Archive - Dec 1, 2010

Even giving the company the benefit of the doubt, and maintaining the stock’s current forward multiple, shares could easily trade down toward the $11 to $16 range based on the midpoint of our estimates highlighted in this report.

RANsquawk Market Wrap Up - Stocks, Bonds, FX etc. – 01/12/10

The Wikileaks ouster lasted all of a few hours. As of right now, the company has switched its DNS to Sweden, from where it continues operating. But not before wikileaks tweeted the following response to Amazon's action: "WikiLeaks tweeted in response: "WikiLeaks servers at Amazon ousted. Free speech the land of the free – fine our $ are now spent to employ people in Europe."

A roundup of reports from around the Web ...

And an update from Reuters: "Amazon.com ceases hosting services for WikiLeaks website - Senator Lieberman" and  "DHS says Amazon has agreed to stop hosting WikiLeaks." Game Over

It seems the days of Wikileaks are over. The Associated Press reports that the website appears to have lost its host. The question now is who will be the next Wikileaks.

A victory lap for the Armageddon crowd. The hard core faithful who suffered a 20-year bear market in hard assets are now wearing better tailored suits.

Politics has a charming way of bringing reality to lame-duck politicians. The Republican gains in the House and Senate have apparently prompted President Obama to do the unthinkable: freeze the pay of civilian federal workers for two years. His constituency is very upset by this apparent betrayal by Obama.

According to the WSJ the US is not discussing a larger IMF contribution to the European Rescue Fund. EURUSD plunging now. The theater continues. And since the market went up on the news, why would anyone expect it should go back down when the news is refuted. The market is now a total and complete travesty.

This isn't new stuff people - that cartoon is 100 years old and we fought against the evils of corporate greed and won at some point but now they've changed tactics and moved onto taking over government and brainwashing the masses so the American people now confuse the good of the corporation with their own welfare when they are, almost by definition - diametrically opposed.

As we are going through the excel sheets from the Fed dump, we will share our key findings. Keep in mind this is very raw data and will need far more processing before conclusions can be derived.

Here comes the kitchen sink: just in case there was a chance the Fed's historic disclosure had a chance of pushing the market lower, almost to the dot at noon Goldman has completely sold out and has released a surprising (in its own words) report, changing its outlook on the US economy from bearish to bullish. Goldman's take on the dramatic nature of its perception shift: "This outlook represents a fundamental shift in the thinking that has
governed our forecast for at least the last five years... Five years ago, we became very pessimistic about the US economic
outlook.  This was because we expected downturns in the housing and
mortgage markets to trigger a substantial increase in the private sector
financial balance—the gap between the total income and total spending
of US households and businesses.  In turn, we thought this weakening in
private-sector demand would cause an economic slowdown as the government
and foreign sectors failed to take up the slack. So why do we now expect growth to pick up?  In a nutshell, it is because
underlying demand has strengthened significantly, as shown in Exhibit
3.  This chart plots the growth rate of real GDP (dark line) alongside
the growth rate of underlying demand (light line).  After a deep
downturn from 2007 to mid-2009 and near-stagnation from mid-2009 to
mid-2010, underlying demand is now accelerating sharply.  Currently, it
is on track for a 5% (annualized) growth rate in the fourth quarter." Much more hopium inside. This is unfortunate. Jan Hatzius used to have credibility.

...Going through it right now

From Reuters: "US official says US would be ready to back larger European financial stability fund via increased IMF commitments." In other words, America, and its oh so rich middle class, is about to bail out Europe again. EURUSD surges on the news, as does ES. Elsewhere, Ireland's new dictator, Olli Rehn, adds that he is "attracted' by Eurobond ideas; sees no initiative soon. Which means about a week.

RANsquawk US Afternoon Briefing - Stocks, Bonds, FX etc. – 01/12/10

The Fed-Primary Dealer scam continues in plain view. After today's $8.2 billion POMO closed at a 3.7x Submitted to Accepted ratio (below median ratio - surge in stocks right on schedule), a quick look at the most monetized POMOs confirms that the near-immediate monetization of just auctioned off bonds continues. To wit: as can be seen on the table below, the highlighted CUSIP most monetized is PK0 (as we speculated earlier) to the tune of $1.4 billion or 17.3% of the entire operation. This is the 7 Year bond auctioned off on November 24. That's one week ago. And the market continues to pretend that the Fed does not buy bonds at auction. Why should it: the Fed continues to hand out billions to Primary Dealers courtesy of their transitory intermediation via the bid/ask spread and price-notional differences. Pathetic.