Archive - Jun 17, 2009

Just released, a new and highly relevant Weekly Strategy report out from Albert Edwards of Societe Generale. Not only does Edwards, who was previously vilified then praised for calling the 1997 Asian Bubble, see a significant drop in equities before the end of the year, his main concern is every optimist's greatest green shoot: China.

Just released, a new and highly relevant Weekly Strategy report out from Albert Edwards of Societe Generale. Not only does Edwards, who was previously vilified then praised for calling the 1997 Asian Bubble, see a significant drop in equities before the end of the year, his main concern is every optimist's greatest green shoot: China.

Joe Saluzzi of Themis Trading has put together a great synopsis of a High Frequency Trading roundtable held today, called, in traditional HFT egomaniacal fashion, “High Frequency Trading: The New World Order.” Useful insight for many, who have been increasingly inquiring about the topic on Zero Hedge. Joe's conclusions is worth highlighting:

Even as the equity market tries to pretend that it can still see one or two glimmers of hope despite the resignation of even CNBC from using the green shoots term, and tries even harder to be excited at the prospect of Larry Summers soon taking over as Worldwide Regulation Czar, financial company CDS have blown out wider (both on an absolute and relative basis) over the past month. Oddly, Wells Fargo, which is facing million in foreclosed units, is considered less risky even than than the government's "most favored market maker" and Sigma X deobfuscator Goldman Sachs.

Even as the equity market tries to pretend that it can still see one or two glimmers of hope despite the resignation of even CNBC from using the green shoots term, and tries even harder to be excited at the prospect of Larry Summers soon taking over as Worldwide Regulation Czar, financial company CDS have blown out wider (both on an absolute and relative basis) over the past month. Oddly, Wells Fargo, which is facing million in foreclosed units, is considered less risky even than than the government's "most favored market maker" and Sigma X deobfuscator Goldman Sachs.

WSJ reporting that William von Mueffling's (who in 2007 allegedly made about $300 million) Cantillon Capital Management is shutting down.

As if anyone needed more confirmation just how bad commercial real estate is. Also includes a brief survey on the collapse of the SoCal regional market.

hat tip Alex

Watch as programs protect the 200 DMA in the SPY.

Intraday below: bounce right off the 200 DMA (white line)

S&P continues to restore some semblance of credibility (at the zero sum expense of its Warren Buffett controlled peer), after it downgraded 22 banks earlier today, some of which rather viciously, and all for good cause. This is how the McGraw Hill company justified its action today:

The actions reflect our belief that operating conditions for the industry will become less favorable than they were in the past, characterized by greater volatility in financial markets during credit cycles, and tighter regulatory supervision.

In addition to presenting the case for/against interest rate changes, the report below is a great compendium of all recent trends in monetary markets, compliments of the St. Louis Fed. A casual skimming the charts in this report should render moot any speculation about the validity of green shoot propaganda: there is no real economic improvement anywhere in sight.

In addition to presenting the case for/against interest rate changes, the report below is a great compendium of all recent trends in monetary markets, compliments of the St. Louis Fed. A casual skimming the charts in this report should render moot any speculation about the validity of green shoot propaganda: there is no real economic improvement anywhere in sight.

After three very volatile weeks, it seems the CDS world tapered off modestly. While action was rather subdued, the bulk of activity was focused on insurance buying, with over $63 billion in net notional being purchased in over 3,400 contracts. Total cumulative CDS action since the beginning of April grew to over $400 billion, and virtually all sectors are now net derisked over the past 2 months, with the consumer leading the risk parade.

It is good that Goldman at least acknowledges the issue of perceived "dark pool"/Sigma X impropriety. I hope Mr. Ed Canaday can now respond in a comparable fashion to the Zero Hedge queries about Program Trading/SLP issues presented here over the past 2 months: after all such disclosures would go a long way toward increasing "transparency, confidence in our industry, and the understanding of our complex market structure."

• Asian Development Bank to double clean energy investment in Asia to $2 billion yearly.
• Asian markets mostly lower as global rally continues to lose steam; European shares weaken.
• ECB: Write-Downs by banks will increase.
• Euro rises against US dollar to 1.3880 in wake of Russian comments on diversifying.
• Home construction climbed 17.2% in May; single-family starts rose for the 3rd month.
• New Zealand central bank says economy to grow again but recovery will be slow, erratic.
• Obama vows tougher Wall Street regulation, says Unemployment toreac
  

• William Pesek: Suitcase with $134 billion puts dollar on edge (Bloomberg, hat tip Mike)
• No inflation: CPI rises less than forecast in May (Bloomberg)
• Mortgage applications fell 16% last week (Bloomberg)