Archive - Dec 29, 2009
Equities Bumping Heads Into The Lead
Submitted by Tyler Durden on 12/29/2009 19:38 -0500
Last night the nikkei failed to make a high close on the year and we see that S&P futures today failed after barely testing the topside resistance of the channel. We have long highlighted the strong divergence in momentum indicators for S&P futures which in theory is precursor to a 10% correction at least. With Nikkei right on resistance as well we have a compelling case to play a reversal here, and would only consider the trade a failure if we have a daily close above the resistance of the daily channel. We are also almost right at year-end, and if we remember last year the market did not wait for any later vacationers to start 2009. Maybe a reversal of low volume end of year price action is in the cards again, the risk reward certainly is good to trade the market that way.
Move Your Money From Your Giant Bank to a Community Bank
Submitted by George Washington on 12/29/2009 19:26 -0500On November 18th, I suggested that everyone:
Still Sitting and Staring
Submitted by RobotTrader on 12/29/2009 16:48 -0500Tape is getting more boring each day. Financials seem to be waffling back and forth, unable to move in one direction or another with any conviction. Meanwhile, traders are restless and bored, and really cannot find anything worth watching other than the anchorettes on CNBC.
General Motors Giving Up the Goat- What's an Incentive Really Worth Anyway?
Submitted by Travis on 12/29/2009 16:08 -0500I have a friend in the car business who loved Pontiacs- in the days before mainstream, popular imports, you were either a General Motors, Ford or Chrysler man; and specifically GM patrons had their own specific preferences to go along with their favorite brands of cigarettes- Chevrolet, Pontiac, Buick- you get the picture. My friend still loves Pontiacs, to this day, reminiscing of the days when he was eighteen, gas was 25 cents a gallon and his ’65 Pontiac GTO “Goat” cost $3,500 out the door. But, those days are over and if you’re a Pontiac man, well, you can just about smell the formaldehyde and see the undertaker coming, leaving nothing but memories and $7,000.
Everything Old is New Again: The Green General Motors?
Submitted by Marla Singer on 12/29/2009 15:08 -0500What a difference a few decades makes?
Pimco CEO: We're Trained to Think the "Farther You Fall, The Higher You'll Bounce Back. We're Hostage to the V"-Shaped Recovery Model
Submitted by George Washington on 12/29/2009 14:25 -0500Are we going to have a V-shaped recovery? W-shaped? L-shaped? WWWWW-shaped?
Guest Post: The Federal Reserve Still Doesn't Know How To Get Rid Of Excess Liquidity
Submitted by Tyler Durden on 12/29/2009 13:06 -0500Jim Bianco submits: "The Federal Reserve owns 80% of AIG. With each passing day it looks like the Federal Reserve is adopting AIG Financial Product’s business practices. That is, when faced with a financial problem, they create complicated tools (like CDS). When critics says these new products will not work, tell them they do not know what they are talking about and create even more complicated tools to dazzle everyone. Once the tools are so complicated that no one understands them, you will be hailed as an expert with no peer. You might even be named TIME’s Person of the Year."
Small Chinese Company Tells Goldman To Take A Hike, Refuses To Pay $80 Million In Derivative Losses
Submitted by Tyler Durden on 12/29/2009 11:53 -0500It appears that even after thoroughly dominating the US legislative, judicial and executive branches, the long tentacles of the squid have been no better than the Mongolian hordes at overcoming the Chinese Wall (which is ironic seeking how easy it is to ignore the same construct internally between the firm's prop and flow traders...and yes, we will be posting our response to Goldman shortly, we have not forgotten). In the meantime, half a world away, a small Chinese power generator, Shenzhen Nanshan Power, is blatantly refusing to honor contracts with Goldman Subsidiary J. Aron for $80 million in derivative losses, and it appears that China itself has decided to stand behind the small company.
The General Growth Properties Valuation Fight Escalates - Hovde v. Ackman Round 2
Submitted by Tyler Durden on 12/29/2009 11:06 -0500The last time we provided Hovde Capital's contrarian perspective to the prevailing opinion on GGP's valuation, there were some stock price fireworks. Is it time for round 2? Over 70 pages recapitulating the short thesis are attached.
AUDNZD: Playing The Range
Submitted by Tyler Durden on 12/29/2009 08:55 -0500
"As volumes are abysmal this week, we continue to think the risk is for lower US Treasury prices as supply chokes the market in low volume/appetite on this holiday week. Equities keep grinding higher and are getting awfully close to resistance levels, with ever lower volumes "supporting" the price action." - Nic Lenoir, ICAP
Welcome to the Michael Jackson Economy
Submitted by madhedgefundtrader on 12/29/2009 08:33 -0500Where is my new economy? Kiss that assembly line job goodbye, and keep taking those Mandarin lessons
MF Global's Ten Predicitions For 2010
Submitted by Tyler Durden on 12/29/2009 08:26 -0500The latest in the 2010 forecast series comes courtesy of MF Global. Unlike the trite cheerfest from the sellside bankers (who can blame them, their jobs depend on optimism) which we have been largely ignoring, this piece is certainly worth five minutes of your reading time.
Daily Highlights: 12.29.09
Submitted by Tyler Durden on 12/29/2009 08:16 -0500- Asia commodity stocks, metals gain on China demand; Japan bank shares drop.
- Beaten by cable and the Web, broadcast TV looks to build a new business model.
- Build America Bond subsidy shift to fuel $130 billion in sales.
- Dollar trades at almost two-month high versus Yen on US recovery outlook.
- Fed proposed selling interest-bearing term deposits to banks, to drain some of the liquidity.
- Gold declines, snapping four-day gain as dollar rise saps investor demand.
- Oil closes in on $79 a barrel in Asia after US cold-snap drives energy futures higher.
The Wall Street Journal Finally Catches Up On Its "Jonathan Weil" Reading
Submitted by Tyler Durden on 12/29/2009 07:01 -0500Two months ago Bloomberg's Jonathan Weil brought up the very relevant topic of fair value divergences on bank balance sheets courtesy of SFAS 107 and lax accounting firm standards (some more lax than others). Zero Hedge immediately followed up on this theme and presented a comparative analysis of various bank asset shortfalls, speculating that certain accounting firms are doing their best to do an Arthur Andersen redux for Generation Bailout.
On October 15 we said: "Just what about the economic environment has given Citi auditors KPMG the flawed idea that the bank's loan can be easily offloaded with virtually no discount? And just how much managerial whispering has gone into this particular decision. If one assumes a comparable deterioration for the Citi loan book as for the other big 4 firms, and extrapolates the 2.8% getting worse by the average 1.5% decline, one would end up with a 4.2% Book-to-FV deterioration. On $602 billion of loan at Q2, this implies a major $25 billion haircut. Yet this much more realistic number is completely ignored courtesy of some very flexible interpretation of fair value accounting rules at KPMG. Maybe Citi and its accountants should take a hint from Regions Financial CEO Dowd Ritter who carries the FV of his $90.9 billion loan book value at a 25% discount." Today, finally, after a two month delay, these two articles seem to have finally made the inbox of the financial gurus at the Wall Street Journal, which, in an article named "Accounting for the bank's value gaps," says: "can investors count on consistency when it comes to bank accounting? As many banks struggle with piles of bad loans, it appears some auditors are being stricter than others when assessing their true value." Way to be on top of that ball WSJ/Mike Rapaport. Nonetheless, we are happy that this very critical topic, is finally starting to get the due and proper, if largely delayed and uncredited, attention it deserves.








