Archive - Nov 4, 2011

williambanzai7's picture

BaNZai7'S NoVeMBeR V 2011...





Good evening America...

 

EconMatters's picture

Recession Drives Up Concentrated Poverty in America's Suburbs





The Great Recession bites yet another New Normal in America.

 

Tyler Durden's picture

CME Goes To Collateral DefCon 1: Makes Maintenance Margin Equal To Initial For... Everything!?





Update: Based on unofficial statements by the CME, it appears that the exchange has gone the way of inviting more risk by lowering Initial to meet existing Maintenance margin across the board. We will likely only know for certain on Monday. We suppose the proposed explanation will be to minimize margin exposure for onboarded MF positions. Of course, that this is very much counterintuitive at a time when risk is spiking and vol readings per SPAN are soaring, and instead is inviting even more risk, is apparently irrelevant to the exchange.

The most important news announcement of the day was not anything to came out of Cannes  (as nothing did), nor from Greece (the merry go round farce there continues unabated). No, it was a brief paragraph distributed by the CME long after everyone had gone home, and was already on their 3rd drink. It is critical, because not only is this announcement a direct consequence of what happened with MF Global several days ago, but because also it confirms one of our biggest concerns: systemic liquidity is non-existanet. We confirmed interbank liquidity in Europe was at an all time low earlier today, and can only assume the same is true for US banks. But what is very disturbing is that this is just as true at the exchange level, where it appears the aftermath of the MF collapse is just now being felt. What exactly was the announcement. Unless we are completely reading it incorrectly, it is nothing short of a margin call for tens if not hundreds of billions worth of product. Because as of close of business on November 4, today, the CME just made the maintenance margin, traditionally about 26% lower than the initial margin for specs, equal. For everything. Which means that by close of business Monday, millions of options and futures holders will be forced to deposit billions in additional capital to the CME just so they are not found to be margin deficient, and thus receive a margin call. Naturally, since it is very unlikely that this incremental amount of liquidity can be easily procured in one business day, we anticipate the issuance of hundreds of thousands of margin calls Monday, followed by forced liquidations of margin accounts across America... and the world. Just like when Lehman blew up, it took 5 days for Money Markets to break. Is this unprecedented elimination in the distinction between initial and maintenance margin the post-MF equivalent of the first domino to fall this time around?

 

testosteronepit's picture

Greece's Extortion Racket Jumps To The Next Level





The G-20 expected relaxed photo ops, handshakes, and fancy dinners, interrupted by rubber stamping the Grand Plan of bailing out Greece, bondholders, and banks. But then Papandreou fired his bazooka....

 

4closureFraud's picture

Spooky Letter | Rep Cummings Seeks Records / Documents Relating to Steven J. Baum’s Foreclosure Practices AND Halloween Party





In his letter today, Cummings requested that the firm provide all documents relating to: preparing for, carrying out, or communicating about the firm’s 2010 Halloween party and much much more...

 

Tyler Durden's picture

Wall Street Knee-Jerk Response To Favorable Greek Vote Of Confidence





Is Wall Street confused by this latest act of political treachery by G-Pap who had promised to collaborate with the New Democracy opposition only to back out in the last minute (just as he backed out of his promise for a referendum) and end up in a coalition government with the socialists and the far right? You betcha. Courtesy of Reuters, here is the knee jerk reaction by so called experts who see this as either bullish or bearish. The bottom line is that until G-Pap actually does something he has previously promised to do, he will continue to lie and cheat in order to simply remain in power and soak up Europe's funding (which is of course used merely to repay Europe).

 

Tyler Durden's picture

G-Pap Wins Vote Of Confidence 153-145





And so G-Pap manages to fool everyone once again, and will now usurp power either directly or via his puppet Venizelos.

 

Tyler Durden's picture

G-Pap To Begin Formation Of New Government Tomorrow





Update: Greek Parliament Begins Voting on Papandreou Confidence Motion

The latest out of the Greek parliament, where G-Pap is proving he is not a man of few words, is that he will commence with the formation of a new government tomorrow, and in which he hopes to have a leadership position.

  • PAPANDREOU TO BEGIN TALKS TOMORROW WITH PARTIES ON GOVERNMENT
  • PAPANDREOU SAYS NEEDS TO AGREE TARGETS, TIMETABLE FOR ACTIONS
  • PAPANDREOU TO DICSUSS POSTS, PEOPLE, EVEN HEAD OF NEW GOVT
  • PAPANDREOU TO PROCEED WITH NATIONAL UNITY GOVERNMENT
  • GREEK NEW GOVERNMENT MUST PURSUE OCT. 26 PACT, PAPANDREOU SAYS
  • PAPANDREOU SAYS NEEDS TO AGREE TARGETS, TIMETABLE FOR ACTIONS
  • PAPANDREOU WILL SEE PRESIDENT TOMORROW

And more such can kicking. In essence the prime minister, whose family has ruled Greece for generations will do anything to pass the vote of confidence, and then will most certainly usurp power once again, saying that it is for the country's stability that he be in charge at least until the 7th bailout tranche is paid, then 8th, then 9th, and so forth.

 

Tyler Durden's picture

G-Pap Speaks - Live And In English





Tired of G-Pap not making any sense in Greek? Here he is sumlcast with English translation... and still making just as little sense.

 

Tyler Durden's picture

The True Value Of Money (Literally)





As a follow up bonus from the Artemis presentation earlier, we present this chart which answers the age old question: what is the true value of money? It does so in quite a literal fashion, and explains why Kyle Bass is such a fan of nickels...

 

Tyler Durden's picture

Credit Unconvinced As Stocks Close Near Highs Of Day





Credit markets were far less sanguine into the close than equity markets as ES managed to get back to day session highs (and beyond). IG and HY credit markets closed much nearer their lows of the day and while broad-based risk assets rallied off the morning lows, the late day surge in stocks was entirely idiosyncratic! HYG outperformed HY while HY secondary bonds were much more balanced (net buying to selling) today than in recent days. It certainly appeared credit market participants were much less comfortable holding into the Greek vote and uncertainty of the weekend than equity players. The USD was noisy all day but rallied into the close (as the EUR drifted back under 1.38) and Gold trod water as oil managed a modest rally while silver and copper lost more ground on the week. TSYs rallied only modestly today with the belly outperforming as we saw major duration reduction in corporate bond trading on the day as the long-end was net sold. VIX rose modestly into the close, disconnecting from stocks - like every other asset class.

 

Tyler Durden's picture

Droop On Groupon





An ugly close for the coupon company as GRPN is held at $26 - its low of the day.

 

Tyler Durden's picture

Euro Shorts Cover Modestly Following Max Pain; Dollar Bullish Bets Tumble





As expected, following the maximum pain rip in the EURUSD late last week, which took the pair from 1.38 to just under 1.4250, all the weak hand shorts took their losses and run. And indeed, as the CFTC has just reported, bearish bets tightened substantially from -76,512 in non-commercial net contracts, to -60,060. At this point it is safe to say that if the ridiculous move higher in the EURUSD did not force the covering of these hands, then they surely have the balance sheet to withstand such epic rips and then some. We no longer expect major short covering in the EURUSD to take the market higher, as the residual shorts not only have the conviction, but the marginable capital to see the EUR, and with it the stock market, much lower. And while of lesser significance, USD net long contracts declined by 25% from 32,110 to 23,823, simply meaning that when the scramble in a risk off moment returns, there will be quite a few incremental buyers of the USD, and thus shorters of that other currency: the EUR, now that both the JPY and the CHF are effectively pegged courtesy of their central banks decisions.

 

Phoenix Capital Research's picture

How Can You Raise One Trillion When Even 5 Billion Auctions Fail!?!





So the EFSF is supposedly going to raise 1 trillion Euros… in an environment in which it struggles to even stage a five billion Euro bond offering?  Give me a break.

 

ilene's picture

Friday Follies - Greece Job





Ah the old "destroying the universe" ploy.

 
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