Daily Reading – Thursday, March 24, 2011

The Slope Of Hope: Precious Metals Rocket Ship

The move higher by gold and – – far more dramatically – silver – has been breathtaking. ProphetCharts has data back for many decades on commodities, and below I’ve chained together the futures contracts for gold and silver to give you an idea as to the nominal cost per ounce of these two more-precious-than-ever metals.

Harvey Organ’s Daily: Silver advances past $37.00/Premium interday on Sprott silver surpasses 23%

“There is nothing inherently wrong and certainly nothing “illegal” about J.P. Morgan Chase (JPM) gaining a vault license for storing and taking delivery of gold/silver/platinum/palladium from the futures markets known as NYMEX/COMEX. However, the speed, timing and manner in which the exchanges just granted it troubles us.”

JESSE’S CAFÉ AMÉRICAIN: Meanwhile In the US: It’s Raining Pennies From Heaven

Visualizing Economics: Real vs Nominal Housing Prices: United States 1890-2010

A $10,000 house in 1890 would be worth almost the same in real dollars in 2010 but more than $350,000 in nominal dollars in 2010.

FT BeyondBRICs: Technology supply chain: still surviving

In the days immediately after the Japan earthquake, there was great concern of a worst-case scenario of severe disruption to the global technology supply chain that would halt or severely delay production of computers, smartphones or – horrors of horrors – the iPad 2.

FT Alphaville: Charts du jour, European bond yields

There’s a fresh lifetime high for the Portuguese 10-year bond yield on Thursday — now well on its way towards 8 per cent…

FT Alphaville: Calculating the size of a Portugal rescue

“We estimate the total loan package size is in the order of €80bn, or 47% of GDP.”

FT Alphaville: Plummeting in Iberia

Who add that ‘either Spanish CDS are trading some 100bp too low or Portugal is some 200bp too high…’

FT Alphaville: Bond buyback irony in Europe

Strange days when a specialist in frontier market sovereigns has the most convincing advice on how to fix the western European ones…

Macro Man: Euro Vinegarette

As far as Portugal goes, TMM was surprised at the fuss being made in the FX market, as a far as we can tell, everyone expected Portugal to go into EFSF anyway. Whether it happens now or in two months when a new government is elected is neither here nor there. Either way, with reports surfacing of an imminent EUR70bn bailout to be negotiated with the caretaker government, it seems as though the excitement is dying down there anyway. Given the recent agreement (or rather, postponed agreement) to allow the EFSF to buy in the primary market, TMM do not expect Portuguese auctions to go uncovered, either a result of a more speedy EFSF agreement or moral suasion behind the scenes to get banks to show up. TMM are sure readers can tell they are about as excited about Portugal as they were with the woollen sweaters their Grandmothers used to knit them when they were mere Macro Tots.

Economics of Contempt: Goldman, the Volcker Rule, and Principal Investing

So in sum, non-fund principal investments are not prohibited by the Volcker Rule because they are by definition medium- to long-term, which means they are not transactions for the “trading account,” and thus not considered “proprietary trading” under the Volcker Rule.

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