KeNo's Housing and Economic Portal: Tuesday February 8 Housing and Economic storie

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Huge US gold position liquidated by fund-WSJ - (www.reuters.com) Hedge fund SHK Asset Management liquidated a U.S. gold futures position this week valued at over $850 million, more than 10 percent of the main U.S. futures market, the Wall Street Journal reported on Friday. As a result of the move, which was made on Monday, the number of gold contracts on CME Group Inc.'s Comex division plunged by more than 81,000, to about 500,000, in their biggest single fall ever, the WSJ reported. It said an average daily move is about 3,000 to 5,000 contracts. Daniel Shak, who runs the $10 million fund, told the newspaper that the trade had been profitable for him for years, but it stopped working and the exchange kept raising his margin requirements, forcing him to put up more money. Shak said that when the exchange raised it by 25 percent on Monday, he decided to cut his losses and end the trade, the newspaper said.

Meet The Man Behind The Liquidating Hedge Fund That Blew Up The Gold Market - (www.zerohedge.com) Over the past several weeks there had been rumors that the reason for the precipitous drop in gold was primarily driven by a hedge fund liquidating its futures positions. This has now been confirmed: "Yeah, that was just me liquidating my spread position," Mr. Daniel Shak, [of SHK Asset Management] 51 years old, said in an interview. "I had a significant, fully margined position. The dollar amount of the gold liquidation was very small, it was just a lot of contracts." Of course in the extremely jittery gold market, the kind of persistent marginal gross selling of contracts was all that was needed to spook weak hands into a consistent dump of the precious metal, which as we pointed out was beyond overdone. Judging by this morning's jump in the PM complex, SHK's liquidation is now not only over but about to promptly reverse as daytrading momos realize they were duped by one single guy. Look for gold to resume its upward advance as investors realize that the gold dump was nothing more than an ongoing futures position liquidation. As for SHK Asset Management, RIP: Mr. Shak said he quit the trade when he was 70% down. People close to the firm confirmed the loss was about $7 million. Just over a week ago, he put his apartment on Manhattan's Fifth Avenue up for sale with a price tag of $7.5 million. He said the sale wasn't related to his losses.

Higher food prices spark global unrest - (money.cnn.com) Food prices have been rising worldwide, as the cost of raw materials and agricultural products surge, contributing to political unrest around the globe. In December, international food prices broke an all-time high when they rose 25% for the year, led by rising costs for staples like rice, wheat, and maize, the United Nations reported. The sharp rise in food prices, in particular, has become "a source of political instability," New York University economist Nouriel Roubini, told CNNMoney's Poppy Harlow, at the World Economic Forum in Davos, Switzerland this week. Roubini, nicknamed "Dr. Doom" for his famously bearish predictions, said spiking energy and food prices pose one of the greatest global threats -- especially to emerging market economies.

The guy who wasn't Ponch on 'CHiPs' avoids jail - (money.cnn.com) Larry Wilcox, the actor who played Officer Jon Baker on the 1970s TV show "CHiPs," was sentenced Friday to three years' probation by a Florida judge for conspiracy to commit securities fraud.

Wilcox pleaded guilty in November and had been cooperating with the authorities, according to court documents. In addition to serving three years of probation, he was ordered to perform 500 hours of community service and pay a $100 fine. Along with Erik Estrada as Officer 'Ponch' Poncherello, Wilcox started in the show about two well-coifed, motorcycle-riding California Highway Patrolmen from 1977-1983. The Securities and Exchange Commission charged Wilcox in October with paying kickbacks to pension fund managers and brokers to manipulate the volume and price of penny stocks and illegally generate stock sales.

The suburban sunbelt is the scene of terrible poverty - (www.economist.com) THE statistics are worthy of Detroit or Newark: almost half the children in the local schools are from families poor enough to be eligible for free or cut-price lunches; a tenth of households qualify for food stamps; one in eight residents gets free meals from soup kitchens or food banks; perhaps one in 12 has suffered a recent spell of homelessness. Yet the spot in question is not a benighted rust-belt city, but Sarasota, Florida—a balmy, palm-studded resort town on the shores of the Gulf of Mexico. The Sarasota-Bradenton metropolitan area, a two-county sprawl of condominiums, marinas and retirement homes, saw the proportion of people living below the poverty line rise by more between 2007 and 2009 than any other big city in America, from 9.2% to 13.7%, according to the Census Bureau. Nor is Sarasota an aberration. All the other metropolitan areas that saw jumps of four points or more are also formerly fast-growing southern and western cities: Bakersfield, California; Boise, Idaho; Greenville, South Carolina; Lakeland, Florida and Tucson, Arizona. Arizona now has the second highest poverty rate in the nation, after Mississippi. The especially severe housing bust that ended the breakneck growth of these sunbelt cities has brought with it deprivation on a scale they have never previously encountered and are struggling to address.

UK consumer confidence suffers 'astonishing collapse' - (www.telegraph.co.uk) Britons' confidence in the economy and their finances has suffered its biggest drop in close to 20 years, raising fears that the Government's austerity onslaught will set off a self-feeding downward spiral. The most closely-watched barometer of consumer confidence revealed an "astonishing collapse" in January as the VAT rise took effect, according to market research group GfK NOP. The first taste of the fiscal tightening to have a widespread impact on consumers appeared to have hit sentiment hard, researchers said, even before the full impact of the public spending cuts is felt. "In the 35 years since the index began, confidence has only slumped this much on six occasions, the last being in the midst of the 1992 recession," said Nick Moon, managing director at GfK NOP Social Research. "Today's figures, when combined with the bleak economic forecast, will make talk of a double-dip recession unavoidable."