Bond Market Open October 07 2009

Prices of Treasury coupon securities are posting very modest gains in overseas trading. A search of news sources does not shed any light on the price movements as the news is a potpourri of information. Global equity markets continue to surge, though the gains at this hour (530AM in New York) are temperate. Futures markets are indicating modest gains in the US when trading begins several hours hence.

Kansans City Federal Reserve President Hoenig added his name to the chorus of Federal Reserve officials endorsing higher rates. He suggests that the central bank should raise rates sooner rather than later and offers the opinion that even a 1 percent or 2 percent funds rate would be quite accommodative. He joins Warsh and Lacker who have each made similar statements. New York Reserve Bank President Dudley took the opposite tack yesterday.

There is one piece of economic data in the US today and that is the monthly report on consumer credit. It has been diving lately as the last report  showed that consumer credit was contract at an annual rate of more than 10 percent. August was clunker month so one would expect a better result in August.

The main focus of trading today will be the auction by the Treasury of $ 20 billion 10 year notes. I think that the issue will come with an outright concession as well as a larger concession on the curve. As we speak the 10 year trades around the 3.25 percent level. I suspect a test of what should be strong support at the 3.30 percent level. I also expect that the gap between the 10 year note and the shorter maturity 2 year note and 5 year note will widen into auction time.

Tomorrow the Treasury will auction $ 12 billion Long Bonds. I think that issue will suffer today with the 10 year note.

Currently the yield on the 2 year note is 0.90 percent which is one basis point lower than its closing level yesterday. The yield on the three year note has slipped a basis point to 1.42 percent. The yield on the 5 year note has dropped 2 basis points to 2.22 percent. The yield on the 7 year note has declined 2 basis points to 2.83 percent. The yield on the 10 year note has slipped 2 basis points to 3.24 percent. The yield on the Long Bond has dropped 2 basis points 4.05 percent.

The 10 year/30 year spread is unchanged at 81 basis points.

The 2year/10 year spread is a tad narrower at 234 basis points.

The 2year/5 year/30 year spread is 51 basis points.

Markets live transcript 7 Oct 2009

Markets live chat transcript for the chat ending at 12:12 on 7 Oct 2009. Participants in this chat were: Neil Hume, FT (NH) Bryce Elder (BE)   NH:HolaNH:It’s 11.03amNH:and that means it is time for another Markets LiveNH:FT Alphaville’s daily spin around the marketsNH:my co-driver today is...

Gold off the charts and heading to $1,500 says BarCap

Yep, that's right $1,500 an ounce -- although we must confess we don't fully understand why. See if you can make sense of Wednesday's call from the Global Commodity Technical Strategy team at BarCap: Gold has threatened to break above its 2008 high for many weeks now and finally managed to do so today....

Versace ditches Japan’s designer-handbag index

Forget GDP growth, industrial output, trade balances and the Tankan survey of business sentiment. The most telling indicator of Japan's economic mood came in this story out on Bloomberg on Wednesday: Versace to close Japan stores, will review strategy. Reports Bloomberg: Gianni Versace SpA will close its Japanese stores and review its entire business strategy,...


After yesterday's post on American national debt and the value of the dollar, a reader asked to see debt/GDP ratios for other countries as well. Here is a table from the IMF (Int'l Monetary Fund) - click to enlarge.

Government Debt As % of GDP

Japan has the largest government debt in relation to its GDP and has been in this position for over a decade, as its government has fruitlessly attempted to revive a stagnant economy by spending public money on useless infrastructure projects, mostly roads and bridges to nowhere (what if they had spent it on "green" instead?). But then again, Japan's domestic savings readily finance this debt and the yen is not a global reserve currency. This should serve as a warning for our own policy makers, who continue to serve out red ink as if it were green beer at an Irish pub on St. Patrick's day.

The US government debt is projected to reach 97.5% of GDP at the end of 2010, the third largest in the G-20 after Japan and Italy (another perennial debt basket case, with the added twist of Mr. Berlusconi as Prime Minister). In absolute numbers the US has the largest debt in the world, of course.

Now, being the world's reserve currency perforce means that an adequate supply of dollars must be available globally to act as reserves and be used in pricing and trading various commodities. But how much is, in fact, needed for these functions? That's the multi-trillion dollar question, isn't it? Too little makes the dollar too dear and strangles the global economy, while too much makes it increasingly worthless, so people don't want to hold onto it, preferring hard assets instead ( including another, "harder" currency).

For quite some time now we have been flooding the world with too many dollars, first from the private sector in the form of mortgage, consumer and corporate debt and now as government bonds. To be sure, some of those Treasury bonds and bills are simply replacing private debt that defaulted on the books of banks and investors world-wide. That's what constitutes a financial sector bailout by the government: socializing private losses.

The battle of the dollar to keep its global reserve status may, therefore, be summarized thus: can US authorities regulate the amount of newly-issued debt so that it does not exceed by much what is currently defaulting? If the Great Recession keeps the flood of defaults going, then overall debt goes down through write-offs, the absolute number of dollars declines and the dollar becomes relatively more valuable. If, on the other hand, the economy stabilizes and starts to improve there are fewer defaults, more debt on the books and the value of the dollar declines.

This explains the inverse relationship between the value of the dollar in foreign exchange markets and prospects for the economy, as seen in stockmarkets and other risky investments such as junk bonds and second-rate mortgages. Stocks go up, the dollar goes down and vice versa.

It is a bit ironic and counter-intuitive: If the US economy starts tanking again, faster than the government can issue debt and induce domestic and foreign investors to buy it, then the dollar may strengthen - for a while anyway, until the nation's ability to service this debt ultimately comes into question.

You are now leaving the Twilight Zone

So say the strategy team at Citigroup in a hefty report published on Wednesday morning, which predicts global equities will make decent, if unspectacular gains, over the next couple of years. Now, in case you are wondering what the Twilight Zone is, or was, here's a quick refresher from Citi's Robert Buckland:...

Q&A: Joseph Stiglitz Sees Welcome Change at the IMF

For years, Joseph Stiglitz has been the scourge of the International Monetary Fund. Since the Asia financial crisis of a decade ago, he has excoriated the IMF for making matters worse in developing countries by pushing them to cut budget deficits during recessions, rather than help them pursue expansionary policies. But the Nobel-prize-winning economist and best-selling author has seen a change in the IMF’s behavior.

Stiglitz says the IMF is beginning to come around. (Getty Images)

He discussed his views while eating kebab with Bob Davis of the Wall Street Journal during the IMF’s annual meeting in Istanbul. Below is an edited transcript.

What was the most significant part of the IMF meeting?

Stiglitz: The strong statement that [IMF Managing Director Dominique] Strauss-Kahn made that there is an asymmetric consequence of a withdrawal [of fiscal stimulus.] If you do it too early, the costs are very great compared to waiting too long. And his statement that we ought to be waiting until the unemployment is down long enough [before starting to withdraw stimulus.] It’s a repositioning of the IMF from what it has been historically. Now it says it believes in Keynesian economics, that stimulus works and that it cares about unemployment.

There was a great deal of discussion at the IMF meeting of Strauss-Kahn’s idea to turn the Fund into a kind of global central bank — a lender of last resort to nations. Part of the reason for his idea was to encourage countries to reduce their foreign currency reserves. What’s your view of that proposal?

Stiglitz: I was surprised how much global reserves were part of the discussion [in Istanbul]… Reserves are important. If countries are putting aside large amounts of reserves, that’s money that’s not being spent. When you say you need more global demand, an obvious way to resuscitate global demand is to fix the global reserve system.

Were you impressed with Strauss-Kahn’s proposal or did you have something different in mind?

Stiglitz: There is just the beginning of a discussion. The argument put forward is that if nations could come to their friendly neighborhood bank — the IMF — when they need money, they would have less need to put money in reserves.
The problem with that idea is if you’re going to give up self-insurance, which is what the accumulation of reserves amount to, and go to cooperative insurance through the IMF, you have to be confident that when the times comes that you need the money, the IMF will provide it without conditions. But the IMF has always operated in the past with much more circumspection.
The problem is that even countries whose polices are seen as good [by the IMF] know that its next administration may not be seen as good. You don’t want to leave yourself in the situation where you have not accumulated reserves and you have lost favor [at the IMF]. It also may be that the next administration is good, but the IMF has changed its definition of good.
The result is that it’s unlikely that countries — particularly given the history of the IMF — will feel sufficient comfort in this new collective insurance to give up much of their desire for self- insurance.

Do you have a better idea?

Stiglitz: There are a number of better ideas that are closer to what [John Maynard] Keynes wanted when he went to Bretton Woods [where the IMF and World Bank were created]. The basic framework is something along the following lines: Countries of the world get together and decide to issue a new global reserve currency that will be exchangeable into their currencies. Every year they issue a certain amount of these, which represent say half of what countries would normally put into reserves. So rather than having to not spend to accumulate reserves, the poorer countries get a grant which they put in reserves and which is there when they want it. It’s up to their discretion.
Here’s a metaphor to explain the idea. Assume that beneath the IMF building they suddenly discover a gold mine. Every year it produced $600 billion of gold. Then the IMF would have to decide who to ship the gold to. Say, there was a sense of social fairness and they give it disproportionately to the poor countries.
Now the countries have gold in their reserve and they don’t have to put away their own income. A little bit later someone comes up with the idea that you really don’t have to ship the gold, we’ll just ship some pieces of paper saying underneath the IMF you own some gold. Then you realize it doesn’t really matter that there is gold under the IMF, so long as people are willing to exchange their pieces of paper for other pieces of paper called euros, dollars.

Wouldn’t you need a new institution to distribute these new reserves if the IMF isn’t trusted?

Stiglitz: Unlike the IMF, there couldn’t be conditions attached to the distribution. [The institution] probably couldn’t be branded IMF. But that’s less important than the broader issue of creating new reserves and the automaticity of distribution.

You’re sounding a lot more positive about the IMF given your well-known opposition to how the IMF operates.

Stiglitz: They should be recognized for not repeating earlier mistakes they made during the Asia crisis. Strauss-Kahn is presenting the institution in a very different way. They are acting more openly.
Still, the IMF is engaged in contractionary macroeconomic policies in many of its programs, maybe even most of them. What the IMF would say is if it were not for our funding, it would even be more contractionary.
There are still anxieties[in borrowing nations]. Several countries have expressed the concern that [the IMF] is putting the screws to them. They complain they are being pushed on exit strategy [to withdraw stimulus].

Do you credit Strauss-Kahn for changing the IMF in ways that you consider an improvement?

Stiglitz: He’s played a transformative role.

Capitalising on recapitalisation…

... is something that can be done by buying European banks' Tier 1 bonds -- even hybrid ones -- according to Société Générale credit analysts. The whole thesis is based, firstly, on the idea that under new regulation (the strengthened Basel II, for instance) many banks will need to raise new capital....

Latvia preparing for devaluation?

On Tuesday, we reported that Latvia's government was taking legislative steps to change the sums lenders could collect on outstanding mortgages to better reflect the current market value of the properties. We argued this was probably a move to sidestep the need for devaluation of the local currency -- the lat....

Reflation, deflation, greed & fear…

Should we be worrying about inflation? Deflation? Reflation? Or, perhaps, as CLSA's Asian equity strategist Christopher Wood suggests further down, none of the above? But first, the FT's John Authers kicks off the debate with his Short View column on Wednesday, noting that the market "has its story straight":...

Charting Spain’s flujo de fondos

A Spanish chart bonanza courtesy of JP Morgan. The second-quarter flow of funds data, which documents things like spending and savings behaviour, for Spain is now available and JPM has helpfully provided us with the charts. And, as JPM economist Greg Fuzesi notes, there have been some rather dramatic adjustments....

US Dollar: “I’m Not Dead Yet!”

Analyzing currencies is weird, and most people don’t get it.  Sometimes, I think I don’t get it.  There is nothing fixed in our economic world, no fixed measure of value.  Everything trades against everything else.  Currencies exist to make the trading easier.  Imagine a matrix that is millions by millions, with trillions of exchange rates for one good or asset against another.  With currencies, it simplifies.  Each nation prices out goods and assets in their own currency, and then currencies trade against each other, subject to arbitrage with commodities, and commodity-like assets.

Anyone who has read me for a while knows that I am not a bull on the US Dollar.  But where I part ways with the grizzly bears (call me a teddy bear :) ), is that the fundamental accounting identities must be maintained.  Whatever country of our world has the status of reserve currency must issue debt, and a lot of it, that other countries can invest in to park their idle cash balances.

It does not matter what currency crude oil trading, or any other trading, is denominated in; it does matter in what currency the proceeds from the sale of crude oil is invested in.  So long as the US runs current account deficits, foreigners must acquire US assets in order to fill in the gap.  In the past that has mainly been bonds — agency, mortgage, corporate, but increasingly Treasury notes.

It is not that easy to abandon the US Dollar.  Where do you go?  The yen will suffer for years as Japan heads into demographic decline and large structural budget deficits. The Euro is still an experiment; there are many pressures on it; its survival is mot assured. Nothing else is large enough or stable enough, or mature enough to run the deficits necessary to have the debt markets, to be the global reserve currency.  As an example, China does not want to run deficits, nor is its financial system strong enough to bear the wear and tear of global use of its currency.

So, when reporters write pieces indicating the imminent demise of the US Dollar, I don’t buy their arguments:

Other parties disagree with the worry:

If the money is not invested in US Dollar investments, where will they invest? That is the question.

Now, there are other issues. China  could queer global trade by asserting that entities in China could default on obligations from derivative contracts and not worry about it.  Why is this big?  If a major country does not respect contract law, that country will not be respected in global trade.  Granted, China is a creditor, not a debtor on net, but the ability to transfer capital is paramount in the global economy, and if China will not honor contracts, that will bite them.

Away from that, I was fascinated by Australia’s interest rate hike.  It makes me bullish on the Australian Dollar, even after its significant rise.  That said, don’t move too aggressively, because eventually US Dollar rates will rise.

My view is that the US is in a Japan-like funk, which it will not rise out of for years.  I don’t think the Fed will move aggressively — they will be timid.  It is easier to argue to Congress that they did their best but conditions were severe, than to argue that they headed off inflation, but many people were unemployed.

Unless Europe moves to a full political union, or China frees its economy, there is no real competitor to the US Dollar.  Yes, the dollar will likely decline over the next decade, but it will not be likely to lose its reserve status, unless a commodity standard currency comes into being.

A Tax Credit to Encourage Hiring?

Would a tax credit for businesses that create new jobs be enough to turn the employment picture around?:

Support Builds for Tax Credit to Encourage Hiring, by Catherine Rampell, Ny Times: The idea of a tax credit for companies that create new jobs, something the federal government has not tried since the 1970s, is gaining support among economists and ... has some bipartisan appeal...
One version of the approach, to be unveiled next week by the Economic Policy Institute,... would give employers a two-year tax credit if they increased the size of their work force or added significant hours of work (for example, making a part-time worker full time). ...
“It’s beautiful if it can be timed at a dire moment like this, when unemployment is way too high and appears to be going somewhat higher,” said Mr. Phelps, an economics professor at Columbia, lamenting that the president dropped it from the $787 billion stimulus plan approved in February. “But it’s a pity that this wasn’t done a year ago.” ...
The federal government last tried this measure in 1977-78. During that period, employment — which had been soft from the 1973-75 recession — climbed at a record pace. The creation of one out of three jobs that was awarded the credit then was attributed directly to the policy. But the permanence of those jobs was less clear, and some dispute how many of those positions would have been created eventually anyway. ...
Timothy J. Bartik, a senior economist at the Upjohn Institute for Employment Research who is working on the draft with John H. Bishop of Cornell, estimates that it would cost about $20,000 for each job created. ... The authors estimate their proposal could create more than two million jobs in the first year. ...
An American Economic Review study has suggested that the 1970s policy was responsible for adding about 700,000 of the 2.1 million jobs that were awarded the credit. This may sound modest, but if accurate, economists say it would make this proposal a successful and relatively cheap way of creating jobs.
Advocates argue that such incentives would be more effective this time around not only because of design, but also because of timing. In 1977, hiring was already on the upswing, whereas economists expect today’s job market to decline a bit more and then stagnate for months.
“Now is a better time than ’77 was because we’re closer to the bottom of a recession,” said Daniel S. Hamermesh, an economics professor at the University of Texas, Austin, who helped create the 1970s plan. “This could help an uptick proceed more rapidly.”
But critics of the idea argue that businesses hire based on actual demand for their products, and a minor subsidy for adding an employee will not make up for the collapse in demand across the broader economy. ...
Barack Obama ... proposed a job creation tax credit during his presidential campaign, and then in discussions for the stimulus package. The proposal was eventually killed because of concerns that employers would exploit the tax credit. For example, companies might close and reopen, claiming credit for all their “new” employees.
Even advocates acknowledge that, as with any tax incentive, employers and their accountants will take advantage of loopholes. But they argue that with strong rules ... the proposal could minimize such abuse. ...

It's worth a try, but just because both sides might agree doesn't mean it will be enough on its own to solve the employment problem. To have a chance of doing that, I think a policy like this needs to be combined with demand-side policies that create the need for more workers, the tax credit alone won't be enough. So yes, let's try this, but let's use it in addition to rather than a substitute for additional stimulus measures (which are being called other things for political reasons) that directly increase the demand for workers.




FunTimes Capital? FugTin Asset Management? Figtan Advisors? FatTom Fund Capital? NagNag Capital? FitNag Fund Management? GitNaf? GaffIt? How can thinking up a name be so difficult? My compliance officer has set up a couple of companies and I have the Change of Name resolutions ready for signing. Starting a new business, even if you have done it before, is not as fun second time round.

It was pleasing to hear that the next UK government is to scrap National Insurance tax for companies with less than 10 employees; given most Asset Managers set themselves up as Limited Liability Partnerships where there is no NI for the partners, this is a kind gesture but doesn’t go far enough. NI should be abolished completely.

Not that have a simplified tax system has helped Latvia. With projected growth of -30% and the country being bailed out by me and the rest of the EU, I still don’t understand why the Euro is such a popular currency. Spain and Ireland are bankrupt too and France is lying through its teeth.

Another day of inactivity and I opened up a spread betting account (after getting sign off from the new Compliance Officer that I wasn’t breaching Personal Account dealing rules: it seems not – betting is fine but running a portfolio is not).

I am getting itchy feet already but I have to learn to be patient. Today I travel British Airways. I hope they don’t go on strike because I do hate it when my plans don’t go to plan. A bit like my prediction of crash 2.0. It will happen, and is happening, it is just that there are lots of newbies piling in at the top of the W. In the case of BA I just hope the unions are slow to do anything.



THE? PRICE?of gold surged to an all-time high of over $1,040 a troy ounce yesterday, as falls in the US?dollar caused investors to go on the hunt for alternatives.

A surprise interest rate rise in Australia contributed to the US currency falls, as the higher yields on offer Down Under caused traders to ditch the dollar.

Spot gold prices rose as high as $1,043.45 an ounce during intra-day trading yesterday, while US gold futures were as high as $1,045 an ounce in New York.

Fintag says
Gold going up at the same time as Equities? Of course this new Arab currency has been discussed here many times. The Euro will soon replace the Dollar as the oil currency of choice. All this talk about a Chinese basket is pants. Most of the Asian currencies are implicitly or explicitly pegged to the USD anyway.

telegraph says ” Gold price hits record high “

breaking views says ” Appreciation when it’s due “


seeking alpha

For the last few months I have been casting around looking for bullish data points as counterfactuals to my more bearish long-term outlook. I have found some, but not enough. If you recall, early this year, I stated that we are in depression, making the case for the ongoing downturn as a depression with a small ‘d.’ Nevertheless, I was quite optimistic about the ability of policymakers to engineer a fake recovery predicated on stimulus and asset price reflation and I certainly saw this as bullish for financial shares if not the broader stock market. But, I saw these events as temporary salves for a deeper structural problem.

Fintag says
Denial. Pure an’ simple.

green faucet says ” The Quant View: Looks Like Groundhog Day “



After suffering through a tough period of falling asset values and client withdrawals, the hedge fund industry may see assets rebound by 10 percent or more in the second half of the year, according to one data provider.

HedgeFund Intelligence said on Monday there were signs that investors were beginning to put money back into hedge funds, while continued performance gains in the third quarter would also increase asset levels, Reuters reported.

Fintag says
Now that is good news. Unfortunately most of this rise is outside of Europe.

bloomberg says ” Asian Hedge-Fund Assets to Double on New Money “

finalternatives says ” Hedge Funds Up 2.2% In September “



Private banks are starting to target the not-so-wealthy as they look to win market share after the financial crisis, financiers told the Reuters Wealth Management Summit. “We would also take people with 800,000 (Swiss francs),” said Boris Collardi, the company’s chief executive, referring to the amount potential clients could invest.

Fintag says
Poor ol’ Switzerland. UBS has trashed its banking model and nobody wants to bank there.

financial times says ” ING to sell Swiss private banking unit to Julius Baer “


financial times

Europe’s biggest industrial companies face the prospect of having to raise tens of billions of euros because of a proposed regulatory crackdown on “over-the-counter” derivatives.

Eon , Europe’s largest utility, said that it could have to raise about €7.5bn in new credit lines or extra cash reserves if the proposals from the European Commission were passed.

Fintag says
It is clear the Socialists of the EU want to ban derivative trading. They want old fashioned loans and deposits. No more futures trading (welcome to volatile commodity prices), no more hedging (welcome to volatile NAVs), no more structured products (no more tax arbitrage).

After the Romans left the UK, for many hundreds of years we went back to living in mud huts and eating grass. Looks like Europe is going to be doing the same. History repeating itself.

The USA and Asia must be laughing themselves to sleep …

(First prize to the person who guesses which Bank this is…)



Don’t worry about the U.S.-China trade war over poultry and car tires. Worry about the coming conflict over T-bills and derivatives. Has a mini-trade war has broken out between the United States and China? On Sept. 12, the Obama administration imposed a 35 percent tariff on tires imported from China. In response, China said it would look into the prices of chicken feet sent from the United States to China. Last week, the New York Times reported that tariffs have been slapped on U.S. imports of Chinese solar panels. Free-traders have begun to worry that President Obama might be back-pedaling on his commitment to open markets.

Fintag says
Funny how this has been kept quiet.



Take an exclusive peek at the first issue of Stylist – it targets women in their 20s and 30s and launches tomorrow. Free women’s weekly magazine Stylist hits the streets tomorrow – but founder Mike Soutar says it is not aiming to steal sales from paid-for rivals such as Grazia.

Around 400,000 copies of the magazine – which can be seen in digital form exclusively here – will be distributed in six cities across the UK.

Fintag says
Good to see GLG behind this. I shall certainly be reading it everyday or should I say looking at the pictures…

links for 2009-10-06

VIX Defining a Range Between 22 and 30

The CBOE Volatility Index, which is usually referenced here by its ticker symbol, VIX, seems to be settling comfortably into a range between 22.00 and 30.00 that is has traded in since early July. Given that the relatively narrow eight point range has now held up for three months, there is a natural tendency to wonder whether the VIX has started to form a natural top and bottom that will result in an extended stay in this range.

The chart below tracks the daily movements in the VIX back to August 2008 and shows how the gravitational forces working on the VIX have pulled it back from just shy of 90 to the low to middle 20s. This is still above the 19.00 – 22.50 range that prevailed in August 2008, but not by a large margin.

Even with all the uncertainties surrounding the upcoming earnings season – which Alcoa (AA) technically kicks off after tomorrow’s close – I still think there is a strong probability that the VIX spends the balance of the year in the same range that it has been during the past three months. In fact, with earnings next week from the likes of General Electric (GE), Bank of America (BAC), Citigroup (C), JPMorgan Chase (JPM), Goldman Sachs (GS), Intel (INTC), International Business Machines (IBM), Johnson & Johnson (JNJ), CSX and others, I expect the tone for the balance of the year to be established in another 2-3 weeks, at most.

As volatility tends to escalate prior to earnings, there is a strong temptation sell some options – including VIX strangles – before the third quarter results start pouring in. I will have more on some VIX short strangle trading ideas in short order.

[source: StockCharts]

Qualcomm Tries To Spark Interest In FLO TV; To Sell Handheld

Qualcomm (QCOM) late Tuesday unveiled plans to sell a stand-alone handheld television for accessing the company’s FLO TV service.

The new FLO TV Personal Television will be available for the holidays, priced at $249.99. Service will start at $8.99 a month. The device has a 3.5-inch diagonal screen, and weighs just over 5 ounces. The battery provides more than 5 hours of viewing, or 300 hours of standby. The unit has a capacitive touch screen for navigation.

FLO TV, unveiled at CES in January 2007, and originally known as MediaFlo, was initially intended to be viewed on mobile phones. But it hasn’t gained much traction; whether a stand-alone device will be a more appealing option for consumers interested in mobile television watching we’ll have to see.

Has Bing Lost Some Zing?

New U.S. search data from market research firm Experian Hitwise suggests that the recent rapid market share growth by Microsoft (MSFT) Bing has leveled out after rising for several months.

In September, Bing had 8.96% of the U.S. search market, Hitwise reports, down from 9.48% in August.

Meanwhile, Google (GOOG) took 71.08% share for the month, up from 70.24% in August.

Yahoo (YHOO) had 16.38% of the market in September, down from 16.96% in August. (IACI) had 2.56% share in the month, up from 2.37% in August.

Amazon Cuts Kindle To $259 From $299; Unveils International Version For More Than 100 Countries (AMZN) has cut the price of the Kindle e-book reader to $259 from $299, the company announced. Amazon also unveiled plans to sell an international version of the Kindle in more than 100 countries. The international version will be priced at $279; it goes on sale October 19. Until now, the Kindle was only offered in the U.S.

Like the U.S. version, the international version of the Kindle will provide wireless access via 3G cellular networks.

On Tuesday, AMZN rose $2.24, or 2.5%, to $90.91.

Australian rate rise boosts gold

Gold prices hit a record high and stocks rallied after Australia’s surprise interest rate rise on Tuesday boosted confidence in a global recovery. Australia stunned the markets, becoming the first G20 country to raise rates in more than a year by lifting the key rate 25bp to 3.25% and driving the Australian dollar to a 14-month high of $0.899....