Archive - Sep 2009
The Fed is watching very carefully risk appetite. Their removal of policy accomodation, whether it is low rates or liquidity facilities, will be driven just as much by a pick up in market risk appetite as by traditional economic indicators such as production and employment. It makes sense to think the Fed is watching the effect on risk appetite and potential asset inflation of the liquidity it is pumping in the system given that it is a just about universal worry that has triggered a lot of animosity towards the US's monetary policy. However what is interesting is to think right now the Fed views risk appetite as subdued. Is it really?
Comcast denies having an agreement to buy NBC Universal. Which means the proxy is coming out within the week (excluding the pseudo non-un-referenced Merrill loss and bonus arrangements)
I'm very concerned about our readership of late. In the wake of recent publicity I want to call your attention to a few figures that I believe might spell doom for Zero Hedge. Doom. Pure and simple.
I know what you are thinking, but I want you to forget for a minute that crap about the statistical illegitimacy of wielding a single commenter (or even an anecdotal few) against Zero Hedge as a measure of a population that numbers over 100,000 readers. That falls right into the "fact trap" as I call it. Facts trap us. They limit us to a particular demographic and make us slaves to topics we cannot control any more than we can control the facts. Our anemic growth since January is proof of that. What is important in today's media is anecdotal data. It is richer, deeper, (once we add our fluffy prose) and fits better in prime-time print with glossy pages. One well-told story about a fringe commenter is significantly more penetrating than a regression of our entire audience. Further, it commands the interest of a wider range of readers (particularly those uncomfortable with numbers or charts). We are losing the publicity battle in the mainstream press here. True, efforts to assail our content and long missives (often error plagued) targeting some of Zero Hedge's messengers have yielded little fruit, but this new approach, attacking our readers, is frightening and dangerous. You see, apparently "day traders" make up the majority of Zero Hedge's audience.
Let me just say that the IMF's Global Financial Stability Report is an excellent document that every serious money manager needs to read carefully. It provides an outstanding overview of global financial system. I went through it today and concluded that global financial risks have subsided but banks are by no means out of the woods. The semiannual report struck me as one of cautious optimism.
The Fed Rightfully Believes That Protecting Goldman Is "In The Interest Of The U.S. Economy And The Interest Of The Public"Submitted by Tyler Durden on 09/30/2009 21:39 -0500
"The public interest favors a stay [of disclosing recipients of taxpayer bailouts]. The Board presented evidence to the district court regarding significant harms that could befall not only private companies, but the economy as a whole, if the withheld information is disclosed. The public interest is coexistive with the Board's interest in that the harms the Board is seeking to prevent inure to the benefit to the U.S. economy." - Federal Reserve
"Some will suggest that I am leaving under pressure or because of questions regarding the Merrill deal. I will simply say that this was my decision, and mine alone." - Ken Lewis
It is sad that modern capital markets have gotten to a point when neither fundamental nor technical analysis matters. The only question is how many dollars with the Federal Reserve print tomorrow and how higher will that push stocks. For those deluded amongst you who still believe 10,000x EV/EBITDA is marginally to quite-marginally rich, and don't feel like chasing trends and passing the hot potato to the latest Down syndrome afflicted E-Trade client, here are some observations on arguably the most overbought (by a metric mile) sector, REITs, courtesy of masters of the (metric) universe, Goldman Sachs.
An article by The Hill dated 9/20/09 quoted President Obama as saying"...I am concerned that if the direction of the news is all blogosphere, all opinions, with no serious fact-checking, no serious attempts to put stories in context, that what you will end up getting is people shouting at each other across the void but not a lot of mutual understanding..."
Since President Obama confirmed that bloggers do run the world, I’d like to dedicate this blog to respond to his comments.
Not a bad move by the man about to be raided by the Fed, the AG, the SEC, the Tooth Fairy and who knows who else. In other news, the Chairman wins again.
"Saturn makes cars people want to buy?!?" The likable car salesman on the commercial proclaims. Yeah, but not for long. Roger Penske, in a deal that made the mega-buck car magnate look like a once knight in shining reorganization, walks away amid supply and production concerns.
Markets are now getting ridiculous. It appears that the "boom and bust" and "inflation or deflation" cycles are now being traded on a daily basis by the Hi-Fi traders. What used to occur over years or decades now oscillates in a matter of hours as thousands of robots are panic buying or chain-selling all instruments based on v-shaped recovery hopes or fears of inflation or deflation.
I was on CNBC a few days ago discussing the Japan debt situation, here are my talking points and some additional thoughts a lot of them I did not have a chance to cover in the previous note or the interview.
Not sure if this is news, but hopefully the robots that are all over CIT will finally get this headline through their babelfish English-to-Machine Language translators and stop drawing retail in, who in turn believe there is some/any value (aside from pure Las Vegas entertainment value) left in this stock.
Correction: he does not explicitly say it, but watch his eyes closely. Also, the man is obviously insane: how can one "not be bullish on government transfer payments." Forsooth, government transfer payments have resulted in an increase of the S&P market capitalization by a few trillion bucks. It is YOU, Mr. Pento, who is the idiot for not believing that the fine upstanding Chairman of the Federal Reserve (and the United Printing Presses of America) will ever stop killing the US middle class at the expense of insiders being unable to sell their stock at what they obviously acknowledge are sky high valuations. If that means Robert Mugabe ends up hiring Tim Geithner as his right hand henchman sooner rather than later, it is truly our loss, Mr. Pento. Our loss.
It has been about a month since the Fed last threatened with mass extinction events if it were forced to disclose whose crony interests it had been propping with taxpayer money, as it was ordered to do in the Bloomberg (Mark Pittman) v Federal Reserve case (08-cv-9595) on August 24. Today, the Chairman is out, guns blazing, and is appealing the decision.