Business

The big news is that the gold-silver ratio closed at 80. This is not only a new high for the move. It’s higher than it has been since 2008.

It’s also exactly what Monetary Metals has been calling for. Last week, we said the gold fundamental was $1,450 and the silver fundamental was $14.90 (i.e. a fundamental value for the ratio over 97 last week). This week, the ratio moved up, and it’s now 1.3 points closer. In other words, silver got cheaper when measured in gold terms.

Back in March of last year, the FHFA warned that Fannie and Freddie may well go bankrupt at which point taxpayers would once again be on the hook for subsidizing their own bad mortgage debt.

As you might recall, the Treasury changed the rules when it came to the GSEs a while back.

The U.S. government are planning to spend over $1 million of taxpayer’s money on a new initiative to encourage people to report their neighbours online if they spot them doing anything “suspicious”. The campaign encourages internet users to report potential online threats, and has been modelled on the “If You See Something, Say Something” campaign initiated after the 9/11 attacks. Critics fear the scheme will target those with “anti-government” views.

After refusing to even consider the possibility of a recession in the US for over a year, the first cracks in Goldman's armor are starting to appear. Over the weekend chief equity strategist David Kostin said that while the probability of a recession according to GS economists remains low, saying that "their model suggests the US has an 18% probability of recession during the next year and 24% likelihood during the next two years", Goldman's clients and investors "continue to inquire about the impact a contraction would have on the US equity market."

While MatlinPatterson's Portfolio Manager Michael Lipsky can't wait to enter the distressed junk bond space, thanks to "$74 billion in debt trading at under 25 cents on the dollar, and $205 billion trading at under 70 cents on the dollar", he agrees with BofA's Michael Contopoulos that it is still far too soon to buy.