Archive - Sep 2009

...Alas does not exist. Which begs the question how have iShares and Direxion not made a quintuple levered, dollar vol tracking index yet? Aside from another class action lawsuit in the making, it would provide the heatmappers with a whole new level of adrenaline now that habituation levels have set in with FAZ and BGZ.

“The August report demonstrates that there is still an ample supply of properties filling the foreclosure pipeline even while the outflow of bank-owned REO properties onto the resale market is being more carefully regulated. After hitting a high for the year in July, REOs dropped 13 percent in August, but we also saw a record high number of properties either entering default or being scheduled for a public foreclosure auction for the first time.” James J. Saccacio, RealtyTrac

• July trade deficit at decade high $32 billion, Cash For Clunkers leads to jump in auto imports: Obama is now officially subsidizing the Japanese economy (AP)
• Wen Jiabao: "China can not and will not pull back from economic stimulus measures" - let the bubbles continue forever (Bloomberg)
• London suicide connects Lehman lesson missed by Hong Kong woman (Bloomberg)
• Bernanke: Greenback's new father (NYT)
• Jobless claims yoyo around as more and more people move to "exhausted" list (Bloomberg)
• Never say never to monetization (SafeHaven)

Reserve Bank Governor believes "a patchy recovery is underway" and inflation expectations are likely to band in the normal range.

Some serious fireworks go off as Clearly Gottlieb clutches at straws to make Lewis, from merely Patron Saint of Taxpayer Funded, No MAC Clause Invoking Acquisitions of Bankrupt Companies, into Saint Ken, Martyr of The Dispossed Investor.

The challenges in private markets are also weighing on many institutional investors who are growing increasingly impatient with private equity groups charging hefty fees on the big funds they raised during the debt bubble. It's fair to say that unless activity picks up, private markets will reach a breaking point - one that may weaken the industry for a very long time.

A closer read of the SEC response to Judge Rakoff reveals some nuances that indicate the SEC could be positioning to throw lawyers from Wachtell, Lipton, Rosen and Katz and specifically partner Ed Herlihy at the wolves, presumably to spare the "chosen one" Ken Lewis from a fate that could potentially include jail time.

Zero Hedge is starting a new commentary piece, which analyzes the immediate market impact of any most recent Treasury auction. As expected our initial focus will be on today's 10 Year Auction. We expect the tomorrow's $12 billion 30 Year to be markedly more interesting.

"To me, the clearest value in these charts is yet one more piece of evidence that this recession/depression is very comparable to the Great Depression, despite the claims of many people that this period is "nothing like the Great Depression." And I did check the data for the years since WWII and found no other dividend declines near as large as today's, so this is not a normal recession pattern." - Thought Offerings

Spreads were tighter in the US as all the indices improved. IG trades 7.7bps tight (rich) to its 50d moving average, which is a Z-Score of -0.7s.d.. At 114.25bps, IG has closed tighter on only 11 days so far this year (180 trading days) and the last five days have seen IG diverging (bullishly) from its 50d moving average (clsoing at its tightest since 08/10). Indices generally outperformed intrinsics with skews tighter in HY, XO, and HVOL and wider in IG and ExHVOL. Spreads ended the day generally improved as tighteners outpaced wideners by around two-to-one with CONSumers systemically underperforming the rest of the non-financial names (especially noteworthy after such a significant rerisking in last week's DTCC data for the sector) while financials outperformed led by general finance names.

If you thought the entire investing world had lost sight of Dick Bove after his Buy recommendation on Lehman stock on August 21, 2008... You were right. Which is why Dick can not contain his excitement at seeing media exposure after someone still apparently cares what the Rochdale analyst has to say.

Classic whipsawing everywhere today in order to get the bewildered herd confused and nervous before Obama's big speech tonight. Odds are high that due to Obama's record low popularity and the collapse in unemployment, the O-Team will pre-program HAL to launch stocks to avoid embarrassment tomorrow.

BofA and the SEC submit their responses to Judge Rakoff. Confusion and hilarity ensues.

The stock market is no longer a one to one match for the DXY. Unless it is, and computers have yet to filter data indicating the it is now whack-a-bid time.

Tudor's former start trader emerges out of the void, and surfaces on the trading desk of London's Brevan Howard. Will a new wave of some serious "capital rotation" into equities follow? Stay tuned to find out.