate Vs. Gold Price (link 2)
110) Federal Reserve Asset Purchases Vs. Bond Yields
111) Currency Vs. Bonds
112) Retail Sales (leading indicator) Vs. Consumer Price Index (CPI)
113) Stock Buyback Vs. S&P
114) Yen USD/JPY Carry Trade Vs. Gold (link 2)
115) Yen USD/JPY Carry Trade Vs. Stocks
116) Leading/Coincident/Lagging Indicator Vs. Recession
117) Gold per Capita Vs. Income per Capita
118) GLD ETF Stock Vs. Total U.S. ETF gold Stock
119) Gold Repatriation Vs. Recession
120) Dividend Yield Vs. Bond Yield
121) Misery Index Vs. Gold
122) Palm Oil (leading indicator) Vs. Soybean Oil Vs. Crude Oil
123) Junk Bonds Vs. Stock Market
124) Junk Bonds Vs. Energy Junk Bonds Vs. Oil
125) P/E Ratio Vs. M/O Age Ratio
126) Tax Revenues Vs. Stock Markets
127) Employment to Population Ratio (leading indicator) Vs. Wage Growth
128) Equity Valuation and Annualized Return Vs. Q Ratio (James Tobin)
129) Chapwood Index Vs. CPI
130) Working Age Population (15-24) Vs. CPI
131) ISM Manufacturing PMI (leading indicator) Vs. ISM Services PMI
132) Global FX Reserves Vs. Global Equities
133) Corporate Loan Charge-Offs and Delinquencies Vs. Federal Funds Rate (leading indicator)
134) Breadth Advance-Decline Line (leading indicator) Vs. Stocks
135) USD/CNY Vs. Crude Oil
136) USD/CNY (leading indicator) Vs. S&P
137) Corporate Profits (leading indicator) Vs. Employment
138) Debt to GDP (leading indicator) Vs. Default Rate
139) African Rand Vs. Silver
140) GDP Output Gap (leading indicator) Vs. Inflation
141) Yield Curve (leading indicator) Vs. Coincident Indicator
142) GDP (leading indicator) Vs. Oil
143) Credit Risk: LIBOR (leading indicator) Vs. Fed Funds Rate
144) Cross-Asset Correlation Vs. Gold
145) Quits Rate (leading indicator) Vs. Wage Inflation
146) Rig Count (leading indicator) Vs. Oil Production
147) U.S. Dollar Liquidity Vs. Emerging Market Stocks
148) Loan Growth Vs. Interest Rates
149) Copper/Gold Ratio Vs. 10 Year Bond Yield
150) Bond Yields Vs. Unrealized Losses Federal Reserve (central bank solvency)
151) Trade War Vs. Inflation Vs. GDP
152) Gold/Silver Minus Oil Vs. HUI
153) Silver Depletion Vs. Silver Production
154) Yield Curve Vs. Net Interest Margin
155) PPI (leading indicator) Vs. CPI
156) LIBOR Vs. Jumbo CD
157) Initial Jobless Claims (leading indicator) Vs. Unemployment Rate
158) Yield Curve Vs. Net Interest Margin
159) 3-2 Year Yield (leading indicator) Vs. 2-1 Year Yield
160) Open Interest Vs. Gold Price (link 2)
161) 2 Year Yield (leading indicator) Vs. Fed Funds Rate
162) Gold Vs. Negative Yielding Debt
163) AAA Credit Spread (leading indicator) Vs. Real GDP
164) Maturity of Debt Vs. Debt to GDP
165) SHFE Silver Warehouse (leading indicator) Vs. Silver Price
166) Freights Vs. Real GDP
167) PSLV Vs. Silver Price
168) Chinese Yuan Vs. Chinese Foreign Exchange Reserves
169) OECD Leading Index (leading indicator) Vs. S&P Revenue
170) China Credit Impulse (leading indicator) Vs. China GDP
171) Credit Card Interest Rate Vs. 10 Year Bond Yield
172) SOFR Vs. LIBOR
173) QE Vs. Yield Curve
174) Suicide Rate Vs. Unemployment Rate
175) Germany IFO Index (leading indicator) Vs. Germany GDP
176) Chinese Yuan Vs. China Errors and Omissions in Balance of Payments
177) NVT/RVT Vs. Bitcoin
178) Yardeni FSMI Vs. S&P
179) Gold Open Interest Vs. Gold Price
180) QE (leading indicator) Vs. PMI
181) Monetary Base/Money Supply Vs. Gold Reserves
182) China GDP Vs. Gold Price
183) New Home Price (leading indicator) Vs. Rent CPI
184) Delinquencies (leading indicator) Vs. Unemployment Rate
185) Taylor Rule Rate (leading indicator) Vs. Gold Price
186) Commercial Paper Rates Vs. Repo
187) Cass Freight Index Vs. Real GDP
188) PCE Vs. CPI
189) Profits Before Tax (leading indicator) Vs. Stock Market
190) Disposable Income Vs. Housing
191) VIX Vs. Margin Debt Gold Selling
192) LBMA Spot Gold/Silver Vs. COMEX Gold/Silver Futures
193) Net International Investment Position (NIIP) Vs. Current Account
194) Debt to GDP Vs. Stagflation
195) Air Traffic Vs. Oil Vs. Stocks
196) Air Freight Vs. Trade Balance
197) Conceptions Vs. GDP
198) Mexican Peso Vs. Silver Price
199) PCE Vs. GDP
200) AUD (leading indicator) Vs. CNY
201) Gold Miner Hedging Vs. Gold Lease Rate
202) Budget Deficit Vs. Gold Price
203) Backwardation in Lease Rate (leading indicator) Vs. Silver Price
204) Silver Margin Hike Vs. Silver Volatility
205) COMEX Deliveries Vs. Gold Price
206) Rhodium (leading indicator) Vs. Palladium
207) VIX Vs. TED Spread
213) TIPS Vs. Gold
221) Government Transfer Payments (leading indicator) Vs. Broad Money Supply M2
222) Bond Yield Vs. CPI
222) Bond Yield Vs. CPI
225) Copper Checklist
226) Gold Checklist
227) Bitcoin Checklist
243) Gold Vs. Debt to GDP
249) Rate Hike Vs. Gold
250) Cobalt Vs. Lithium
258) Food Vs. Ammonia
259) Drought Vs. Food
260) Food Vs. Oil
270) SPR Vs. Oil Price
276) Tanker Supply Demand
279) Zinc Vs. Natural Gas
281) Wealth Vs. Happiness
Negative correlations:
1) Copper Price Vs. Copper Futures Contango
2) Interest Rates (bond yields >3%) Vs. P/E ratio of gold mines
3) Non-Farm Payrolls Vs. Unemployment Rate
4) Federal Debt Held by Foreigners Vs. U.S. Bond Yields
5) Size of Governments Vs. Their Economies
6) Stocks Vs. U.S. Dollar
7) Silver Stock at CME Vs. Silver Price
8) China Reserve Requirements Vs. Shanghai Real Estate Prices
9) Capacity Utilization (leading indicator) Vs. Unemployment Rate
10) Net Commercial Short Positions Vs. Bond Yields (Alternative Site)
11) Net Non-Commercial Long Positions Vs. Bond Yields
12) % Change in Gold Vs. Real Interest Rates on 10 Year Treasuries
13) Shanghai Silver Premium Vs. Silver Price
14) Probability of Recession Vs. 10 year - 3 year Yield Spread (link 2)
15) Junk Silver Premium Vs. Silver Price
16) Wage Inflation Vs. Unemployment Rate
17) Initial Unemployment Claims Vs. S&P
18) Gold/Silver Ratio Vs. S&P
19) GLD Flows Vs. Shanghai Gold Premium
20) Unemployment Rate Vs. Real GDP (leading indicator)
21) Mortgage Rates Vs. Mortgage Applications
22) Single Family Housing Starts Vs. Unemployment Rate
23) Tax Revenue Vs. Personal Savings Rate
24) Change in Non-Farm Payrolls Vs. Change in Unemployment Rate
25) Fed Funds Rate Vs. Unemployment Rate
26) Labor Force Participation Rate Vs. Unemployment Rate
27) M1 Money Supply (leading indicator) Vs. CPI
28) GOFO Vs. Gold Premium
29) Shanghai Silver Inventory Vs. Shanghai Silver Premium
30) Misery Index Vs. Forward P/E Ratio
31) Flattening Yield Curve Vs. Fed Funds Rate
32) Oil Contango Vs. Oil Price
33) Business Inventory to Sales Ratio (leading indicator) Vs. GDP Growth
34) QE (leading indicator) Vs. Deficit
35) Credit Spread (leading indicator) Vs. S&P
36) Gold/Silver Ratio Vs. CPI
37) Temporary Workers Vs. Recession
38) Stock to Use Ratio Vs. Agriculture Price
39) Help Wanted Online Ads (leading indicator) Vs. Unemployment Rate
40) Federal debt held by foreigners Vs. 10 Year U.S. Yield
41) Economic Policy Uncertainty (leading indicator) Vs. GDP Growth
42) U.S. Treasury Cash Balance Vs. Monetary Base
43) Gold Price Vs. Gold Production
44) Yield Curve (leading indicator) Vs. VIX
45) Copper/Zinc/Lead Production Vs. Silver Price
46) Youth Employment Vs. Initial Jobless Claims
47) Maturity of Debt Vs. Budget Deficit
48) Put/Call Ratio Vs. Stocks
49) Non-Farm Payroll (leading indicator) Vs. Unemployment Rate
50) Household Durables Good Time to Purchase (leading indicator) Vs. Unemployment Rate
51) Productivity Vs. Inflation
52) Phillips Curve: Unemployment Vs. Inflation
53) Palladium/Platinum COMEX Stock Vs. Palladium/Platinum Price
54) Oil Vs. CCC Junk Bonds
55) Savings-Investments Vs. Housing
56) COMEX Silver Vs. Silver Price
57) COT Swap Dealers Vs. Gold Price
58) Existing Home Sales Vs. Housing Inventory
59) Oil Inventories Vs. Rig Counts
60) Outstanding Shorts Vs. Stock Price
86) VIX Vs. Stocks
92) Gold Vs. USD
103) Oil Vs. Yield Curve
These are a lot of correlations that you need to monitor on a day to day basis!
Correlation: Deposits Vs. LTRO: How to monitor deposits of Eurozone banks
Now that everyone is scared of the bank runs, it is necessary to monitor the deposits at the peripheral countries.
The data is available at the ECB site:
I compiled the data for the most important countries to watch, namely, the PIIGS. And of course Cyprus.
If Cyprus falls, let's see what will happen to the PIIGS. Probably they will fall too.
I will give a monthly update on this.
I challenge you: do you see a correlation here between deposits and something else?
Yes, it's the ECB's LTRO lending to banks (Chart 2). The country that gets the most LTRO will have the most deposits on their banks. That's because most of the deposits just stay on the balance sheets of the banks. Normally loans should go up, but that's not the case anymore since 2008. The deposit to loan ratio is going up (Chart 3).
If all people take their money out of the bank, we get a bank run. Result is that the loans will disappear and go bad. We get an entire collapse in the financial system. So I expect to see LTRO coming back soon as Chart 1 tells us that deposits are again decreasing.
I compiled the data for the most important countries to watch, namely, the PIIGS. And of course Cyprus.
 |
| Chart 1: Total Deposits of Peripheral Eurozone Countries |
I will give a monthly update on this.
I challenge you: do you see a correlation here between deposits and something else?
Yes, it's the ECB's LTRO lending to banks (Chart 2). The country that gets the most LTRO will have the most deposits on their banks. That's because most of the deposits just stay on the balance sheets of the banks. Normally loans should go up, but that's not the case anymore since 2008. The deposit to loan ratio is going up (Chart 3).
 |
| Chart 2: ECB Lending to Banks |
 |
| Chart 3: Deposit to Loan Ratio U.S. Banks |
dinsdag 19 maart 2013
U.S. Deficit Spikes
As December and January were pretty good months (no deficit), February 2013 marked a record deficit of $204 billion. The deficit to outlay ratio spiked to 60%, way over the hyperinflation ceiling of 40%.
If the U.S. keeps going at this rate, we will see $2 trillion dollars in deficit soon.
 |
| Chart 1: Deficit to Outlay Ratio |
Bitcoin Exploding on Cyprus
And if you hadn't noticed, bitcoin just exploded 20% to the upside on the Cyprus news, which bodes well for gold obviously.
What does Cyprus mean to your money?
On 15 March 2013, Cyprus said it will impose a levy of 6.75% on deposits of less than 100,000 euros and 9.9% above that. The measure will raise 5.8 billion euros ($7.5 billion), which implies that we have about 68 billion euro ($85 billion) in deposits in the Cypriot banks. What this means is that each depositor in a Cypriot bank will get a haircut on their savings. This event is actually a very important one in history as it marks the first time that depositors actually lose their money, despite the presence of a deposit insurance. Of course, you can't have deposit insurance without a bailout of the banking system by the IMF. But to have this bailout, depositors need to have a cut (imposed by the IMF). It's sort of a paradox: "from now on deposit insurance is not insured anymore".
Many people think that their deposits are safe when they put their cash in the bank, but they either lose it to inflation or in this case lose it to the government. The result is that investors lose confidence in the banking system and will go to assets like precious metals which don't have counterparty risk.
To read more go here.
Many people think that their deposits are safe when they put their cash in the bank, but they either lose it to inflation or in this case lose it to the government. The result is that investors lose confidence in the banking system and will go to assets like precious metals which don't have counterparty risk.
To read more go here.
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