Archive - Sep 5, 2009

The first week of historically the worst month in stocks showed big volume come in early in the week on the sell-side in equities and big volume on the buy-side in gold the very next two days. Insiders are selling at record levels, volume is expanding as stocks contract, and gold and bonds are rallying. Green shoots?

It's been another one of those weeks.  The good news is, the next one is shorter.

Get ready.  Radio Zero is going into labor (day).

URL to emerge 6:30 (ish) ET.  Guests arrive at Studio Zero around 8:00 ET, so expect things to start getting wild then.

Meanwhile, chat up the DJ / make requests / send mp3s (to which you own the rights): here.

Update: Get your audio epidural here: http://cdo.zerohedge.com:8000/listen.pls

Our rates, reach and potential.

The long weekend is upon us. Please use this space to discuss anything that is relevant, or that may need our focused attention.

Also, a reminder that there is a forum for extended threads.

The soapbox is yours.

China is exploring the use of "regulatory tools" to pull some capital out after a record H1 of lending.

If you ever needed to see a formalized definition of what momos are and why they believe chasing momentum is actually a credible strategy instead of a self-perpetuating bubble that sucks many of their kind in, until the musical chairs game stops and then you have a mad dash for the fire exits, read the below press release by AQR, issued when Cliff Asness' fund decided to go pedal to the metal in momoism. And keep in mind Cliff is not alone - these are the same "strategies" that gun up the market every day at 9:45 am, noon and 3:30 pm, simply because "it has worked in the past." Then again, the question, just like in the RenTec case, is who is on the other side of the trade that recurs like clockwork each and every day and where just 60 minutes of trading accounts for over 70% of the entire intraday stock market movement over the past 6 months. Another key question to consider as more and more momos pile into the momentum trade is what happens when it fails and all the previously natural buyers become very unnatural sellers. Will be a sight to behold when the momentum flips. But for now, someone is very happy to keep feeding the momos, who, with Pavlovian regularity, keep coming back, until one day the Skinner box fails.

We have two choices for what to do with our savings: 1) we can “park it” in existing assets (stocks, bonds, mattresses), or 2) we can invest it in new capital formation. What makes us choose one over the other?

A doubling of the pension rate is terrible news? I got a better idea, why don't we also cap public sector pensions in North America? Any politician courageous enough to propose this idea here? Of course, that means a cut in their own gold plated pensions.

Presently many otherwise intelligent and capable individuals in America do not seem to understand the origins of the financial crisis -- and the multiple aspects (or shall we say 'tentacles'?) of its origination.

Some stunning revelations have been disclosed in the David Kotz 477 page report on SEC's colossal (and in normal societies, terminal) blunder with Madoff. Primary among them is that everyone's favorite liquidity provider RenTec was not only an indirect investor in Madoff via its Meritage Fund of Funds, not only was fully aware based on internal correspondence that Madoff was a pyramid scheme, but that it did nothing to notify the authorities, and also decided to keep half of its investment with Bernie, even after numerous internal emails certifying the illegitimacy of the fund way back in 2003.