A service like this could provide serious competition for the current standard of "free" content paid for by advertising revenues. It is not clear to me how many people see this coming but I am guessing it is not too many yet.
A Forrester Research Inc. analyst thinks Google's plan to facilitate payments on the Internet may go much further than helping people sell stuff at virtual yard sales.
Charlene Li wrote on her Web log that since Google Inc.'s AdSense service already puts links on Web pages, why not add micropayment processing?
"Google (GOOG: news, chart, profile) could offer a subscription 'pass' that grants users access to premium content on multiple sites, with each site getting a share of the payment based on usage," she wrote. Such an idea for bundled Web subscriptions was suggested several weeks ago by Martin Nisenholtz, senior vice president for Digital Operations at The New York Times.
The Forrester (FORR: news, chart, profile) principal analyst reasons that with millions of producers of Web logs and podcasts wondering how to make some money, Google's payment services venture might be a solution.
In remarks Tuesday, Google's CEO, Eric Schmidt, confirmed the company is working on payment services which are "a natural evolution of Google's existing online products and advertising programs," according to a report by the Los Angeles Times.
Jun 22, 2005
Jun 21, 2005
Strange they didn't mention this before they sold debt. I wonder if "but a lot can change in two weeks" is a valid courtroom defense?
Ford Motor late Tuesday slashed its full-year profit target and said it would terminate about 1,750 of its North American salaried workforce to cut costs in the face of slumping sales.
The No. 2 U.S. automaker now expects to report a full-year profit in a range of $1 to $1.25 a share, down from prior estimates of $1.25 to $1.50 a share.
GM's bonds have already been trading a bit heavy the last week so I think the auto debt market could make it back to the headlines tomorrow.
*Update 6 AM 6/22 - According to the FT, "General Motors has stepped up the pressure on Ford in recent weeks with an “Employee Discount for Everyone” incentive programme. JD Power Associates estimated last week that GM’s discounts boosted its market share by eight percentage points in the first 12 days of June, while pushing down Ford’s share by more than a point.
Ford has responded by offering cash rewards of up to $1,000 to employees and pensioners who line up buyers of Ford vehicles."
The world's biggest steelmaker tried to calm markets on Tuesday as falling prices and profit warnings fuelled fears that the steel cycle had taken a turn for the worse.
Lakshmi Mittal, chief executive of Mittal Steel, blamed recent industry weakness on short-term factors such as the persistence of excess stocks that built up last year when customers were worried about shortages. "It's all about sentiment and an overhang of inventory," he told industry leaders in New York. "The long-term prospects remain strong."
His comments came as figures on global production suggest excess capacity may play a bigger part dragging the industry back to its old pattern of boom and bust.
Data on Tuesday from the International Iron and Steel Institute confirmed signs of a rise in Chinese production, in spite of attempts to control new investment. China was again the largest crude-steel producer, with output of 29.7m tonnes in May, up 37.5 per cent over this time last year.
Andy Mohinta, a commodities analyst with JP Morgan in London, said: "I don't think you can ignore the supply side. There now seems a real danger that increased Chinese production will slow their demand for imports and they may even start exporting back to Europe."
Steel is definitely weighing in on the bearish side of the market/economy lately. Particularly when - like this morning - it appears to be leading a general rout in both industrial and precious metals. The precious metals did alright (probably reacting to the yen) by the close but despite some attempts the industrials couldn't manage the same trick.
The yen rose the most in seven weeks against the dollar and appreciated against all major currencies on speculation China is closer to a decision to allow its currency to trade more freely.I am pretty sure this is a case of trying to fit the news to the market. Not that I disagree with the move but I don't think the G8 attendence in itself means anything. I mentioned last week that sentiment had swung about as far as I thought possible from the "its coming tonight" view of two months back.
The rise in the yen followed an announcement that U.S. Treasury Secretary John Snow and Federal Reserve Chairman Alan Greenspan will testify to Congress on June 23 about U.S.-Chinese economic relations. Both men have called for China to let the yuan float, freeing it to appreciate against the dollar. A stronger yuan boosts the yen by improving Japan's export competitiveness against China.
``The revaluation news spread like wildfire,'' said Enrico Caruso, chief trader at currency hedge fund Tempest Asset Management in Newport, California. ``That's the biggest driver of the dollar-yen right now.''
The latest round of speculation that the yuan would be revalued was tied to the announcement earlier today that Chinese President Hu Jintao will attend the Group of Eight industrialized countries' annual summit in the U.K. on July 7, according to Patrick Brodie, chief currency dealer in New York at Sumitomo Mitsui Banking Corp.
The Conference Board reported yesterday that only one of the 10 components of the leading index, stock prices, increased in May. The other components that dragged down the index included building permits, vendors' performances, the index of consumer expectations, manufacturers' new orders for nonmilitary capital goods, consumer goods and materials and average weekly initial claims for unemployment insurance.I am not sure if the stock market's contrary move represents vision or the lack of it.
Jun 19, 2005
"The mutual fund croupiers rake huge sums off the stock market table," says Bogle. He estimates that management fees average 0.9%. Other expenses are 0.6%. So the average expense ratio is 1.5%, five to seven times the take for index funds.
Next deduct "hidden portfolio transaction costs of at least 0.8%" from managed funds says Bogle. Then deduct the long-term costs of "sales commissions on load funds, another 0.7%." So the total cost in an actively managed fund can run as high as 3%, leaving investors with just 4% on a 7% return.
But it's even worse on an after-tax basis: "Because of the shocking tax inefficiency" of funds' average turnover, which is greater than 100% for an actively managed stock portfolio, you deduct another 2.2%, says Bogle.
Bogle goes further and compares the results of compounding the two alternatives over a 20-year period: "The cumulative profit of each $1 initially invested in the managed fund came to just $1.55 in real terms, after taxes and costs, only 34% of the real profit of $4.50 in the index fund." In short, indexing is almost three times more profitable.
Jun 16, 2005
This is the kind of trend I was envisioning when I first thought the Fed might be done soon. As the story says this report is not consistent with May's production numbers.
Manufacturing in the Philadelphia region weakened unexpectedly in June, the Federal Reserve Bank of Philadelphia reported Thursday.
The Philly Fed's activity index fell to -2.2 in June from 7.3 in May.
This is the first negative reading since May 2003.
The drop was unexpected. Economists were expecting a slight increase to 9.4, according to a survey conducted by MarketWatch. See Economic Calendar.
Treasury prices reversed direction and moved higher after the report was released. Treasurys improve on weak Philly Fed data.
The index has been positive for two straight years. Readings over zero indicate expansion in the sector
In May, the index fell to 7.3 from 25.3, the largest one-month decline since January 2001.
The decline in the Philly Fed index contrasted with a rebound in the Empire State index in June and a strong gain in industrial production in May. See full story.
Marin Capital Partners, a hedge fund that once oversaw about $2 billion in assets, is shutting down because the firm sees few opportunities in the convertible arbitrage and credit arbitrage strategies it follows.
Marin, which has moved most of its investments into cash, will stop trading at the end of June and return money to investors in early July, according to a letter the firm sent to investors this week.
"Due to a lack of suitable investment opportunities in the current market environment, and in our view an unfavorable risk/ reward situation in the relative value strategies we trade, Marin has moved the fund's portfolio largely into cash," Marin said in its letter, a copy of which was obtained by MarketWatch.
Marin, founded in 1999 by John Hull and J.T. Hansen, said it was proud of its record, citing the performance of its flagship Tiburon Fund which had returned more than 98% with relatively low volatility since inception, according to the firm's letter.
Contrahour runs down the bull and bear views this AM. For bear support he also looks to transports but he sees the banks as central to the bull case. I would add to the bull side that with the yen joining in dollar weakness this AM, last week's bond weakness, and renewed commodity strength we are basically seeing a resumption of the trends from Spring '03.
Not quite convinced it will happen but yesterday's reversal to the upside certainly keeps it on the table.
FENGHUA, CHINA -- Chen Hsien, an employee of Fenghua Ningbo Plastic Works Ltd., a plastics factory that manufactures lightweight household items for Western markets, expressed his disbelief Monday over the "sheer amount of shit Americans will buy."
Above: Chen makes yet more stupid crap for consumers overseas.
"Often, when we're assigned a new order for, say, 'salad shooters,' I will say to myself, 'There's no way that anyone will ever buy these,'" Chen said during his lunch break in an open-air courtyard. "One month later, we will receive an order for the same product, but three times the quantity. How can anyone have a need for such useless shit?" - continued at the Onion
Hat tip to Mark in the comments at Brad Setser's Web Log.
The government yesterday unveiled measures to induce overseas investment by local firms and individuals, a major shift in its foreign exchange policy that once strictly restricted capital outflow.
The plan drafted by the Ministry of Finance and Economy is aimed at removing regulations on Koreans buying foreign real estate and other overseas assets.
The finance ministry expects the new measures to create outflows of between $1 billion and $1.5 billion per year. Korea has had a net inflow of foreign currencies worth about $25 billion on average every year since the 1997-1998 Asian financial crisis, according to the finance ministry. The central bank expects the net inflow to reach about $20 billion this year. In a separate move, the Bank of Korea yesterday was supposed to unveil a plan that would allow part of its foreign exchange reserves to be lent to overseas investors.
Jun 15, 2005
Also check out Calculated Risk's summary of today's MBA report.
What happens when an unstoppable force meets an immovable object?
U.S. retail sales staged their sharpest drop in nearly a year in May while producer prices showed the biggest decline in nearly two, according to government data on Tuesday that may ease inflation fears but show consumers may be faltering.I have been thinking a consumer slowdown or at least the fear of one was on the horizon so maybe I am just fitting the data to my view but it does not seem unreasonable. The CPI number this AM is also consitent with the idea that the worry going forward will be slack demand.
While commodities and their producers have managed a bounce the transports don't seem to be tagging along like they did last year. Norfolk Southern (NSC) and FedEx (FDX) stand out for their weak patterns. Last year the transports stormed higher through 9 months of market weakness and I repeatedly heard the reassurance that the sector was a leading indicator. I think this belief is rooted in Dow Theory and I am no expert there but I always try to note when once important "relationships" suddenly stop being discussed. That sector is giving the best support to the bear case in my view. Weakness in transports is also consistent with a continued weak production numbers.*
The bull case is still strongest in housing. Whether it is the all clear or just evidence of too many shorts remains to be seen. Also on the bull side was Walmart's (WMT) positive response to yesterday's data. Continued strong action in these sectors is pretty inconsistent with a thesis based on a weakening consumer.
*The airlines did not really play in last year's rally but the S&P downgrade of Northwest (and the insider sales) probably has some future relevance to the transport sector and possibly credit markets.
Jun 14, 2005
Hints by Jean-Claude Trichet, ECB president, and Otmar Issing, the bank's chief economist, that the possibility had increased of borrowing costs falling have contrasted with comments by several national central bank governors on the committee.I wrote last week that I doubt U.S. interest rates will plunge like Japanese rates did in the 90's. I am much less convinced that the same can be said for Europe. The U.S. is in a much more attractive position to prevent deflation because lowering U.S. interest rates mostly punishes foreign lenders. Europe's higher savings rates make the ECB's decision tougher. In the end I think they will cut rates (maybe this fall) and I am guessing it will happen while the euro is rising rather than falling. I would also expect the ECB to follow any rate cuts by the U.S. Fed this time around too.
The differences highlight the dilemma faced by the ECB. Economic growth, lacklustre for the past four years, has slowed again, and politicians are increasing the pressure for a further cut in borrowing costs. But excess liquidity and oil price increases are sounding inflationary alarm bells.
The confusion puts pressure on the ECB to clarify its stance at its next rate setting meeting on July 7.
When Bank of America and Banca Popolare di Intra declared a truce in their long-running dispute over alleged derivatives mis-selling last week, they chose an odd time to release the news.I had not heard of this lawsuit before today. CDO's seem to be in danger of losing their status as a modern financial miracle.
But, discreet or not, the news of this settlement is likely to provoke considerable debate among lawyers and investment bankers in coming days. Over the last five years, the CDO market has expanded rapidly and also moved to a new level of product complexity. Consequently, the question that worries some industry observers - particularly since credit conditions have become more volatile - is whether the BPI/BoA deal could be the precursor to a host of similar lawsuits.
This story of market failure (relating to GM/Ford downgrade) was also news to me. It seemed like pretty standard action for bonds as they jump across the great divide between credit grade and junk. A big dislocation and about 2 weeks to sort out forced sellers and new buyers. The Kerkorian bid spiced it up a bit but as he was buying in size it seems he would have done an aweful lot to relieve any panic. I am not active in corporate markets so maybe I am clueless about the horrors that transpired. With the SPX above 1200 I guess I have lots of company.
Jun 13, 2005
GLG Partners, Europe's largest hedge fund manager, has admitted that flaws in its trading models were partly to blame for a 14.5 per cent drop last month in the value of its Credit Fund.I recommend this as some background reading on the current state of hedge fund risk models. The comments about Mandelbrot and Eckhardt seem most relevant.
In particular, it has acknowledged that the mathematical model it used to price complex credit derivative products failed to foresee market swings after last month's ratings downgrades of General Motors and Ford.
In a private letter to investors, a copy of which has been obtained by the Financial Times, the hedge fund argues that it has now rejigged these trading models. The admission is significant because other banks and hedge funds appear to have been using similar trading models, meaning that they may also have suffered big derivatives losses.
GLG warns that conditions in the credit market could remain difficult for some time because banks and hedge funds are trying to get out of loss-making derivatives positions at the same time.
"Segments of the hedge fund community and a substantial number of investment banks are nursing material losses in structured credit trades as a result of recent market conditions," the letter says.
The FT goes on to say that while the GLG's models considered a move like last month's (May?) an 8 sigma event that could be "ignored". This quote in particular seems like the root of problems: "GLG blamed the model's shortcoming on the fact that this CDO market had only traded since last year...". Personally I bet the model did exactly what it was built to. Generally they do that.
Maybe the CDO market is small enough and has had its time in the sun but with the VIX still tripping along sub 15% I find this kind of explanation troubling.
Jun 12, 2005
Shawn Fanning's new company, dubbed Snocap, was poised to announce on Monday that it would start allowing all artists and record labels to register their music in a database designed to serve as a global clearing house that can identify digital tracks shared across the net and collect royalties on behalf of copyright owners.Finally. I imagine this kind of system will eventually replace the current advertising model that exists on blogs as well. I have not seen it yet but whether it is this product or something else the value added through distribution, filtering or promotion is falling to zero so I don't understand how money doesn't end up flowing directly from consumers to producers.
"This registry is key to creating a world of authorised peer-to-peer networks that will attract music fans en masse - enabling consumers to share and discover new artists in much the same fashion as they did with old P2P - but done in a way that respects the rights holder," Mr Fanning, who serves as Snocap's chief strategy officer, said.
Jun 10, 2005
Google's stock has amazed investors and the public, but the returns still lag those experienced by New River Pharmaceuticals, a 19-employee company that has designed an attention deficit disorder drug.
The two companies went public two weeks apart in 2004. New River went public at $8.00 and is now sells at above $33, giving it a 317% return, according to statistics on IPO Home. Google went out at $85 and sells for $286, a 236 percent return. Google also trails China's Shanda Interactive, which has seen its stock rise from $11 to $38, in terms of return.
It's an improvement for the search giant, however. In April, it also trailed WPT Enterprises, which organizes the world poker tournament, and Syneron Medical, an Israeli company specializing in laser hair removal technology.
China's political leadership is actively considering breaking the 11-year link between the dollar and China's currency, the yuan, and tying its value instead to a group of currencies, current and former senior Chinese officials said in interviews. The proposal being weighed at almost daily meetings of the Standing Committee of the Chinese Communist Party's Politburo would use a so-called basket of currencies to set the yuan's value. The yuan would move up and down in currency markets in relation to the average values of the dollar, yen, euro and possibly other currencies like the British pound.A few weeks ago speculative pressures were the reason for not moving. The current sentiment (knowing it is coming but it will be small and hard to time) is probably the best Chinese politicians can hope for.
But the initial value of the yuan under the new system could, in dollar terms, be very close to its current value of 8.277 to the dollar.
The Politburo's Standing Committee - which includes President Hu Jintao, Prime Minister Wen Jiabao and seven other top officials - has made no decision yet on when or whether to act, and may decide soon or wait as long as next year, the officials said. But the deliberations have taken on a pressing quality, with the Standing Committee meeting almost every day last week to review currency policy. Senior economic officials have been told to be on hand for consultations at any moment.
In a telling instance, Yang Weizhe, the mother of Zhou Xiaochuan, the governor of the Chinese central bank, died at 6:30 a.m. on May 31, but Mr. Zhou was still required to attend a Standing Committee meeting on the currency an hour and a half later.
Victor Fung, a Hong Kong tycoon who is chairman of one of the world's largest garment companies and heads the territory's airport authority, said, "They recognize the need to go away from a peg and move toward a basket."
Mr. Fung said each currency's percentage in the basket should match the percentage of China's trade conducted in that currency, an approach favored by many economists. He also said that China should reveal the relative weightings of the currencies in the basket.
But other advisers said Chinese officials were leaning strongly toward switching to a basket without disclosing the currency weightings. Singapore has long done this with its dollar.
They sure seem to be focusing on the finer details right now. In currencies I have quite a few yen longs on and most recently shorted AUD/JPY near here (stop at 83.5). That chart is bouncing along just on top of a long uptrend and looks set to have a big reaction to any yen strength. Other than oil, the commodity stocks have not put in much of a recovery so I am also watching the AUD to see if it is pointing out continued weakness there.
Jun 9, 2005
Whether we spike to new highs or not after that is really dependent on consumers maintaining their confidence and spending habits in light of growing debt loads and a 'soft' wage market. That has been the same story really since 2002. Eventually consumers will balk though and the longer it lasts the easier it is to envision that happening.
So if low long-term interest rates can create another binge it is liquidity enema part III (I - Spring 03, II - Aug 04) I guess. Otherwise we see debt payments crowding out consumption which leaves little support for asset prices. I lean towards the latter but doing my best to stay open to signs pointing the other way.
Jun 8, 2005
Chief Justice William Rehnquist, the ailing octogenarian who has presided over the US Supreme Court for 18 years, is expected to step down in about a fortnight. And immediately afterwards the body politic will be consumed with internecine combat over abortion.Something to keep in mind I guess.
I guess Kirk will be thanking Merrill for correctly recognizing the strong inherent demand while the stock was in free fall. That advice is all the more impressive as it was able to anticipate and look past the looming credit downgrade to the current nirvana.
While I am ranting I may as well discuss some other recurring thoughts that I have on GM and the auto sector. That Chicago number last week was nasty to say the least. Just one number but it is not too hard to imagine lots of bankruptcy headlines slowing purchase and hiring decisions at all levels. Those headlines could also have a very negative effect on the consumption of employees in the sector. Maybe that is not what is happening but I think it is too early to say for sure.
On another note it strikes me as a very large contrarian flag, that GM's salvation is being seen in ditching its manufacturing business so that it can focus on financing. If the long-term problem facing the US is an excess of borrowing and a lack of manufacture for export, there certainly appears to be some short-term forces going the other way.
These two thoughts contradict a bit but it comes down to timing. At this point demand for US exports is not sufficient to shift production patterns but at some point in the future it should be. In the mean time the manufacturers are dependent on US consumption which could be heading for a rough patch.
Barry, in his post Monday, chose to shift the UST data to the left for comparison. I reproduce this below using my data. The chart extends further to the left including the data leading up to the Japanese stock market top.
It matches up pretty good, but both series have been in downtrends for the last 15 years so several sideways shifts will appear highly correlated over a 5 year period.
The argument I attempted yesterday was that the two series are already a good fit without any lag. I represent my view below by offsetting UST yields lower by 3%. This vertical shift lays the two data series on top of each other for visual effect.
It looks like a pretty good fit for the last 20 years. Lots of peaks and troughs line up. Notice that the last two years line up in uptrends similar to Barry's graph. The need for a 3% shift might be explained by the savings differential between the US and Japan. Probably an oversimplification but not entirely unreasonable.
The two shifted charts lead to different implications for the future. If the downtrend in JGB yields has reversed I would not expect US rates to continue lower. I would not even expect US yields to be weighed down by some sort of structural damage left over from the 1999 stock market top. I would instead expect them to continue tracking JGB yields and head higher.
However, the market has improved significantly from its worst levels in mid-May. Ford Motor Credit on Tuesday sold $1.5bn of three-year paper at 330 basis points over Treasury rates. It increased the size from the original $1bn as a result of demand.
The deal was a "drive-by", meaning it was announced and priced on the same day. This usually implies an issuer is taking advantage of market conditions. In the secondary market on Tuesday, Ford 2008 notes were trading at about 320bp over Treasuries, down from a peak of 514bp in mid-May, according to MarketAxess.
The article also mentions the Qwest $1.25 bn junk offering being placed tomorrow. It is the biggest junk issue since the auto downgrades.
Jun 7, 2005
Between this and my estimate of where sentiment is at I am going to buy some puts for the Fall. I am looking at the 1140 and 1100 strikes because I like to have the gamma around inflection points.
I probably won't short anything in cash unless TOL slips back below 85. Looking at other things too for that judgement but the breakout in homebuilders in the face of a lot of bearish commentary sums up my defensiveness best.
A divergence the other way occurred on May 13th just for some perspective.
Also, the most unique part of Japan's history is the 1994-1999 segment where rates fell from a 4 handle to a 1 handle. The policy mistakes (failure to clear out bad loans and banks mostly) in that period led to the long bottoming process we are seeing in that economy. The U.S. rate cuts of 2001-2003 were done specifically to avoid the deflationary trap that Japan fell into and so far it has worked. This comparison of bond yields also ignores the very different saving and fiscal situation of the two countries. Japan's high saving rates bias its policies towards deflation (defending the purchasing power of savers) while the U.S. will lean towards inflating its debts away.
I think JGB yields bottomed in March of '03 which not coincidentally is when U.S. deflation fears peaked. I would rather bet on U.S. interest rates following Japanese rates in the present than in the mid 90's.
Jun 4, 2005
Standard & Poor's on Friday cut its rating on American International Group's debt by another notch to AA, citing concerns about the scale of accounting problems the world's biggest insurer reported when it filed its annual report this week.
The downgrade represents another setback for AIG, which has seen its borrowing costs rise since it lost its prized AAA rating following the investigation by US regulators into its accounting standards.
Jun 3, 2005
Second, there is a growing market for non-deliverable forward contracts for Chinese renminbi. NDF contracts are traded offshore and are used to hedge against exchange rate movements in non-convertible currencies. In this case they are agreements to buy or sell renminbi at a specific future date at a specific exchange rate. At maturity, the contracts are settled using only the hard currency, usually dollars, and no renminbi are deliverable. Dollar payments are made or due based on the difference between the prevailing spot rate and the NDF rate. If, at maturity, the renminbi has appreciated against the dollar, the holder of the NDF will be paid a certain dollar amount. If the renminbi has depreciated, the holder will owe a certain dollar amount.
The BIS report suggests that the growth of these renminbi NDF markets presents one of the few real price signals from the markets as to future expectations of the renminbi exchange rate. Billion dollar daily turnovers are now common, and most of the activity seems to be hedging against a renminbi revaluation. Moreover, the report has uncovered evidence of a movement away from strictly dollar oriented exchange rates among Asian currencies towards an "effective exchange rate orientation." In other words, Asian exchange rates are seeing higher volatility against the dollar as compared to between Asian currencies.
This is important, as it is evidence of market signals that the renminbi will play an increasingly important role in determining exchange rates across
East Asia. Considering the rising trade flows between and the other Asian economies, this only makes sense. It is becoming increasingly likely that a renminbi revaluation could allow other Asian currencies to rise against the dollar while maintaining (or at least limiting the rise in) their renminbi exchange rates. China
Still, so long as the Chinese prevent current account convertibility, they will be free to determine exchange rate and monetary policy as they see fit, without bowing to pressure from the financial markets or foreign governments. But as
's share of international trade grows, renminbi turnover will inexorably rise along with it. Importers and exporters will find increasingly sophisticated ways to manage their foreign exchange needs, and capital flows should prove harder and harder to manage. In the long run, international financial markets will provide the real challenge to Chinese efforts to maintain control over their exchange rate and monetary policies, and not foreign governments. China
Jun 2, 2005
Jun 1, 2005
The supply of new European corporate bond issues more than halved in May compared with the same period last year as borrowers were pushed to the sidelines amid the sharp volatility in the secondary market.The article continues by discussing the return of investor demand in later May. Even so I think the trend of spread widening that started in March has a ways to go. Because of that I am leaning towards shorting stocks here but am patient to see where this rally goes. Seems like we could hang out around these levels for a few weeks.
The supply of new bonds with investment-grade credit ratings reached just EUR6.875bn in May, down 52.5 per cent from the same month in 2004. The supply in the year to date is running 26 per cent below last year's levels, which ended up being 40 per cent weaker than 2003.
But the reason behind the low issuance in May and late April differed from that of the preceding months, in that it was the market that turned away from borrowers and not the other way round.
Of course I am still watching TOL as a main tell. It seems like sentiment could keep squeezing it higher but it will be interesting to see how housing stocks can do if the market has a bad week.
Also watching silver and the yen to see if the dollar rally will run out of steam.
All in all not much to do.