Archive - Nov 2, 2010
India is Catching Up With China
Submitted by madhedgefundtrader on 11/02/2010 23:56 -0500The subcontinent is poised to overtake China’s white hot growth rate. India will grow by 8.5% this year. Growth could exceed that in the Middle Kingdom as early as 2013. Financing and construction of huge transportation, power generation, water, and pollution control projects are underway. India is also a huge winner on the demographic front, with one of the lowest ratios of social service demanding retirees in the world. Many hedge funds believe that India will be the top growing major emerging market for the next 25 years. (INP), (FXI).
They're baaaaaaaaaaack!
Submitted by MoneyMcbags on 11/02/2010 23:20 -0500The market rallied today as election booths underflowed with discontented voters, unemployed workers looking for a warm place to hang out during the day, and douchey hipsters who thought the lines were for the Apple store.
Bank Of America's Jeff Rosenberg Attempts To Debunk POMO "Conspiracy" Theory, Fails
Submitted by Tyler Durden on 11/02/2010 23:07 -0500Various rumblings started at Zero Hedge and a few other fringe sites, and now essentially mainstream (not to mention emanating from such firms as, oops, Goldman Sachs) as pertains to a rather curious correlation between POMO days and market outperformance, appear to have finally gotten to such institutional stalwarts as Bank of America and its traditionally imperturbable Jeff Rosenberg (whose opinion we tend to respect). In a piece released tonight titled appropriately enough, "The POMO Conspiracy Theory", Rosenberg (not to be confused with former M-Lyncher David) sets off to debunk that POMO days have an impact on risk assets. Alas, he fails. The conclusion: "Our analysis points to the correlation, but not causality of POMO with rising stock prices." Sure enough, if one could confirm definitive "causality" of Fed intervention in the stocks markets, that would pretty much be the ballgame right there. And it appears that even his correlation results force Rosenberg to step back: "We likely are about to get a lot more days of POMO if the market’s expectations of $500bn further expansion of the Fed’s balance sheet is confirmed at the conclusion of Wednesday’s FOMC meeting. If the correlation of POMO purchases and stock prices were to continue to hold going forward as it has since August, than we should expect more frequent days where stocks go up as the Fed pumps in liquidity into the financial markets." Thank you for proving our point Jeffrey. Amusingly, at the end of his "debunking", Rosenberg, in typical banker fashion inverts the argument by 180 degrees, and says essentially that even if POMO is goosing markets, it basically creates a self-fulfilling prophecy that "can contribute to a better economic outcome" as it boosts inflation expectations. Jeffrey: a better outcome yes, but for you. And nobody else.
Of (Economic) Myths And (Central Banking) Heretics
Submitted by Tyler Durden on 11/02/2010 21:56 -0500Now that a revisionist political backlash against a system that failed its constituency in every possible way is in full force judging by the sea of red almost visible on the metaphoric CNBC heatmap (and literally so, after a casual glance at the turn in the AUDJPY pair derivative known as the futures), it is time for today's little political diversion to end, and for everyone to redirect their attention to where it belongs: namely the Marriner Eccles building located ironically enough on Constitution Avenue in D.C. With just over 12 hours left until what some consider the most important decision in the history of Keynesian economics, and of the fiat monetary regime, we wish to bring to you an extract from William Buckler's recent edition of his most excellent Privateer newsletter. In it he talks about myths and heretics, about dogma and revolution, about ignorance and abuse thereof, but mostly, he talks about the Federal Reserve, and its imminent end. Since pretty much everything else about what may happen tomorrow has been said, here is an essayistic view about what may happen the day after tomorrow.
4closureFraud - Wall Street Bankster Party For All Our Friends
Submitted by 4closureFraud on 11/02/2010 21:18 -0500Recent media reports in Florida and around the country, which reveal rampant error and fraud in the foreclosure process, have shown that courts should take particular care with foreclosure cases. Instead, in the rush to push foreclosure cases through the courts, Florida may be taking shortcuts and, in the process, forsaking constitutionally-required due process protections.
Death of American Liberalism?
Submitted by Leo Kolivakis on 11/02/2010 18:57 -0500Today's U.S. mid-term election is widely expected to bring bad news for President Barack Obama. But according to Chris Hedges, the situation is way worse than that which is why he's written an obituary for American liberalism.
Mid-Term Election Open Thread
Submitted by Tyler Durden on 11/02/2010 18:36 -0500
Since political commentary is most certainly not our strong suit, and since the Zero Hedge staff really couldn't care less about the outcome of this particular election, we leave it up to our proactive and interested readers to discuss, if they so desire, the evening's political developments.
With A Five Year Delay, Banks Are Finally Hiring Foreclosure Experts, As Major AG Changes Guarantee To Delay Any Foreclosure Settlements
Submitted by Tyler Durden on 11/02/2010 18:30 -0500This is just too ironic: after possibly sinking the entire mortgage-backed industry in a moronic attempt to maximize fees and minimize expenses, and hiring any carbon based lifeform that knows 5 words of English to engage in rampant robosigning, the banks are finally seeking to recruit foreclosure experts. Um, isn't that about five years too late? And isn't it also an acknowledgement that banks were in essence lying when they testified under oath that they were sufficiently well equipped to handle millions of foreclosures? The FT reports: "Recent job postings on Monster.com and other employment websites indicate that banks are recruiting “foreclosure specialists” and “bankruptcy documentation” experts. Adecco, the world’s largest temporary staffing company, said the number of such job openings was 25 per cent higher than a year ago. Monster.com says it has seen a 16 per cent rise in recruitment for such positions in the past two months." We would be most amused to discover just how many such job postings the seemingly error-proof Wells Fargo has submitted in the past month. Luckily for Wells, the new recruits will fit right at home: "Most of these jobs are lower level and require no more than high school
diploma, according to advertised listings." In other words, few if any will notice the new additions.
From Quantitative Easing To Stagflation?
Submitted by asiablues on 11/02/2010 17:13 -0500The latest dismal GDP data probably will cement an official kick-off of Fed's QE2 on Nov. 3. However, as more quantitative easing could further dilute the value of the dollar, pushing up the commodity prices, the system could be pushed beyond its limit into a possible “demand-pull stagflation” scenario.
Were There Other Hedge Funds Involved In The Human Genome Sciences Insider Trading Scandal Besides FrontPoint?
Submitted by Tyler Durden on 11/02/2010 17:05 -0500As was earlier announced by the SEC, another insider trading scheme has been exposed, this time involving company Human Genome Sciences, a tipper: French doctor Yves Benhamou, who was in charge of a steering committee in charge of a potential Hepatitis drug for HGSI, and a tippee, which Reuters reported to have been Morgan Stanley spin off FrontPoint Partners. In essence Benhamou, who apparently worked as a consultant to FrontPoint (we are currently trying to determine if this was via a public "expert network" such as Gerson Lehrman or on a one-off arrangement), tipped off one or more of FrontPoint's PM (Chip Skowron, Jason Bonadio, Ajay Bhalla, who incidentally had joined from SAC in 2003) that trial developments were not progressing as hoped. The result was a plunge in HGSI stock by 44% on January 23 when the news was made public... But not before Morgan Stanley had sold off all of their holdings, which amounted to 6 million shares, the day before. Altogether, a rather amateur operation. And one which a simple glance at FrontPoint's 13F holdings would have confirmed, something was shady. As the chart attached demonstrates, FrontPoint did dump all its HGSI shares held as of December 31, 2007, held nothing in Q1 2008, and then resumed accumulating stock in the next quarter. Yet what the Raj Rajuratnam scandal taught us is that when it comes to criminal activity, hedge funds typically do not act alone, and share inside information with some of their closest confidants, to "spread the risk" in a syndicated (no pun intended) club deal. Which is why we looked for comparable odd 13F "liquidations" in HGSI between Q4 2007 and Q1 2008. We found two... one of which is certainly peculiar.
As Irrelevant Election Results Start To Trickle In, A Visualization Of 100 Years Of Government Lies And Their Impact On (What's Left Of) The Economy
Submitted by Tyler Durden on 11/02/2010 16:18 -0500
As election results gradually trickle in, the following chart from John Palmer presents one of the best compilations of how the government and the economy have coexisted over the past 100 years. To say that there has been much of a difference under either regime would be an overstatement: the end goal has always been the debasement of the dollar, the incurrence of more debt, the expansion of the economy courtesy of ever cheaper debt-created money, all the while nothing has actually changed. As Palmer notes, "this historical perspective visualizes economic trends and spending patterns, during good times and bad. Present-day assumptions regarding core party values have had major shifts over time, and the ridiculous extremes in voter alignment, lobbying, and legislative action are due for revision. As a basis for future shift, this data can educate a presumptive public, empowering citizens to make an informed decision on each and every election day." It appears that with broad hatred for the Fed gradually eclipsing party allegiances, that the presumptive public is finally waking up.
Daily FX Summary: November 2
Submitted by Tyler Durden on 11/02/2010 16:01 -0500The EURUSD finished the session higher on Tuesday amid a weaker greenback, which fell as investors looked forward to the FOMC decision on Wednesday which is expected to feature a statement on asset purchases and also following the release of higher than expected European manufacturing PMI's. The Bulls largely disregarded renewed concerns over the Eurozone and the pair steadily marched higher and by the closing stages on Tuesday was trading above the key 1.4000 level. Despite a weaker than expected UK construction report, the GBPUSD finished the session on Tuesday largely unchanged as a weaker greenback counteracted the selling and provided the much needed support for the pair. Despite a weaker USD on Tuesday, the USDJPY remained stuck in a tight trading range in the high 80.00 territory. All eyes on Wednesday will be on the FOMC decision, where the Fed is expected to announce that it is to initiate another round of asset purchases.
Iridian Asset Management Devotes Entire Q3 Update Letter To MBS Crisis
Submitted by Tyler Durden on 11/02/2010 15:48 -0500More and more hedge funds are starting to not only look and be concerned by the "MBS Crisis" but are using it to determine their investing strategy. To wit from Iridian Asset Management: "Our typical quarterly letter has three parts. We describe our current macro view of the world, discuss briefly a current investment theme, and conclude with an examination of micro-market dynamics. Our goal with this structure is to share with our investors what we are seeing from the front lines of the global capital market battleground. But rather than write one more description of the pros and cons of QE 2, rather than write one more post mortem of the SEC report on the Flash Crash or the pernicious impact of correlation on stock picking, we have decided to devote this entire letter to an in-depth review of an investable theme that we are currently researching and acting upon: the mortgage backed securitization (MBS) crisis of 2010. This theme also has secondary and tertiary macroeconomic implications, and therefore influences our portfolio-wide views on risk and exposures."
The Fraud Started At the Very Top: With Government Leaders
Submitted by George Washington on 11/02/2010 15:32 -0500The scam started at the top ...
19 Reasons Why The Real Bubble Is In Inflating Bubbles
Submitted by Tyler Durden on 11/02/2010 15:32 -0500BNP shares 19 reasons why the real bubble is not in gold, it is in quantitative easing itself...








