Archive - Apr 2010

RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 21/04/10

As was reported first on Zero Hedge yesterday, Greece may now be considering a restructuring. Full press accounts of what is going on in the absence of the usual Greek rumor mill are murky. Reuters is claiming that the IMF portion of Greek aid would amount to €12 billion. In the meantime the market has spoken: the spread is now a fresh new record 522 bps. At this point every single rating agency is expected to downgrade the country.

RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 21/04/10

Never be satisfied with the gruel we are handed, take anything offered and everything demanded. Rather than complain that the gruel doesn’t fill, think like Oliver Twist and declare you want more swill. Be the voracious mindless consumer that the Ponzi claims they don’t forbid. Become a blood sucking vampire and plunge into the blood funnel of your favorite giant squid.

A few weeks ago, I asked Fred Hickey what he would do as chairman of the Federal Reserve. In the remainder of our interview, I asked Fred whether we can avoid recessions in a business cycle, what will happen to the US Dollar, how our creditors are behaving, and what advice he can offer given the new economic environment.

The government wants to regulate your intake of salt because your lousy eating habits will drive up the cost of Obamacare. Salt consumption is anti-social behavior and deserves to be punished.

AAPL earnings blew the doors off, DARPA got its grapefruit on with an Industry Day for the "Mind's Eye Program" and even 'Hitler is no longer upset about the iPad'. Wonder what Jimmy Cayne was up to in the clubhouse between bridge tournaments? After inspecting AAPL and market internals, almost as many looks at POT as UC-Boulder saw yesterday.

Let the economy do the heavy lifting, Some 60% will be achieved through tax hikes, and 40% via spending cuts. But the plan assumes that interest rates remain unchanged, the economy grows at 3%, and the war on terror ends in four years. What if the terrorists don’t cooperate? Houston, we have a problem….

Did the SEC just take away Wall Street’s punch bowl with this suit? "They might have," says Jim Bianco, President of Bianco Research in Chicago. If the SEC wins the Goldman case, "this would have far-reaching effects," he says. With all due respect to Jim, I say let the witch hunts continue. Besides, it's just another circus show and nothing will change on Wall Street. The sleazebags will concoct new ways to satisfy their insatiable greed.

Today's Casablanca moment of the day is brought to you by CalPers. The latest entity to be shocked, SHOCKED, at just what Goldman's standard operating procedure has been for many, many years is none other than the world's largest pension fund, the California Public Employees' Retirement System (and repeat Goldman client), which itself has been having quiet a few problems recently, and not just ethical ones, but more importantly performance related ones. The irony is that were Goldman to close tomorrow, the outcry from all these same hypocritical bandwagoneers would have been ten times louder.

From the tip-bag:

c-bass was a subject of the SEC request.  i don't have any knowledge of what turned up in the search for material on it. 

This is getting interesting.

Dear Attorney General Holder:

While the SEC lacks the authority to act beyond civil actions, the U.S. Department of Justice (DOJ) has the power to file criminal actions against those who commit financial fraud. We ask assurance from you that the U.S. Department of Justice is closely looking at this case and similar cases to further investigate and prosecute the criminals involved in this, and other financially fraudulent acts. Furthermore, if the DOJ is not currently looking into this particular case, we respectfully ask you to ensure that the U.S. Department of Justice immediately open a case on this matter and investigate it with the full authority and power that your agency holds. The American people both demand and deserve justice in the matter of Wall Street banks whom the American taxpayers bailed out, only to see unemployment and housing foreclosures rise.

By 1 PM, the DJIA was up more than 30 points and crude oil prices were up right around $2.00 a barrel. The US dollar was higher against the euro and yen, but precious metals prices were higher. It might be too broad a statement to say that risk appetite has returned, but certain aspects of it did seem to be back in play.
More than anything else, it seemed that investors felt they had over-reacted to the Goldman event on Friday – and even more so on Monday, when there was still left-over selling. A large part of that selling was attributed to the volcano, but it was clearly predicated on Goldman, as well – or we would not have seen such a sharp rally on Tuesday. An additional 24,824 contracts were liquidated on Monday, showing that investors were still getting out of existing positions as the week started.

Spreads tightened in general today with HY outperforming IG as both the major US indices gapped tighter and never made it back to yesterday's tightest levels as the late day charge in risk appetite continued into today. Breadth was largely positive with single-names catching up to yesterday's late day strength.

I applaud and welcome Paul Krugman's clarification ...