Archive - 2009

In case you were curious how Goldman Sachs is axed vis-a-vis the dollar, we present the firm's complete Commodity Outlook, which among other things sees another $250 increase in gold, and thus continued dollar destruction which of course is wonderful for Goldman. Then again, Goldman has had an abysmal and permabullish commodity prediction track record: reader beware.

Modest menu sampler

APERITIFS & HORS D'OEUVRES - Minted-Green Dacquiris Flowing From a Kozlowski-Inspired Ice Sculpture Fountain. (Holy Water or non-alcoholic beverages available on request)

FIRST COURSE - Shark-Fin Soup

MAIN COURSES - Roasted Market Goose Entier with "Couilles Brasse" With Scalped Pototoes

DESSERT - Gaffes with a Blanc-Fine Syrup

PETITS-FOURS - Bittersweet Karma Cookies

Major negative surprises by virtually all retailers with two exceptions, indicate that the consumer is becoming increasingly tapped out into the holiday season. Black Friday sales which were not too bad are likely merely another unsubsidized (yet) Cash For Clothing program with substantial demand being pulled forward: at this rate December sales will likely be an even greater negative surprise.

Developing story from Market News

I have been bullish on the Japanese currency since March 2007. What I think defines broad movement in currencies is perception along with broad relative monetary actions. The expansion or contraction of monetary aggregates in one currency versus another is in essence its purest denominator. We show today such a timing model in the yen/usd rate of exchange. Notice that timing simply based on monetary aggregates can be not forgiving for quite some time until the new trend establishes itself.

$180 Million, yes, not Billion, Million, was Reverse Repoed (in a 3 day operation) by the FRBNY in its first executed Temporary Open Market Operation Test as part of the liquidity soak up process. The collateral was "Treasury", not CMBS, not stocks of bankrupt companies, but the safest of the safe securities. And even so Primary Dealers could barely part with just under $200 million. So let's do the math: excess liquidity of about $1 Trillion, and a reverse repo of $180 Million: that's just over 5000 TOMOs to go. Don't say the Federal Reserve has no sense of humor.

RANsquawk 3rd December US Morning Briefing - Stocks, Bonds, FX etc.

From the Non-manufacturing ISM survey responses: "No one trusts that the recovery is real. Seems everything and everyone is in a holding pattern." Amen to that. In other news, the Services ISM comes at 48.7, well below October's level of 50.6, and far below consensus of 51.6. Double dip - here we come.

Watch it live without newly Comcastic interruption here: http://banking.senate.gov/public/index.cfm?FuseAction=Hearings.LiveStream

When Goldman releases a public powerpoint defending its compensation practices and its soon to be disclosed multi-million dollar bonuses, you know that the firm is expecting a firestorm once the proxy is released and leaks about what top traders receive come out.

"You want to do something about jobs? Well, considering a different Fed Chairman might be a good place to start. Nothing would more clearly display the inability of our leaders to deal with the disastrous state of our economy than easily reconfirming Ben Bernanke for another round at the Fed on the same day that they hold a "job summit" in a harebrained attempt to try to figure out how to create jobs in this country." - Dylan Ratigan

Deutsche Bank presents its four 2010 scenarios together with a plethora of data to keep even the most detail oriented among you busy for hours.

• The Wall Street Journal: The country needs a new Fed Chief (WSJ)
• Steve Rattner reminds people he still exists: Bernanke deserves our thanks (WaPo)
• Roubini on lessons from Dubai: Don't assume government backing for state owned businesses (Forbes)
• Must read: Fudging losses is easy when the FDIC does it, too "The surest way for the FDIC to
  regain its credibility is by replenishing its fund’s balance
  sheet with fresh capital raised from the banking industry, and
  by demonstrating that its financial reports can be trusted
  again. Until then, its reputation as a captive regulator
  incapable of managing its own finances will remain intact." (Bloomberg)
• Goldman takes offense on pay (WSJ)
• Goldman's 2011 forecast would be an absolute disaster for Democrats (Reuters)
• Pensions eliminating stocks add $40 billion to corporate bonds (Bloomberg)

RANsquawk 3rd December Morning Briefing - Stocks, Bonds, FX etc.

• Asian stocks rally most since May, led by Japanese exporters; Yen weakens.
• E-commerce sales grew 5% YoY on Cyber Monday—first Monday after Thanksgiving.
• Euro up to $1.5111 in European morning trade as investors await ECB meeting.
• Gold sets third straight record; Newmont Mining forecasts $1,350/oz in 2010.
• Hong Kong should tighten rules to control asset prices: IMF.
• Japan shares jump nearly 4 percent to five-week high on weakening yen.