Recap 12-14-11

Main Items:

  • Merkel reiterated to the Bundestag that the consolidated total firepower of the ESM and EFSF will stay at 500bn.
  • The FT says doubts are growing about whether the IMF can get a near-term boost in funding. Non-Europe IMF shareholders don’t want the EU200B to go into the general fund while Europe doesn’t want to create a special account. Japan today said it wants to see Europe do more before contributing more money. Meanwhile, the Bundesbank wants to be given permission by the German parliament before giving money to the IMF (something the parliament won’t do).
  • 3m Libor hit the highest level since mid 2009.
  • Both existing and new Home Sales back to 2007 will be revised down next week because of double counting. Corelogic claims sales figures could be overstated by as much as 20%. – CNBC
  • US Import Price Growth declined to 9.9% vs 10.2% exp and 11% prev


  • Norgesbank cut 50bps to 1.75% vs 25bps exp
  • UK Claimant Count Rate was stable at 5% vs 5.1% exp
  • Chinese M2 growth declined to 12.7% YoY vs 12.8% exp and 12.9% prev.
  • Australia Westpac Consumer Confidence declined to 94.7 in Dec vs 103.4 prev


So that gold call was … spectacularly badly timed. The longer term thesis still intact though, IMO. All the CTAs just have to get short first.
Gold has fallen 8.3% in 3 days. Here is the gold chart with the previous instances when gold has fallen more than 7% in 3 days: