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The Goldbugg Report – December 15, 2009

December 15, 2009

“Seasonal Sale” on Precious Metals. Contact your Broker at Worldwide Precious Metals for information on the Special Seasonal Offerings.

GOLD-SILVER

-Gold’s performance over the past month has truly been epic. Since late October, it has soared 18.2% higher. Over a 21-trading-day span, no fewer than 16 days achieved closes at new nominal all-time-record highs! Even the perpetual gold disdain from Wall Street and the financial media is fading.

With gold surging so rapidly and relentlessly, growing numbers of investors and speculators are wondering if we are now entering the long-awaited Stage Three gold bull. Over 5 years ago, when gold was trading at $400, I wrote an essay describing the evolution of a secular gold bull through 3 distinct stages.

Stage One stealthily emerges out of a secular-bear low when everyone loathes gold. In response to a devaluation in the dominant currency, this metal starts quietly creeping higher. Stage One in today’s bull began in April 2001 and ran for over 4 years. It was marked by modest yet consistent gains in gold.

Once global investors figure out that gold is moving up on its own supply-and-demand-driven fundamental merits, Stage Two dawns. More and more investors “discover” gold and deploy increasing amounts of capital in it. Today’s bull transitioned into Stage Two shortly after euro gold broke decisively above €350 in June 2005. Read more here-http://www.zealllc.com/2009/goldpara.htm

-Whenever the real interest rates have been negative, gold has proved to be a very good investment. Real interest rates (interest on a risk free government bond minus the inflation rate) were negative in the US between 1973 and 1980 and gold returned 32% per annum! Similarly, the median rate of interest has been negative since 2002 and today, a period where gold has returned nearly 19% on a compounded basis.

Also, stocks turn out to be a bad investment if gold soars and vice versa. Any idea what will gold do in 2010? Well, it looks highly unlikely that US Fed will raise interest rates significantly. In other words, real interest rates are likely to remain in the negative zone, thus clearing the field for gold to go even higher. Read more here-

http://www.equitymaster.com/5MinWrapUp/detail.asp?date=12/8/2009&story;=2

-’Gold price marching steadily higher to $1,500/oz’. Read more here-http://www.commodityonline.com/news/Gold-price-marching-steadily-higher-to-$1-500-oz-23580-3-1.html

-Newmont Mining chief executive Richard O’Brien says gold may rise to $US1350 an ounce next year and reach as high as $US1500 within two years because of the declining dollar and new investment demand. Read more here-http://www.theaustralian.com.au/gold-prices-will-keep-rising-says-newmont-boss-richard-obrien/story-e6frg8zx-1225806754072

-Gold’s Next Leg Up is $1,350 an Ounce. The recent sell-off is a consequence of too many investors getting too bullish at once. Once the excesses are cleared, the metal can hit new highs. Read more here-http://online.barrons.com/article/SB126016430551179699.html?mod=BOL_hpp_popview

-Gold prices could trade as high as $1,300 an ounce next year if the US dollar’s decline accelerates and doubts about its status as the world’s principal reserve currency continue to increase, says James Steel, chief commodities analyst at HSBC. Mr Steel has just raised HSBC’s average 2010 gold price forecast from $950 an ounce to $1,150 an ounce. Read more here-

http://money.ninemsn.com.au/article.aspx?id=981442

-Pretend and Extend: The Reason Gold Will Reach $1650 And Beyond. Jim Sinclair-Read more here-

http://jsmineset.com/2009/12/09/pretend-and-extend-the-reason-gold-will-reach-1650-and-beyond/

-Over for gold? Not so fast. Bullion’s bull market remains intact. Read more here-http://www.marketwatch.com/story/story/print?guid=099C86D9-F951-4E15-9CAC-AE37CDE72014

-China Needs to Buy Gold in Long-Term, Industry Executive Says. Read more here-http://www.gata.org/node/8116

-China should increase the proportion of gold in its foreign exchange reserves to ensure the safety of its overall portfolio, an official Chinese newspaper said on Tuesday. The commentary, which was written by an academic and appeared in the overseas edition of the People’s Daily, also said that a bigger holding of gold was a crucial building block for the yuan to become an international currency. Read more here-http://in.reuters.com/article/bankingfinancial-SP/idINTOE5B702F20091208?pageNumber=1&virtualBrandChannel;=0

-John Hathaway: Gold is now a contrarian’s dilemma. Tocqueville Gold Fund manager John Hathaway, perhaps the most deliberate thinker on gold’s side, has just published an essay evaluating the metal’s contrarian success of the last decade and its prospects now that it’s in the spotlight.

While Hathaway is not comfortable with that spotlight, he still concludes that gold remains “under-owned and misunderstood by most” and that “as long as deflationary forces prevail, world governments will remain addicted to currency debasement” which means the market’s increasing restoration of gold as a currency. Read more here-

http://www.gata.org/node/8138

-Gold’s new rise compared, contrasted with that of ’70s. While Parallels Exist, New Factors Could Make High Prices More Sustainable Now and Limit Falls When They Come. Read more here-

http://www.gata.org/node/8133

-Egon von Greyerz: Gold is not going up; paper money is going down. With great detail and helpful charts, Egon von Greyerz of Matterhorn Asset Management in Zurich explains today how and why all paper currencies are depreciating against gold. Von Greyerz’s analysis is as comprehensive a case for gold as has been made this year. It’s headlined “Gold Is Not Going Up; Paper Money is Going Down. Read more here-http://www.gata.org/node/8130

-Rick Ackerman’s commentary at GoldSeek quotes most interesting remarks from a friend who is a London gold trader and claims to have been offered a premium of 125 percent not to take delivery of September gold contracts because the LBMA’s supply of real metal is so tight. Even if the trader meant a premium of 25 percent, the situation would be extraordinary and would support similar things reported anonymously lately. Read more here-http://www.gata.org/node/8134

-Gartman: A Gold Correction Won’t Derail The Long-Term Bull Market. Read more here-http://wallstreetpit.com/12797-gartman-a-gold-correction-wont-derail-the-long-term-bull-market

-Gold rally is not a bubble, mania stage ahead of us. Doug Casey-Read more here-http://www.commodityonline.com/news/Gold-rally-is-not-a-bubble-mania-stage-ahead-of-us-23584-3-1.html

-Ned Schmidt’s Gold Thoughts. Read more here-http://www.kitco.com/ind/Schmidt/dec072009.html

-All U.S. Mint gold offerings are sold out, suspended, or limited. Read more here-http://www.gata.org/node/8122

-Patrick A. Heller: Gold coin premiums soar. Read more here-http://www.gata.org/node/8135

-Barrick details why it closed its gold hedge book. Read more here-http://www.businessinsider.com/barric-heres-why-we-eliminated-our-gold-hedges-just-as-the-metal-started-to-peak-2009-12

-GoldMoney’s James Turk interviewed by King World News. Listen here-http://www.gata.org/node/8126

-The Coming Collapse Of The Global Gold Mining Industry. Read more here-http://www.businessinsider.com/the-coming-collapse-of-the-global-gold-mining-industry-2009-12?utm_source=feedburner&utm;_medium=feed&utm;_campaign=Feed%3A+businessinsider+%28The+Business+Insider%29

-World Gold Council’s new chairman seeks ‘lasting prominence’ for gold. Read more here-http://www.gata.org/node/8140

-South Korean central banker disparages gold. But North Koreans probably would have preferred it when their own national currency was grossly devalued last week. Read more here-

http://www.gata.org/node/8131

-Bloomberg does its best to make gold look bad when it’s shining. Read more here-http://www.gata.org/node/8127 or http://www.bloomberg.com/apps/news?pid=20601039&sid;=aF1zfwwrcA2w

-Reuters can’t figure gold out, so it must be a bubble. Read more here-http://www.gata.org/node/8115

Gold to silver ratio at 80 to 1 with gold at $1,500 the silver price would be $18.75

Gold to silver ratio at 70 to 1 with gold at $1,500 the silver price would be $21.43

Gold to silver ratio at 60 to 1 with gold at $1,500 the silver price would be $25.00

Gold to silver ratio at 50 to 1 with gold at $1,500 the silver price would be $30.00

Gold to silver ratio at 40 to 1 with gold at $1,500 the silver price would be $37.50

Gold to silver ratio at 30 to 1 with gold at $1,500 the silver price would be $50.00

Gold to silver ratio at 20 to 1 with gold at $1,500 the silver price would be $75.00

Gold to silver ratio at 15 to 1 with gold at $1,500 the silver price would be $100.00

-Barry Allan: Stage Is Set for Stellar Silver Performance. Read more here-http://news.silverseek.com/SilverSeek/1259961194.php

-Silver held up well Friday, Ted Butler tells King World News. Listen here-http://www.gata.org/node/8123

-Outlook for silver looks bright this winter. Silver has a period of seasonal strength from the end of October to the end of May. Silver has gained in nine of the past 10 periods for an average gain per period of 21.4%. Although silver is responsive to changes in the price of gold, it tends to have a greater correlation with base metal prices that also have a period of seasonal strength from the end of November to May.

Silver is considered as “gold’s poorer cousin” and usually lags the performance of gold in times when speculators are focusing on gold as a monetary commodity. The silver/gold ratio has been in an intermediate uptrend since last October.

However, the focus of gold as a monetary commodity briefly reversed this trend in September and October. The ratio bottomed at the beginning of November and is showing early technical signs of resuming its upward intermediate trend.

Technical action by silver remains positive. The intermediate trend remains up. Short-term momentum indicators are overbought, but continue to trend higher. Read more here-

http://www.financialpost.com/story.html?id=2314459

-Investors in oil, metals and grains shouldn’t worry too much about selloffs in these markets as the vast sums of money being printed around the world will take prices higher, commodities bull Jim Rogers said. Read more here-http://www.reuters.com/article/idUSTRE5B85E020091210

CHART OF THE WEEK-QUOTES-QUICK HITS

-Chart of the week: Shock Backslide In Goods Shipped To The US. Global trade declined last month, with total shipments dropping 9% from October. This bad news could undermine the notion that we are in the midst of an economic recovery. In fact, the number is higher than it was at the depth of the crisis last year when shipments to the US dropped 7% from October to November.

The news jibes with data from JPMorgan, released last week, that global economic activity stalled out again in November. Read more here-

http://www.businessinsider.com/chart-of-the-day-global-manufacturing-shipping-us-2009-12

Source: www.chartoftheday.com

-Our government continues to do its best to suppress gold and silver and commodity prices. Their ham-fisted presence was quite evident this past week and it was only marginally successful. All they accomplished was to make an unnatural correction in a market that could have needed a natural correction. The underlying fundamental factors are still very bullish.

The technicals and the long-term charts as well as pro-gold and silver psychology are still in place. The reality is that gold, silver and commodities are still in bull markets and intervention by the President’s “Working Group on Financial Markets” cannot and are not capable of stopping what are going to be the biggest bull markets in history. Bob Chapman-Read more here-

http://news.goldseek.com/InternationalForecaster/1260384196.php or http://news.goldseek.com/InternationalForecaster/1260142645.php

-The question that has to be answered is how we are in a durable recovery when we can see developments in the real world take place, such as the fact that McDonald’s sales have fallen now in each of the last two months? This is despite the array of deflation strategies like “Why Pay More” and other “value” offerings. David Rosenberg-Gluskin/Sheff

-LaVonna Gottschall paid $260,000 for her Merced, California, home in September 2007. She put down more than half the price and financed the rest with a 30-year fixed loan. Today, houses in her neighborhood are worth 59 percent less, according to Zillow.

“I almost wiped out all my savings,” Gottschall, 64, a retired insurance-company clerical worker, said yesterday in an interview. “I did the right thing. I didn’t get in over my head. Now I’m living month-to-month.” Bloomberg

-Bernanke Sees ‘Formidable Headwinds’ for U.S. Economy. Federal Reserve Chairman Ben S. Bernanke said the U.S. economy faces “formidable headwinds,” including a weak labor market and tight credit that are likely to produce a “moderate” pace of expansion. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=alVKXec_boNE&pos;=1

-Adams Says 2010 to Be ‘Year of Volatility’ Amid Bubble Risk. Former U.S. Treasury Undersecretary Timothy Adams said financial markets will be unstable next year as nations seek to withdraw emergency policies undertaken during the global recession.

My biggest concern is that “we are simply creating new bubbles,” Adams said in an interview in Tokyo today. “2010 is a year of volatility, as capital sloshes around the global markets in the search of yield as exit strategies are put in place at different times and at different magnitudes.” Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=a_NJGQXQh108

-Slow growth and high unemployment for U.S. in 2010: report. Low interest rates will prevail through most of next year as the U.S. economy expands modestly and the unemployment rate remains stuck in double digits, the UCLA Anderson Forecast group said on Wednesday. Read more here-http://www.reuters.com/article/idUSTRE5B813Q20091209

-Bernanke Low Rates ‘Poison’ to U.S. Economy, Xie Says. Federal Reserve Chairman Ben S. Bernanke is prescribing “poison” to the U.S. economy by keeping interest rates near zero and fueling a wave of speculative capital that may cause the next global crisis, former Morgan Stanley chief Asian economist Andy Xie said. Read more here-

http://www.bloomberg.com/apps/news?pid=20601068&sid;=athNs65A8rew

-Canada Keeps Key Rate at 0.25%, Dollar to Slow Growth. Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid;=aTSZfY8Qv2tE

-The Bank of England kept its benchmark interest rate unchanged on Thursday and decided to stick to its program of buying government bonds, tacit acknowledgement that signs of a recovery remained faint.

The central bank kept the interest rate at 0.5 percent, a record low. The bank has already spent about £185 billion to buy debt in order to stimulate the credit market and can spend an additional £15 billion (for a total of $325 billion) as part of the program. Read more here-http://www.nytimes.com/2009/12/11/business/global/11pound.html

-John Williams of shadowstats.com interview: Hyperinflaton Special Report Update 2010. Listen here-http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2009/12/4_John_Williams.html

-How to Inflation-Proof Your Portfolio-Part 2. Read more here-http://news.goldseek.com/GoldSeek/1259200800.php

-Obama urges major new stimulus, jobs spending. President Barack Obama called for a major new burst of federal spending Tuesday, perhaps $150 billion or more, aiming to jolt the wobbly economy into a stronger recovery and reduce painfully persistent double-digit unemployment. Read more here-

http://www.google.com/hostednews/ap/article/ALeqM5jy6s4th2AWz2wvrF9UGpJs3t_WxgD9CFFRJG0

-Cash for Caulkers could seal $12,000 a home. Under President’s proposal, homeowners would be reimbursed for energy-efficient appliances and insulation. Read more here-

http://money.cnn.com/2009/12/08/news/economy/president_energy/index.htm

-Obama administration predicts $30B loss on auto bailout. Read more here-http://www.detnews.com/article/20091208/AUTO01/912080414/Obama-administration-predicts-$30B-loss-on-auto-bailout

-Geithner Says Treasury Faces Losses From Autos, AIG. Treasury Secretary Timothy Geithner said the government is unlikely to recoup its investments in insurer American International Group Inc. or the automakers General Motors Co. and Chrysler Group LLC. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=an_cFnRTEPZI

-2009 Retail Store Closings: Complete List of Retailers Going Out of Business. Read more here-http://wallstcheatsheet.com/breaking-news/economy/2009-retail-store-closings-complete-list-of-retailers-going-out-of-business/?p=3970/

-Americans Grow More Pessimistic on Economy, Nation’s Direction. Americans have grown gloomier about both the economy and the nation’s direction over the past three months even as the U.S. shows signs of moving from recession to recovery.

Almost half the people now feel less financially secure than when President Barack Obama took office in January, a Bloomberg National Poll shows. Those concerns have put consumers in a miserly mood as they head to the mall for holiday shopping, with half the country planning to spend less on gifts than last year and few buyers willing to run up credit-card debt for Christmas. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=ag35PRefGeIc

-‘Vultures’ in Ireland Grab Champagne, Mercs in Recession Sales. The worst recession in Ireland’s modern history has turned the country into a bargain basement with cut-price champagne, country houses and Mercedes cars.

The liquidator of Dublin wine importer Parbind is selling boxes of six bottles of Bernard Remy rosé champagne for 132 euros ($199), down from the original tag of 205 euros. Elsewhere, prices of empty homes have been slashed by as much as two-thirds as property developers are forced to wind up.

“It’s a bit like old vultures over the carcass,” said Donall O’Murchu, a retired school teacher, avoiding shoppers with trolleys laden with cases of Parbind wine. “You see all sorts of places coming down. The recession seems to be biting.” Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=aQw1pm.Qz9sg

-Food Stamps Go to a Record 37.2 Million, USDA Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aFbqGE.lEdi0

-Hunger, family homelessness on rise in U.S. cities. Read more here-http://www.reuters.com/article/idUSTRE5B72DS20091208

-Swine Flu Infects 50 Million in U.S., Kills 10,000. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=azX192_MtLFA

-Cognac From 1788 Fetches $37,000 at Tour d’Argent Wine Auction. Read more here-http://www.bloomberg.com/apps/news?pid=20601088&sid;=atDMtu8zib2g

-The Gambler Who Blew $127 Million. During a year-long gambling binge at the Caesars Palace and Rio casinos in 2007, Terrance Watanabe managed to lose nearly $127 million. The run is believed to be one of the biggest losing streaks by an individual in Las Vegas history.

It devoured much of Mr. Watanabe’s personal fortune, he says, which he built up over more than two decades running his family’s party-favor import business in Omaha, Neb. It also benefitted the two casinos’ parent company, Harrah’s Entertainment Inc., which derived about 5.6% of its Las Vegas gambling revenue from Mr. Watanabe that year. Read more here-

http://online.wsj.com/article/SB125996714714577317.html?mod=article-outset-box

-Branson Collects $42 Million From Would-Be Astronauts. U.K. billionaire Richard Branson’s Virgin Galactic Ltd. venture is riding out the recession, with would-be astronauts paying $42 million to book a trip to the edge of space, its chief executive officer said.

Virgin Galactic added $4 million in deposits in the past nine months, CEO Will Whitehorn said in an interview. Fees range from a minimum $20,000 to the full $200,000 fare, with singer Sarah Brightman, physicist Stephen Hawking and X-Men director Bryan Singer among more than 300 clients to sign up. Virgin aims to sell at least 700 tickets by the first commercial launch. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=afiHz5U5pxWk

WWW.RARECOLOREDDIAMONDS.COM

-The Rare Colored Diamonds Historical Value Tracker system is the perfect tool for investors to view the potential future value of a rare colored diamond based on the current market trend of a particular type of diamond. Track the potential future value of colored diamonds here-http://www.rarecoloreddiamonds.com/HistoricalPriceTrackingsystem.html

-Watch BTV interview of Harold Seigel on colored diamonds and his website http://www.rarecoloreddiamonds.com/. Watch video here-http://www.rarecoloreddiamonds.com/watchnow.html

-Marwan Chatila, owner of Chatila, a leading London jeweller that regularly serves ultra-wealthy Middle Eastern customers, says “Some very sophisticated investors are buying important diamonds and keeping them aside as portable wealth.” Read more here-http://www.nationalpost.com/homes/story.html?id=2299864

-The rich are back buying Bentleys, Rembrandts and pink diamonds. Read more here-http://www.timesonline.co.uk/tol/news/uk/article6941728.ece

-Jewelry is “an international currency: you don’t have to take a position in dollars, pounds or euros when you hold diamonds,” he said. Aleks Paul, a Russian gem dealer at Essex Global Trading in New York-Read more here-http://www.bloomberg.com/apps/news?pid=20601088&sid;=aP9wcC1Cjk.0

-Diamonds are the new gold. Read more here-http://www.theglobeandmail.com/life/style/marilyn-was-right-diamonds-are-a-girls-best-friend/article1389569/

-Sotheby’s New York Sale of Magnificent Jewels held December 9 2009. Full results here-http://www.sothebys.com/app/live/lot/LotResultsDetailList.jsp?event_id=29347&sale;_number=N08601

or http://www.sothebys.com/app/live/lot/LotResultsListPrint.jsp?sale_number=N08601&action;=A&show;_lot_name=Y

-Lot 222-Rare and important fancy intense yellow diamond and emerald ring, Tiffany & Co., designed by Louis Comfort Tiffany, circa 1915-1920. The oval diamond of fancy intense yellow color weighing 11.05 carats, within a gold filigree mounting set with calibré-cut emeralds, foliate pattern engraved inside shank, size 8, signed Tiffany & Co, two emeralds missing.

Accompanied by the original silk floral box in the Japonesque style. These boxes were used only for the art jewelry designed by Louis Comfort Tiffany. Estimate 200,000-300,000 USD. Lot Sold. Hammer Price with Buyer’s Premium: 818,500 USD. Read more here-http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=N08601&live;_lot_id=222

-Lot 218-Fancy light yellow diamond ring, Graff. The cushion-shaped diamond of fancy light yellow color weighing 7.29 carats, flanked by pear-shaped diamonds weighing 1.07 carats, mounted in 18 karat gold and platinum, size 5½, signed Graff. Estimate-45,000-55,000 USD. Lot Sold. Hammer Price with Buyer’s Premium: 146,500 USD. Read more here-

http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=N08601&live;_lot_id=218

-Lot 189-Fancy yellow diamond ring. The oval diamond of fancy yellow color weighing 7.05 carats, round diamonds of near colorless and yellow hue weighing approximately 4.00 carats, mounted in 18 karat gold and platinum, size 5¾. Estimate 50,000-70,000 USD. Lot Sold. Hammer Price with Buyer’s Premium: 62,500 USD. Read more here-

http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=N08601&live;_lot_id=189

-Lot 132-Pair of fancy vivid yellow diamond earclips, Van Cleef & Arpels New York. The oval diamonds of fancy vivid yellow color weighing 3.26 and 2.84 carats, framed by round diamonds weighing approximately 1.00 carat, mounted in 18 karat gold, signed Van Cleef & Arpels, numbered N.Y. 50850, maker’s marks. With signed pouch. Estimate-80,000-120,000 USD. Lot Sold. Hammer Price with Buyer’s Premium: 170,500 USD. Read more here-http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=N08601&live;_lot_id=132

-Lot 119-Fancy grayish blue and pink diamond ring. The emerald-cut diamond of fancy grayish blue color weighing 1.67 carats, framed by round diamonds of pink hue weighing approximately 1.60 carats, mounted in platinum, size 6½. Estimate 175,000-225,000 USD. Lot Sold. Hammer Price with Buyer’s Premium: 194,500 USD. Read more here-

http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=N08601&live;_lot_id=119

-Lot 118-Fancy light pink diamond ring. The oval diamond of fancy light pink color weighing 1.82 carats, framed by round diamonds of pink hue and near colorless hue weighing approximately 1.00 carat, mounted in platinum and 18 karat pink gold, size 5¾. Estimate 65,000-75,000 USD. Lot Sold. Hammer Price with Buyer’s Premium: 74,500 USD. Read more here-

http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=N08601&live;_lot_id=118

-Lot 70-Fancy intense yellow diamond ring. The cut-cornered rectangular modified brilliant-cut diamond of fancy intense yellow color weighing 5.53 carats, flanked by trapeze-cut diamonds weighing approximately 1.40 carats, mounted in 18 karat gold and platinum, size 5¾. Estimate 70,000-90,000 USD. Lot Sold. Hammer Price with Buyer’s Premium: 110,500 USD. Read more here-http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=N08601&live;_lot_id=70

-Christie’s New York Jewels sale December 10 2009.

-Lot 171-A colored diamond ring set with a cut-cornered modified rectangular-cut fancy intense blue diamond, weighing approximately 7.02 carats, to the circular-cut pink diamond gallery and bifurcated shoulders, with an 18k rose gold hoop. Estimate $2,000,000-$3,000,000. Price Realized $3,890,500. Read more here-http://www.christies.com/LotFinder/lot_details.aspx?from=salesummary&intObjectID;=5277557&sid;=bb4728e3-30d6-47ec-84ae-ac38175768e7

-Lot 166-A colored diamond ring set with a modified cushion-cut light yellow diamond, weighing approximately 9.09 carats, flanked on either side by a half-moon diamond, mounted in platinum and 18k gold. Estimate $35,000-$50,000. Price Realized $56,250. Read more here-http://www.christies.com/LotFinder/lot_details.aspx?from=salesummary&intObjectID;=5277552&sid;=bb4728e3-30d6-47ec-84ae-ac38175768e7

-Lot 114-An impressive colored diamond ring. Set with a modified cushion-cut fancy intense yellow diamond, weighing approximately 40.92 carats, to the circular-cut yellow diamond prongs, gallery and sculpted “figure-8″ hoop, mounted in 18k gold, ring size 6. Estimate $550,000-$650,000. Price Realized $1,106,500. Read more here-http://www.christies.com/LotFinder/lot_details.aspx?from=salesummary&intObjectID;=5277500&sid;=bb4728e3-30d6-47ec-84ae-ac38175768e7

GREEK TRAGEDY?-SOVEREIGN DEBT CRISIS COMING

-Former BOE Official Buiter Says Greece May Be First EU Default. Former Bank of England policy maker Willem Buiter said Greece may be the first major country in the European Union to default on its debts since the aftermath of World War II.

“It’s five minutes to midnight for Greece,” Buiter, who will join Citigroup Inc. as its chief economist next month, said in a Bloomberg Television interview today. “We could see our first EU 15 sovereign default since Germany had it in 1948.”

The EU’s economic affairs commissioner said late yesterday that officials are ready to help Greece with its budget deficit after concerns about its public finances sparked a rout in Greek government bonds. Fitch Ratings cut its rating on the nation’s debt yesterday to BBB+ and two other major ratings companies are threatening to follow. Read more here-

http://www.bloomberg.com/apps/news?pid=20601068&sid;=aDMQfsXXnSqw

-Greece Finance Minister Says No Risk of Default. Greek Finance Minister George Papaconstantinou said there is “absolutely” no risk the country will default on its debt or seek a European Union bailout after a credit rating cut caused its bonds to plunge. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aeqip67GkWSY

-Greek Bonds Slide as Fitch Says Government Doesn’t Grasp Crisis. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=a.K7PWalJ8tM

-If you’re looking for one global risk to really worry about, look no further than the mountain of debt accumulated by governments in their efforts to support domestic economies. Moody’s Investors Service says there’s $49.5 trillion of sovereign debt outstanding and this week, ratings firms, and some jumpy bond traders, have shone a glaring light on it. The raters are worried that governments’ massive deficit-spending campaigns to pull their economies out of last year’s crisis won’t produce enough economic growth to pay for itself.

But none of this is new. A month ago, the International Monetary Fund projected that the average debt-to-gross domestic product ratio of the 10 advanced country members of the Group of 20 developing and developed nations would mushroom to 118% by 2014. Such numbers have led some pundits to warn of a debt crisis, especially regarding the U.S.’s dependence on foreign creditors.

What’s key now is that the recent market jitters could be self-fulfilling. Falling bond prices mean higher yields, which makes it harder for governments to refinance future obligations. That will hurt the currencies of those nations and will challenge fixed exchange rate regimes especially in the euro zone and for currencies pegged to the dollar.

Spain became the latest flashpoint Wednesday when Standard Poor’s changed the outlook on its AA+ rating to negative. As it did when it downgraded Portugal’s outlook Monday, S&P; emphasized a weak growth outlook. And with their bonds hammered for different reasons, Greece and Dubai’s and Abu Dhabi’s government-controlled entities have similarly seen ratings or outlook downgrades this week.

Also on Tuesday, Moody’s acknowledged two elephants in the room. Although it referred to worst-case scenarios, the agency said the U.S. and the U.K. whose public debt runs to $12.1 trillion and $1.3 trillion, respectively could potentially lose their triple-A ratings. Meanwhile, analysts are worried about Japan, where deflation makes it ever-more expensive for the government to repay a debt that’s projected to hit 220% of GDP in 2014.

Sovereign borrowers aren’t supposed to default, at least not on local-currency debt, because their central banks can always print money. But Russia’s ruble default in 1998 blew that theory away. And in any case, printing money to pay down the debt means robbing Peter to pay Paul: too often, we pay for it with inflation. Read more here-http://online.wsj.com/article/SB10001424052748704240504574586312453815896.html

-Sovereign Debt Defaults Likely Over Next Several Years, Says Ken Rogoff professor of economics and public policy at Harvard University. Read more here-

http://finance.yahoo.com/tech-ticker/article/387122/Sovereign-Debt-Defaults-Likely-Over-Next-Several-Years,-Says-Rogoff

-Moody’s Investors Service said the top debt ratings on the U.S. and the U.K. may “test the Aaa boundaries” because public finances are worsening in the wake of the global financial crisis. “The deterioration has been pretty severe,” said Pierre Cailleteau, managing director of sovereign risk at Moody’s, in a Bloomberg Television interview in London.

“We expect a pretty strong policy response in the next couple of years in order to keep the debt in the Aaa range. We expect them to bend but not to break.” The U.S. and U.K. have “resilient” Aaa ratings, as opposed to the “resistant” top ratings of Canada, Germany and France, Moody’s analysts led by Cailleteau said in a report today.

None of the top-rated countries is “vulnerable,” or have public finances that are “stretched beyond the point of ‘no return’ to the Aaa category,” New York-based Moody’s said. Read more here-

http://www.bloomberg.com/apps/news?pid=20601087&sid;=av16pDNNrMig

GLOBAL BANKING CRISIS

-Geithner Extends $700 Billion Bank-Bailout Program. The Obama administration extended the $700 billion financial-rescue program until October, arguing that the U.S. must hold on to the money in case of new financial shocks. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aRPPFxSkXnOY

-Baroness Vadera: ‘I still have nightmares about the financial crisis’. Baroness Vadera, the adviser to the G20 Presidency, has warned that some of Europe’s biggest banks have yet to “come clean” on the extent of their losses and could still provide shocks to the financial system. Read more here-http://www.telegraph.co.uk/finance/financetopics/financialcrisis/6763411/Baroness-Vadera-I-still-have-nightmares-about-the-financial-crisis.html

-U.K. Banks Must Add $47 Billion in Trade Capital, FSA Says. U.K. banks must find as much as 29 billion pounds ($47.3 billion) of additional capital by 2011 to put against their trading books under proposals published by Britain’s financial regulator.

Today’s proposals by the Financial Services Authority to strengthen balance sheets would also limit the amount U.K. banks and building societies can lend to any single borrower, and tighten up rules on what counts as capital. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aRjAZg_rPbKI

-Geithner Rejects Goldman Sachs Assertion It Didn’t Need U.S. Help. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=aWBnxBZDUtZo

-Geithner: “none…would have survived”. Secretary Geithner acknowledges what most doomsdayers were saying last fall, that without the government’s extraordinary rescue measures, the entire financial system was on the verge of collapse. Read more here-http://blogs.reuters.com/rolfe-winkler/2009/12/06/geithner-none-would-have-survived/

-U.S. Banks Take Losses on Short Sales as Foreclosures Soar. Drew Schlosser tried for two years to sell his three-bedroom Punta Gorda, Florida, waterfront condominium for less than he owed on its two mortgages. The deal only went through last month when Wells Fargo & Co. agreed to take a $165,000 loss on the loans. Read more here-

http://www.bloomberg.com/apps/news?pid=20603037&sid;=a_NoPFp0r8Y4

U.S. BANK FAILURES HIT 130

-AmTrust Bank, a Cleveland-based lender with $12 billion in assets, joined five other U.S. banks in being seized by regulators as companies buckle under the weight of commercial real estate losses.

Closely held AmTrust collapsed alongside three banks in Georgia and one each in Virginia and Illinois, according to statements issued yesterday by the Federal Deposit Insurance Corp., which was named receiver. The failures will cost the FDIC’s deposit fund $2.38 billion, the agency said.

“The commercial real estate market is the big problem,” said James Barth, a former chief economist at the Office of Thrift Supervision. Office vacancy rates climbed to 13.3 percent nationally in the second quarter from 12.3 percent in the prior period, according to a CB Richard Ellis index.

With the closings, 130 U.S. lenders have collapsed this year. Banks are failing at the fastest pace in 17 years even as the U.S. economy shows signs of pulling out of the recession. The unemployment rate fell to 10 percent from 10.2 percent in October, according to figures from the Labor Department. The number of failed banks reached 179 in 1992.

“The unemployment rate is quite high, so unless there is a turnaround in sales you will see commercial real estate continue to suffer,” Barth said. Read more here-

http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=adRrN41CGEDk or http://money.cnn.com/2009/12/04/news/economy/bank_failure/index.htm

-Saga of shutting down banks in America. Read more here-http://www.commodityonline.com/futures-trading/currency/Saga-of-shutting-down-banks-in-America-1835-1.html

U.S. UNEMPLOYMENT

-Last Friday, the Labor Department reported that nonfarm payrolls (jobs) decreased by 11,000 in November the smallest decline since the recession began at the close of 2007. Today’s chart puts that decline into perspective by comparing job losses during the current economic recession (solid red line) to that of the last recession (dashed gold line) and the average recession from 1950-2006 (dashed blue line).

As today’s chart illustrates, the current job market has suffered losses that are more than triple as much as what occurs at the lows of the average recession/job loss cycle. Read more here-

http://www.chartoftheday.com/20091204.htm?T

Source: www.chartoftheday.com

-A deeper look behind the jobless numbers. Despite the upbeat report, long-term unemployment worsens. Within the vast pool of 15.4 million unemployed workers, a split is emerging: The number of long-term jobless those out of work six months or longer is growing, while the number of short-term unemployed is declining.

The trend highlights a considerable challenge for the economy and policymakers: finding a way for the millions of Americans laid off last fall and early this year to get back to work.

The data, buried in Friday’s unemployment report, are stark: The number of Americans out of work for 27 weeks or more reached 5.9 million last month, the most on records dating from 1948. That’s 18 percent more than just three months ago, when the total was just below 5 million. Read more here-

http://www.msnbc.msn.com/id/34280589/ns/business-stocks_and_economy/

-Economy 101: Long-Term Unemployment Worsens. Read more here-http://www.nytimes.com/aponline/2009/12/04/us/AP-US-Economy-101-Unemployment-by-the-Numbers.html

-Now See The REAL State Of The US Labor Market. Nathan A. Martin at Nathan’s Economic Edge has gone through all of the employment data, most of it out of the St. Louis Fed, and it paints a grim picture about how bad the employment situation really is. The scope of the problem which has now become an obsession in Washington truly remains enormous. Read more here-

http://www.businessinsider.com/the-real-state-of-the-us-labor-market-2009-12

-Jobs Lost in Great Recession May Be Gone Forever. Read more here-http://www.bloomberg.com/apps/news?pid=20601039&sid;=afDdQ4LBwBHg

-Chart of the week: Depressed Americans Quit The Labor Force. One caveat in last Fridays jobs report is the fact that Americans continue to leave the work force, and that these people aren’t included in the headline rate. Said the BLS: About 2.3 million persons were marginally attached to the labor force in November, an increase of 376,000 from a year earlier.

(The data are not sea-sonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. As you can see, that number remains at a record high, and eventually they’ll be coming back. Read more here-http://www.businessinsider.com/chart-of-the-day-persons-not-in-the-labor-force-2009-12

Source: www.chartoftheday.com

U.S. DEBT CRISIS

-Dems to lift debt ceiling by $1.8 trillion, fear 2010 backlash. In a bold but risky year-end strategy, Democrats are preparing to raise the federal debt ceiling by as much as $1.8 trillion before New Year’s rather than have to face the issue again prior to the 2010 elections.

“We’ve incurred this debt. We have to pay our bills,” House Majority Leader Steny Hoyer told POLITICO Wednesday. And the Maryland Democrat confirmed that the anticipated increase could be as high as $1.8 trillion nearly twice what had been assumed in last spring’s budget resolution for the 2010 fiscal year. Read more here-

http://www.politico.com/news/stories/1209/30417.html

-U.S. already $292 bln in the red this year-CBO. The U.S. government racked up a gaping shortfall in the first two months of this fiscal year after posting a record budget deficit last year, congressional analysts said on Friday.

In October and November, the government spent $292 billion more than it took in, the nonpartisan Congressional Budget Office said. That was even worse than the same period last year, when the government was on its way to posting a record $1.4 trillion deficit for the fiscal year that ended Sept. 30. Read more here-

http://www.reuters.com/article/idUSN0418093920091204

-State Revenue ‘Nightmare’ Seen in New Budget Gaps, Report Says. New budget gaps totaling $28 billion have opened in 36 U.S. states since July 1 as recession-battered tax collections declined and health-care spending increased, the National Conference of State Legislatures said.

The chasm marks the second consecutive year states will be forced to change course in mid-stream, and will drive spending to decade-low levels, the conference said in a report titled “Nightmare Before Christmas.”

“Even if the recession is over, state budgets are in appalling conditions and are going to be that way for quite a while,” Corina Eckl, the conference’s fiscal director, said at a meeting in San Diego today. “For many states, revenue recovery is not even in the forecast.” Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aruNXiyTcgjA

-U.S. State Revenue Fell 16% in Fiscal 2008, Census Bureau Says. U.S. state government collections fell 16 percent to almost $1.7 trillion in fiscal 2008 from a year earlier, while spending increased 6.2 percent, according to the U.S. Census Bureau. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=alurdK3Uf7Ac

U.S. DOLLAR-GLOBAL CURRENCY

-Dollar Faces ‘Crosswinds’ as Risk Appetite Returns, BIS Says. The dollar faces “crosswinds” as rising stocks stoke demand for higher-yielding assets, reducing the allure of the U.S. currency as a haven, according to the Bank for International Settlements. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aRrVGWfsp8Xw&pos;=7

-Another bounce in the U.S. dollar. The US Dollar Index jumped 1.7% on Friday, from 74.63 to 75.91. It was the largest one day gain for this index since February 9th, when it jumped 1.8%. That in turn was the biggest one day rally since the month before. On January 20th the Dollar Index jumped 2.4%, so this year there have been three rallies greater than 1.7%.

In 2008 the Dollar Index rallied more than 1.7% four times. Interestingly, looking back to the peak of the Dollar Index in July 2001, the Dollar Index has rallied 1.7% on only two other occasions. So clearly these large one-day rallies are rare, but they are now happening more frequently. Why the greater volatility?

It could be that the dollar is approaching its death throes, and these huge erratic swings are like the wobbles of a spinning top just before running out of energy and toppling over. Given all the ‘hot money’ being moved around the globe at the speed of light, these tidal waves of paper wealth no doubt also move into and out of the dollar.

But the occasional bounce does not by itself improve the outlook for the dollar. That would require a change in policy, and there is no indication any corrective change is happening at all. Consequently, we can expect the dollar to remain within the long-term downtrend clearly seen on the following chart.

The dollar began this long-term downtrend against the basket of currencies comprising the US Dollar Index over eight years ago, but the above chart is telling only half the story. While the dollar has been sinking against the euro and most other currencies, these currencies are themselves sinking with the dollar against gold. The following chart presents a Base-100 analysis from the beginning of this decade of the dollar and the euro against gold. For comparison, it also includes the US Dollar Index.

When viewed against gold, the time-tested numéraire of all national currencies, we can see that the euro is collapsing almost as fast as the dollar, which is not too surprising. The dollar and the euro have both caught the fatal disease that inevitably inflicts and eventually kills all fiat currencies central bank mismanagement. In this regard, I recommend reading Senator Bunning’s critique of Ben Bernanke’s first term at the Federal Reserve. Read here-http://bunning.senate.gov/public/index.cfm?FuseAction=NewsCenter.NewsReleases&ContentRecord;_id=556a0e84-feaa-d20f-2867-6793698d6974

So does this latest bounce in the Dollar Index mean anything? Not in my view. The dollar is still on the same road headed to the fiat currency graveyard. So unless policymakers do an about-face and start heading in the right direction, continue to accumulate gold and silver. James Turk-Read more here-http://goldmoney.com/commentary-another-bounce-in-the-dollar.html

-James Grant: Requiem for the dollar. Read more here-http://www.gata.org/node/8120

-Pimco Says ‘Fear Not,’ Weak Dollar Will Spur Growth. Pacific Investment Management Co., which runs the world’s biggest bond fund, said the dollar is poised to fall and the decline may help spur the U.S. economy.

“Fear not the falling dollar,” Scott Mather, head of global portfolio management at Pimco, wrote in an article on the company’s Web site. “A gradually weakening dollar may help heal the U.S. economy” by encouraging demand for the nation’s exports, he wrote.

The Dollar Index, which Intercontinental Exchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners including the euro and yen, has declined 6.3 percent this year. The currency is sliding as the Federal Reserve keeps U.S. interest rates at a record low, encouraging investors to seek higher yields outside the U.S. Read more here-

http://www.bloomberg.com/apps/news?pid=20603037&sid;=a4ny.J5sdqak

-North Korean Money Shift Sparks Violence. New reports emerged Tuesday of protests and deadly violence in North Korea as the country’s authoritarian regime over the past week seized most of its citizens’ money and savings via a new-currency issue.

Open Radio for North Korea, a Seoul-based shortwave radio station that broadcasts news to the North, said police killed two men in Pyongsong, a market center outside of Pyongyang, on Friday after they divided their savings among a large group of people and urged them to exchange the money for them, attempting to get around the government’s limit. Read more here-

http://online.wsj.com/article/SB126029137357982133.html

STOCK BEAR TO LAST UNTIL 2018

-U.S. stocks are in a bear market that may last until 2018 and benchmark indexes may set new lows, said Alan R. Shaw, the technical analyst who retired from Citigroup Inc. after 45 years with the bank and its predecessors.

“I don’t think the bear market that started in 2000 has run its course yet,” Shaw said in an interview in New York. In the last report he authored for Citigroup in 2004, Shaw said the Dow Jones Industrial Average might struggle to remain above 10,000 for up to 20 years, “and I see no reason to change it five years later. My mindset continues to be very cautious.”

Shaw’s forecast, co-authored with Louise Yamada, who succeeded him as Citigroup’s head of technical analysis, was based on how long it took the Dow average to sustain advances above the 100 level from 1902 to 1927, and its struggle to exceed 1,000 from 1960 to 1985.

“It’s too early for another big bull market, period,” said Shaw, who from 1993 through 1999 was the top-ranked technical analyst in Institutional Investor magazine’s annual poll. Technical analysts base predictions on price and volume chart patterns.

Stock benchmarks are likely to fall below this year’s lows before the bear market is over, Shaw said. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=apymPUamAG7o

DAVID ROSENBERG WEEKLY REVIEW

-VIX May Double in ’10 as Stock Gain Slows, David Rosenberg Says. The benchmark index for U.S. stock options may almost double in 2010 on investors’ concern that the Standard & Poor’s 500 Index’s rally outpaced prospects for economic and earnings growth, according to David Rosenberg. Read more here-

http://www.bloomberg.com/apps/news?pid=20601110&sid;=aV9Kkv8HFyC4

-Is the credit crunch over? In a nutshell, toxic assets have basically been swept under the rug in the hopes that we will outgrow the problem. Leverage ratios across every level of society are still reaching unprecedented levels as the public sector sacrifices the sanctity of its balance sheet in its quest to stabilize the dubious financial position of the household and banking sectors in many parts of the world.

Whatever bad assets have been resolved have almost entirely been placed on the books of governments and central banks, which now have their own particular set of risks, as we have witnessed very recently in places like Dubai, Mexico, Spain, Greece, U.K., the Baltic states, not to mention at the state and local government level in the United States.

-All of a sudden, the world doesn’t feel that much of a safer place. Dubai and Greece as prime examples that risk did not go away and that no amount of global liquidity can disguise unsound leveraged financial decisions indefinitely (Greek 10-year bond yields are trading 250bps north of German bunds after being downgraded to BBB+; Dubai’s entire stock market rally for 2009 just evaporated in the last three sessions).

The question for Europe is just how much more solvent are places like Italy, Portugal and Spain (we know about Ireland). Could it be that these are the regions where the next financial shoe is going to drop? Does the continent have the balance sheet that the US does to absorb the losses and guarantee the liabilities?

-We long maintained that this 60%+ rally from the lows was a bear market rally, and unlike secular bull markets, these are to be rented and not owned. Japan had about a half a dozen of these since its credit collapse began nearly two decades ago.

The short-covering was massive and continuous since the government stepped in to effectively draw a line in the sand for big banks, coupled with hedge funds leveraging up again after getting their credit lines re-established and mutual fund managers taking their cash ratios back down to where they were in late 2007.

This buying power seems to now be subsiding; at the same time, insiders have been sellers, the general public have been sellers (the retail investor would never have believed back in March that they would ever have this opportunity to shed their portfolio at a 60% premium, at least this quickly the rally from the March lows must have felt like winning the lottery or like a religious experience at the very least) and pension funds have been rebalancing towards the fixed-income market of late. It does beg the question, who is the marginal buyer going to be going forward?

-Consumer credit in October fell less than consensus expectations, falling $3.5bln (or -1.7% at an annual rate) versus market estimates of a steep $9.4bln decline. September was revised to now show an $8.7bln decline compared to earlier estimates of -$14.8bln. However, we are now in a phase of frugality and households are not willing to take on more debt this is the ninth consecutive monthly of decline in consumer credit, a streak never before seen in the data’s 66-year history at a time when wages are still falling and the unemployment rate is still at lofty levels.

-The sweet spot for stocks is over, 10 reasons why.

1. For the time being, the equity market is going to have to contend with more chatter of the Fed’s exit strategy.

2. The market also faces a new reality. While employment stabilizing (maybe) is a good thing, it means the era of declining unit labour costs and margin expansion is behind us.

3. Market leadership is beginning to fade as seen by the receding advance-decline line on the big board.

4. Market complacency is a worry with the VIX index back down to 21.25. The good news is that insurance against a correction is priced about as low as it can go. Protection is cheap.

5. The WSJ (page C1) reports that not only have individual investors been selling into this last leg of the rally (then again, the S&P; 500 has really done nothing for over six weeks), but pension funds have been rebalancing too.

6. Volume has declined markedly and has surpassed 4.7 billion shares on the NYSE just once in the past three weeks.

7. With the correlation between a weak greenback and a positive stock market above 90% over the past eight months (versus zero over the past 30 years), a countertrend rally in the U.S. dollar would likely coincide with sputtering equity prices.

8. The Dow transports/utilities ratio has turned in a classic triple-top and this is a signpost to get defensive.

9. The latest Investors Intelligence poll shows the bull camp at 50%; the bear share at a mere 16.7%. In other words, there are three bulls for every bear. This is negative from a contrary perspective (another sign of complacency).

10. Corporate bond yields have stopped narrowing over the past three months and have actually recently shown modest signs of an upward bias.

-Was the drop in the U.S. unemployment rate a big deal? In our opinion, the answer is no. This was the eighth time we have seen the unemployment rate go down in a month since it bottomed back in October 2006. Nothing moves in a straight line. The peak still lies ahead of us.

In the prior cycle, the unemployment rate bottomed on April 2000, at 3.8% and peaked at 6.3% on June 2003. During that time, we saw the jobless rate fall five times. In the early 1990s cycle, the unemployment rate actually fell no fewer than six times. Declaring victory because of a one-month wiggle can be dangerous. Especially since a key reason why the jobless rate dipped was because the ranks of discouraged workers who exited the labour force due to grim job prospects jumped 60,000 to 357,000 last month.

As for the -11k print on Friday’s headline payroll report, unadjusted, the number was +80k, which therefore goes down as the third softest November reading in the past 18 years. November is normally a month where between 300k and 500k workers find a job before the seasonal adjustment kicks in. Something to keep in mind.

REAL ESTATE

-U.S. Homeowners Lost $5.9 Trillion Since 2006 Peak. U.S. homeowners have lost about $5.9 trillion in value since the housing market’s peak in March 2006 as mounting foreclosures and the recession weighed on prices, according to Zillow.com.

Almost half a trillion dollars was wiped out this year through November as housing headed for a third straight annual decline. New foreclosures and higher mortgage rates in 2010 may hinder a rebound, the property data service said today in a statement.

“A phenomenal amount of wealth has been erased since the housing bust,” Stan Humphries, chief economist for Seattle- based Zillow, said yesterday in an interview. “For many households, most of their wealth is tied up in real estate.”

The net worth of U.S. households at the end of June fell 19 percent from two years earlier to $53.1 trillion, according to Federal Reserve data. Employers have cut more than 7.2 million jobs since the start of the recession in December 2007. Read more here-http://www.bloomberg.com/apps/news?pid=20603037&sid;=af9OWXW1MJ6k

-U.S. Foreclosures to Reach 3.9 Million in Second Record Year. Foreclosure filings in the U.S. will reach a record for the second consecutive year with 3.9 million notices sent to homeowners in default, RealtyTrac Inc. said.

This year’s filings will surpass 2008’s total of 3.2 million as record unemployment and price erosion batter the housing market, the Irvine, California-based company said. “We are a long way from a recovery,” John Quigley, economics professor at the University of California, Berkeley, said in an interview. “You can’t start to see improvement in the housing market until after unemployment peaks.”

Foreclosure filings exceeded 300,000 for the ninth straight month in November, RealtyTrac said today. Read more here-

http://www.bloomberg.com/apps/news?pid=20603037&sid;=a6aLuu9zxbcM

-South Florida Foreclosures Up 15% In November. Read more here-http://www.businessinsider.com/south-florida-foreclosures-up-15-in-november-2009-12

-Quarter in U.S. foreclosure plan late on payments. More than one-quarter of homeowners receiving help under a U.S. government foreclosure prevention plan are behind on their new mortgage payments, a Treasury Department survey has found. Read more here-http://www.reuters.com/article/idUSN0517257820091205

-Homeowner bailout plan may not stop US housing market crash. The meltdown in the American housing market is not over yet, with experts warning that a rise in home foreclosures next year and in 2011 could undermine the chances of a sustained economic recovery in the United States. Read more here-http://www.timesonline.co.uk/tol/money/property_and_mortgages/article6946619.ece

-For the second time in two months, property in Ginn-developed communities were sold at a Flagler County tax deed sale. A lot in The Conservatory and a Hammock Beach Club one-bedroom condo were sold at yesterday’s sale. In each case, there was more than one bidder; forcing the final selling price above the minimum opening bid.

The minimum opening bid is equal to the accumulated back taxes, interest, penalties, and administrative costs. The starting bid for the Conservatory lot was $17,039.53. One hundred dollars at a time, bidders arrived at the final price of $20,100 totally furnished. The lot at 403 Bourganville Drive overlooks a lake and the ninth hole of the Tom Watson-designed golf course. It sold in 2005 for $439,900. Read more here-http://www.gotoby.com/news/ginn_tax_deed_sale.htm

-Calpers Real-Estate Holdings Decline 30% During First Quarter. Read more here-http://guanteik.blogspot.com/2009/12/calpers-real-estate-holdings-decline-30.html

-Paradise Lost for Wealthy Resort Novice. Robert Sillerman amassed a billion-dollar fortune buying and selling media and entertainment companies. Among his most successful deals: the purchase of television franchise “American Idol.” Mr. Sillerman’s winning streak ended on an alluring stretch of beach on this tiny Caribbean island.

His luxury hotel, condominium and golf resort here, Temenos, languishes half-built and out of money. “American Idol” creator Simon Fuller and novelist Dan Brown, among others, have put down deposits on million-dollar villas. It’s not clear when or if their vacation homes will be completed. Read more here-

http://online.wsj.com/article/SB126014120205579167.html

-Chart of the week: The Amazing Spiralling Mortgage Delinquencies. The Mortgage Bankers Assocation (via Rolfe Winkler) is out with its latest look at loan delinquencies across a variety of investor groups. The one trend: up. CMBS has now crossed the 4% delinquency rate, though at least there are some signs of a turn, rather than just a pure straight line. Read more here-

http://www.businessinsider.com/chart-of-the-day-commercialmulti-family-mortgage-delinquency-rates-among-major-investor-groups-2009-12

Source: www.chartoftheday.com

GEOPOLITICAL NEWS

-Bin Laden ’seen in Afghanistan in early 2009′. A Taliban detainee in Pakistan claims to have information about Osama Bin Laden’s whereabouts in January or February of this year. His claims cannot be verified, but a leading American expert says his account should be investigated.

The detainee claims to have met Osama Bin Laden numerous times before 9/11. He claims that in January or February he met a trusted contact who had seen Bin Laden about 15 to 20 days earlier in Afghanistan. Read more here-http://news.bbc.co.uk/2/hi/south_asia/8394470.stm

-No Bin Laden information in years, says Gates. The US has had no reliable information on the whereabouts of al-Qaeda leader Osama Bin Laden in years, US Defence Secretary Robert Gates has admitted. Mr Gates told ABC News in remarks broadcast on Sunday: “Well, we don’t know for a fact where Osama Bin Laden is. If we did, we’d go get him.”

A Taliban detainee in Pakistan told the BBC last week that he had information Bin Laden was in Afghanistan this year. However, Mr Gates said he could not confirm that information. When asked by ABC’s This Week programme when the US last had any good intelligence on the whereabouts of the al-Qaeda leader, Mr Gates said: “I think it’s been years.” Read more here-

http://news.bbc.co.uk/2/hi/south_asia/8397684.stm

-Petraeus Says Afghan War Likely to Be Tougher Than Iraq Fight. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=agTXn0.SJHD0&pos;=9

© 2010, Worldwide Precious Metals.
www.wwpmc.com

The Goldbugg Report – December 15, 2009
Posted by Worldwide Precious Metals on Tuesday, December 15, 2009

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