Archive - Nov 2010

Where does one start here? The massive revision (from -39K to -2K), the constant flip flopping (from -2K to +43K), the fact that every single time the consensus was missed lead to a jump in the NFP (expectations this time were +20K), or that nobody cares about ADP anymore as it is merely noise?

• Election reaction: GOP Wins House in Huge Swing (WSJ); El-Erian: We've Voted. What's Next For The Economy? (WaPo), Obama Confronts Setback to Agenda (FT), Obama's Window for Change May Close With Republican Win (Bloomberg), G.O.P. Captures House, but Not Senate (NYT), Republicans to Take On U.S. Health Law, From Taxes to Insurance (Bloomberg)
• Bernanke Bond Buying May Risk Rise in Prices Similar to 2004 (Bloomberg)
• Straight from the Fed via Hilsenrath: Central Banks in Rate Clash (WSJ)
• Business Looks to Republicans to Block Obama on Rules, Taxes (Bloomberg)
• Borrowing Costs Rise for Weak in Europe (WSJ)
• Greece Suspends Outgoing Airmail After Wave of Bombs (NYT)
• Markets like divided government but real problems will go unaddressed (Barrons)
• The Fed at Jekyll Island: 100 Years Later, They're Baaack! (Economic Policy Journal, h/t John)

• API: Crude supplies decline 4.1 mln barrels - larger than expected decline.
• CFTC to probe range of natgas derivatives-trading activity spanning parts of 2008, 2009.
• R&D spending drops for the first time in a decade at major firms: Booz & Co.
• World Bank: China should raise interest rates, allow a stronger yuan to damp inflation.
• Aetna Q3 profit jumps 53% to $497.6M on lower costs.
• BP: Dividend policy to be reconsidered in an effort to restore growth.
• GM to save up to $45B in taxes under an unusual provision of its govt-funded bailout.

An incredibly busy day today, with labor market data, a refunding announcement, and various reports on business conditions, factory orders, and vehicle sales leading into the FOMC announcement at 2:15.

RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 03/11/10

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. So what are the signals?

The following post includes Part 2 of the Alice Schroeder interview with Simoleonsense. My sources tell me that the last parts are the most revealing. So read this and stay tuned...

Truth is the first casualty of war ...

The 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).

The 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.

Various 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.

Now 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.

Recent 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.

Today'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.

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.