After record bear and bull markets in both real estate and gold, the real estate:gold ratio might be telling us that we’ve reached an extreme trough in real estate prices. The ratio hasn’t been this low in over 30 years

Natural gas prices hit their lowest price levels since 2002 during the current decline at $2.289 in the March contract but has recovered by as much a 18.5% since Monday after Chesapeake Energy Corporation (the US’ second largest natural gas producer) said it will reduce dry gas drilling activity and production with immediate effect.

The US high yield (HY) market is starting to look somewhat frothy. We’ve had over $7 billion of fund inflows this month with $2.5 billion this week alone. Of the $2.5bn, roughly $1.5bn went into HY mutual funds and $1bn into HY ETFs. That compares to about half a billion into mortgage-backed bond funds and $700mm into muni funds (according to EPFR Global). With the Fed on hold for a while, investors are chasing yield.

The Fed is worried, and you should be too. That is the major take-away from yesterday’s FOMC statement, combined with its release of updated projections and Bernanke’s press conference. Despite the market’s cheering of the promise of a near-zero fed funds rate until late 2014 and the prospect of QE3, the Fed is fighting a lonely battle against severe economic headwinds—-and they know it.

In addition to seeing a steep term structure in the implied volatility of S&P 500 options, you can see the same phonomenom in the VIX futures curve. A simple way to make this obvservation is to compare the curve today versus the curve in late June of 2011, right before the European crisis caused a strong pullback in the equity markets.

The great hyperinflationary collapse is still coming.   Via a recent John Williams update:
“The U.S. economic and systemic-solvency crises of the last five years continue to deteriorate.  Yet they remain just …

Rail data has been all over the map in recent weeks most likely due to seasonal discrepancies.  This week’s data settled back towards the 10 week trend with carloads up …

The massive industrial company and economic bellwether says the outlook in 2012 is better than most presume. Specifically, they say there will be no global recession. Some highlights via this morning’s earnings:

Bullish sentiment stayed near 50% for the fourth consecutive week in the latest AAII Sentiment Survey. Bearish sentiment is unusually low for the third time in four weeks.

According to Robert Merton Senior there are five causes of unanticipated consequences:

There has been a deluge of articles recently about the upticks in the housing data. The consensus is that these data points are surely pointing , finally, to a bottom in the depressing decline of real estate. Let me acknowledge that I do not dispute the improvement in the data regarding home starts, permits, pending sales, etc., however, let’s be clear that all of these data points are still mired at very depressed levels.