Archive - Apr 12, 2010

As we claimed yesterday, Greek bailout #4 is nothing but more hot air and mirages that more debt will fix excess debt. Just as the bond traders who are now starting to take the entire Greek curve wider once again. Goldman agrees too.

• Recession not over - National Bureau of Economic Research not ready to say when recession ended (Bloomberg, Economic Populist)
• Profits for banks dimmed by home-equity loss seen at $30 billion, CreditSights (Bloomberg)
• And now attention turns to... Spain's toughest job, 20% unemployment (WSJ)
• Interest rates have nowhere to go but up (NYT)
• Palm hires Goldman, Quattrone to find buyers (Bloomberg)
• Dubai's $330 billion deferred buildings impose fees (Bloomberg)
• What do we do if the rich start to leave? (RCM)
• 47% of Americans pay no taxes (Fundmastery)

As the chart demonstrates, even after bailout #4, 10 year spreads are just wider than where they were when this latest risk-flaring episode commenced, and are now in the 6.6% range, a spread to bunds of about 350 bps. As the so-called rescue mechanism is supposed to come in at 5% for the 3 year and presumably cheaper down the curve the bond market is once again not convinced that this weekend's videoconference festivities are anything but hot air. That the kneejerk reaction on Monday was unable to tighten spreads more is very concerning, and likely indicative that Greece will activate the rescue plan within the week. Next catalyst: tomorrow's 6 and 12 month auctions.

• Asian stocks rise as Greece rescue, US data boost risk appeal.
• Bank of Korea raises growth forecast to 5.2%, fastest pace in four years.
• Brazil's real poised to rise as rate increase spurs carry trade.
• Chicago to sell $1.2B O'Hare bonds as issuance recovers.
• China import surge triggers trade deficit, adds pressure to scrap Yuan peg.
• Chinese watchdog eyes local loan books; state cos borrow heavily for pet projects.
• Euro strengthens as stocks, commodities gain on Greek rescue; Bonds fall.

RANsquawk 12th April Morning Briefing - Stocks, Bonds, FX etc.

As long as man has lived, man has always been keen to commit grand acts of deception on his fellow man. Joseph Goebbels, Hitler's Propaganda Minister said, "The bigger the lie, the more it will be believed." The theory of global warming caused by carbon emissions is likely to be another one of these great lies. But the greatest big lie of all, in my opinion, is our global monetary system and the suppression of gold and silver prices that aid and abet this lie.

RANsquawk 12th April Morning Briefing - Stocks, Bonds, FX etc.

Russia and China have also formed alliance to help each other increase their clout in global affairs. Underneath the geopolitical and trade pacts, this newly elevated Sino-Russian alliance seems to also suggest the beginning of an economic paradigm shift for both countries.

Enter the announced Greek Bailout that doesn't bailout! Greece's problems are much, much deeper than the mainstream press is revealing. Let's walk through the latest bailout propaganda then step through a few facts that should embarrass anyone even considering buying those Greek bonds.

With an initial bailout of Greece 'out of the way', many market pundits will proudly proclaim the bear market slain. An initial pop monday morning will likely stoke fears of "missing the next leg up." Friday's end-of-day buying surge into the close raises the odds that the market begins the week with strength, but the real test will come when the S&P 500 cash (INX) tests 1,200 and the DJIA (INDU) 11,000. The US Dollar (DXY) plotted a daily FNH (failed new high) this past Thursday at 81.91 before rolling over. Barring a 3-day reversal pattern back up above 81.6, Uncle Buck will likely digest his gains into mid-May after having rallied for four months straight. Ten explicit stock trade setups for GNW, LNC, PFG, RDC, IBB, EMR, HST, AONE, SKYW & APWR.

Iceland, Dubai, Greece ... Portugal ... JAPAN?