Archive - Jan 29, 2010

• Asian stock markets were trading sharply lower Friday after Wall Street's losses.
• Bernanke confirmed by Senate for second term as Fed Chairman in 70-30 vote.
• China's economic planning agency sees crude oil at average $80 a barrel this year.
• Euro trades at almost 9-mt low versus Yen on Greece's budget turmoil.
• European January inflation accelerates to fastest in 11 months
• India raises bank reserve rate by 75 bps, more than expected; Keeps key interest rates.
• Japan Consumer Prices fall 1.3% in December - the 10th monthly decline.

The lead story this morning of ZH is "The Only Thing Better Than A Zero Hedge? Wells Fargo's "Never Lose" Economic Hedge", explaining more accounting shenanigans (if you read the links below, you will see that I have caught Wells in a few rather aggressive interpretations) related to MSR's. One thing that was noted was the inputs for valuing MSRs using interest rates as was extolled by management. Well...

The US Gov't can show 'profits' ad infinitum by endlessly EFT'ing money from the Treasury's savings account (at JPM) to the Fed's brokerage account (at GSCO) and vice versa. Or better yet, the Fed can pay the Treasury several times more by printing trillions of US dollars, buying companies on Wall Street, and achieving small dividends.

Thus, the so-called "profits" are NOT evidence that the US economy is doing well. Far from it, these profits are proof that the printers are working long hours. Moreover, the state's Dept. of Moral Hazard has taken upon itself Robert Wadlow-sized liabilities, which call into question the solvency of the entire American financial system.

RANsquawk 29th January Morning Briefing - Stocks, Bonds, FX etc.

We mean, if you simply had to pick....

Frustrated with hedge funds and private-equity investments, public pension funds are turning to one of the oldest investment strategies—using borrowed money to boost performance...