Archive - Nov 3, 2009

Two take homes from the attached clip:

1. It is somehow not totally shocking that Robert McTeer, former president of the Dallas Fed, has no idea what an asset bubble is and how everyone lining up to short the dollar is conducive to just that occurring, and subsequently exploding.

2. Santelli with the brilliant: "Our leaders dilute our dollars to pay for the sins of everyone." Simple, elegant... Then proceeds to eviscerate a clueless (as usual) Steve Liesman. One almost wonders if this is not staged in preparation for a payperview version of CNBC Premium - "The first in Octobox to Octagon transition, worldwide."

It turns out that the main reason why Bank of America is unable to find someone willing to jump into Ken Lewis' hot shoes has nothing to do with BofA toxic balance sheet and everything to do with proximity to Carnegie Hall, the Lower East Side and any of a plethora of Daniel Boulud restaurants. Bloomberg reports that as BAC continues its search for a CEO replacement it is now willing to let the fall guy's replacement be domiciled out of New York. Whether that means that the Charlotte, NC-based firm is looking to relocate entirely to the Big Apple, and whether Mel Watt is aware that he no longer needs to be the lap dog of the firm's soon to no longer be landed interests, is yet to be determined.

Over the course of the next two weeks, we at Fibozachi will present a series of analyses that detail both the technical and fundamental landscapes of gold, silver, copper, oil, the CRB (Commodity Index), the US Dollar, the EURO and the remaining major currencies of the G8 (the “Group of Eight”) in relation to one another. After examining Freeport-McMoRan (FCX) yesterday, and to presage the bulk of our upcoming series, today we present an initial look into the technical composition of silver.

With October car sales forthcoming from the Big 2 (and Fiat), the Street is being explicably cautious, with October SAAR estimates slightly higher than 10 million. As a reminder prior year's October SAAR came in at 10.8 million, and that was in a month following the standstill of the entire economy. What was that about increased lending going to consumers courtesy of the Fed's monetary largesse? Or does that only account for "big ticket" purchases like iPhones? Yet where the street may be in for a surprise is its optimism that the Cash For Clunker overhang has subsidized: a rather bold assumption for an economy running entirely on government stimuli.

These are some of the more important headlines coming from around the World this morning.

Very jumpy equities today. SPY trading like a penny stock all morning, and now gold rushing to an all time high: was India's IMF purchase just the starter gun for all CBs to "get involved." Also, anyone hearing any fun rumors regarding UBS?

Yesterday's "blowout" ISM reading of 55.7 (on 53 in consensus) was enough to lead to a big market rally, at least temporarily. Yet, just like CfC and the overall Q3 GDP took early credit for massive stimulus payments (whose cost will be felt more gradually over the next decade), it appears the same principle of "borrowing from the future" is applicable to the ISM reading as well. And if David Rosenberg is correct, and the ISM, along with all other stimulus indicators, holds the seeds of its own destruction inside of it, look for this to be an ISM top, potentially until such time as the next stimulus is invoked.

Zero Hedge's resident ink-master, John Redmann, again.

After hitting stupid tights of 236 bps in the prior week, the secured-unsecured spread started widening marginally again, going back to above 250 bps. And while the bulk of moves by the index constituents were noise based, except for TRW's presumably erroneous reading of a 450 bps tightening in loans to 157 bps, the question remains of whether there is any principal upside left or whether new investors will be stuck collecting meager spreads over a virtually non-existent LIBOR in the loan universe, while bonds are dependant on the vagaries of the stock market, and thus the Fed.

• Wall Street cries "Feed Me" or the world will end (Bloomberg)
• RBS, Lloyds get $51 billion in second bailout (Bloomberg)
• Even as Europe raises 2010 growth forecast (AP)
• Mort Zuckerman: Forget inflation, deflation is a bigger danger (USNews)
• States are pondering fraud suits against banks (NYT)
• Retailers "dodge bullet" with CIT November bankruptcy filing (Bloomberg)

• China said to plan review of developer loans on concern at surging prices.
• EU raises 2010 GDP forecast as deficits, jobless soar.
• Euro higher to $1.4800 in European morning trade as ECB expected to hold rate.
• IMF sold 200 metric tons of gold to India's central bank for about $6.7B.
• Korean Won leads Asia currency gains as US data spurs demand for higher yields.
• Most Asian stocks fell as concern over the withdrawal of stimulus measures.

Audit the Federal Reserve bill gutted, EU monster rises from abyss, new strain of failflu emerges in Ukraine.

The recent bear rally has driven most of the solvent, semi-solvent and absolutely insolvent CRE stocks up, quite a few approaching 100%, while their macro outlook has deteriorated significantly, along with their fundamentals. Quite a few have actually acted in cahoots with the banks that held their increasingly worthless debt, having issued secondary offerings basically converting the bank holdings of debt that didn't have an icicles chance in the hottest portion of Hell of getting repaid, into worthless toilet paper, heretofore marketed as stock certificates. They have also begun offering this used toilet paper as dividends. If this isn't the sector screaming for me to come back and short it, I don't know what is.

India buys 200 metric tons of IMF gold.

Who's next?