Business

While the Fed has long been focusing on the revenue part of the household income statement (which unfortunately has not been rising nearly fast enough to stimulate benign inflation in the form of nominal wages rising at the Fed's preferred clip of 3.5% or higher), one largely ignored aspect of said balance sheet has been the expense side: after all, for any money to be left over and saved, expenses have to surpass income.

Following two disappointing auctions earlier this week when first the 2Y and then the 5Y auctions either demonstrated a substantial drop off in bid-side interest or priced wildly through the when issued, we said to await today's 7Y auction for the true picture of demand for primary paper, as the first auction took place when Europe was out for Easter vacation, and the second one took place just as Yellen speaking at the Economic Club yesterday.

There has been an odd shift when it comes to US sentiment toward home ownership: while in the past, the higher home prices rose the greater the demand was for housing (leading ultimately to the housing debt bubble of 2006), this time around we are getting increasingly more frequent indications of just the opposite.

Some have started to notice: as we noted one week ago, in its traditionally cheerful assessment of the US housing market, the NAR's Larry Yun snuck in an unexpected warning:

The recent weakness in Silver has done nothing to dissuade precious metal 'hoarders' from buying-the-dip. Silver ETF holdings rose 846 metric tons in March (so far) - the biggest jump since August 2013 - to the highest since April 2015.

And all of this buying has occurred as prices dropped to one-month lows, as it seems - like China and Russia - taking advantage of lower precious metal prices amid the collapse of central bank credibility around the world.

Submitted by Nick Cunningham via OilPrice.com,

Since February, major investors have predicted that oil prices were poised for a huge rally. Hedge funds and money managers piled into bets on rising oil prices, going long on the crude rally.

Short sellers were squeezed, and the stampede become too much for many, resulting in a large liquidation of shorts. The short selling drove the rally, increasing oil prices by about 50 percent since early February.