Global insights audio-slides-08-25-11

Listen to the original podcast for this slide at www.GordonTLong.com/UnderTheLens

The content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of this slide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.

Global Macro Tipping PointsAugust 24th, 2011

STEALTH QE III

http://www.gordontlong.com/UnderTheLens.asp?sid=agr




BANK OF AMERICA





US CREDIT MARKETS

A Rush Out of 'Junk' - High-Yield Bond Market Dries Up in Flight From Risk; Bad News for Buyouts. Demand for high-yield bonds sold by the riskiest U.S. companies has nearly dried up, an ominous sign for low-rated companies hoping to tap the bond markets and private-equity firms trying to finance leveraged buyouts. New junk-bond offerings in August were at their lowest level since December 2008. Retail investors have been withdrawing record amounts from high-yield mutual funds, forcing those funds to dump bonds in order to raise cash, driving prices even lower.


http://online.wsj.com/article/SB10001424053111904009304576528901302667510.html?mod=WSJ_hp_LEFTWhatsNewsCollection




STEALTH QE III





STEALTH QE III

DEFINTIONS

NON BORROWED RESERVES (NBR)The NBRs represent the excess capital owned by the commercial banks, which have not been drawn down for use as the capital base for the expansion of bank credit. They currently stand at about $1.76 trillion while in normal circumstances NBRs would be no more than a few tens of billions. High levels of NBRs reflect the reluctance of banks to lend and bankable borrowers to borrow: they are symptomatic of an economy that refuses to expand.

REPURCHASE AGREEMENT (Repo)Government Agrees to Buy Back Security for a fixed amount within a specific period of time.

REVERSE REPURCHASE AGREEMENT (Reverse Repo)THE BUYER of government securities conducts a reverse repurchase agreement, or a reverse repo. THE INVESTOR in a reverse repo buys securities with an agreement to sell them back to the seller at a fixed price at a future date. For the seller of the securities, the deal is defined as a simple repurchase agreement and is the mirror-image of the reverse repo. If the cost of financing a reverse repo is profitable then the transaction can be highly geared to give a substantial return on the underlying capital. By encouraging this market for short-term government debt, the Fed can exercise tight control over short-maturity government bond yields with benefits extending to medium maturities, irrespective of the quantity issued.

CONTINGENT LIABILITYLiability or Debt obligation is contingent on a contractual term. By the nature of a Repo Agreement it is a Contingent Liability with zero effect to the balance sheet.





STEALTH QE III





JULY 27th – FANNIE & FREDDIR ADDED





AUGUST 12TH “OPERATIONAL READINESS” STATEMENT





STEALTH QE III


DISCLOSURE STATEMENT AND TERMS OF USE

THE CONTENT OF THIS SLIDE PRESENTATION AND ITS ACCOMPANYING RECORDED AUDIO DISCUSSION ARE INTENDED FOR EDUCATIONAL PURPOSES ONLY.

This slide presentation and its accompanying recorded audio discussion are not a solicitation to trade or invest, and any analysis is the opinion of the author and is not to be used or relied upon as investment advice. Trading and investing can involve substantial risk of loss. Past performance is no guarantee of future returns/results. Commentary is only the opinions of the authors and should not to be used for investment decisions. You must carefully examine the risks associated with investing of any sort and whether investment programs are suitable for you. You should never invest or consider investments without a complete set of disclosure documents, and should consider the risks prior to investing. This slide presentation and its accompanying recorded audio discussion are not in any way a substitution for disclosure. Suitability of investing decisions rests solely with the investor. Your acknowledgement of this Disclosure and Term of Use Statement is a condition of access to it. Furthermore, any investments you may make are your sole responsibility.

THERE IS RISK OF LOSS IN TRADING AND INVESTING OF ANY KIND. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.



Global insights audio-slides-08-25-11

Economy & Finance

Transcript of Global insights audio-slides-08-25-11