Archive - Sep 2009

The Internet retorts that it is even more concerned by spread of disinformation by NBC/GE subsidiaries.

Some technical market observations courtesy of an insider. Alas, it is computers run amock as usual, so nothing else matters.

"From a stock market point of view [the refusal to allow raters to use First Amendment protection] is a game changer" - David Einhorn

"So for the first time in the post-WWII era, we have deflation in credit, wages and rents, and from our lens this is a toxic brew that in the end will ensure that the focus on capital preservation and income orientation will be the winning strategy over a strict reliance on capital appreciation." - David Rosenberg

A month ago, Goldman had no idea how to run the market higher so it quoted Barney Frank as a reason to upgrade GE and cause some serious squeezage. JP Morgan, which prudently sensed that the equity market being a derivative of the dollar weakness needs some substantiation, came out with a comparable GE upgrade last night, raising its target price from $12 to $17, not on anything as fundamental as a quote by a Congressman, but merely "on sentiment, as [it is] one of the last stocks for which a little good news can still go a long way. In the look for non-consensus, catch-up stories, GE stands out as the last, in our view." And it turns out potential upside momentum is good for a 40% increase to a multi-billion company's target price.

Who says momos are confined to equities. We present to you the latest bond/loan relative action, where every week there is some vomit inducing squeeze squeeze or collapse on no news: this week the yoyo was SS&C Technologies, whose loans tightened by over 100bps, while bonds widened by 20bps. Otherwise, the secured-unsecured divergence continues, with leveraged universe loans tighter in the last week by another 5 bps to 395 bps, while bonds continue drifting wider, 3 bps wider over the last week and over 70 bps over the past three weeks.

• Gold rallies past $1,000 an ounce on momentum and dollar  (Reuters)
• Dollar falls to 11 month low, Bernanke will not be satisfied until it hits 0 (FT)
• Oil follows gold higher as dollar gets hammered (AP)
• And another nail in the USD's coffin: Beijing issues first 6 billion, non-dollar denominated renminbi bond sale (FT)
• The next financial crisis: It's coming and we just made it worse (New Republic)

• Asian markets were mostly higher Tuesday; Taiwan up 1.2% on Cabinet reshuffle.
• China plans to offer 6B yuan ($879M) of government bonds in Hong Kong
• China showcases commercial jet at Asia air show
• China 2009 vehicle sales may rise 28% on stimulus, probably surpassing US.
• ECB says significant contraction in euro-zone economy has ended; rates unchanged.
• G-20 finance chiefs propose banks curb bonuses, increase capital holdings.

Blast from the future: this will be today's 4:01 pm headline.

"Zero Hedge (4:01 PM) - Another day in which the market was driven by the ongoing dollar cataclysm, the EUR-JPY carry trade, and some speculation on what gold will do. Also, another day in which stock direction was absolutely not based on fundamentals, and momos gunned every move higher on micro volume and every reversal was meet with a huge volume ramp."

• Ron Paul: End The Fed (Ludwig Von Mises Institute)
• Evans-Pritchard doubleheader: Does the world have the courage to deal with its debts (Telegraph) and China, Bernanke, and the price of gold (Telegraph, h/t Steve)
• Gold advances to $1,000 an ounce as Bernanke dances on dollar's grave (Bloomberg)
• "Everyone is guilty" of aid means U.S. WTO wins may be harder (Bloomberg)
• Russia oil production overtakes Saudi Arabia (Global Research, h/t Washington)
• Syringe stabbings roil China as ethnic tensions rise (Bloomberg)

Debt is like herpes: ignore it long enough and it just disappears on its own.

The market's upward momentum this year has hordes of investors still looking for opportunities with good entry points. With crude prices hovering around the $70/bbl range, even with reduced demand, oilfield services remains one of the more promising sectors still with room to grow.

And what better way to kick off the short work week than the forced administration of productivity killing legislation and strong (but voluntary) dose of Radio Zero?

Let's call it 8:30 (ish) ET.  URL unveiled here with great fanfare 15 min before (or so).

Till then, requests, legislative markup, stories of a lack of productivity all welcome via AIM here: radiozh

Update: Get your French Workweek on: http://cdo.zerohedge.com:8000/listen.pls

Update 2: Radio Zero is on EFNet!  #radiozh

But even when employment eventually picks up, it will be the most meager recovery ever and the pick-up in activity will likely be in sectors like education, health care, infrastructure and alternative energy.

...At least for marketing purposes. It appears Fund of Funds are staging a come back. And investing in momentum funds. Yes, you read that right. Investors are willing to pay someone 2 and 20 to heatmap stocks for them, and there is an extra 0.5 in there somewhere if the heatmapping occurs at exactly 3:30pm each and every day. Which is why Zero Hedge dug through its archives, with the goal of reminding its readers just what a seemingly great idea activist funds were as recently as 3 years ago: so good in fact, that UBS had dedicated an entire fund for the sake of chasing Activist returns. We challenge readers to go through the roster of investees and to tell us how many of the highlighted funds are still in operations. (We would go so far as to add Barry Rosenstein's Jana to the list of "not-so-YTD-ourperformers").