Carl Levin wasn't kidding when he said he would refer Goldman to another set of Goldman subordinates: The DOJ and the SEC. Sure enough, as Bloomberg reports, "Senators Carl Levin and Tom Coburn, the Democratic chairman and senior Republican on the Permanent Subcommittee on Investigations, have signed a referral letter asking the agencies to examine the panel’s report, Levin said today in an interview." And now Goldman can finally pull all those high-CPM paying ads (for which the FT is very grateful) with photos of puppies and Ethiopian kids on them: obviously the humanitarian PR campaign has been an abysmal failure, and in fact is making the firm appear even shadier. "The scrutiny is a setback for Goldman Sachs, which hired lawyers, lobbyists and public relations specialists to monitor the two-year investigation and tamp down any controversy that arose from the subcommittee’s conclusions." On the other hand, as presaged in the first sentence with the keyword "subordinates" it is obvious that absolutely nothing actual will come out of this. Sure, someone may end up paying a fine that will amount to less than one day's worth of Goldman prop profits, but someone going to jail? Please...
Just like yesterday and the day before, 6:30pm is now the official precious metal "bang the afterhours" launch time. As we predicted minutes ago, silver just got taken to the cleaners on what is now an apparent attempt to push silver around in the no volume part of after hours trading, in the 6-7 pm no man's land. We expect an imminent rebound after this latest attempt to trigger stop losses, probably those around $40, fails. If it succeeds in pushing silver below $40 it is very possible that the metal can promptly trade down to the mid $30s as a result. And while banging the close has been investigated by the CFTC for years (resulting in some modest smacks on the wrist recently for the ex-Moore trader who did this with impunity), we are confident it won't be before 2015 that the CFTC's commissioners investigate this particularly odd behavior in silver and gold. By then it, of course, won't matter.
And now for something different. From Omid Malekan, the brains behind "the Bernank", and the xtranormal short clip cottage industry, comes this clip of proposed replacement sayings for that old adage of "Sell in May and go away." Alas, since the market is no longer, free, rational, or for lack of a better word, a market, but merely a plaything of the central banks, it is indeed time to provide a new set of slogans, especially since "BTFD" is getting a little stale. Among our favorite proposals: "Buy today's cause it's early May", "Buy tomorrow with funds you borrow", "Buy next week when the market is at a peak", "Buy like crazy when the outlook is crazy", "Buy all commodities without hesitation, but don't dare we have inflation", "Buy the REITs cause real estate is on fire, but don't you dare become an actual home buyer", and, without doubt the best: "Buy everything and laugh all the way to the bank, cause if any market ever goes down, you can sell to the Bernank." As usual, readers are encouraged to provide their own.
One would think that following the total "annihilation" (as it has already been pegged by some) in silver over the past few days, that Comex would promptly reverse its "temporary" reclassification of Registered into Eligible silver, or so the believers in Comex holdings claim. Which is why to our surprise we noticed that today, the Comex announced that the ongoing inverse reclassification from Registered into Eligible continues, with Scotia Mocatta seeing another 186 thousand ounces of physical silver moving into that dark pool known as "eligible" holdings.
An Illustrated Fat Finger In Healthcare Stocks Causes Avalanche Of Broken Trades And Pain For Anyone With A Sub 30% LimitSubmitted by Tyler Durden on 05/03/2011 - 16:33
Yesterday we reported that the NYSE was seeking to break a bunch of trades in healthcare related stocks, after an unprecedented surge sent Pfizer up to $90 and Eli Lilly over $60, Abbot Labs to $280, and JNJ to $100. Today, via MarketWatch we learn that this was not a now traditional HFT freak out, but apparently a "brokerage" fat finger. Why a brokerage would be executing in size at 6 pm Eastern, when the market to the best of our knowledge is beyond illiquid, is beyond us. From MarketWatch: "The sharp spikes in dozens of health-care stocks late Monday — trades eventually cancelled by two exchanges — were caused by a brokerage’s bad order on a basket of health-care stocks, said Nasdaq OMX exchange spokesman Frank De Maria. The exchange was not releasing the name of the brokerage, De Maria said by phone Tuesday. Late Monday, Nasdaq said it was cancelling trades in 26 healthcare stocks, and exchange operator Direct Edge decided to cancel trades on 52 stocks that traded more than 30% from their previous print and were executed between 4:57 p.m. and 5:05 p.m. Eastern. Cancelled trades included those of Boston Scientific Corp. , Medtronic Inc. , Aetna Inc. , Bristol-Myers Squibb and Baxter International." That said, if you were short into this flash smash with a stop loss that is 10%, 20% or even 29.99% away from the NBBO, you are fresh out of luck. And let that be a lesson to you: if you carry over a short from one day to the next, and have a sub 30% stop loss limit, you will likely see at least a 30% loss.
It is not a good day for MS, BofA and Aletheia Research, the top 3 holders of SLV respectively. While the next 13F update of SLV holdings will hit in two weeks, below we present the funds with the largest SLV holdings as of December 31. Granted, considering that silver has had a nearly 70% YTD gain since then we will probably not shed too many tears. Curiously, Texas Teachers, not to be confused with University of Texas established its entire 2.8 million share stake in Q4 of last year. We wonder if Kyle Bass is to be thanked for that as well. And more curiously: JPMorgan, with 3.6 million shares is the 5th largest SLV holders.
According to the National Stock Exchange April is so far shaping up to be a very cruel month for banks. After the March spike in trading volume and volatility in the aftermath of the Japanese earthquake and Fukushima disaster, April saw broad market volume tumble, particularly as represented by the one "synthetic CDO" product that everyone appears to be in: ETFs. While in March, ETFs accounted for 31% of all equity volume, in April, this number dropped to 27.5%, although it is the key components that bear pointing out. The traditionally most popular ETF, the S&P500 SPDR saw its notional volume plummet from $637 billion to just $386 billion, a 40% drop. If this is indicative of broader stock trading, then April will be a disaster for bank trading desks. Other key ETFs fared comparably: QQQ dropped 22%, and the XLF was down 43%. There was, of course, one major exception. See if you can spot it on the chart below and which should make everyone who is in it very concerned about a possible Finra margin hike in the ETF (because Finra will never hike margins in pure equity ETFs) as was discussed previously.
When it comes to precious metals, an often discussed topic is whether one should own precious metal stocks or the actual physical metals. Here's some things to ponder if you are considering placing money into either.
Let's ask the question. Why does one own metals' stocks? Answer? Because you expect metal prices to rise. Any answer you give after this, takes second place, third, fourth, whatever!
Has the time, when the end of QE is ultimately priced in, finally arrived? Following another steep sell off in silver, matched only by the decimation in Chinese stocks, it appears margin calls have finally come to crude, which just plunged by $2 in seconds. And if the answer is yes, is this the expected rotation from the inflationary to deflationary mood which is so very critical for Bernanke to launch his third and final QEasing episode? Expect a major spike in real vol (not VIX) here if we have finally come to the inflection point.
...And that would be bears as in cartoon bears, who are now back for the 6th installment of their periodic, and very much unique and extemely politically incorrect and PG-18 recap of key developments in the silver market. Love them or hate them, they do provide an interesting thought experiment on what happens if silver does finally experience the long-expected technical drop.
The Guardian, which always does the fastest analysis of Wikileaks cables, has just released that back in 2008, US forces were as close as a few hundred yards away from OBL's Abbottabad compound (which incidentally is home to the Pakistan Military Academy which trains officers from across the nation. The academy is streets away from where Bin Laden was tracked down and killed.) From the Guardian: "The revelation that US forces were so close to the world's most wanted man in 2008 comes after material from the Guantánamo Files suggested the US may have received the intelligence that led them to Bin Laden as early as 2008. The US soldiers were due to perform a routine posting "training the trainers" of Pakistan's 70,000 strong federal military unit, the Frontier Corps." What a very unlucky coincidence. Surely, it explains the increased need for caffeine consumption by the Al Qaedan who surely needed to stay up at night and listen for SEALs jumping over the compound walls: "The two polite Pakistanis who helped Osama bin Laden hide in the shadow of their country’s army bought bulk food orders, chose major brands and equally favored Pepsi and Coke, neighbors and a local shopkeeper said." We wonder if the shopkeeper also sold the insulin so very desperately needed by the highly diabetic bin Laden following his Coke binges.
Following relentless margin hikes in silver on various exchanges, here are some thoughts on what may happen as the "regulators" do everything in their power to bring down commodity prices down as the broader population increasingly creates their own gold (and as the case may be silver) standard.
According to a just released Washington Post-Pew poll, Obama's rating from Monday night, following the digestion of the bin Laden news, hit 56% as respondents say they approve of the way Obama is handling his job as president, an increase of nine percentage points over April polls by Post-ABC News and Pew. On the other hand: "the new poll, conducted Monday evening by The Washington Post and the
Pew Research Center, also finds virtually no movement in Obama’s numbers
when it comes to handling the economy." That said, "that is the highest approval rating for the president in either poll since 2009." Alas, if history is any precedent, the small boost will rapidly wane unless the president does something about the number one concern on voters' minds: (no, not the Russell 2000) - gas. "Compared with the mid-April Post-ABC poll, Obama’s approval rating among independents is now 10 points higher, at 52 percent. Bush got an identical 10-point boost among independents in December 2003. For Bush, that lift proved short-lived, with the entire increase gone within six weeks." And then there is always the question of polling objectivity. Steve Brusk at CNN just tweeted: "New CNN/ORC poll: bin Laden raid brings only small bounce to President Obama's approval rating: now 52%, up 1% from before raid." It is to be fully expected that in a centrally planned economy, no number can be trusted, regardless of its source. Certainly not something as manipulated as the president's ratings.
The dollar managed to stage another faux-rally to the just above abysmal level of 73.30... for about 3 hours. At last check, the dollar is plunging and everything else is once again surging, meaning all those hoping for some miraculous spike in the USD on expectations that there will be a time when the USD will once again be a flight to safety will have to put their dreams on hold yet again. Remember: state healthcare benefits are 5% funded, so the Weimar rally (in stocks, if not so much the dollar), has to go on or else pensioners will realize there is 5 cents on every benefits dollar owed to them.