Archive - Sep 3, 2009

Out of the 24 retailers who reported August same store sales results, the surprise split was even with 12 beating estimates, and 12 reporting below estimates. Yet the biggest weakness was seen in the Upscale/Specialty category, where only Nordstrom beat its -9% same store sale estimate marginally, coming out at -7.6%, likely as a result of continued heavy discounting/clearance. The other category names, including Saks, Macy's and Hot Topic all came in well below expectations. Also notable is the lack of color from discount retail bastion WalMart which has stopped reporting monthly same store sales.

You didn't think the $9 trillion budget deficit was going to finance itself did you? Neither did the Department of the Treasury. Which is why it just announced $128 billion in Treasuries on deck, of which $70 billion in 3, 10 and 30 Year Notes, to be auctioned off on September 8, 9 and 10th. With $25 billion in remaining Fed buybacks, September will be a very interesting month indeed: the Treasury portion of QE will likely be exhausted by the end of next week via POMOs: one only hopes China sees this as a positive development.As a point of reference, August saw $272 billion in new issues, while September's runrate is now at $384 billion (and a $4.6 trillion annual runrate).

The dirty little secret in the pension world is that kickbacks are more common than people think in the private markets and hedge funds where funds try to bribe underpaid pension fund managers. How do I know? Because I have been approached in the past (very subtle, using words like 'facilitate') and witnessed my fair share of shady deals across many pension funds where I asked myself why the heck is this pension fund manager so gun-ho on that fund?

TrimTabs TrimTabs earlier disclosed that the ratio of insider selling to buying had averaged about 31x for August, with $6.3 billion of insider sales matched by only $210 million on insider buys. Insiders apparently decided to exit August with a bang, with the last week of insider transactions doubling the sell-to-buy ratio to 61.8x! Over half a billion in stock was sold, while a whopping $8 million was purchased.

If there is any doubt as to which way insiders were leaning during this "market rally," this data should seal that particular coffin.

A favorite practice by numerous market makers, better known as "spoofing," in which order blocks, which will never be executed, prop up either side of an order book with the goal of manipulating the stock price, is starting to get much needed scrutiny across the Atlantic. In the meantime the SEC is resting on its Madoff laurels, as more and more investors are confirming a necessary and sufficient inventory of pitchforks.

Gold and silver are outperforming a basket of currencies.

In a clip that has to be seen to be believed, California Congressman Pete Stark displays the most unbelievable combination of economic incomprehension, stupidity, hubris, and to top it off tells interviewer Jan Helfeld to "get to fuck out" or he will be thrown out of the window for daring to expose just what a sack of... hot air Stark is.

A line that will now live forever, thanks to Congressman Stark: "The more debt we owe, the wealthier we are".

That pretty much sums up political "thought"

"This “new” vs. “old” normal dichotomy was perhaps best contrasted by Barton Biggs, as I heard him on Bloomberg Radio in early 2009, when he said he was a “child of the bull market.” I thought that was a brilliant phrase, and Barton is a brilliant phrase-maker. He went on to say though, that his point was that for as long as he’s been in the business – and that’s a long time – it has paid to buy the dips, because markets, economies, profits, and assets always rebounded and went to higher levels. That is not only the way that he learned it, but that is the way, basically, that capitalism is supposed to work. Economies grow, profits grow, just like children do. I think that’s why he said he was a child of the bull market, not just because he had experienced it for so long, but also because economic growth and higher asset prices are almost invariably a natural evolution, much like the maturation of a person. That’s how people grow, and so I think Barton was saying that capitalism just grows that way too. Well, the surprise is that there’s been a significant break in that growth pattern, because of delevering, deglobalization, and reregulation." - Bill Gross

• U.S. retailers report weak sales (WSJ)
• Weil: Investors find love in $260 billion black hole (Bloomberg)
• Reilly: Banks need to end $1 trillion kick the can game (Bloomberg)
• Ratings firms lose free-speech bid to dismiss lawsuit (Bloomberg)
• Jobless claims higher than expected (Bloomberg)
• OECD joins the green shoots bandwagon, just 4 months behind the curve (AP)

• Asian stocks gain on Gold, Alcoa forecast; Honda drops on strong Yen.
• China to buy around $50B in notes denominated in the IMF's quasi-currency.
• China's stocks rise most in six months
• Employment in the US private sector falls by 298000 in August
• European Central Bank will leave interest rates at a record low to nurture recovery
• European equities were seen falling for a fourth straight session