Wednesday November 12 Housing and Economic stories

TOP STORIES:

German Precious Metal Dealers Report Huge Run on Silver Coins - (www.goldreporter.de)  Precious metal dealers in Germany have literally been run down after the latest slump in gold and silver. Wholesalers already expect deferred deliveries. The latest plunge in gold and silver late last week has led to a sharp increase in demand by German precious metals investors, which also continued on Saturday. There was a particularly strong demand for silver coins. “On Thursday and Friday people had to draw numbers in order for us to control the run”, reports Andreas Heubach, CEO of Heubach Edelmetalle in Nuremberg. “On both days we sold each around 40,000 silver ounces – incredible”, he said. “Demand is back – and hysteria as well”, he evaluated.

NYSE Margin Debt Drifted Higher Again in September - (www.advisorperspectives.com) The New York Stock Exchange publishes end-of-month data for margin debt on the NYX data website, where we can also find historical data back to 1959. Let's examine the numbers and study the relationship between margin debt and the market, using the S&P 500 as the surrogate for the latter. The first chart shows the two series in real terms — adjusted for inflation to today's dollar using the Consumer Price Index as the deflator. I picked 1995 as an arbitrary start date. We were well into the Boomer Bull Market that began in 1982 and approaching the start of the Tech Bubble that shaped investor sentiment during the second half of the decade. The astonishing surge in leverage in late 1999 peaked in March 2000, the same month that the S&P 500 hit its all-time daily high, although the highest monthly close for that year was five months later in August. A similar surge began in 2006, peaking in July 2007, three months before the market peak. Debt hit a trough in February 2009, a month before the March market bottom. It then began another major cycle of increase. Margin debt hit an all-time high in February of this year.

Bullard backs down on QE, endorses Fed decision -Fox - (www.reuters.com)  A Federal Reserve official who a few weeks ago proposed further monetary stimulus said on Tuesday the central bank in fact made the right decision last week in shelving a bond-buying program, in part because financial markets have rebounded. St. Louis Fed President James Bullard, speaking on Fox Business, said global markets seemed to be expecting a global recession earlier in October. "As it turned out, that all kind of evaporated," he said. The Fed "did a very sensible thing at the meeting last week," he added, when it halted the bond buying while acknowledging some lower measures of inflation.

JPMorgan Faces U.S. Criminal Probe Into Currency Trading - (www.bloomberg.com) JPMorgan Chase & Co. (JPM) said it faces a U.S. criminal probe into foreign-exchange dealings and boosted its maximum estimate for “reasonably possible” losses on legal cases to the highest in more than a year. The shares fell in New York. The firm is cooperating with the criminal investigation by the Department of Justiceas well as inquiries by regulators in the U.K. and elsewhere, it said yesterday in a quarterly report. The largest U.S. bank said it might need as much as $5.9 billion to cover losses beyond reserves for legal matters, up $1.3 billion from the end of June, and the most since since mid-2013.

New Junk-Bond Derivatives Are Hot as Traders Get Creative - (www.bloomberg.com) When it gets tough to maneuver in the junk-bond market, traders can either give up or get creative. Many of them are opting for creativity these days. There’s been a surge in demand for a relatively new index of derivatives that aims to replicate the risk and return of high-yield bonds. As volatility soars to the most in more than a year, trading in a total-return swaps index reached a record $4 billion in September from almost nothing in May, according to data compiled by Morgan Stanley. The demand is in part coming from fund managers who are looking for ways to be agile as individual investors become more fickle, pulling money out and then putting it back in, said Sivan Mahadevan, a credit strategist at Morgan Stanley in New York.

OTHER STORIES:

Trade Deficit Widens to Four-Month High as U.S. Exports Drop - (www.bloomberg.com)
More Unknowns Leave Central Banks Facing Greater Internal Strife - (www.bloomberg.com)

U.S. Inflation Outlook Falls in 2014 as Gross Warns on Prices - (www.bloomberg.com)
[Richard Fisher, Dallas Fed] R.I.P QE3... Or Will It? - (www.dallasfed.org)

Exclusive: Central bankers to challenge Draghi on ECB leadership style - (www.reuters.com)

Yuan Forwards Drop as PBOC Sets Reference Rate at Two-Month Low - (www.bloomberg.com)

Brazil's BNDES in spotlight as Rousseff faces fiscal pressure - (www.reuters.com)

Animal Spirits Rekindled With Debt-Fueled Growth Ambition - (www.bloomberg.com)