Archive - Oct 8, 2010

The global resource frenzy has grown so heated that money has begun pouring into the marginal fringes of the universe. The Mongolian stock market has been one of the world’s best performers this year, spiking some 100%. A call the world’s largest undeveloped copper resource (IVN), (RTP)

The research firm OLP Global came out with an excellent research report on Wonder Auto Technology, Inc. (WATG) last week, which I’ve attached here. The report examines a $15 million acquisition that the company made in July 2010, and raises serious questions about whether the acquisition was legitimate.

As more come on board with QE2, risk appetite is rising, but betting on a Fed-inspired recovery rally can be a dangerous game...

Jailed Chinese dissident Liu Xiaobo won the 2010 Nobel Peace Prize on Friday for "two decades of non-violent struggle for human rights". China is totally livid and called the award "an obscenity".

Some thoughts on a funny week.

For different reasons, the Federal Reserve and the Bank of Japan are trying to weaken their respective currencies. China is allowing its currency, the yuan, to strengthen, but not quickly enough for the U.S. This amounts to a two-fer for central banks in that they can accomplish two seemingly diverse tasks. It reminds me of an old spoof television commercial showing a couple fighting over whether a product was a floor wax or a dessert topping–”It’s a stimulus program. No, it’s currency manipulation. No kids, it’s both.”

Got any better ideas?

This week, Soc Gen's Stephen Antzak delivered the definitive presentation to a sell out (no pun intended) crowd of bankers and hedge funders, on how to hedge [idiosyncratic|market|correlation|macro] but most importantly, fat tail risk: the biggest bogey man in day and age when commodities open limit up, and when any day the ES can open limit down. What are the cheapest hedging strategies? What are the best pair trades? How should one be positioned in this environment of unprecedented correlation? All these and many more questions are answered by Antzak in this all encompassing presentation which we are happy to bring exclusively to our readers.

RANsquawk Market Wrap Up - Stocks, Bonds, FX etc. – 08/10/10

The following headline from the Telegraph explains it all.

The recovery of the economy depends on several important factors, but the recovery of the real estate market is near the top of the list, especially commercial real estate (CRE) because most of America's banks are loaded down with CRE debt. Here is a current assessment of the state of the CRE market.

A simple visual aid for understanding and explaining the subprime pipeline to your family and friends, using a sewage treatment plant metaphor.

Now that the impact of census hirings is presumably over, one would think it is fair to say that the whole private versus non-private distinction can go away. Because with the census program now netting itself out, as census hirings and firings offsetting, the only thing that matters is private and non-census government hiring. And to say that non-census government hiring is irrelevant, when it is precisely the government's hiring that has been the only category that is flat or positive for the duration of the second great depression, would be about the equivalent of calling the Hiroshima bomb a modest gust of wind. Which of course has not prevent Obama to completely strip out the government impact on jobs in 2010, when in a speech earlier he told an adoring audience that he has created 850,000 jobs in 2010 (for those who care the clip can be seen here). Which is in essence completely ignoring the impact of the millions, or, as some would say, billions, of non-census government jobs in the economy. What's more, Obama conveniently forgot to mention that the BLS just revised its trailing 12 month NFP number by 366 earlier today, taking a major Birth/Death biased haircut out of the propaganda numbers. Which is why when adding all YTD NFP numbers (excluding census), and excluding the now revised impact of the 366,000 on a monthly basis (30.5K from from the January-March numbers), one gets a number of 530K jobs, which is about 62% of the number boasted by Obama earlier.

Sorry Warren Buffet and Charlie Munger: the lie was fun while it lasted. Suck it up.

BN  *CALIFORNIA AG CALLS ON BANKS TO HALT FORECLOSURES IN CALIFORNIA

and there's more:

BN  *AG BROWN SAYS IN TALKS WITH BOFA, ALLY, JPMORGAN, WELLS FARGO

and yes, it's now airborne:

BN  *NEW MEXICO AG CALLS FOR SUSPENSION OF MORTGAGE FORECLOSURE

In the following interview with the WaPo's Ezra Klein, Janet Tavakoli shares some more information on why every bank is about to shut down all foreclosures, in what she calls the "biggest fraud in the history of capital markets." Not very surprisingly, we are, so far, spot on in our 29th September projected timeline at this point: "We predict that within a week, all banks will halt every foreclosure currently in process. Within a month, all foreclosures executed within the past 2-3 years will be retried, and millions of existing home sales will be put in jeopardy."