Mark to Unicorn

I couldn’t help laughing after reading the phrase “mark-to-unicorn.” While the phrase was not coined by the linked article, the article tells it like it is and is well worth reading. News of RBS having capital problems just reinforces the point that the accounting rules change that allows banks to lie on their balance sheets is the mirage that currently keeps the major financial institutions of this world afloat.

Stocks in Asia rose 1.2% Monday continuing the hope-fest started in the U.S. the previous week. In Europe and the U.S., the rally in stocks fizzled as both closed nearly unchanged on low moderate volume. Tuesday, stocks in Asia gave back about half of Monday’s gain, dropping 0.6%. In Europe, stocks gained 0.4%, but in the U.S. stocks gained 0.5% on low volume.

Wednesday, stocks in Asia followed the prior-day sentiment in the West and rose 0.8%. In Europe they closed unchanged and in the U.S. they fell 0.5% on low volume as the FMOC’s still dovish statement didn’t surprise with greater hope for the feeding frenzy. The VXO rose 4% to close at 12.71.

Thursday, stocks in Asia gave back the previous day’s gains dropping 0.8%, while stocks in Europe rose 0.4%. In the U.S., stocks dropped 0.4% on low moderate volume. Precious metals and their miners dropped 3% while notably Silver Wheaton dropped 7% on news that development of one of its major planned streams would be stopped by Barrick Gold.

Friday, stocks fell in Asia slightly and in Europe 0.3%. In the U.S., stocks held steady on low volume. Precious metals lost another 1% and their miners 3% or more, while the 10-Year U.S. Treasury Bond yield rose over 3% to close at 2.62, but the VXO dropped 4% to settle in at 12.03.

For the week, stocks were unchanged but for the often scary month of October, stocks rose 5%. For the week, precious metals lost nearly 5% and their miners about twice that — erasing the gains of the previous week.

 

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