Archive - Nov 10, 2010
Banzai7 Salutes the Maestro
Submitted by williambanzai7 on 11/10/2010 23:25 -0500The central banking PhD rash that just keeps coming back...Ladies and Gentleman....Maestro!!!!!!!
CPPIB Overtakes the Caisse?
Submitted by Leo Kolivakis on 11/10/2010 23:13 -0500Did CPPIB just overtake the Caisse as Canada's largest pension fund?
RINO's Stock Price Plunges Into Muddy Waters As Research Report Claims Stock Is Scam
Submitted by Tyler Durden on 11/10/2010 22:50 -0500Before CSCO defecated the bed, today's most notable downside mover in the market was RINO International, a relatively recent addition to the US stock market, which in the past 2 years has gone from over $50 to $2, and recently was trading $15.66, until small research company Muddy Waters Research came out with a 30-page brutalizing report this morning, which once it made the rounds, sent the stock into a tailspin, closing down 15%. In a nutshell, Muddy Waters believes the company is a dud, and has initiated the company with a Strong Sell and a $2.45 price target (likely backed by a solid short position, but hey: if they are right, they deserve to make money). And cursory view indicates Muddy may actually be generous in their PT. The research company notes: "[RINO] reported 2009 revenue of $193 million. In reality its revenue is under $15 million, and its management has diverted tens of millions of dollars for its own use. We value RINO based on the cash we believe remains in the company after the most recent raise." After reading the report, we tend to agree that report author Carson Block may be on to something, and that this stock has a very material probability of dropping another 80% over the next several weeks or months as the downside case gathers momentum.
China Wants World To Believe Inflation Jumped By 4.4%, In Line With Shadow Expectations, Fastest Fake Price Growth In Two Years
Submitted by Tyler Durden on 11/10/2010 22:02 -0500That China somehow magically pulled a 4.4% inflation number for October out of its hat is not surprising. After all this is precisely the number that the "local market" was expecting as there are no secrets in China, even if the Bloomberg surveyed Keynesian fundamentalists-cum-economists end up being "pleasantly surprised." Yet none of this is at all relevant: now even Credit Suisse's Sean Keane (see below) is openly ridiculing the magic 8-ball that the Chinese department of truth is. The only open question is whether this acceleration in the economy to a two year high will lead to a rate hike. And the answer, as Bank of America says, is no. Which means a whole of nothing is about to happen as a result of this latest non-news which just confirms that China's economy is telegraphed to be overheating at precisely the rate that its politburo has determined is just right.
Daily Oil Market Summary: 11.10.2010
Submitted by Tyler Durden on 11/10/2010 21:36 -0500Oil prices were higher yesterday, and refined products had especially brisk sessions. In the process, crude oil prices settled well above $87.15, confirming the technical breakout that prices had been flirting with for days and pointing towards a test of $89.50 and then somewhere in the $94-$95 zone. Gasoline prices powered past their important resistance at 219.92-220.11, settling a solid three- and-a-half cents over that resistance. Heating oil prices deepened their breakout and widened the distance between the last price and their initial breakout area. The combined result is that we have solid technical breakouts across the spectrum.
Perfect Storm – February 2013?
Submitted by Bruce Krasting on 11/10/2010 21:23 -0500Things are lining up for a hard landing in a few years.
A Revisionist Greenspan Accuses America Of Weakening The Dollar
Submitted by Tyler Durden on 11/10/2010 19:13 -0500Greenspan chimes in on the biggest debate of the post-Bernanke era, and says "America
is also pursuing a policy of currency weakening." Duh. At this point we would love to ask the dear demented revisionist: just what on earth was your policy, Mr. ex-chairman, and why is "it" really known as the Greenspan Put? At the end of the day, does all the Fed do, aside from bubbles of course, is just create insane, cannibalistic, and completely revisionist, apparatchiks?
27th Consecutive Week Of Domestic Fund Outflows
Submitted by Tyler Durden on 11/10/2010 18:58 -0500
Though we may sound like a broken record, just one more week, and we promise that the hot potato chasers will return to the broken market. After all who else will the Primary Dealers and HFTs offload their billions in AMZN, EBAY and AAPL shares to? And now back to your regularly scheduled propaganda.
Cisco Plunges In AH Session After Major Cut To Guidance On Earnings Call, Sees Up To $1 Billion Revenue Shortfall In Q2
Submitted by Tyler Durden on 11/10/2010 17:39 -0500
The conference call is still ongoing, but the company has dropped a bombshell by cutting revenue guidance by 10%: it now anticipates a 3-5% revenue growth from Q2 last year, which was $9.8 billion, or therefore a range of $10.1-$10.3 billion. As the estimate on the street is for $11.1 billion for the next quarter, the firm just whacked up to $1 billion of the top line. Weakness attributed to US Cable segment, public spending, and Europe. In other words, everything. CSCO also sees Q2 EPS 32c-35c vs. consensus 42c. In other words, the second tech bubble may just have popped although don't count out the Fed-backed momos just yet. The stock is down 13% as of this posting, and the futures are plunging. We will bring you the call transcript asap.
NIA Releases Food Price Estimates For A QE2 World: Bread To $23.05, Corn To $11.43, $62.21 For Sugar
Submitted by Tyler Durden on 11/10/2010 17:12 -0500On one hand we have the WSJ writing day after day that prices of food and energy products are not "really" rising. On the other hand we have empirical evidence that virtually every staple is already higher in price, or is being served in proportionally smaller portions. One possible arbitration on the issues comes from the NIA, which even if biased, does provide an estimate of where prices of various key perishables will end up in a post-QE2 world. These are as follows: "$11.43 for one ear of corn, $23.05 for a 24 oz loaf of wheat bread, $62.21 for a 32 oz package of Domino Granulated Sugar, $24.31 for a 32 fl oz container of soy milk, $77.71 for a 11.30 oz container of Folgers Classic Roast Coffee, $45.71 for a 64 fl oz container of Minute Maid Orange Juice, and $15.50 for a Hershey's Milk Chocolate 1.55 oz candy bar." Granted these are likely somewhat whimsical, but even if they are partially correct, it would mean the bulk of US society, as we pointed out previously, is in for a long, cold, hungry winter.
A Classic Stop And Squeeze: The Fed-PD-Fed Free Money Arbitrage
Submitted by Tyler Durden on 11/10/2010 16:40 -0500
Well at least the only trade left in town is working! In a classic old school alley-oop clinic that could make us forget Magic to Kareem, the Fed to dealers to Fed (remember the Fed runs the auctions) switcharoo was in full force today. Add to that the fact we have a mid-week bond holiday before the start of QE 2.0 on Friday, and really the set-up was perfect. A nice tail at the auction stopped out the day traders and the weak longs into the hands of the dealers who turned around and bought, even more so in the 5y to 10Y sector, so they can deliver to the Fed on Friday. We happily tried to help our clients collect on the round trip as this kind of day is clearly a sign of what's to come in the Fixed Income space. - Nic Lenoir
RANsquawk Market Wrap Up - Stocks, Bonds, FX etc. – 10/11/10
Submitted by RANSquawk Video on 11/10/2010 16:30 -0500RANsquawk Market Wrap Up - Stocks, Bonds, FX etc. – 10/11/10
Gonzalo Lira And The Boiling Frog: Effects Of QE2 On The Bottom 80% Of The U.S. Population
Submitted by Tyler Durden on 11/10/2010 16:14 -0500
The recently announced Quantitative Easing 2 policy of the Federal Reserve has had and will have a profound effect on the dollar—and a profound effect on the American people: Especially the bottom 80%. In a word, QE2 will make four fifths of the American people poorer. Bernanke’s stated purpose in QE2 is to spark consumer spending, and thereby reignite the economy. But QE2 will have the paradoxical effect of making basic necessities—food, housing, clothing, transportation—more expensive for everyone. This will mean that basic necessities will take a bigger bite out of household incomes, reducing consumption, rather than stimulating it. So like a frog dropped in a pot of cold water that's had the heat turned up, the American people—especially the bottom 60% to 80% of the population—will slowly be boiled to death in the stew of QE2. —Gonzalo Lira
Cliff Notes Of Hedgeye's Take On A Paul Krugman Lecture: A Good Charlatan Who Still Doesn't Get It
Submitted by Tyler Durden on 11/10/2010 15:49 -0500In attending a Paul Krugman lecture yesterday, we came away with two main takeaways: 1) the Perceived Wisdoms of academic dogma run rampant throughout U.S. monetary policy; and 2) Keynesians really don’t get it. - Hedgeye Risk Management
California Discloses A $25.4 Billion Budget Hole, Asks If It Should Pass The "Huge Challenge" To "Future Californians"
Submitted by Tyler Durden on 11/10/2010 15:39 -0500The California Legislative Analyst's Office has just released the latest fiscal outlook. It's not pretty. The state discloses a $25.4 billion budget "problem" which consists of a $6 billion deficit for the remainder of 2010-2011, and a $19 billion budget deficit forecasted for 2011-2012, thanks to a $8 billion plunge in revenues for the general fund, as temporary tax increases adopted in 2009 expire. Furthermore, as the state admits: "One major reason to stop passing the state’s problems to future Californians is that the state’s long-term fiscal liabilities—for infrastructure, retirement, and budgetary borrowing—are already huge. The costs of paying down these liabilities already are reflected, to some extent, in the state’s recurring deficits, but these costs will only grow in the future. By deferring hard decisions on how to finance routine annual budgets of state programs to future years, the state risks increasing further the already immense fiscal challenges facing tomorrow’s Californians." Luckily this is all rhetorical, and Cali will just take the Bernanke pill, and kick the can down the road. And as state budgets ultimately have to balance, at least on paper, one wonders if Cravath's ploy with its pro bono Harrisburg gimmick is merely to get Sacramento on a silver platter when the Chapter 9s move to the Golden State. One can be certain that one won't be pro bono.






