Archive - Nov 6, 2009

Mixed CDS action yesterday, with credit predominantly flat even as equities melted (molted?)-up. Discussions with fixed income traders indicate a predominantly bearish posture yet nobody is willing to stand against the Fed and the Druckmaschinen imports. Where is a man with Soros-size balls when you need him? Alas, that "man" just may end up being China, which would either buy the balance of the IMF gold package (and damn soon) or leave the indirect bid hanging.

The melt up in stocks on no volume was fully expected after the worst possible employment news to come in over 20 years: the market-economy disconnect is now complete, and all stocks are freeriding purely on Bernanke's printing press. At least gold vigilantes are beginning to whisper in Bernanke's ear he can go fornicate himself and his dollar destruction deathwish: let's see what happens when gold melts up ala the S&P to 1,200, 1,300 and maybe 1,500 in a few weeks. Look for some old-fashioned massive panic at the Federal Reserve.

Another credit fund has given up the ghost and the fight over the spoils begins. Oddly, with leveraged loans returning over 40% YTD, and these guys obviously believe that diversification away from Term Loan B's is a waste of time, somehow they managed to still shoot themselves in the foot. Well, we wish them well on their way to padding the BLS' U-6 number, and in the meantime here is a listing of their holdings: top five holdings consist of Regal Cinemas, Penn National, Neiman Marcus, CHS and Dollarama. By their holdings it seems that this was a rather diversified loan fund with holdings in virtually every sector, implying that the PMs would buy whatever their prime broker/sales coverage would pitch them: always a very sound and stable money management strategy.

Remember this? No?

• RBS posts $3 billion Q3 loss as its trading desk in Stamford looks like a ghost town (AP)
• US stock futures drop after unemployment hits highest since 1983: mid-term election outcomes you can't really believe in (Bloomberg)
• Credit-card countdown: Higher rates abound (MarketWatch)
• El-Erian: How to fill the gaps left by the dollar decline (FT)
• Reilly: Bondholders extract revenge on fee-hungry bankers (Bloomberg)
• As expected, the SAC-insider trading scandal connection grows stronger (Reuters)

The ever increasing unemployed are buying Kindles to read all about their predicament.

Major deterioration in both categories, worse than estimates. Market not shooting up for some reason.

• Asian markets rise after Wall Street rallies on positive economic data; HK up nearly 2 pct.
• Australia's central bank raises growth forecast, strongly hints at more rate hikes.
• China blasts US anti-dumping tariffs on steel pipe imports ahead of Obama visit.
• China criticizes US over pipe duties, launches auto probe ahead of first Obama visit.
• China shares rise for sixth day on better corporate earnings, ending week up 5.6 percent.
• Congress passes economic package helping jobless, homebuyers.