Money supply vs. gold

MZM vs. gold as of 6/1/2009:
MZM (billions, St. Louis Fed, not seasonally adjusted): 9609.9
Gold supply (oz, estimated): 5,175,202,156
Gold price in USD: $939.30
MZM/oz: $1,857

M2 vs. gold as of 6/1/2009:
M2 (billions, St. Louis Fed, not seasonally adjusted): 8349.4
Gold supply (oz, estimated): 5,175,202,156
Gold price in USD: $939.30
M2/oz: $1,613

Physics envy

“Economists suffer from a deep psychological disorder that I call ‘physics envy'. We wish that 99 percent of economic behavior could be captured by three simple laws of nature. In fact, economists have 99 laws that capture 3 percent of behavior. Economics is a uniquely human endeavor ..."
Andrew Lo, a professor of finance at the Massachusetts Institute of Technology

Added ZeroHedge

ZeroHedge by Tyler Durden (of Fight Club fame) has an insider/trader perspective and is awash isn technical articles and news.

Added St. Louis Fed EMRATIO

During a long period of recession, the unemployment numbers become a less accurate measure of the employment situation because as benefits run out, people fall off the continuing claims roll. This has the same effect on the measurement as if they became fully employed.

When this happens, a better measurement to track is the civilian employment ratio, EMRATIO published by the St. Louis Fed.

Removed Interfluidity

While I like the writing and deep treatment of topics at Interfluidity, it is updated infrequently. I plan to replace it with another blog that has more timely commentary.

Edward Abbey

"Growth for growth's sake is the ideology of the cancer cell." -- Edward Abbey

What is a 2/5/30 butterfly?

One of my favorite blogs to follow is the bond oriented Across the Curve.

The author has a fantastic article explaining the butterfly trade with the Treasury 2-year note/5-year note/30-year bond.

Fun reading, although I had to read it twice to get the idea.

GM Bankruptcy

GM entered chapter 11 today, which was not a surprise for anyone.

While this was unavoidable, it guarantees, in my opinion, the bankruptcy of Ford. My best guess is June 2010. The federal government is now providing financing to see GM through to the other side of chapter 11 and also funneling billions of dollars to GMAC (now Ally Bank) in order to finance more subprime GM and Chrysler cars.

I wonder who can finance more cars, Ford or the federal government? Ford is in terrible financial condition and would probably be bankrupt anyway, but this assures it.

So here is my prediction in writing. One year from today, Ford will complete the U.S. automaker bankruptcy trilogy.