Archive - Jan 15, 2010
Moving Your Money Can Have a Real Effect on Big Banks
Submitted by George Washington on 01/15/2010 23:51 -0500Institutional Risk Analytics FTW ...
Weekly/YTD Credit Summary: January 15
Submitted by Tyler Durden on 01/15/2010 21:29 -0500This week has been noticeably weak for credit markets as they underperformed equity markets, fitting with our aggregate capital-structure model perspective. IG-HY has decompressed rather well buy the intrinsics have decompressed considerably more as market breadth is dominated by wideners and steepeners.
We see a slightly different picture evolve as spreads remain slightly tighter from 12/31 close with FINLs still leading the way as non-financials are mostly wider on average. Breadth is negative around 4to3 as the indices have handily outperformed intrinsics in IG and ExHVOL but not so in HY. Credit has underperformed equity since the start of 2010 (once again fitting wit hour model perspective) and their is more room to go yet on this.
Guest Post : Stretch To Farthest Point Known - Thoughts on a Hyperinflation Event
Submitted by Tyler Durden on 01/15/2010 20:24 -0500Let’s assume for a moment that Goldman Sachs is wrong. After all, at most points in time and space, predictions tend to fail—except the lucky ones. So it’s good to think through scenarios that one would consider extremely remote. Active risk management means low probability / high catastrophic outcome tail events must be hedged, and as importantly, gain exposure to those pesky Blacks Swans in ways that lead to advantage. To accomplish this, it helps to obtain a quantitative sense of their impact, to get a “feel for the cloth” as an wise former boss of mine used to say. So let’s try here.
What if the Fed more than succeeds in reflating and the end result is hyperinflation? As remote a possibility as I think this is, they really could print a way to another, completely different type of economic destruction. All they have to do is print proactively, not reactively.
Another 'Sneaky Pete'?
Submitted by Bruce Krasting on 01/15/2010 18:19 -0500Just another day at the office. Treasury, Fannie, Freddie and HUD have completed a sweet deal. Another $30b down a hole. But his time it won't cost us a cent. Honest, really, this time it'll be different. Lies.
Goldman Takes A Stab At Gold Bugs And 'Oil-Peak'ers, Says Dollar Will Flourish
Submitted by Tyler Durden on 01/15/2010 18:05 -0500
Several observations out of Goldman's Investment Strategy Group which seek to allay fears that even if the Fed were to print another few trillion dollars, the greenback would still reign supreme, never mind that all the currency in circulation now (secondary Fed liability after excess reserves), one could argue, is more than 100% backed by MBS on the asset side of the equation (or in other words, diluted by more than half from solid, and real AAA-rated securities). Goldman is also taking a stab at gold-bugs, claiming that all reports of the dollar's demise are not only premature, but borne out undue fatalism, and in fact are deja vu. Yet is this time really not different?
More Illegality From The Big Banks: This Time Short Sale Fraud
Submitted by Tyler Durden on 01/15/2010 16:39 -0500As many readers have pointed out, CNBC's Diana Olick is out with some pretty damning news of a new form of pervasive homeowner fraud, this time conducted in complicity of the very banks that yesterday were swearing up and down the FCIC hearings that they hear, see and speak no evil. Maybe such hearings should become a weekly spectacle as they now represent the only expression of Main Street's excess and growing anger, yet pushed far enough and the imminent revolt will surely become a reality. A few more incidents like this, uncovered by America's unbought journalists, may be all the straws needed to break a few CEO's backs. At least the bankers will have a few hundred billion in bonuses and some Textron private jets to help with their head start to non-extradition treaty countries.
Darrell Issa Seeks To Expand AIG Disclosure Inquiry To Ben Bernanke, Hank Paulson And Goldman's Friedman
Submitted by Tyler Durden on 01/15/2010 16:10 -0500Soon coming to a daylight drama TV show near you: Ben Bernanke, Hank Paulson and Stephen Friedman, valiantly defending America from itself and the dumb peasants that inhabit it.
Bloomberg: Only 30 Mins Behind The Curve
Submitted by Tyler Durden on 01/15/2010 15:22 -0500...And Bloomberg breaks the news...

Racketeering 102: Fed's Lacker Threatens With Mutually Assured Destruction If Fed Audited
Submitted by Tyler Durden on 01/15/2010 15:14 -0500It was a four short months ago that the Clearing House Association, in a court filing, threatened with untold destruction if the Fed was ordered to submit to an audit that would expose all their dirty laundry in the form of undervalued assets used as collateral by the Federal Reserve.
It is fitting that as attempts to expose the Fed's shady practices accelerate on all fronts, and include direct legal approaches as well as subpoena demands by various politicians, that a Fed President would once again come out today, and recap the good old Mutual Assured Destruction treatise that both Wall and Main Street have gotten used to since the beginning of the bailouts. Somehow financial M.A.D. makes an appearance every time the bankers demand something and have no other rational justifications. So why not just feed the stupid plebs something about the Apocalypse that is certain to transpire should the financial oligarchs not get their way. Today was no exception.
Supermodels Trip and Fall, Investors Flee to Bonds
Submitted by RobotTrader on 01/15/2010 15:13 -0500An absolutely horrid day for the semiconductors (aka "Supermodels") from Silcon Valley, as the INTC blowout earnings were sold with force. Consequently, investors of very race, stripe, color, and ethnic origin immediately dumped all "risk assets" and immediately piled into bond funds. Setting up yet another opportunity for our foreign debt enablers to swallow another pile of freshly printed Treasuries next week.
Another Gold Bull Emerges: Hermitage Capital, And The Fund's 2010 Predictions
Submitted by Tyler Durden on 01/15/2010 14:11 -0500Earlier we presented a very bearish piece on Emerging Markets from UBS. Now we present a somewhat opposite view from Hermitage Capital Management, which does not share quite the bearish sentiment on EM's but rather is very bullish on "frontier" markets: Kazakhstan, Saudi Arabia, Abu Dhabi, Lebanon and Nigeria. One interesting observation from Hermitage when asked which currency to own: "The answer is none of the developed market currencies...If the supply of fiat currencies is changeable at the whim of government policy, while the supply of gold or oil is fixed by the physical limitations on new production, which would you rather own as a store of value? The answer seems pretty clear to us. You want to own the commodities because they are insulated from the actions of vote-seeking politicians and their amenable central bankers who in our view will carry on in debasing their currencies." Can we get a Gold, B#@$&*s?
From The Rumor Bag: Citadel Head Of Investment Banking Todd Kaplan Quits
Submitted by Tyler Durden on 01/15/2010 13:57 -0500
From the rumor bag: Todd Kaplan, who joined Citadel less than a year ago from Merrill to build the firm's investment banking business, has quit. Wonder if that means the hedge fund's attempt to become a direct competitor to Goldman in the underwriting/advisory business has been scrapped? Perhaps an analysis of how many deals Citadel underwrote in the past year should be sufficient to answer this question.
BofA Gulfstream On Final From Moscow; Bank Of Russia In The Cards? Just Think Of The Synergies...
Submitted by Tyler Durden on 01/15/2010 13:40 -0500Update: It appears the plane is a C/O ConocoPhillips. Now that makes MUCH more sense.
Hat tip to reader Anynomous who points out a Bank of America jet on arrival from Moscow. This brings up some questions:
- Did Hank Paulson just host another secret bash for Goldman Board members in his Kremlin pad, and decide to open it up to the ex-Lewis boys?
- Is Bank of America preparing its Rakoff defense, and is so terrified of being spied upon it has decided to go to the only place deemed safe from flies on the wall?
- Dare we say it... Bank of USSR?
Stock Market Review - The Most Profitable Letter In 2009
Submitted by Value Expectations on 01/15/2010 12:59 -05002009 reacquainted the investment profession with the alphabet, as it was the year of the V, U, L, and W. Every economist tried to get recognition for predicting the most appropriate letter to describe the US economy’s expected path. Sadly, very few of those letters made investors any significant amount of money during the year, and now the debate about the economy rages on as to whether it will double-dip, or continue to climb. However, there was one letter that was very profitable to investors for most of 2009 – Beta.
Visualizing Flight Patterns Over The U.S.
Submitted by Tyler Durden on 01/15/2010 12:58 -0500
An original piece by Wired magazine presents some amazing visualizations of the various traffic routes by different airplanes over the United States. The distinction in the long-hauls versus the puddle jumpers is quite notable. Also, air traffic controllers are very likely underpaid.






