The “Michael Jordan of trading” is now table-poundingly bullish on gold. And the Reserve Bank of India may have just made him look like a prophet… John Paulson (no relation to Hank) is widely viewed as the most successful money manager of our times. Paulson made billions of dollars for himself and his investors by finding an obscure, non-public way to bet against the housing bubble. In terms of absolute dollar profit, his subprime crisis score is the largest ever. Given his success, it is notable that Paulson is now quite bullish on gold. The Paulson Funds have heavy exposure to gold and gold stocks, and even offer an investment vehicle with payouts denominated in gold. But, for all that, John Paulson is more of an investor than a trader. A trader, in the purist sense of the word, is an opportunistic mercenary type… someone who can raid most any asset class – stocks, bonds, commodities, currencies – and walk away with armloads of cash. A Trader’s Trader That is what makes it even more notable for Paul Tudor Jones – the ultimate trader’s trader, and arguably the most successful pure trader alive today – to be wildly bullish on gold. Your editor has long been a fan of PTJ (Jones’ initials), seeing him as a sort of market mentor from afar. In the 80s and 90s, PTJ was known as the “Michael Jordan of trading.” After cutting his teeth in the commodity pits, Jones went on to trade most every asset class under the sun in his futures trading fund. The track record is legendary. PTJ started out with multiple consecutive years of triple-digit returns in the 1980s. He then reputedly made $80 million to $100 million in the 1987 stock market crash… nearly doubled investors’ money again in the 1990 Nikkei crash… and went 20+ years overall with no losing years. While some fund managers are happy to chat with the press, PTJ prefers to avoid the spotlight as a rule of thumb. After a documentary came out in the 1980s (appropriately called Trader ), PTJ decided he didn’t want it out there...

The supply of homes available for sale in 27 major metropolitan areas at the end of October was down 2.8% from a month earlier, according to figures compiled by ZipRealty.

November 2, 2009: FHFA Refinance Report Shows Refinance Volumes Dropped in September; Mortgage Rates Still Higher than the Spring

From the American Bankruptcy Institute: The 135,913 consumer bankruptcy filings in October represented a 27.9 percent increase over last October's monthly total of 106,266, according to the American Bankruptcy Institute (ABI), relying on data from the National Bankruptcy Research Center (NBKRC). The October 2009 consumer filings represented an 8.9 percent increase from the September 2009 total of 124,790. Chapter 13 filings constituted 28.5 percent of all consumer cases in October, a slight increase from the September rate. "The nearly 9 percent increase in consumer bankruptcy filings in October, together with a 7 percent jump reported in business cases, demonstrates the sustained stress on the U.S. economy," said ABI Executive Director Samuel J. Gerdano. ABI forecasts that total bankruptcies this year will exceed 1.4 million, the highest number since 2005. emphasis added Click on graph for larger image in new window. This graph shows the non-business bankruptcy filings by quarter. Note: Quarterly data from Administrative Office of the U.S. Courts, Q3 2009 based on monthly data from the American Bankruptcy Institute. Q4 is three times the October rate. The quarterly rate is at about the same level as prior to when the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) took effect. There were over 2 million bankruptcies filed in Calendar 2005 ahead of the law change. There have been 1.18 million personal bankruptcy filings through Oct 2009, and the American Bankruptcy Institute is predicting over 1.4 million new bankruptcy filings by year end.

Press Release

From the Institute for Supply Management: Economic activity in the non-manufacturing sector expanded in October for the second consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business®. ... "The NMI (Non-Manufacturing Index) registered 50.6 percent in October, 0.3 percentage point lower than the 50.9 percent registered in September, indicating growth in the non-manufacturing sector for the second consecutive month, but at a slightly slower rate. ... Employment activity in the non-manufacturing sector contracted in October for the 21st time in the last 22 months. ISM's Non-Manufacturing Employment Index for October registered 41.1 percent . This reflects a decrease of 3.2 percentage points when compared to the 44.3 percent registered in September. emphasis added According to this survey, the service sector expanded in October, but at a slower rate than in September. Employment contracted at as faster rate than in September - the opposite of the manufacturing sector.

House Financial Services Committee Chairman Barney Frank (D., Mass.) held a press conference Tuesday on efforts to overhaul financial regulation. Some key points: 1) A vote on the House floor isn’t expected until early December, at the earliest. 2) He supports making Harvard Law School Professor Elizabeth Warren the first director of the Consumer Financial Protection Agency. 3) He supports an amendment by Rep. Ed Perlmutter (D., Colo.) that would allow regulators on a case by case basis to reinstall Glass-Steagall rules preventing specific institutions from operating both a commercial bank and an investment bank if it poses a systemic risk. 4) He supports an amendment by Rep. Paul Kanjorski (D., Pa.) making more explicit that regulators will have the ability to limit a specific company’s size and complexity over concerns about safety and soundness. 5) He said it would be impossible to legislate a repeal of the Gramm-Leach-Bliley Act. 6) His legislation would direct institutions with more than $10 billion of assets to pay into a fund that could be used later to dissolve of a faltering large, complex financial company. This fund would be large, but not in the “hundreds of billions” of dollars. If the fund runs out because of an emergency and more money is needed, Congress would have to be involved before any money is appropriated by Treasury, he said. 7) He is working on a deal that would allow the government to offer assistance to companies that are still solvent but need aid. This could likely be in the form of an emergency liquidity facility from the Federal Reserve. The Fed would be able to lend money to a facility but not specific institutions.

To view or print the PDF content on this page, download the free . November 4, 2009 tg347 Minutes of the Meeting of the Treasury Borrowing Advisory Committee Of the Securities Industry and Financial Markets Association The Committee convened in closed session at the Hay-Adams Hotel at 10:32 a.m. All Committee members were present. Deputy Assistant Secretary (DAS) for Federal Finance Matthew Rutherford and Office of Debt Management Director Karthik Ramanathan welcomed the Committee, introduced the new Chairman Matthew Zames and the new Vice Chairman Ashok Varadhan, and then gave them the charge. The first item on the charge asked the Committee what adjustments to debt issuance Treasury should make in consideration of its financing needs and uncertainty regarding the fiscal outlook. Given the cumulative deficit over the next three fiscal years of nearly $3.5 trillion according to OMB, Director Ramanathan stated that Treasury will need to remain extremely agile through its debt management approach and actions to confront challenges related to the fiscal and economic outlook. Director Ramanathan said that market participants should expect between $1.5 trillion and $2 trillion in nominal and inflation linked issuance again this year; at the same time, bill issuance may marginally decline while shorter dated coupons stabilize at current levels. Treasury debt managers will continue to remain aggressive in managing financing needs while minimizing potential market implications. As an example, Director Ramanathan outlined Treasury's successful strategy in addressing the $1.4 trillion deficit in fiscal year 2009. Noting the $1.9 trillion in nominal coupon issuance this past fiscal year, Director Ramanathan stated that Treasury was able to raise $1.25 trillion in new cash in tenor beyond two years, nearly six times the amount raised in fiscal year 2008, while at the same time meeting unexpected borrowing needs through bills. Director Ramanathan pointed out that outlays in FY...

The Associated Press' monthly survey reports that Nevada, Michigan, and California remain at the top of the list of areas with the most anxiety over the economy.

ADP : Nonfarm private employment decreased 203,000 from September to October 2009 on a seasonally adjusted basis, according to the ADP National Employment Report®. The estimated change of employment from August to September was revised by 27,000, from a decline of 254,000 to a decline of 227,000. Note: ADP is private nonfarm employment only (no government jobs). The BLS reported a 210,000 decrease in nonfarm private employment in September (-263,000 total nonfarm), so once again ADP was only marginally useful in predicting the BLS number. On the Challenger job-cut report from MarketWatch: Planned job reductions at major U.S. corporations declined for the third month in a row in October, falling to the lowest level since March 2008, according to a monthly tally compiled by outplacement firm Challenger Gray & Christmas. Planned layoffs fell to 55,679 last month, down 16% compared with September and down 51% compared with October 2008. The BLS reports Friday, and the consensus is for 175,000 net job losses, and a 9.9% unemployment rate, for October.