Ian Mathias (The Daily Reckoning): The U.S. government will finish its historic streak of debt sales today with a record $16 billion offering of 30-year bonds. This will pile on top the $65 billion in 3-year and 10-year paper auctioned earlier this week, both records in their own right.

It’s worth noting that Monday’s auction for 3-year debt was met with ravenous, near-record demand and that Tuesday’s 10-year sale met a bid-to-cover ratio of 2.8… historically high for the 10-year, but not even close to the 3.3 ratio for the shorter dated bonds the day before.

“The market is sending many errant signals right now,” notes Dan Amoss. “U.S. policymakers are trying to reinflate stocks, houses and wages, while also recapitalizing an undercapitalized banking system with overt and covert subsidies. All of these actions are extraordinarily costly — so costly that creditors are getting nervous.

For the rest of the

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American markets at a standstill… can the Far East drive stocks forward? … Chris Mayer on buying “what China needs, but can’t make for itself” … Dan Denning’s pair trade for the next decade … Bill Bonner and Goldman Sach’s CEO on the current “bull market” … Plus, a CEO pay debate fills our inbox… your letters and our response, below…

The Dow crashed 1.4 points yesterday, wiping out Monday’s 1.3 point moonshot. Desperate for something beyond these 0.014% “swings,” the market’s putting China in the driver’s seat today… and these guys still have quite a lead foot:

Chinese auto sales soared 34% in May, year over year. According to the China Association of Automobile Manufacturers, the Red Nation scooped up 1.12 million vehicles last month, outpacing any nation in the world. Consider the course of the last 12 months,

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Jun 3rd, 2009 #124; By Ian Mathias As you’ve likely heard, a Chinese company will soon own the Hummer brand. Heh, let’s count the ways this transaction epitomizes the new economic landscape… 1. A Chinese company now owns an automaker that will build and sell cars in the U.S. – a first. 2. That company – [...]div class="feedflare" a href="http://feeds2.feedburner.com/~ff/YourFinancialFuture?a=PMjsiRNN7qw:YWhQy60SG9U:yIl2AUoC8zA"img src="http://feeds2.feedburner.com/~ff/YourFinancialFuture?d=yIl2AUoC8zA" border="0"/img/a a href="http://feeds2.feedburner.com/~ff/YourFinancialFuture?a=PMjsiRNN7qw:YWhQy60SG9U:F7zBnMyn0Lo"img src="http://feeds2.feedburner.com/~ff/YourFinancialFuture?i=PMjsiRNN7qw:YWhQy60SG9U:F7zBnMyn0Lo" border="0"/img/a a href="http://feeds2.feedburner.com/~ff/YourFinancialFuture?a=PMjsiRNN7qw:YWhQy60SG9U:7Q72WNTAKBA"img src="http://feeds2.feedburner.com/~ff/YourFinancialFuture?d=7Q72WNTAKBA" border="0"/img/a a href="http://feeds2.feedburner.com/~ff/YourFinancialFuture?a=PMjsiRNN7qw:YWhQy60SG9U:V_sGLiPBpWU"img src="http://feeds2.feedburner.com/~ff/YourFinancialFuture?i=PMjsiRNN7qw:YWhQy60SG9U:V_sGLiPBpWU" border="0"/img/a a href="http://feeds2.feedburner.com/~ff/YourFinancialFuture?a=PMjsiRNN7qw:YWhQy60SG9U:qj6IDK7rITs"img src="http://feeds2.feedburner.com/~ff/YourFinancialFuture?d=qj6IDK7rITs" border="0"/img/a a href="http://feeds2.feedburner.com/~ff/YourFinancialFuture?a=PMjsiRNN7qw:YWhQy60SG9U:l6gmwiTKsz0"img src="http://feeds2.feedburner.com/~ff/YourFinancialFuture?d=l6gmwiTKsz0" border="0"/img/a a href="http://feeds2.feedburner.com/~ff/YourFinancialFuture?a=PMjsiRNN7qw:YWhQy60SG9U:gIN9vFwOqvQ"img src="http://feeds2.feedburner.com/~ff/YourFinancialFuture?i=PMjsiRNN7qw:YWhQy60SG9U:gIN9vFwOqvQ" border="0"/img/a /div

Euro goes back and forth over 1.42…Geithner make another promise to China…RBA leaves rates unchanged…The Mogambo on a Tuesday! And Now… Today’s Pfennig!

Good day… And a Terrific Tuesday to you! Well… The currencies, led by the euro, ran into a dollar road block yesterday, not once, not twice, but three times… The first two times the euro traded over the 1.42 figure, it fell back, but recovered to again try to remain over 1.42… It was a classic case of profit taking at a line of resistance… But the third time, was no charm for the euro, and thus it ended the day and night sessions below 1.42… But hey! Has this run from 1.2578 on March 1st, been something or what?

I see where UBS believes this is it for the euro… Sort of like the thought that a star burns the brightest right before it burns out…

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Bonds down. Gold up $17. Someone seems to think there is a whiff of inflation in the air. Sniff…sniff….

We’re not so sure. It seems too early to us.

But we’re not even going to think about it. Today, we’ve got to make tracks. We’re traveling.

In light of our voyage we’re turning today’s essay over to guest host Ian Mathias, of Agora Financial’s 5 Min. Forecast. He’ll take over from here…

Your family’s share of the government debt is now over half a million dollars. A record $546,668, to be exact.

That cheery Monday stat comes courtesy of a USA Today study, which claims that each American family’s share rose 12% in 2008. That’s $55,000 in new government debt last year for every US household – thousands more than the median household annual income. Here’s how it breaks down:

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Notes from the Investment Underground

April 14, 2009

Palermo Viejo, Buenos Aires, Argentina

Richard Russell: Why this is a bear market correction… That latest outbreak of investor credulity… 25 biggest earnings-per-share movers and shakers heading into earnings season… Banks to be allowed to screw up indefinitely… The great “too big to fail” fraud… Bailouts costing $42,105 for each U.S. citizen… Bush-Obama tag team piles on debt at the rate of $60,000 a second… Bob Higgs on C-SPAN… China wises up… And more!

*** This Richard Russell quote is a must-read for investors thinking about buying back into stocks. Russell, now in his 50th year of publishing the excellent Dow Theory Letter, believes we are now witnessing a bear market correction.

The essence of Dow Theory has to do with VALUES. At the March low the price/earnings ratio for the Dow was 25.79 and the dividend ...

Gold booms after global strife, Byron King on whether the precious metal is still a buy… Stimulus bill a done deal, details of the final 1,073-page fiasco… States in peril, revenue crash causes budget crisis from California to New Jersey… Wal-Mart surprises Street, Rob Parenteau on retail’s sudden comeback… Stocks dive toward new crisis lows, equity advice from Mayer and Buffett… Plus, have you noticed? One major index quietly up 30% YTD…

So how’s the financial world faring so far this week? One chart should set the scene:

A seven-month high for our favorite metal may be sign that investors are losing faith in…. umm… everything. In fact, gold is up 33% since October, making it one of the planet’s finest asset classes during this “credit crisis.” Who’d have thought?

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The U.S. isn’t the only country rolling back on free-market principles. Communist China is also busy bailing out its economy. Over the weekend, the People’s Republic announced a $586 billion ’stimulus’ plan of it own. U.S stock futures are up on the news.

- Italy may be the next country to ‘rescue’ its economy with taxpayers’ money. According the The Times the Italian government was working on plans over the weekend to pump as much as $26 billion into its biggest banks.

- Uncle Sam is about to bailout AIG from its bailout. Apparently, the original handout was too tough on poor old AIG. So now its going to get a sweeter deal. This from the WSJ:

The U.S. government reached a deal Sunday night to scrap its original $123 billion bailout of American International Group Inc. and replace it with a new $150

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HIDDEN VALUE

Dear Friend,

America votes today.

Early indicators suggest turnout will be huge. We reckon most people in those long lines will have plenty to think about.

“U.S. voters are heading to the polls with stock and bond markets mired in the worst slump in three decades,” reports Bloomberg.

“Pity the poor fellow who wins,” says my dad, Bill Bonner.

Yes, dear reader, it’s going to be a baptism of fire for the new president. By inauguration day, on January 20, the economy will surely be in an ‘official recession’ (two consecutive quarters of negative growth).

Out of interest, an ‘official’ depression requires five quarters in a row.

Of course, these technical definitions won’t matter much to businesses, workers or consumers. They already know this crisis is going to be painful.

“The real danger economically, socially or politically speaking in the 1930s was loads of young men without jobs,”

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“The Master,” Alan Greenspan, yesterday admitted he made a “mistake.” We wonder if this is the first of such admissions from the former Fed head. Speaking to Congress, the one-time gold bug and Ayan Rand acolyte, said he had found “a flaw in the model” that he perceived “is the critical functioning structure that defines how the world works.”

– Greenspan said it was a “mistake” to believe that banks operating in their self-interest would be enough to protect their shareholders and themselves. He also called the current crisis “once in a century credit tsunami” that he and other policy makers didn’t see coming.

– Isn’t that the problem with policy makers in the first place? They never see things coming. That Greenspan claims not to understand the cause and effect relationship between artificially low interest rates over protracted periods of time and asset bubbles simply isn’t believable.

– The

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