Archive - Nov 10, 2011
Italian Banks Are 'Free'-To-Trade As Short-Sale-Ban Is Not Extended
Submitted by Tyler Durden on 11/10/2011 23:28 -0500
Unlike their French counterparts, it appears the hapless (or sensible) Italian demagogues have decided not to extend the short-sale ban that was enacted three months ago. With the US Treasury market closed and volumes likely thin elsewhere, we wonder what outlet the flight-to-safety flow will take as Italian bank equity reality is unleashed. In general the CDS market took the systemic brunt of the hedging and protection-seeking since the 8/11 ban and it seems likely that Intesa Sanpaolo and Mediobanca have the most to fall to catch up with peers in equity while UniCredit seems to have the most to lose in equity to catch up to CDS performance.
White Paper | The MERS Mortgage in Massachusetts: Genius, Shell Game, or Invitation to Fraud?
Submitted by 4closureFraud on 11/10/2011 22:25 -0500Although the title says “in Massachusetts,” many of its salient points have broader application. If you really want to understand MERS, I suggest making time to read this one in full.
The Irishman Is Back, And Shares His Views On Wall Street: "Total Fucking Chaos"
Submitted by Tyler Durden on 11/10/2011 22:19 -0500
About a year ago, a rather outspoken Irishman told the world what he thinks about what then seemed like a groundbreaking event (and is now a daily occurence): the Irish bailout. A year later, the Financial News has caught up with the same gentleman, and we are delighted to share his latest somewhat politically incorrect thoughts on all aspects Wall Street, with our readers. The language in the video may resemble that encountered at a trading desk a little too vividly - you have been warned.
Jim Grant: "The ECB Is Now Implementing The MF Global Trade"
Submitted by Tyler Durden on 11/10/2011 21:40 -0500
To print or not to print: the choice of whether to open the European Pandora's box, which as we suggested two months ago is an interesting but ultimately moot thought experiment, has suddenly become the only talking point for TV pundits desperate for eyeballs and suckers to buy their books, who are now experts not only on monetary policy but European monetary policy. And while 99% of these empty chatterboxes should be promptly muted, one person whose opinion we value in any regard is that of Jim Grant. Earlier today, with Bloomberg TV's Deirdre Bolton, he discussed not only the expected ECB response to the ever worsening contagion (while the ECB bought Italian bonds in the open market, and potentially primary against its charter, it is prohibited from buying French bonds which is why the OAT-Bund spread closed at record wides), but all the other developments in the insolvent continent. Here are some of the key sounbdbites, and, of course, the full clip.
Fed Opens New FX Swap Line With Bank Of Japan; Second After ECB
Submitted by Tyler Durden on 11/10/2011 20:39 -0500Today, for the first time in months, the New York Fed disclosed that in addition to its outstanding $1.9 billion in swap lines with the ECB, it had opened for the first time since the swap line reopening, two new USD liquidity lines with the Bank of Japan, a 7 day and an 83 day one, for 1.1%, or just modestly more than what the 7 Day Drawn line with the ECB costs. The combined is for $102 million which brings up two questions: how much longer will the BBA pretend its LIBOR quotations are even remotely useful: after all today, according to the daily bank matrix, the most expensive 3 Month unsecured USD loan in the interbank market was 0.575% (courtesy of Credit Agricole). Yet the BOJ had to borrow from the 100x levered FRBNY at double that? Amusing. And also, just what the hell is the BOJ doing: after all in the past week the bank supposedly bought over $200 billion worth of dollars (and sold Yen) in order to weaken its currency. Where did all this money go if the bank was forced to serve as a conduit for a meager $102 million. We are sure the explanations will be fast and furious, and none of them will be right.
HYG, JNK, HY17, And Missing The Trees For The Forest
Submitted by Tyler Durden on 11/10/2011 20:08 -0500The inter-relationships between various credit market and equity market instruments is a regular part of what we discuss, and most importantly, using these potential dislocations to our advantage. The last few weeks have been awash with notes where we have pointed to divergences and convergences both within credit as well as across credit and equity - most recently today's credit-equity divergence. Peter Tchir, of TF Market Advisors, takes a deeper dive to address some of the reasons for the dislocations and why following the relationships we so vociferously highlight can be highly profitable.
It’s Official: Wall Street Firms May Legally Steal From Their Customers
Submitted by ilene on 11/10/2011 18:05 -0500"This will not be resolved quickly or easily." Maybe it will never be resolved.
Thursday Afternoon Humor: Mike Tyson Vs (or As) Herman Cain
Submitted by Tyler Durden on 11/10/2011 17:09 -0500
We launch into our traditional Friday afternoon comedy post one day early courtesy of Iron Mike.
Credit Closes at Lows As Equity Ends At Highs
Submitted by Tyler Durden on 11/10/2011 16:42 -0500
Investment grade and high yield credit spread markets, which typically trade very closely coupled with equities, followed the path of the European session and completely negatively diverged from stocks today. IG and HY credit closed very close to its wides of the day while the S&P managed to limp up on average volume to close near the day's highs - after stagnating around VWAP for much of the afternoon. Into the close, we saw a similar pattern to yesterday as hedgers jumped in to credit and HYG (the high-yield ETF) dropped significantly and IG credit (a cheap hedge) lost ground. ES tracked risk markets (outside of credit) almost perfectly all day long - something we haven't seen in a few days - as today appeared very much a wait-and-see day with Europe's modest outperformance enough to quench sellers in equity positions for today at least. Commodities (ex-Oil) were largely unchanged as the dollar ended modestly lower as EURUSD oscillated on Merkel rumors and correlation trades. TSYs rallied off what was an awful 30Y auction but ended the day higher in yield and steeper in curve.
RANsquawk Market Wrap Up - Stocks, Bonds, FX etc. – 10/11/11
Submitted by RANSquawk Video on 11/10/2011 16:41 -0500Guest Post: Is There No Shame?
Submitted by Tyler Durden on 11/10/2011 16:09 -0500
I have been blind with rage for the last week as I’ve watched the powerful men of Penn State attempt to retain their power and reputations at the expense of truth, honesty, and accepting responsibility for their actions and willful inaction. As I’ve watched this tragedy unfold I was struck by the thought process of rich men in positions of power. They have huge egos and believe they are above the law. They think so highly of themselves they believe they can make the rules and ignore the laws which the little people must follow. They have no moral compass whatsoever. They cannot be shamed. The most despicable behavior by prominent men has been willfully overlooked because these men generate $50 million of profit per year for the university. Their sociopathic desire to protect their reputations and power has led to a scandal of such epic proportions that it will haunt Penn State forever and has permanently damaged the institution. This is an institutional cancer that eats away at the fabric of our society. It is not isolated to Penn State. It is a societal sickness that threatens to overwhelm every facet of our lives. There is a constant thread that runs through every incident that comes to light. In 99% of the cases it is men protecting men. Money and greed always trump morality and truth. The exact circumstances can be observed in the priest abuse scandal that has rocked the Catholic Church in the last five years. Pedophile priests have existed within the Catholic Church for decades. The Penn State situation shows that pedophiles exist everywhere in our society. The bottom line is that they are sick men and need to be locked up and kept away from little boys. There is no more heinous criminal act than a grown man raping a little boy. Anyone who does this is pure evil and must be punished.
No Truth Coming From Mortgage Bankers Ass.
Submitted by ilene on 11/10/2011 15:29 -0500You can't handle it.
With Iran This And Iran That, Here Is The Weekly US Naval Update
Submitted by Tyler Durden on 11/10/2011 15:18 -0500Let's face it: with the Iranian invasion foreplay having gone on about 3 years too long, everyone is just waiting for the flashing red "GDP boosting" headline. But to know how close we are to I-day, there is one question needing an answer: where are the boats? Below we share the latest weekly update of US naval positioning, as usual courtesy of Stratfor. The chart is self explanatory: the 5th Fleet AOR is getting just a little too crowded.
Shifting To Short-Term Funding For EFSF Is A Sign Of Weakness
Submitted by Tyler Durden on 11/10/2011 15:16 -0500Comments from the EFSF's CEO Klaus Regling that they will issue short-dated debt to ensure they will be ready to help - for instance, Italy - is extremely worrisome and smacks of desperation in our view. Peter Tchir of TF Market Advisors agrees noting that shifting to shorter term funding for EFSF is a sign of weakness and creates real risk of contagion much sooner than if they stuck to the higher cost, but longer term funding programs. The dramatic widening in EFSF spreads that has occurred since some clarity on risk transfer, post EU summit, was made suggests market participants are extremely skeptical also.
Guest Post: What "Average Joe" Really Thinks
Submitted by Tyler Durden on 11/10/2011 14:40 -0500
Every day we are blugeoned with a variety of economic reports from various government agencies about the state of the economy. Most of these reports have some form or another of "seasonal adjustments", speculations, estimations or just flat out "guesses" about what is going on in the economy. What we tend to find out over time is that these numbers are generally overly optimistic during recessionary periods as we are in today. Today, we are going to look at three different polls from the Gallup organization on consumer spending, the economy and employment. The Gallup organization has studied human nature and behavior for more than 75 years and focus on what people "think and feel" about various issues. They employ many of the world's leading scientists in management, economics, psychology, and sociology, and other consultants to identify and monitor behavior. The key difference between Gallup and the various government agencies is that these polls are direct questionnaires to individuals and the responses are tallied and reported. There are no adjustments, assumptions, guesses, etc. In the famous words of Bill Clinton; "What is...is."






