Archive - Sep 2009

Another precious dollar pounding moment, brought to you by the folks whose only noble intent is to push the market ever higher. Don't forget: a dead dollar is victory for the momentum chasing bulls, with the acceptable side effect of killing the middle class. As for international trade, don't worry: who needs to trade when you have a "stock market."

Two key charts this morning for EURUSD: weekly and daily. The weekly chart shows how the market is testing as resistance the old support line of the bullish channel, and last time it attempted to reintegrate the channel last December it rejected it strongly on the close. On the daily chart, we see that the slow stochastic is basically at the same level that corresponds to all the previous significant highs, and we have run all the stops over the past few days after we broke out of the ending diagonal which sets up for a perfect capitulation.

• Pearlstein: What kind of judge stands up for truth and justice? (WaPo)
• Treasury announces it will reduce one of its rescue programs from $200 billion to $15 billion (AP) - we now have six weeks before the US defaults under current debt ceiling regime
• Foreign trade keeps stalling: current account deficit at 2.8% of GDP hits lowest since 1991 (AP)
• Gold keeps climbing higher (FT)
• The SEC gets neutered again (CNNMoney)

• Americans Back Obama's health goals even as they doubt chances for success.
• Asian stocks were higher Wednesday after Wall Street closed at its best levels for '09.
• Bank of England is still considering a reduction in the bank's deposit rate.
• Bernanke says US recession 'very likely' has ended, economy still weak.
• China shares fall on liquidity doubts.

Buy a contango and high cost-of-carry burdened asset versus a stream of perpetual earnings? What planet am I from?

But the wizards of Wall Street remain undeterred. They will come up with new ways to model all risks, including systemic risk. Will the consuming public be fooled by their chicanery? I don't know about the consuming public, but I guarantee you that the pension parrots will be fooled by their chicanery.

It was just yesterday that Tim Geithner was pleading that banks are increasing consumer lending. Well, yet another lie refuted. Banks, and not just any banks, but those receiving government bail outs and subsidies, continued constricting lending in July, with total average loan balance outstanding declining by $54 billion from $4,295 billion to $4,241 billion, a 1.3% decline, following a 1.1% decline in June. The Truth: the consumer, the one followed by the ABC Confidence Report, not the manipulated, CNBC-friendly one, has retrenched to a point where he has no desire to even approach the bank lending window.

"The question we face now is: how has the playing field for our economy changed and how will those changes affect our future? The answer to these questions will determine the future of the world’s economies."

The ABC Consumer Confidence Index declines from the prior week, as UMich indicator continues to spread rose-colored glasses propaganda and the expected closed-loop market uptrend.

In print yesterday, today we present, in all its HD glory, the video of Senator Kaufman discussing irregularities in market structure and a proper holistic approach to financial regulation.

Spreads were mixed in the US with most indices tighter (reaching 2009 tights) as ExHVOL underperformed as high beta compression smashed low beta names. IG trades 15.2bps tight (rich) to its 50d moving average, which is a Z-Score of -1.5s.d.. At 104.25bps, IG has not closed tighter this year (184 trading days) and is back to mid June on-the-run levels for IG. The last five days have seen IG diverging from its 50d moving average.

Even more mainstream media starting to focus not just on flawed Wall Street practices, and crony DC efforts, but Goldman Sachs in particular.

Obama was on the stoop once again, and to avoid embarrassment, he ordered the Goldman Prop Desk to show "who 'da boss" by cranking up the Spoos to get the greyhounds moving. Hi-Fi traders and junk chasers had another field day.

71: here we come.