Archive - Apr 5, 2010

More self-serving drivel on how Canadian public pension funds are leading the world by "internalizing" asset management. Please take the time to read this comment carefully.

The payroll data Friday was roundly trumpeted as a sign the economy was advancing strongly. White House advisor, Larry Summers, is quoted in a headline projecting that the economy had achieved “escape velocity”. The concept, we suppose, is that the economy is finally free of the recession gravity that has been holding it back. The 162,000 jobs added were the best in three years. But the number was below the consensus and well below the more optimistic estimates that blossomed late Thursday. The primary negative in the report was a drop in hourly earnings. That is a rather rare occurrences with some mild deflationary implications. Another negative was the length of unemployment for so many folks.

Whitney Tilson's T2 rose 4.6% in March, and 10.1% in Q1, primarily due to its GGP holdings. Also, Iridium appears to still be in business and generating returns for T2. Other longs include such non-blue chips as Borders, Winn-Dixie, Resource America and Yahoo. The fund's short book seems to not have done so well, with key names Lululemon, DineEquity and MBIA surging during the period. The one bright spot on the short side was Palm.

RANsquawk 5th April Morning Briefing - Stocks, Bonds, FX

• America: time to rebalance (Economist) - somehow we don't see America becoming a massive producing/saving powerhouse ever... But that's just us
• Bernanke shuts down printint press - "America must walk without crutches on gangrenous legs" (Telegraph)
• Inflation fears cut two ways at the Fed (WSJ)
• Goldman openly defies Volcker Rule as it buys stake in Ganek's Level Global (Bloomberg)
• Greece and California - Debtor states (New Yorker)
• PIMCO's battling brains (LA Times)
• Joe Cassano to sneak by with no charges filed against him (WSJ)
• It's ponzimonium in the gold market (HuffPo)
• When stocks stop moving like a herd (NYT)

 The IMF has recently released the results of their staff consultations with Greece. Some may find
it interesting, particularly where it intersects with relevant
BoomBustBlog research. Let's not mince words here. Greece is going to
effectively default on its debt, one way or another, and it is probably
going to do it relatively soon. Shall we walk through the IMF findings
from LAST YEAR and how they are actually optimistic compared to the facts that my
team and I have dug up?

RANsquawk 5th April US Morning Briefing - Stocks, Bonds, FX etc.

• Asia stocks, commodities rise as US employment data lifts recovery view.
• California hotel foreclosures climb as unemployment curbs business travel
• Construction spending in U.S. declines to seven-year low amid foreclosures
• Crude oil climbs to 17-month high amid signs of global economic recovery.
• Manhattan apartment sales double as buyers seek bargains after price drop
• Mortgage rate on 30-Year fixed U.S. home loans rise to 5.08%
• Service industries in US probably grew at fastest rate since June 2007: Bloomberg survey.

Once upon a time, Western opinion leaders found themselves both impressed and frightened by the extraordinary growth rates achieved by a set of Eastern economies. Although those economies were still substantially poorer and smaller than those of the West, the speed with which they had transformed themselves from peasant societies into industrial powerhouses, their continuing ability to achieve growth rates several times higher than the advanced nations, and their increasing ability to challenge or even surpass American and European technology in certain areas seemed to call into question the dominance not only of Western power but of Western ideology...

Last week, one of our 3 bullish candidates, DNR, was the 2nd greatest gainer (+11.2%) across the S&P 500. For this week, our scans say energy complex up, consumer discretionary down. The energy patch, utilities included, appears primed to pump higher. Weekly charts with explicit trade setups ~ DELL, NKE, PCLN, F, BIG, HD, HAS, MAT, UNG, CNX, AES, FE, MFE & QID.