Archive - Jun 2009

Quants are back pushing the market up on no volume in tried and true fashion. Credit panicking, as 7 shares of something or another higher means inflation is here to stay. In the meantime, mortgages are on a one way street higher, while 2s10s are enjoying the cattle gun. At the same time, Treasury vol is starting to pick up again: just what the doctor ordered for a quant manipulated market as even PT volume disappears.

So which will it be Bernanke: 401(k) down only50% form their peak or people buying that 7th vacation home again.

Quants are back pushing the market up on no volume in tried and true fashion. Credit panicking, as 7 shares of something or another higher means inflation is here to stay. In the meantime, mortgages are on a one way street higher, while 2s10s are enjoying the cattle gun. At the same time, Treasury vol is starting to pick up again: just what the doctor ordered for a quant manipulated market as even PT volume disappears.

So which will it be Bernanke: 401(k) down only50% form their peak or people buying that 7th vacation home again.

A very vivid representation of securitization for the Obama generation. When you see 4 different tranches, at spreads between +50 and +425, and all rated Aaa/AAA/AAA, (not to mention all using 12x taxpayer money as leverage) it would be simply criminal if you do not invest all your client's money in any/all of these completely risk free classes.

Oh, and just in case you are desperate seeking a broker with whom to place your all in TALF order, look no further than Citi. After all...

As the 10 Year has resumed its daily pounding (and it seemed like just yesterday that bond concerns had disappeared... oh wait it was - time to deflate equities guys), the scheduled bond releases for next week should make the bond vigilantes giddy at the prospect of further uncovering China's growing lack of interest in US printed pieces of paper.

Here is the line up for next week:

$40 billion 2 Years on Tuesday
$37 billion 5 Years on Wednesday

The spread between mortgages and the 10 year just exploded...

Slide 4 - June's abnormally low volume
Slide 7 - Bull/Bear ratio is 2:1
Slide 9 - Most overbought market since 2003
Slide 10 - Overbought... and rolling over
Slide 22 - A Zero Hedge favorite topic - the bond drop as a prelude to the 1987 crash
Slide 23 - Curve inversion is the kiss of death
Slide 25 - Correlation are finally declining: time to hire that fundamental analyst

With Eliot Spitzer selling D.C. real estate these days, and Attorney Generals chasing hundreds of billions of dollar from illegal taxpayer funnels, it is no wonder there is nobody left to monitor potential abuse within the broker/dealer community. Among the items that has been trampled the most in the recent market free for all as everyone tries to make that last dollar before the market's terminal collapse, is none other than Regulation Fair Disclosure, or otherwise known as Reg FD. Taking from the SEC's own definition of Reg FD:

Good, succinct obit of the Green Shoots period compliments of Rosie's headline points from his morning piece.

Era of the Green Shoots is Over

After the good folks in the Deutsche Bank securitization group anticipated a 47% drop in NY housing prices in March, they have released an updated report discussing the future pain in the top 10 MSA, and the biggest outlier by a big margin, once again, is the New York-White Plains-Wayne NY-NJ MSAD.

As program trading computers pretend to care about such fundamental things as continuing jobless claims, a peculiar trend emerges.

As program trading computers pretend to care about such fundamental things as continuing jobless claims, a peculiar trend emerges.

As program trading computers pretend to care about such fundamental things as continuing jobless claims, a peculiar trend emerges.

So which will it be Bernanke: 401(k) down only 50% form their peak or people buying that 7th vacation home again.

• Consumer prices fell 1.3% from a year earlier, the largest drop since 1950.
• AutoZone Board authorized repurchase of an addln $500M of co's common stock.
• BB&T Corp announces it pays Treasury more than $3.1B to exit TARP.
• Eddie Bauer Hldgs files for Chapter 11, to be acquired by CCMP for $202M.
• E*Trade to $400M in stock as it looks to exchange more than $1B of existing notes and raise excess capital.
• Fedex CEO: "the worst of the recession is behind us".
• FedEx's loss widened to $876M on $1.2B of write-downs. Revs down 20% to $7.85B.
  

• Jobless claims rise, total benefit rolls decline (Bloomberg)
• Uncle Sam's favorite subsidized Fiat calls for restructuring of auto industry (AP)
• China sells US bonds to "show concern" (Breitbart, hat tip SB)