Archive - May 2, 2010

Bloomberg reported that crude oil open interest was 1.41 million contracts, the highest since June 11, 2008. Some analysts think the high level of open interest raises concerns about whether the market is overvalued relative to fundamentals and whether the upward price trend can continue.

Soon appearing on the Bernie Madoff Book to the Month club.

Today is D-Day for Europe, and soon, the world. Shortly, the IMF will take its historic place as the cash cop of last resort, a post traditionally reserved for the Federal Reserve, which incidentally was rumored to have activated its FX currency swaps with European banks last week (whether or not that is true will be disclosed by next week's H.4.1). This action will open a floodgate of consequences, as every semi-bankrupt country forces itself into a spending frenzy to guarantee that it is truly bankruptcy, no ifs about it, and qualifies for IMF (and thus 20% US) aid. And at that point the politics of a US-funded world bailout really will come to the fore. Because while the Fed bailing out America is one thing due to the Fed's untouchable and unsupervisable status, the IMF, as a corporation, does not share the same "above the law" privileges. And in an election year, with Americans slowly realizing that the fate of the world is truly in their hands, and their tax money is being involuntarily taken away from them as we speak yet again, ahead of midterm elections, all bets are off. For those interested in the actual mechanics of the IMF rescue mechanisms available, as well as some of the political implications likely to follow, here is an overview via Bank Of Countrywide Lynch.

Last night just after 6 pm a home made car bomb, containing 3 propane tanks and 2 containers of gasoline, electrical wires, black powder and some sort of timing device, put in a green VIN-less Nissan Pathfinder, situated on the corner of 45th and Broadway, was prevented from killing numerous people in the heart of Times Square, on 45th and Broadway. According to a hotdog vendor eye witness account, quoted by CNN, the car had filled with smoke and actually exploded, however the explosion was subdued. At that point a bomb squad appeared and managed to diffuse the bomb. The car bore license plates registered to a Connecticut-based Ford F-150. Mayor Bloomberg rushed back to New York from Washington and was quoted as saying: "We are very lucky that we avoided what could have been a very deadly event. We have no idea who did this or why.” It is unclear whether the organizers of the terrorist attempt were foreign-based or domestic. Looks like Goldman Sachs and a bankrupt Greece are finally going to be dropped from the front page, for at least a few hours. And, as always, nothing like a "failed terror attempt" as a cohesive force to consolidate an increasingly polarized population.