Jim Sinclair’s Commentary
I asked Mr. Fred what he felt about today. He yuaned.
Jim Sinclair’s Commentary
In time this will be a headline on the US 30 year Treasury Bonds.
Lula Saps Bond Market as Trading Shrivels on Tax Increase: Brazil Credit
By Tatiana Bautzer – Oct 26, 2010 1:53 PM MT
Trading in Brazil’s longest-maturity bonds is drying up after President Luiz Inacio Lula da Silva tripled a tax on foreigners’ purchases of local debt.
Daily average trading of fixed-rate bonds due 2021 has tumbled 62 percent to 172 million reais ($101 million) since Lula raised the tax for a second time this month on Oct. 18 in a bid to stem a currency rally, according to the capital markets association, known as Anbima. Trading averaged 454 million reais in the first 11 business days of the month and 354 million reais in September.
The yield on the 2021 bonds soared to the highest ever relative to the country’s interest-rate futures contracts, a sign investors are demanding bigger returns in exchange for buying securities that are becoming harder to sell in the secondary market. Trading in the bonds due in 2021 has been hurt the most because foreigners owned 49 percent of the notes as of April, five times the 10 percent stake they have in local government debt overall, according to the Treasury.
“With foreign investors out, the trend is for very low liquidity,” David Rocha, a trader at Renascenca DTVM Ltda., one of 14 dealers that trade directly with the Brazilian Treasury and central bank, said in a telephone interview from Sao Paulo.
A Finance Ministry official who asked not to be identified in accordance with government policy declined to comment.
Jim Sinclair’s Commentary
CIGA Marc, our true businessman in the trenches, comments on the following.
"This sounds more indicative of the "real" economy."
USG posts a loss of $100 million for Q3
(Oct. 21) Chicago-based USG Corp., parent company of North American Gypsum and owner of the Sheetrock brand, posted a third-quarter net loss of $100 million, compared with a loss of $94 million for the same quarter last year.
Sales for the quarter ended Sept. 30 were $758 million, down 7.7% from $822 million as reported for the same quarter in 2009.
“Our third-quarter results reflect continued weak market conditions and extraordinarily low shipping volumes,” said William Foote, chairman and CEO. “Nonetheless, operating margins for our domestic wallboard business were stable, our ceilings business had another strong quarter, and the performance of our distribution business continued to improve despite ongoing weakness in commercial construction.”
USG’s North American Gypsum segment reported third-quarter 2010 net sales of $413 million and an operating loss of $43 million.
USG’s building products distribution segment, L&W Supply Corp. and its subsidiaries, reported third-quarter net sales of $281 million, down 15% compared with the third quarter of 2009 with an operating loss of $24 million.
