Archive - Nov 2011

November 30th

williambanzai7's picture

ATLaS MuGGeD





Atlas was permitted the opinion that he was at liberty, if he wished, to drop the Earth and creep away; but his opinion was all he was permitted.--Franz Kafka

 

Tyler Durden's picture

Did A Large European Bank Almost Fail Last Night?





Need a reason to explain the massive central bank intervention from China, to Japan, Switzerland, the ECB, England and all the way to the US? Forbes may have one explanation: "It appears that a big European bank got close to failure last night.  European banks, especially French banks, rely heavily on funding in the wholesale money markets.  It appears that a major bank was having difficulty funding its immediate liquidity needs. The cavalry was called in and has come to the successful rescue." Granted the post is rather weak on factual backing and is mostly  speculative, but it would certainly make sense. That said, it harkens back to our original question: just how bad was the situation if the global central banking cabal had to intervene all over again, and just what was not being told to the general public? Lastly, and most important, slapping liquidity bandaids on solvency gangrenes does nothing but buy a few days at most. Furthermore, we now expect the stigmata associated with borrowing from the Fed to haunt each and every European bank as vigilantes will now use the weekly ECB update on borrowings from the Fed as a signal to hone in on this and that weak Italian and French, pardon, European bank.

 

Tyler Durden's picture

Anti Tilson Once Again Best Performing Investment As It Trades At Lifetime High





While being caught short stocks in the face of the global Bernanke Put, or long Chinese IPOs this year, it seems relative-value trades remain preferential from a risk-reward perspective. That is of course unless you are our old friend Whitney Tilson. The Anti-Tilson ETF (Long GMCR / Short NFLX) is up 8% today and stands at an impressive +43% (lifetime highs) in the 20 days since we recommended it. NFLX weakness this morning attributed to Wedbush's 30% downside target downgrade.

 

Tyler Durden's picture

US Economic Data Reporting Now Officially A Farce: Every Economic Data Point Prints 4+ Std Devs Above Consensus





It appears that central bank intervention was not the only thing in full force today: The US version of the Chinese Ministry of Truth in economic reporting has now officially joined the fray. Anyone wondering just how much of a joke the US high frequency economic data updates have become should look no further than these three charts showing Wall Street forecasts (consensus and distribution) and actual prints for the ADP Payroll, the Chicago PMI and Pending Home Sales. Not one indicator has come below 4 standard deviations above the average forecast, and every single one has printed above the highest forecast. It is now safe to say without any doubt that US data is equal if not more equal in credibility terms with that of China.

 

Tyler Durden's picture

Here Is What Happened After The Last Global Coordinated Central Bank Intervention





Presented with little comment but following the mid-September Global Save, things didn't end so well.

 

Tyler Durden's picture

November Chicago PMI 62.6 Better Than Expectations Of 58.5





The barrage of better than expected "everything" is relentless.November PMI comes at 62.6, higher than 58.4 before, and a beat of Consensus 58.5. Highest since April. This also means that the ISM will almost certainly be an upside "surprise" imminently. And with the miraculous outlier print from the ADP it was only logical that the employment index in the PMI would print... lower, from 62.3 to 56.9. No data makes sense anymore, so just buy: after all there is no risk. Fed will bail everyone out.

 

Tyler Durden's picture

Foreign Currency Liquidity Swaps (aka Global Bail Out Plan B) FAQs





Those wondering about the global Fed bailout (this is not the first time, recall How The Federal Reserve Bailed Out The World) can read the FAQ from none other than the source of the global liquidity tsunami itself.

 

Tyler Durden's picture

Did The Fed Just Buy Europe A Week?





One of our most watched indications of the pressure on European funding markets is the EUR-USD cross-currency basis swap. This simple trade is a way for European entities to take the excessive EUR funding they can get from the ECB and 'swap' it into USD to meet their significantly problematic USD funding needs. It has smashed higher (well lower in the charts) as the cost of the transaction moves with demand for the swap - indicating that demand for USD is huge and we are in as much of a liquidity crisis as we were in the middle of the 2008 critical period. What is fascinating to us is today's reaction - a 22bps jump - while being large, merely moves us back to the same levels of stress we were at one week ago. So even if this is seen as some huge form of liquidity surge, it seems not to have even solved the liquidity problems of banks, let alone solvency problems.

 

Tyler Durden's picture

UK-Iran Situation Escalates





Looks like geopolitical Plan B is still in play.

  • HAGUE SAYS U.K. DEMANDS CLOSURE OF IRANIAN EMBASSY IN LONDON
  • HAGUE SAYS ALL IRANIAN STAFF MUST LEAVE
  • UK FOREIGN SECRETARY HAGUE SAYS HAS ORDERED CLOSURE OF IRANIAN EMBASSY IN LONDON, EXPELS ALL STAFF

That much-needed by Corning glass price cut may still be coming.

 

Tyler Durden's picture

Wall Street Pundits' Instant Response To Global Fed Bailout





Legendary ex-Bear commentator Sal Catrini summarizes it best: "Whether this solves our long-term problems remains to be seen, but when you flood the market with liquidity, risk assets go much higher"

 

Tyler Durden's picture

Market Reaction To Global Bailout, Sovereigns Disappoint





Risk markets are tearing higher globally with equities, commodities, and credit all considerably higher. Equities and CONTEXT are back in line as this is a very systemic shift up as the dollar tanks and TSY yield surge. US equities are back to 11/18 levels but are stalling out a little here as the initial spike wears off - whether this liquidity surge fixes the insolvency crisis is the question it seems markets are considering now that they have had some time to think (and squeeze). Silver and Copper seem the largest movers for now along with AUD relatively speaking as most equity and credit assets are back to 11/18 levels. We do note that while sovereign spreads in Europe are narrower, the moves are not dramatic and in some cases are actually deteriorating still.

 

Tyler Durden's picture

ADP Payroll Print Of 206,000 Comes 4 Standard Deviations Higher Than 130,000 Consensus, Above Highest Wall Street Estimate





The global coordinated "feel good" rally is out in full force. First China, next Fed global bail out, and now ADP confirming that massive banker layoffs are actually beneficial, reporting a 206,000 increase in private payrolls in November. This compares to a consensus estimate of 132,000, and is above the highest Wall Street forecast of 200,000. In other words, first we get record volatility in the markets, and now we get record upside volatility in economic data after this number comes 4 standard deviations above consensus! More: "The increase in November was the largest monthly gain since last December and nearly twice the average monthly gain since May when employment decelerated sharply." Of course, this is not to say that America is actually making anything: "Employment in the private, service-providing sector rose 178,000 in November, which is up from an increase of 130,000 in October. Employment in the private, goods-producing sector increased 28,000 in November, while manufacturing employment increased 7,000." Still, surely, the unemployed among the 99% will be delighted to know they were actually working all along.

 

Bruce Krasting's picture

On FX intervention and the ECB/SMP





Some thoughts on FX interventions and the job the ECB has in front of it.

 

Tyler Durden's picture

Here Comes The Global, US-Funded Liquidity Bail Out





As expected, the Fed has just bailed out the world once again:

  • FED, ECB, BOJ, BOE, SNB, BANK OF CANADA LOWER SWAP RATES - BBG
  • ECB, FED other major central bank to lower the pricing of existing USD liquidity swaps by 50BPS

And as we have been writing every single day, the worldwide dollar crunch is now confirmed:

  • At present, there is no need to offer liquidity in non-domestic currencies other than the U.S. dollar,

This means that the global situation is far, far more dire than the talking heads have said. Luckily, when this step fails, which it will, Mars can always come and bail us out.

 
Do NOT follow this link or you will be banned from the site!