Archive - Nov 9, 2010

What you have is a contest where you are trying to find the proverbial dog with the least flees on it, and at these levels, I am not sure the euro is the winner in this currency contest.

Precious metals have now entered their parabolic phase. The latest catalyst for gold having traded north of $1,420 is not only the ongoing collapse of Europe via surging spreads and accelerating ECB bond monetization, which in tried and true bizarro fashion have lead to a more than 100 pip move higher in the EURUSD, but the latest speech by PBOC academic advisor Li Daokui, who said that it is "absurd" that the dollar is still the reserve currency of the world. We are confident that pretty much everyone in China agrees. The likelihood that China is about to do something big in FX land was also confirmed by the biggest move higher in the CNY which rose by 0.51%, the most since the revaluation period, and also by the high yield in the one week auction, which has led some to believe that China may be willing to hike rates once again, and further weaken the dollar peg.

A fundamental restructuring America’s conduct of its foreign policy through the implementation of a quadrennial review is in the works. The US is executing a two pronged military/diplomatic strategy of stepped up bombing, while enticing the Taliban to the negotiating table. Before the US helps Pakistan, it must help itself first, through the raising of domestic taxes. Pushing for a common negotiating forum with Europe to bring Iran to the table on the nuclear issue. The START treaty with Russia on nuclear weapons control may pass in the Senate during the lame duck session. The US supports China’s peaceful rise, but the picture is “complex.”

Small business survey, wholesale inventories, and consumer confidence… No POMO today, PM short squeeze continues as silver now threatens to pass $30.

• Inc. to sell its distribution business to TPG Inc. for $930M.
• AutoZone sells $500M of 10-year debt in increased offer.
• Bank of China reportedly considering taking a stake in Portugal's Banco BPI SA.
• Barclays' Q3 net falls 76% as invt banking unit posts loss on revaluation of its own debt.
• BlackRock's largest investors BofA, PNC raise $8.3B in stock sales.
• Chrysler reported Q3 loss of $84M; ups 2010 forecast. Expects positive free cash flow.

"The love of money as a possession--a distinguished from the love of money as a means to the enjoyments of life--will be recognized for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shutter to the specialists in mental disease."--John Maynard Keynes

RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 09/11/10

Retail traders are notoriously wrong at picking market direction/tops and bottoms. Most retail traders very naturally seem to adopt a counter-trend stance and this offers very accurate signals for individuals looking to trade against this group. This daily report is designed to help traders focus their efforts on higher probability pairs.

Just as in fraudclosure, the PM manipulation lawsuits are now coming daily... Soon - hourly. From the just filed lawsuit by Eric Nalven, which references Andrew Maguire's series of whistleblowing emails: "In connection with its acquisition of Bear Stearns in March 2008, defendant JPMorgan acquired massive short positions in the silver futures market. Thereafter, JPMorgan, with HSBC, artificially depressed the price of silver dramatically downward. The conspiracy and scheme was enormously successful, netting the defendants substantial illegal profits. The conspiracy and scheme has been corroborate by a 40-year industry veteran and former employee of Goldman Sachs (the "Informant") who was told by representatives of the defendants about the conspiracy and scheme. The Informant has stated that he had been told first hand by traders at JPMorgan that JPMorgan manipulates the silver market. The JPMorgan traders would brag to the Informant about how much money they were making as a result of such manipulation. The informant reported the defendants' activities to the CFTC which has opened an investigation into the manipulation of the silver market."