Archive - Nov 2010
Cramer Call To Chase Ambac "Animal Spirits" Nets Those Who Listened Another Complete Wipeout
Submitted by Tyler Durden on 11/01/2010 08:23 -0500
Back on April 13, when Abmac hit over $2/share as the HFT swarm of locusts decided to make the insolvent mortgage insurer its plaything, we highlighted Cramer's call that even though the company is bankrupt, investors should "chase it" there. To wit, the CNBC pumper said: "The purists out there have spurned these points. I could care less about purity. I could care less that someone might be able to say Cramer likes worthlessness. But the !@#$% animal spirits have it going, and a worthless stock can be worth something if it moves up that much and starts offering equity or bonds against it." We are not going to say that Cramer likes worthlessness. For that to be the case, Cramer should be able to voice a reasonable argument for or against over/under-valuation. He has proven time and again that he is completely unable to do that. Instead, all Cramer does is recommend stocks that go up or down, and throws his viewers into the lemming vice, while constantly hiding behind his disclaimer. Unfortunately for those who listened to Cramer, as he predicted that his situation is "real. [It is] happening. [It has] happened. And this is one of them that I feel is destined to happen again" are now facing yet another complete loss, as the stock opens trading at pennies in anticipation of Chapter 11, and as Cramer esposued momentum trading is proven once again to be lead to nothing but financial ruin.
FX Heatmaps: EUR Rolling Over
Submitted by Tyler Durden on 11/01/2010 08:01 -0500
After opening strong, the EUR is now slowly rolling over, on increasing concerns over bund spreads which are once again surging. If the EURUSD moves to white, look for futures to hope and pray that Australia can sustain the greenness there. Else, all those who were bidding up futures overnight are about to offload accumulated and now largely underwater positions.
Personal Income And Spending Both Miss Expectations, As Savings Rate Drops To 2010 Low
Submitted by Tyler Durden on 11/01/2010 07:39 -0500
One thing is sure to happen when Americans buy more iPads than they can afford: the savings rate will fall. Sure enough, the just reported September savings rate dipped to 5.3%, the lowest reading in 2010, and a decline from August's downward revised 5.6%. This is due to a miss in both personal income and personal spending, the former coming at -0.1% vs Exp. of 0.2 (and a prior revised to 0.4%) with the latter at 0.2% versus expectations of 0.4% (and an upward revised prior to 0.5%). The savings rate has now declined in a straight line since peaking at 6% (2010 high), to the current low. In other words Americans have been spending more than they were making for four months in a row. And on wonders why consumer discretionary names have been doing well... Luckily, it means that courtesy of Americans' savings decline by nearly 20%, there are only so many future landfill filling gadgets that will be bought going forward.
FDR beat Wilkie, and with the Fed's 1939 QE Alpha a distant memory, it was risk-off baby
Submitted by EB on 11/01/2010 07:34 -0500See the 1940 Dow analog, when the markets crashed in May and again during election week.
Bonus: Murphy v. Krugman update...nearly $50k raised to date.
Frontrunning: November 1
Submitted by Tyler Durden on 11/01/2010 07:29 -0500- Here is why Europe is not screeching about EURUSD 1.40: Bernanke Greenmail - Fed Helping Spanish Debt Keeps ECB Mum on Dollar (Bloomberg)
- More Mixed Signals: China cuts discount to mortgage rates (China Daily)
- China Waves Magic Central Planning Wand and Manufacturing Posts Biggest Gain in Six Months (Bloomberg)
- Dollar/yen Jump Short-Lived After Suspected Miss-Hit (Reuters)
- White House Considering New Tax Cut Plan, Washington Post Says (Bloomberg)
- Natural-Gas Futures Advance to Six-Week High as Heating Demand to Increase (Bloomberg)
- China says no significant cut for rare earth quotas (Reuters)
- Fed Risks Its Credibility on a Bowlful of Mush (Bloomberg)
Daily Highlights: 11.1.2010
Submitted by Tyler Durden on 11/01/2010 07:11 -0500- Asian stocks, emerging currencies, oil climb on China manufacturing, Korea data.
- Chinese factories get busy; Official PMI shows surprise gain, sends stocks higher.
- South Korea's inflation rate climbs to 20-month high, exports accelerate.
- US unemployment probably hovered near 10% as Fed discusses additional easing.
- 3M is using acquisitions, its own labs to diversify into areas as biometrics and fuel cells.
- Ambak to file for bankruptcy if prepackaged plan is unsuccessful.
Ambac Does Not Make November 1 Coupon Payment, To File Bankruptcy Within A Month If Unable To Raise Additional Capital
Submitted by Tyler Durden on 11/01/2010 07:00 -0500Ambac decides to not pay its November 1 coupon payment. And with that the 30 day grace period clock on the company starts ticking. Bankruptcy is now imminent unless the ad hoc bondholder committee can find a way to fund a pre-pack DIP. Of course, a prepack coupled with bond churn in the next few weeks would wipe out $7 billion in NOLs, as a debt for equity traditionally qualifies as an ownership change when accompanied by rapid changes in bond owners. Additionally, the implications of what this now inevitable monoline bankruptcy means for mortgage insurance are not entirely clear, but certainly are not good.
Global PMI Readings: Every Economy Grows As Everyone Devalues Equally, Means More Devaluation Ahead
Submitted by Tyler Durden on 11/01/2010 06:46 -0500Futures are still on fire, following a much stronger than expected manufacturing reading in China. As Bloomberg reports: "A purchasing managers’ index released by the logistics federation rose to 54.7 from 53.8 in September, with input prices climbing the most in six months. A second PMI, from HSBC Holdings Plc and Markit Economics, jumped to 54.8 from 52.9." What is less known is that European PMIs also jumped across the board. As Erik Nielsen points out below UK, Norway, Turkey and Russia all reported stronger than expected PMI readings. Nielsen tries to make the case that even a 1.40 EURUSD is not sufficient to bring Europe down as somehow this is the new goldilocks. We completely disagree, and so will the ECB once the dollar is pushed strongly beyond the 1.40 barrier on Wednesday. Lastly, all eyes are now on US ISM to be reported later, with a consensus estimate of 54. It will be somewhat confusing if in the race to devalue the fastest, every single economy ended up growing. Not to mention somewhat incredible. But if confirmed, it will only give further impetus to debase currencies, as the last resort of economic growth is validated as "working." Which of course will mean more strength for assets that can not be printed out of thin linen.
RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 01/11/10
Submitted by RANSquawk Video on 11/01/2010 04:41 -0500RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 01/11/10
Trade Against The 90% That Lose Money 1st Nov
Submitted by Pivotfarm on 11/01/2010 01:50 -0500Retail 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.
Sodomized By the Nobel Laureate!
Submitted by williambanzai7 on 11/01/2010 00:23 -0500What exactly does Paul Krugman know that the rest of us don't?






