Archive - Jul 2010

July 30th

Tyler Durden's picture

Morning Gold Fix: July 30 And Contango Crush





Yesterdays’ activity showed the Q/V spread coming in while the market gyrated a little higher as this time it was Q longs who were the aggressive liquidators. Rumors however still abound about delivery issues. Observably, the majority of spreads continue to come in as the market rallies. It can’t be emphasized enough. The cost of carry should not come in on a financial spread as the underlying rallies, as evidenced in the Contango Crush here.

For gold: Cost of carry = risk free interest rate + storage costs for the time period.

 

Tyler Durden's picture

2 Year Treasury Hits Fresh All Time Low Of 0.5461%





And this is happening even despite the very appropriately named Bullard telling CNBC that he calls "for a plan to have significant easing if the situation arises" in essence guaranteeing QE2.0. Today's GDP report has just confirmed that another round of dollar debasement, long expected by everyone at Zero Hedge, is now inevitable. And with the ECB actively "easing", better known as printing, as well, the race to the currency bottom, now well in the second to last lap, is starting to get interesting once again.

 

Tyler Durden's picture

GDP Misses Expectations, Comes At 2.4%, Plunges From Revised Q1 GDP Of 3.7%





Double dip confirmed as Q2 GDP plunges from revised Q1 number: GDP comes in at a below consensus 2.4%, which a huge drop from the revised Q1 number which came in at 3.7% (from 2.7%). The GDP Price index comes at 1.8%, the core PCE comes at 1.1%, from 0.7% previously. Per the revised GDP numbers, the US economy has now shrunk by 4.1% from Q4 2007 to Q2 2009, compared with the 3.7% previous estimate. From the BEA: "The increase in real GDP in the second quarter primarily reflected positive contributions from nonresidential fixed investment, exports, personal consumption expenditures, private inventory investment, federal government spending, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased."

 

Tyler Durden's picture

Daily Highlights: 7.30.10





  • Asian stocks lower on Friday ahead of fresh growth numbers from the US.
  • Japan's industrial prodn unexpectedly fell 1.5% in June on expectations of lower exports.
  • US close to Japan-style deflation, Bullard, a voting member of the Fed Reserve says.
  • Alcatel-Lucent swings to Q2 loss of €184M on a 2.4% decline in revs to €3.8B.
  • American Apparel shares fall as much as 25% after auditors, Deloitte & Touche, resign.
  • Anglo American's H1 profit falls 31% to $2.06B, despite 35% jump in revs at $15.02B.
  • Bayer cuts full-year forecasts at two of three units as profit declines
  • British Airways' Q1 loss widens to GBP122M following strikes. Revs fell 2.3%.
  • Citigroup pays $75M to settle charges for providing inadequate information to investors.
  • Consortium led by Li Ka-shing to buy EDF's U.K. assets for $9.05B.
  • DBS posts surprise 2Q loss on $747M impairment charge
  • Disney selling Miramax to Tutor and Colony Capital for more than $660M
 

Reggie Middleton's picture

Spain Reports 20%+ Unemployment, a Structural Problem That May Persist For Some Time





The Spanish banks rallied after the (faux) stress tests, just to have reality spank them the following week. This time around, will the revolution be televised, or covered through a blog?

 

Tyler Durden's picture

Here Is What To Watch Out For Today In Addition To GDP (Consensus At 2.6%, Range 1.0%-4.0%)





With everyone focusing on today's GDP, it is easy to ignore the other relevant economic data to be released in the one and a half hour block before 10am. In order of appearance, they are: Q2 GDP,the employment cost index, the Chicago PMI, and the final UMichigan consumer sentiment. Below is a summary from a rather bearish Goldman Sachs (which expects a 2.0% GDP print in 15 minutes) on each of these data points.

 

Tyler Durden's picture

Drop In Euribor And EUR Libor Causes Sharp Drop In Euro As Funding-FX Correlation Persists





As expected, the tight correlation between European interbank funding rates and the EURUSD FX rate continues: today, we have seen the first inflection point in both 3M Euribor and 3M EUR Libor, as both have dropped marginally lower, the first from 0.899 to 0.896, the second from 0.83344% to 0.8325%: this is the first decline since July 14. And, not surprisingly, today we see a big pullback in the EURUSD complex. Never too far behind with its own attempt at an explanation, here is Goldman, which after calling for 1.15 in the EURUSD flipflopped yet once again, and is now selling the other side of its 1.35 target to clients.

 

smartknowledgeu's picture

This Week in Financial Sarcasm: Goldman Sachs, Charles Schwab, Formula Capital & the SEC





These days it’s hard to distinguish mainstream media financial journalism from the funny pages. Here are some of the best stories of the past week.

 

RANSquawk Video's picture

RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 30/07/10





RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 30/07/10

 

Tyler Durden's picture

Guest Post: The Ruling Elite Called





I just got off the horn with the Ruling Elite. We had an emergency conference call and to tell you the truth, they ain’t happy. You little people are not responding the way you are supposed to. A significant portion of you are not getting more optimistic because they tell you to. Instead of just reading the headline on Bloomberg that durable goods orders skyrocketed in June, you actually read the details that said durable goods orders plunged. It is getting difficult for the ruling elite to keep the masses sedated and dumbed down. These damn bloggers, with their facts and critical thinking, are throwing a wrench into the gears. Obama and his crack team are working round the clock to lock down the internet, but it will take time. Not that they are totally dissatisfied. They’ve been able to renovate their penthouses and purchase new mansions in the Hamptons with the billions in bonuses you supplied through TARP. The $1.2 trillion supplied by your children and grandchildren to buy up toxic mortgages off their balances sheets was a godsend. They will never call you suckers, to your face.

 

July 29th

Econophile's picture

The Fed Reports A Sluggish Economy





The Fed came out with its Beige Book, a summary of economic activity from June to mid-July. The report overall noted "modest" growth if not slowing growth. Consumer confidence declined and durable goods orders were also down.

 

Fidel Sarcastro's picture

Market Profile Confused





With the lack of action lately we all seem to be confused - including Market Profile analysis. Watch out for the Chicago PMI...it comes out before you're really told.

 

Leo Kolivakis's picture

Circling Back to the Caisse's 2009 Annual Report





When the Caisse released its 2009 results back in February, the annual report wasn't made available then, and I didn't provide a full discussion on it. It turns out they published one of their best annual reports ever, focusing on accountability.

 

Tyler Durden's picture

Guest Post: The Pretence Of Knowledge





The "Pretence of Knowledge" was the title of economist Friedrich Hayek's 1974 Nobel speech. In his first few sentences, he described the then-prevailing economic condition in words appropriate to today:

“[this economic condition] has been brought about by policies which the majority of economists recommended and even urged governments to pursue. We have indeed at the moment little cause for pride: as a profession we have made a mess of things.”

Hayek's words in 1974 were not meant to describe today's condition, although they were extremely prescient. His hope was that the limits of knowledge would be recognized by the economics profession so that we would never reach our current situation.

Hayek's call was for professional humility at a time when Keynesians arrogantly believed they could manage the economy and the business cycle.

 

Tyler Durden's picture

China Blocks All Mainland Google Access As Pissing Contest Escalates





Earlier we highlighted a very sternly worded anti-US essay on the front page of the primary communist party daily. Some thought it was merely yet more posturing. Alas, they may have been very wrong. Associated Press reports that Google has now been completely blocked from mainland China access, with few if any details coming from Google itself, meaning this was another unilateral muscle flexing exercise by China. However, as far as Google is concerned, and judging by BIDU stock after hours, it may well be game over for the great Chinese decoupling experiment.

 
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