Archive - Sep 23, 2009

naufalsanaullah's picture

Distribution Fed Day





The market spike on the FOMC announcement was subsequently met with heavy volume selling that turned today into a big distribution day, foretelling of the coming decline. How long can this liquidity-fueled USD-financed carry trade equity bubble last with less than 4% of Treasury POMOs left to fund it?

 

Leo Kolivakis's picture

Private Equity on the Cusp of Golden Age?





In the environment we're heading into, I prefer liquid asset classes over illiquid ones and I certainly would pick and choose my private equity and real estate funds more carefully instead of writing big checks to every large buyout fund. I'd make sure that my private equity managers are not glorified financial engineers who came from an investment banking background, but guys and gals with solid hands on experience restructuring companies from the bottom-up.

 

Tyler Durden's picture

Paul Volcker Blasts The Goldman Business Model, Moral Hazard, And Calls For A Return Of Glass-Steagall





Tomorrow at 9 am, former Fed Chairman Paul Volcker will testify before the House Committee on Financial Services, discussing topics on Systemic Risk and Resolution Issues. Since a former Fed Chairman will effectively be discussing the actions undertaken by the current one, this promises to be a most interesting testimony. We present some key points from Volcker's prepared remarks below: at first blush it would appear that the former Chairman is distancing himself substantially from the activities of the current one, and among other things, is proposing serious curbs on Moral Hazard, on the lack of Fed's accountability, highlights the need for a return to a Glass-Steagall system, and blasts the prop trading/hedge fund business model, whereby in discussing what he believes should be prohibited activities by systemically important firms, he highlights "ownership or sponsorship of hedge funds and private equity funds [as] should in my view a heavy volume of proprietary trading with its inherent risks." If that is not a direct stab at Goldman Sachs, nothing is.

 

Tyler Durden's picture

Is The Fed Hiding Gold Swap Arrangements With Foreign Central Banks?





"The Federal Reserve System has disclosed to GATA that it has gold swap arrangements with foreign banks that it does not want the public to know about. The disclosure contradicts denials provided by the Fed to GATA in 2001 and suggests that the Fed is indeed very much involved in the surreptitious international central bank manipulation of the gold price particularly and the currency markets generally." - GATA

 

Tyler Durden's picture

Kaufman Continues Quest For Efficient Markets





"In years past, without a sufficient regulatory presence, an aura of invincibility developed at many financial institutions. We failed to ask questions, we failed to ensure that regulators were on the field with the tools they need to do their jobs, and the results are clear: millions of Americans have lost their jobs, their homes, and their savings. We must not repeat that mistake." - Senator Ted Kaufman

 

asiablues's picture

What Does A Flattening Oil Contango Mean?





You may recall that the crude spread gap opened just a few weeks after Lehman Brothers failed and AIG required a capital infusion. During the super contago phase of late 2008 and early 2009, the spread was so ridiculously wide that the rate of return was close to 70% at one point of time.
Those few who had a role in taking advantage of the super contango ended up boosting the spot oil price back to a more normal relationship to the outer months.

 

Tyler Durden's picture

SEC Files Lawsuit Claiming Insider Trading in Perot Takeover





Amazing how quick the SEC can move when it is presented with visual aids. And we didn't even have to part ways with a single calculator, stapler, abacus or toothpick.

"The overwhelming evidence in this case allowed the SEC to move quickly against the trader before he could spend the huge profits from his illegal trading," said Rose Romero, Director of the SEC's Fort Worth Regional Office. "The Commission is seeking a court order to freeze Saleh's assets."

 

Tyler Durden's picture

Over $7 Billion In Domestic Equity Mutual Fund Outflows In September. $2 Billion In Outflows Last Week





ICI has released its most recent fund flow data, and while overall flows have been positive, this has been exclusively due to a ramp up in taxable and municipal fund inflows. In equities, there has not been one positive inflow since August 12. Last week saw a $2 billion outflow from domestic equity mutual funds, bringing the total for the last month to $7.1 billion. Attached are equity flows superimposed over the performance of the SPY.

 

Tyler Durden's picture

Textron CEO Leaving, Joining Departed CFO In Management Reconstruction Effort





First Textron's CFO Ted French was sacked, and now the CEO, Lewis Campbell, is retiring at the ripe old age of 63. The new CEO: a 19 year GE veteran. Hopefully he will have the same sucess with "restructuring" Textron Financial as Goldman, pardon, the Fed, pardon, GE, has had, with "restructuring" GE Capital. In the meantime, the entire management slate has been wiped clean. Opportunistic timing, or would it have been difficult to put TXT on its conviction buy list and subsequently issue debt for it, if it was public that the CEO was bailing? Inquiring minds don't really give a rat's ass anymore.

 

Tyler Durden's picture

Did The Market Just Protest?





Hard to tell if it's a coincidence, or if the market just rejected the news as Ben Bernanke pretty much said he would print whatever amount necessary even in the face of improving conditions to make assets go up. The initial reaction was positive in equities, welcoming the guaranty of continued ability to carry any deranged semi-defaulted asset for a meager spread without having to worry. But then the equity markets turned on a dime, to finish a fair bit lower, and down on the day.

 

Tyler Durden's picture

SPY Volume Action





You didn't expect a spike in volume on the puke, did you. Keep an eye on the real action, better known as AH.

 

Tyler Durden's picture

FDIC May Be Prohibited To Borrow From US Treasury Due To Federal Debt Ceiling Limitations





Even as the FDIC is scrambling to find ways to replenish the practically empty Deposit Insurance Fund, one of its options, namely borrowing from the Treasury, may be a non-starter due to the egregious monetization by its counterparty, the Federal Reserve, as both run up against the Federal debt ceiling.

 

Tyler Durden's picture

Time For The JPM SPY Desk To Remind The Market Who Is In Charge





The question: is "The client" buying or selling today.

 

Tyler Durden's picture

NY Fed On Mortgage Purchases: Smaller, Less Frequent





This can't be good for the dollar bears and the liquidity addicts.

"Agents acting on behalf of the Federal Reserve Bank of New York's Open Market Trading Desk will gradually reduce the average weekly purchase amounts of agency mortgage-backed securities, starting with purchases conducted during the reporting week beginning Thursday, September 24, 2009. Additionally, the Open Market Trading Desk will gradually reduce both the size and frequency of individual agency debt purchase operations, with the frequency of agency debt purchases remaining, on average, once per week before declining to once every two weeks at some point during the first quarter of 2010. All other terms of the purchase programs remain unchanged." - NY Fed

 

RobotTrader's picture

All Aboard Riverboaters!!!





Gambling Fever is now reaching exponential proportions, proof positive in today's Wall Street Journal, outlining how Bucket Shop traders are gunning stocks like AIG. Even the former superbear Damon Vickers is now running one of these daytrading shops, pumping stocks like AIG with outlandish $300 price targets.

 
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