Gold was under pressure right from the open in Sydney on Wednesday morning. This pressure accelerated once London was open for business. The bottom was in about fifteen minutes after Comex floor trading began in New York. A rally began that was highlighted by a big spike in the price around the time of the London p.m. fix. Was it that…or Geithner’s lips moving? The top price of the day arrived shortly after Comex trading ended and electronic trading commenced. All in all, a very interesting 24 hours.

The usual N.Y. commentator had this to say about yesterday’s activities…”Wednesday’s dramatic Comex session was notable for huge volume–particularly before the Geithner “Open Mouth/Insert Foot” incident. By 10 a.m., 117,039 lots were estimated to have traded, with gold being successfully contained. A spike after the Geithner report carried April gold to up $18.20 on the day…although this was partially eroded on very heavy

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We just got May existing home sales data from the National Association of Realtors. Here's what the numbers looked like ...* Sales climbed 2% to a seasonally adjusted annual rate of 4.99 million in May from 4.89 million in April. That was slightly better than the average forecast of 4.95 million home sales. Sales were down 15.9% from the year-earlier reading of 5.93 million.* By region, sales rose 4.6% in the Northeast, 5.5% in the Midwest, and 2% in the West. They fell 0.5% in the South. By property type, sales climbed 1.6% in the single-family market and 5.5% in the condo arena. * The supply of homes for sale dipped 1.4% to 4.49 million units in May from 4.55 million in April, but climbed from 4.378 million a year earlier. On a months supply at current sales pace basis, inventory dipped to 10.8 months from ...

Speaking of higher inflation (see previous post) ... there are so many bad outcomes that could come from this especially in an economy which needs its life blood of "cheap money" to exist (solve problems).... I cannot even begin addressing all the myriad issues but let me throw one out - long term rates will be going up as inflation expectations pick up; and you know what is tied to long term rates - mortgages. So what happens to home prices when mortgage rates go up? They must go down - because higher rates means it costs more to own a home. Oh dear. Housing recovery of spring 2008, err summer 2008, err fall 2008, err spring 2009, here we come. But never fear the statistics show a "surprising increase in home sales" in certain areas - they forget to look behind the curtain and mention that these are

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Short post: RBS has taken very few charges on its HELOC buiness. I have pointed out that - at least for some houses the price has fallen to near-zero - and the HELOCs are worthless. This is true for about half of Detroit (an area laden with Charter One branch originated HELOCs). I will leave you one factoid from todays Wall Street Journal: For the first four months of this year, home sales in Detroit, excluding suburbs, totaled 3,360, up 48% from a year earlier, according to the Michigan Association of Realtors. The average price dropped 56% to just $20,514. That average is so low because many of the sales involve decrepit homes in neighborhoods with few jobs. Does anyone believe - even remotely - that Fred Goodwin or Larry Fish have an iota of credibility? Advice to the board: terminate them for cause. Then resign yourself.