- Bernanke urges to let the Fed keep all of its banking oversight.
- BoJ's loan program may resound more with Government than economy.
- Brazil central bank leaves key rate at 8.75%.
- China conducts stress tests to gauge impact on industry of end to yuan peg.
- Euro weakens and Greek stocks and bonds fall due to bailout plan.
- Gov't bank regulators got big bonuses despite missing warnings signs of crisis.
- Greek PM Papandreou says austerity program not sustainable due to high borrowing costs.
Summarizing Today's Fed Chairman Q&A: Prepare To Vastly Exceed Your Recommended Daily Allowance Of Bernanke's PrevaricationsSubmitted by Tyler Durden on 03/17/2010 - 23:47
We comb through today's key Q&A by Ron Paul, Brad Sherman, Spencer Bacchus and Scott Garrett to find all the relevant instances in which Ben Bernanke either a) pleads the fifth, b) provides reasons to doubt his sanity, c) confuses what monetary policy is all about (not to mention cause and effect), d) forces Zero Hedge to send an Econ 101 textbook to the Marriner Eccles building c/o Ben Shalom Bernanke, or, e) lies outright.
A lot of people theorize or blog about the future of media. However, a handful of people actually walk the walk. One such person is Larry Kramer.
Larry spent 20 years as a reporter and editor at the San Francisco Examiner, the Washington Post, and the Times of Trenton. However, during the tech boom in the 90s, Larry seized the opportunity to become a successful media entrepreneur when he founded MarketWatch and managed the company as Chairman and CEO.
Clinical Proof Of Banker Psychopathology: Repo 105's "Pimply" Importance To A Few Managing Directors' Lehman Equity StakesSubmitted by Tyler Durden on 03/17/2010 - 19:57
What is $50 billion between a couple of psychopaths? It's basically “a drop in the ocean” according to Max Abelson's account of how the Repo 105 fiasco is seen by the other side. Several ex-Lehman bankers speak off the record in "The repo men's new Lehman shrug" and confirm that not only is Wall Street terminally deluded in its own self-importance, but that basically everyone in finance is a megalomaniac, with no sense of relative worth, or any worth, for that matter, unless it goes straight into their back pocket. “I’m like, whatever" says London managing director #1, when asked what his reaction to the Repo 105 disclosure is. So when is it not "whatever?" $500 billion? $500 trillion? In its pursuit of finding ever more complex ways of defrauding the middle class silly (without the latter even being aware its share of net global wealth is about to decline from 1% to half that), Wall Street's bankers have passed the clinical psychopathology barrier, and will stop at nothing to destroy the wealth of everyone else not only with impunity, but with a smirk and a smile. Now that's net worth change you can believe in.
Seek and ye shall find. Never has this been more true than combing through theStreet's (much delayed if at all available) financials. As investors may have been digging through the company's SEC reports to find out just what the financial website's unadjusted EBITDA is (hint: much, much less than its "adjusted" cousin), one stumbles upon this gem just filed in today's Form 12B-25:
As a result of the need for the Company and its independent registered public accounting firm to focus attention on matters related to the Company's previously-announced review of the accounting in its former Promotions.com subsidiary, which subsidiary the Company sold in December 2009 -- including matters related to the preparation and filing by the Company in February 2010 of a Form 10-K/A for the year ended December 31, 2008, a Form 10-Q/A for the quarter ended March 31, 2009 and Forms 10-Q for the quarters ended June 30, 2009 and September 30, 2009, respectively, and matters related to an investigation commenced by Securities and Exchange Commission in March 2010 -- the Company requires additional time to prepare its financial statements, assess its internal controls and file its Form 10-K for the year ended December 31, 2009 ("2009 Form 10-K").
Oops. We can't wait to see how Mr. Cramer will explain to the Mad Money faithful this particular twist on the hangover of the show's five year birthday bash. Also, we wonder if CNBC will finally cancel the ludicrous Jim "truth" Cramer campaign once this news breaks. We doubt it- in the quest for evaporating eyeballs, all is fair.
Today will be day 12 of 13 (or something just as silly) that the market has been melting up on no volume: yet another truly ridiculous statistic in the anals of momoism. As David Rosenberg points out: "the market has been able to digest California, Dubai, and Greece" - and this has all been offset by what? Merely promises of ever increasing liquidity and bailouts by the Fed, first domestically, and soon internationally. Have people really forgotten yet again that this is precisely what got us on the verge of a historic collapse in the first place? Yes, the Fed bailed capitalism out last time around (with about 3 hours to spare), but this time it has gone dodecatuple all in, and unless intelligent, and very rich life, on Mars is discovered pretty quickly, this will all end in ruins (certainly those of the Marriner Eccles building).
Due to some upcoming travel, posting over the next few days will be somewhat sporadic. We will attempt to provide recap thoughts on any major developments, although we have a sense the task will be pretty much comparable to the job of a weatherman in San Diego: "The market was... up. Back to you." Please use this post as an open thread for items of relevance. We leave you with this video in which Bruce Caldwell, a Professor of Economics and the Director of the Center for the History of Political Economy at Duke University and expert "Austrian," discusses a very relevant topic for our day and age: Friedrich Hayek's observations on the Road to Serfdom.
Today Ben Bernake and Paul Volcker will lead Panel 1 at a hearing of the House Financial Services Committee on "Examining the Link Between Fed Bank Supervision and Monetary Policy." With the just announced news that the Volcker Plan is dead after all, we fully expect this to be the last public appearance of the former Fed chairman before he is stuffed back in the closet for good. After all with 8.33 bid to cover for 1 year Ukranian bonds what can go wrong?
The hearing can be seen live at 2 PM eastern at the following link.
Market pundits scrambled to fill up air time by attributing the market movement to this data or that comment. The market rally catalyst was quite singular however. As rumors spread of a firmed up Greek rescue package, and the S&P suggested it was shifting Greece out of ICU, the Euro soared. It spiked 0.7% which is a significant move in the currency arena. The result was immediately evident and dramatic. Gold spiked $20 and oil shot up over $2. Those moves came long before the FOMC statement. Those moves were not influenced by some piece of economic data. Those moves were not the result of some shift on the outlook for the President’s health plan. Those moves were the direct result of the jump in the Euro and the correspondent weakening of the dollar. We believe that the Euro/Dollar move was also the primary catalyst in the stock market. Given the action in gold and oil, the stock market’s reaction was rather mute. With such a strong tailwind, you might have expected something like a 100/150 point move in the Dow. The real question on stocks was what was holding stocks back given the currency boost.
- China in Midst of ‘Greatest Bubble in History,’ ex-LTCM General Counsel Rickards Says (Bloomberg) (click here for recent extended interview with Rickards)
- Coal beats solar as analysts favor Peabody while subsidies drop (Bloomberg)
- Steve Forbes on Fannie and Freddie: Ugly beasts loom again (Forbes)
- Feldstein Sees Greece Euro-Exit Pressures as Deficit Plan Fails (Bloomberg)
- Evans-Pritchard: The proposed EU Greek bail-out cannot simply bypass German law (Telegraph)
- Deflation: Producer prices post biggest drop in 7 months (Reuters)
- Ex-Lehman boss sees vindication in Examiner's report (Post)
- Hussman: Ordinary outcomes in extraordinary recklessness (Hussman Funds)
- Asian stocks, commodity prices rise on Fed rate pledge, BOJ lending expansion.
- Bank of Japan doubles credit program to $222B, holds interest rate.
- BoJ loosens monetary policy, increasing low-interest loans available to the money market.
- India may create sovereign wealth fund to help state entities to acquire overseas energy assets.
- OPEC Ministers poised to keep output steady with Oil over $80/bbl.
- World Bank raised its forecast for China's growth this year to 9.5%.
RANsquawk 17th March Morning Briefing - Stocks, Bonds, FX etc.
Earlier today Tim Geithner was interviewed by Fox Business' Peter Barnes. The interview itself was not notable, with Timmy "Repo 105s are perfectly legal: I signed off on them myself" Geithner toeing the party line on issues such as a the Renminbi (It is a very important issue. It’s an important issue for China. I think China will decide it’s in their interest to move." - uh, right, just as soon as the US decides it is in its interest to tighten a couple of trillion in extra liquidity), trade wars (“No I’m not concerned about that.”) and other Houdini issues that just distract from the center piece of America's middle-to-klepto class wealth transfer.No, what was hilarious was Peter Barnes Freudian slip not once, but on two occasions: "Isn't the New York Fed Wall Street's representative?"... and even after an immediate and adamant refutation by tax challenged one, Barnes asks once again: "But [the Chairman of the FRBNY ] does represent Wall Street and its views." Leading to a response of "No....No...."
Hillarious Freudian slip or the absolute and unmitigated truth - you decide.
ECB's Juergen Stark Warns Of "Clear Risk Of Sovereign Debt Crisis," Cautions Recovery Largely Due To Massive Support By Governments...Submitted by Tyler Durden on 03/16/2010 - 22:00
The ECB's executive board member Juergen Stark had a rare admission (and even rarer for a central banker demonstration of rationality) that not only are most advanced economies about to enter a "third wave, a sovereign debt crisis in most advanced economies", not only is a "timely exit of extraordinary fiscal measures crucial in order to ensure a continued recovery", but that the mentioned recovery and economic improvements are largely as a result of "massive support measures taken by governments and central banks." In other words, the whole episode of the past year has been a one-time item which most analysts would exclude from "recurring operations" yet due to the magic of the Keynesian magic wand, the new normal is expected to persists as the magical "consumer" at some point takes over the recovery from the government effort. Alas, while the economy has indeed stabilized (effect), the cause continues to be purely based on governmental actions, as the consumer, and the private sector in general, continues retrenching. Too bad the US Federal Reserve has no aerobic critters than can formulate the same critical thoughts as Mr. Stark, or else they would realize that the path they are leading the US on is pure disaster, and furthermore, with the lessons from the last bubble fresh in everyone's mind, doing all they can to be branded mad, at least according to the Einsteinian definition of insanity: let's just keep flooding the system with money and keep hoping that something will change. In retrospect, pleading insanity in a decade when the entire western world is in ruins, before a tribunal of the people may not have quite the desired effect.
PIMCO Total Return Fund Hits $214 Billion, Gross Cuts Cash By $14 Billion, Buys Treasuries And Foreign Government HoldingsSubmitted by Tyler Durden on 03/16/2010 - 18:49
Pimco's Total Return Fund has released its February holdings, which is now a ridiculous 54% higher than a year earlier, at $214.3 billion. The fund reduced it cash holdings from $19 billion in January to just $4 billion in February, and used the proceeds to buy $10 billion of US Treasuries ($75 billion in total), $5 billion in Mortgages ($36 billion), and also expanded further internationally, buying $3 billion in Non-US Developed country bonds (total of $41 billion). Pimco also surpassed the $10 billion mark in Emerging Market holdings. The firm kept its holdings of High Yield bonds flat at $6.4 billion. While there were no major asset reallocations, Pimco did change its curve exposure materially, eliminating all of its sub-1 year paper, which in January amounted to $17 billion. The firm added the most exposure to the 5-10 year bucket, which increased by $12 billion to $72.9 billion. The greatest amount of holdings is still in the 1-3 year bucket. Holdings of 20 years or over were a moderate $15 billion. Is Pimco gradually shifting to a flattener position?