Archive - Apr 2010

Jobless claims missed consensus for the second week in a row, coming it at 484,000, 44k worse than expected, 24k worse than the week before, and the worst since February 20. Of course, the B(L)S has to provide a narrative for why the economy is not performing as expected by the propagandorium: and this week's explanation is hilarious. A Labor Department economist said Thursday that this  latest rise can also be pegged to lag effects from the spring holidays including  Easter and Cesar Chavez Day, which is celebrated in worker-heavy California. This is now the second week that Easter has gotten blamed for deteriorating economic data. Easter was also blamed for the delay in Greek bonds a few weeks ago (those particular investors now wish they had just slept in through the day they were getting their allocated share). As for initital claims, the four-week moving average, which aims to smooth volatility in the data to help paint a  better picture of the underlying trend, also rose for the week ended April 10.  The Labor Department said the four-week moving average went up by 7,500 to  457,750 from the previous week's unrevised average of 450,250. Continuing claims also increased by 73,000 to 4,639,000 from the preceding week's revised level of 4,566,000. And while Extended Benefits declined by 99,716, Emergency claims increased by 261,817 to 5.855 million.

• Bond-fund fraud suits leaves auditor speechless: PwC joins the E&Y in the incompetent lineup (Bloomberg)
• Goldman director in probe: prosecutors examine trades by Galleon in bank's shares as investigation widens (WSJ)
• The rumors were spot on: Chinese economy grows 11.9%, highlighting threat of overheating (Bloomberg, Reuters)
• New Basel restrictions blasted by banks who thing 100x leverage is perfectly acceptable, anything less and the "client" will suffer (Bloomberg)
• More bad news out of PIIG land: Greece may cancel bond issue - "Athens now hopes to raise "up to $1 billion to $4 billion," compared with $5 billion $10 billion previously." (WSJ)
• We need a Blankfein amendment (DealBook)
• Behavioral economics—the governing theory of Obama’s nanny state (The Weekly Standard)

RANsquawk 15th April Morning Briefing - Stocks, Bonds, FX

Is is only me who sees absolutely non-sensical, bubblicious issues coming through the news wires at an increasingly quickening pace? Some of this stuff is ridiculous.

RANsquawk 15th April Morning Briefing - Stocks, Bonds, FX etc.

RealtyTrac reports the next catalyst that will surely take the Dow to 12,000 by 9:31 am tomorrow. "Foreclosure filings were reported on 367,056 properties in March, an increase of nearly 19 percent from the previous month, an increase of nearly 8 percent from March 2009 and the highest monthly total since RealtyTrac began issuing its report in January 2005." And people were wondering where consumers get all their money from. Of course, those foreclosed upon have likely figured out ways to continue squatting in their house so they dont have to pay mortgage and rent. Nothing beats living for free in America, especially in a 2,000 sq. foot average home. We can't wait to hear Jamie Dimon's rebuttal on how this data massively misrepresents the optimism that JP Morgan is seeing everywhere, and how the JP Morgan unicorn ranchis about to issue a royal smackdown on those speculative traitors over at RealtyTrac who, unlike JPM, dare to speak the truth.

Some thoughts on fixing our ailing pension system. Please provide me with your comments on this important topic.

The Fib retracement from the highs to the lows in the cycle is now nearly 61.8 (at 1,228). The retracement from the highs to the lows in the first wave of the Great Depression peaked just below 61.8. Does history repeat itself, or come in tidy little Fibonacci packages? Are today's math Ph.D.'s even aware of retracements, or do they just know how to buy, buy, buy on ever declining volume?1,228 is the magical number on the S&P. We'll find out soon enough.

The recent unrest in Kyrgyzstan has largely been portrayed as an epic clash between U.S. and Russian interests.

That said, interest in events in Bishkek extend far beyond Kyrgyzstan throughout the regional and one should expect the following voices to add their concerns as the situation evolves. While largely overlooked by media coverage, their influence could be a significant factor in both interim and long-term solutions that emerge to Kyrgyzstan’s recent upheavals.

I can assure you of two things. Israel is definitely planning a strike on Iran, which I’m told may happen this Summer. The country has been having large simulated chemical attack drills, and even my small town has had its own drills (which I’m sure were ordered from above). Number 2 is that I am also hearing that Israel will not attack w/o the OK of the US. Israel needs to fly over Iraq to reach Iran, and it can’t do this w/o US attack codes. I’m not sure what the solution is, but, as someone once said – “a Jew who does not believe in miracles is not a realist.” - Chashmonaim, Israel (West Bank)

If only they had known ... Oh, wait ...

Dylan Ratigan and the Story Pirates have dumbed down the biggest generational theft in US history to the level where a Sesame Street fan can get it... Or is that a master ES trader with laser precision liquidity withdrawal reflexes? Anyway, it is somewhat sad to witness the transition of America from at least a passably respectable nation to one in which it is made plainly obvious to children, that to succeed in life one must cheat, lie and steal with the best of the the bankers.

Earlier today we posted the unredacted version of the 5th volume of the Lehman Examiner report, which unhid all the specifics of the unwind related to Lehman's options and futures positions. There was a reason why Goldman et al felt sufficiently motivated to make the data hidden in the first place. The reason: the banks participating in the liquidation made a killing on the unwind. Yet another involuntary gift from the Lehman creditor estate to the big banks who had the inside scoop on Lehman's books all along, and certainly in the days just before the bankruptcy was announced. The market continues to be one for the banks, and one for "everyone else." And "everyone else" still can not borrow at the Discount Window. Although we are confident that that may change soon. At least in the meantime, Anton Valukas scores one for honesty and transparency, and "concludes that an argument can be made that the transfers at issue were fraudulent." Which means Goldman can likely be sued for ripping off Lehman.

Spreads were broadly tighter today with HY outperforming IG as equities got a boost from retail sales, Bernanke's low-and-long comments, and Beige book headlines. JPM's earnings (along with CSX's beat and INTC's smash) also helped as financials outperformed in equity and credit. The psychological break of several critical levels in equity and credit indices seems relevant for the moment (despite the survivorship bias inherent in these long-run indices reducing the real worth) but there was no arguing with the breadth today as tighteners outpaced wideners by over 8-to-1.

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