Archive - Oct 2010

SigTarp Neil Barofsky has just released the most scathing critique of all the idiots in the administration, with a particular soft spot for Tim Geithner. If after all this disclosure Geithner does not resign, well, America truly will have the Treasury Secretary, not to mention administration, it deserves.

Here is an example of how the blogosphere is destructive to the cataclysm that is the US economy: we present the truth. To wit: Fitch Ratings has placed the 'F1+sf' ratings on three Bank of America N.A.-sponsored ABCP conduits on Rating Watch Negative. Next up: all of BofA's MBS conduits to be downgraded on complete legalese  vacuum on pervasive fraud.

Some headlines out of a freshly striking Greece, which is doing all it can to remind the world, suddenly, that things in Europe may go full circle back to the conditions from May:

• PAPANDREOU SAYS CONCERNED ABOUT GREECE GOING FORWARD
• GREECE IS STILL IN A STATE OF ALARM, PAPANDREOU SAYS

And here is G-Pap reprising in his role as the US president:

• PAPANDREOU ASKS GREEKS TO CAST A VOTE OF HOPE, CHANGE
• PAPANDREOU ASKS GREEKS TO REJECT CASTING VOTE OF PROTEST

Blogs, Banks, Derivatives Risk and the Fiery Sword of Truth: This One Has It All - Even a step by step guide to the TRUTH!

Still confused by the whole concept of currency wars? Wondering why every day some new nation is said to have entered into the 21st century digital equivalent of good old fashioned dive bombing, when the only thing diving is the dollar? Then the following interactive infographic from the FT is for you. The data after the jump (free registration may be required) allows readers to explore the background and actions in the so-called currency wars, looking at the economic and political basis of the key countries’ actions.

With the Bank of Canada lowering their economic outlook for the third quarter, the BoC maybe accurate as many of the most recent data points have remained tepid. These data points indicate that the Bank of Canada will most likely sit tight on any further monetary tightening at the next policy meeting.

As we reported some time ago, the weird stuff in TIPS land continues, and was brought to the surface during today's 4 Year 6 Month TIPS auction, which closed at, drumroll, -0.55%. That's right, a yield of negative 0.55%. This compares to +0.55% in April. TIPS Investors better hope that the CPI eventually captures all the fun that is happening in the Rare Minerals space.

Fraud? What fraud?

It depends where you live, your race, income and age ...

As all financial service companies are making ritual sacrifices of lambs, goats, or virigns, whatever is cheaper to procure these days with rampant asset price explosions, to assorted gods that stock volumes finally pick up, the next chart demonstrates the very vivid Catch 22 that markets now find themselves in. To wit: every single pick up in volume, which means more than just the upward biased churn of the High Frequency Pirates, is immediately followed by a complete obliteration of the bidside order books, and a consecutive plunge in prevailing stock prices, especially in such ETFs (courtesy of record stock correlations) as the SPY and (synthetically) ES. Which is why the daily action since the beginning of September on less than miserable volumes is not an indication of any sort of buying interest, but a complete lack of trading interest. And any actual trading volume is always from a better seller. We hope that the brokers are positioned appropriately for that inevitable volume pick up, which however, will result in the market trading down quite promptly to late August levels, and, who knows how much lower.

Finally the FDIC acknowledges the shitshow:

• BAIR: LITIGATION FROM SERVICER ISSUES COULD BE `VERY DAMAGING'
• BAIR SAYS FORECLOSURE PROBLEMS WILL REQUIRE `GLOBAL SOLUTION'
• BAIR: CRISIS REQUIRES `DECISIVE' ACTION FOR MORTGAGE SYSTEM
• BAIR: FDIC SECURITIZATION RULES `CONSISTENT' WITH DODD-FRANK

And the kicker:

• BAIR SAYS CRISIS REVEALED `CRITICAL FLAWS' IN MORTGAGE FINANCE

Oh, so there are flaws??? As a result, Bank of America takes out 10/20 lows

Below is the full text of Berkshire's "disagreement" letter with the SEC over the recognition of long-term impairments. The letter was sent out in July 1. Good thing Berkshire only took so much temporal liberty with determining what filing is material. Had it waited a mere decade longer, it is more than likely this whole matter would have been completely irrelevant, as its 2020 release would have coincided with TARP/QE 666, geared exclusively to bailing out Berkshire's 99.9% holdings in Goldman and all the other insolvent TBTFs.

A token amount for a test of what the US apparently does not have the guts to do: note maturity - November 1, 2060. Price talk on the $250 million issuance at 6.25%. Use of proceeds: General Corporate Purposes, also known as bonuses for the janitors. Oddly enough, the par on the notes is just $25. Is Goldman now trying to appeal to retail direct? Are pension and mutual funds tapped out, courtesy of endless redemptions and lack of cash for ponzi perpetuation purposes? Either way, if this is successful, and it will be in the broader drash for yield, look for most TBTF banks to start issuing 100 year bonds that will never be repaid.

Having rallied virtually non-stop since the beginning of September, stocks are now about to come up against MAJOR long-term resistance in the form of the 200-week moving average.

Some earth-shattering insider buying in the past week (a fact not seen in months), courtesy of a large block of stock purchased in Monstanto (for $1 MM), Intel ($384K), and GE ($334K), has done miracles to the general insider selling to buying ratio, and almost managed to offset the $114 million sold in Google, $100 million in Oracle, and $30 million or less sold in Safeway, Discovery Communications, Costco and a total of 61 other names. In the week ended October 22, S&P 500 insiders sold 229 times more stock than they bought, per Bloomberg. To be sure, this is a vast improvement from last week's 2,000+ plus ratio, yet still the rolling insider average selling to buying over the past 8 weeks is about 1,000 to 1. At least insiders continue to benefit from ever more irrational prices in stocks from which they can bail at increasingly loftier levels.