last train out of Dodge?

Lots of stuff going on over the holiday weekend and this morning., let’s re-cap…

1) The Swiss National Bank pegs the CHF to the Euro: Central bank meddling across the globe has begotten more central bank meddling as the SNB was forced to intervene. To put it simply the SNB will buy an unlimited amount of Euro’s and sell(increase supply) an unlimited amount of CHF to keep the rate at 1 Euro to 1.2 CHF. The Swiss are obviously starting to see a slowdown in exports to make a move like this, which is troubling. This should obviously benefit gold as some people looking to the CHF for safety will undoubtedly turn to gold. We’d expect a gold price over $2,000 shortly… Full Story

2) PIGS yields up – Yields on the PIGS(Portugal, Italy, Greece, Spain) were up across the board on Monday. Lots of action on the Euro front particularly with Italy. 10 yr yields are up around 5.5%, this is after the last few weeks of the ECB buying Italian bonds. As you can see the effects of these measures aren’t working. Investors are worried about the ability of Italy to enact austerity measures(there were protests at the Italian Borse yesterday-Italians aren’t happy) and the fact that Italy and the IMF are projecting ~1% growth the next year or two. On the Greece front we’ve got a ruling by the German Constitutional court on the validity of the original Greece bailout in 2010 tommorow(wed, Sept.7th). This looks like a rubber stamp so we shouldn’t see much effect.

3) The Gov’t sues the banks – “The Federal Housing Finance Agency (FHFA), as conservator for Fannie Mae and Freddie Mac (the Enterprises), today filed lawsuits against 17 financial institutions, certain of their officers and various unaffiliated lead underwriters. The suits allege violations of federal securities laws and common law in the sale of residential private-label mortgage-backed securities (PLS) to the Enterprises”….Full Text

That’s it for now…stay nimble, stay liquid and stay safe out there it’s getting hairy


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