Archive - Jul 2009

Results of USD 11bln (Act) 30y note auction
- Yields 4.303% vs. Exp. 4.292%
- B/c 2.36 vs. Avg. 2.54 (Prev. 2.68)
- Indirects 50.2% vs. Avg. 47.73% (Prev. 49.09%)
- Allotted at high 67.88%

House Committee On Financial Services hearing on Regulatory Restructuring: Balancing the Independence of the Federal Reserve in Monetary Policy with Systemic Risk Regulation.

Here is the link with all the prepared testimony.

The lately abnormally notorious Goldman Sachs received a little pat on the back today compliments of Bank Of America and its analyst Guy Moszkowski, who in a report published this morning announced his expectation of an "unexpected" Q2 surprise (quick, someone find the next big counterparty that Goldman shorted and also has several tens of billions in collateral exposure with the 85 Broad oracles) and also anticipates forecasts to rise. Maybe now that Goldman's fate allegedly is in the hands of a few good hackers, Guy may want to redo his hypothesis. But I digress.

Max Keiser: "Does the US Secretary of the Treasury work for the people or does he work for the banking system on Wall Street?"

Dr. Paul Craig Reports: "He works for Goldman Sachs."

• What is good for the US apparently doesn't work for the UK: PIMCO refuses to buy BOE's gilts (Bloomberg)
• And speaking of PIMCO, the "frequent flier miles accumulation facilitating" bond manager will not be in the PPIP: hopefully due to pressing conflicts of interest arising from participation in every other single alphabet soup ever created. (Bloomberg)
• One man's personal account of the UBS tax follies (Bruce Krasting)
• Chinese rioting subdued for now (Bloomberg)
• And Chinese full scale intervention has resulted in a 48% jump in car sales. Oh yeah, and new loans have jumped five times since June. Can the world ever operate anymore witout a credit bubble somewhere? (Bloomberg)

China reports a big 48% increase in car sales as many analysts see an end to the economic contagion in China.

The last time Matt Rothman did a holistic analysis of the market two months ago, he observed market dispersion which was at October 1987 levels: investors were buying anything and everything indiscriminately. In his latest Quantitiative Strategies observations, Rothman is noticing a slight return to normalcy as finally there is a slight discrimination between various asset classes. Whether this will persist, now that potential program trading disruptive elements may have been removed (even if temporarily) or whether the return of the 3:30pm SPY/ES microblock buying sprees will result in this fledgling flight to fundamentals being aborted, only the next few weeks will demonstrate.

Summary observations of today's key events.

Still out in the boonies, so a few more days without extended analysis. In the meantime, some more amusement on GoldmanGate: Cryptogon has created a piece of html code that Google queries latch on to when searching for "Goldman Sachs Code Torrent", allowing the sysadmin to track which IPs and firms are querrying this keyword. Interesting results.

The full Aleynikov transcript.

sdf

In an opinion piece submitted to The Wall Street Journal, U.K. Prime Minister Gordon Brown and French President Nicolas Sarkozy wrote that governments need to act to curb a "dangerously volatile" oil price that defies "the accepted rules of economics" and "could undermine confidence just as we are pushing for recovery."

Hours earlier in Washington, the Commodity Futures Trading Commission, the main futures-market regulator in the U.S., announced it would hold hearings on whether to introduce tougher regulation of oil-futures markets. The rules, which drew immediate criticism from traders, would seek to curb the influence of speculative investors such as hedge funds and investment banks by limiting how much money any single trader can bet on any one commodity at a given time.

GATA today urged the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission to investigate the Goldman Sachs Group Inc. computer trading program that, according to a federal prosecutor, the bank acknowledges can be used to manipulate markets.

"Despite massive state interventions in economies around the
world, many corporate leaders and investors act as though
globalization remains the dominant paradigm. That is a mistake."

Some perspectives on why everyone should take out their credit card (preferably one issued by General Electric), dial 1-900-PIMCO and buy as many treasuries as their credit rating will allow them. Also, fast forward to 4:20 for some candid observations on puppeteering regarding PIMCO's most recent personnel addition. Odd that CNBC should be asking such questions.