Archive - Jan 2011
January 29th
Arab World's Berlin Moment?
Submitted by Leo Kolivakis on 01/29/2011 14:39 -0500There is a virtual media frenzy proclaiming the "Arab world's Berlin moment". I'm very skeptical but realize that no matter what outcome, developments in Egypt will have a profound effect on the global political landscape, economy and financial markets...
Interactive Map Of Egypt Riots
Submitted by Tyler Durden on 01/29/2011 14:39 -0500
Curious to link a place with a protest you have seen on Al Jazeera (and only Al Jazeera: US "media companies" can send journos to Davos... and who can forget what Marc Faber thinks of all those who have gone to Davos... and spend $100K+ per person, but can't cover, at no cost, what is rapidly becoming the most important event of the decade) over the past two days? Here is your chance: the New York Times has put together an interactive map of Cairo highlighting the key protest areas, which also happen to be the key choke points in the geography of the Egyptian capital.
Tracking The Gold "Conspiracy" - GATA's Must Read Presentation To The Cheviot Asset Management Sound Money Conference
Submitted by Tyler Durden on 01/29/2011 13:45 -0500GATA has compiled what is probably one of the best and most comprehensive reports on the history of the gold market, the "special" place gold holds in the central bankers' world, the interaction between the physical and gold paper markets, and the documented historic evidence and definitive proof that the gold price has long been the most manipulated concept in the history of modern capital markets. Must read for all interested in the dynamics behind the price of gold.
Protests Spread To Saudi Arabia
Submitted by Tyler Durden on 01/29/2011 13:19 -0500
While the biggest threat to the Middle East region is the possibility that the population of Saudi Arabia may try to imitate what has been happening in the area, thereby bringing total chaos to the established regional geopolitical and more importantly, energy, structure, the first protests in the Saudi Arabia city of Jeddah are already in the books. The clip below shows the peaceful demonstrations that have taken place recently, which as Fedupmontrealer explains are "taking place in front of the Municipality in protest of the severe lack
of infrastructure, and corruption, that led the city to be inundated this week causing billions of dollars of damages for the second time in two years." That this is even occurring in a state where the average wealth is orders of magnitude greater than in Egypt is remarkable. On the other hand, we expect more news such as those from yeserday that Kuwait is paying its citizens $3,500 plus free food for a year to keep calm. Oddly, visions of money dropping helicopters, infinitely extendable unemployment insurance and tax breaks keep dancing in our head. Those who wish to follows the latest developments out of Jedda which appears could be the lightning rod for Saudi riots can do so by tracking #JeddahProtests on Twitter.
Guest Post: The Nature And Origin Of The State
Submitted by Tyler Durden on 01/29/2011 12:41 -0500Instead of the “model for the protection of man in a state of freedom and order” that Jefferson imagined it to be, the American state, both before and after its founding, was a model of conquest and subjugation – not only of the continent’s native inhabitants and the millions of others imported from another continent but of the human detritus endlessly washing up on its shores.xi As such, the American state is simply another state and, like any state, is therefore “an evil inflicted on men by men” that persists solely through the indoctrinated enslavement of its people. And to make matters worse, even some who are not indoctrinated but, on the contrary, recognize the state as the evil that it is, compound that evil by maintaining that the preservation of society nonetheless “justifies the action of the organs of the state.” This is a very serious proposition – so serious, in fact, that the very foundation of human morality hangs in the balance, and with it the very viability of civil society
FX Charts That Matter: The Screaming EURUSD Spot-2 Year Fwd Swap Spread Convergence Trade
Submitted by Tyler Durden on 01/29/2011 12:21 -0500
Goldman's John Noyce once again confirms that he is the signal to Thomas Stolper's endless noise (pun intended). After Goldman did its traditional flip flop yesterday on the EURUSD, Noyce has been steadfast in his position on where he sees the euro. Indeed while Stolper was chasing the bouncing ball, and recommending every nano-uptick, and bailing the second there was a more than 10 pip pullback, Noyce actually has had some actionable long-term advice. That said, with Noyce's report coming out on Thursday ahead of Friday's EURUSD rout, he did provide some critical resistance pivots that appear to have been sustained, and it seems the interim top in the EURUSD is now fully in place even based on technicals (as for fundamentals, should the North Africa crisis jump across the Suez and hit Jordan, Syria or Saudi, watch as the scramble to cover dollar carry shorts goes into overdrive).
Profiling Omar Suleiman: "One Of The Most Powerful Spooks In The Middle East"
Submitted by Tyler Durden on 01/29/2011 11:31 -0500
From Foreign Policy Magazine, August 2009: "Lost in this Egyptian Kremlinology is the fact that neither Gamal Mubarak nor Omar Suleiman presents a clear departure from the present state of affairs. Neither offers the new social contract that so many of Egypt's 80 million citizens are demanding in strikes and protests. The prevalence of the Gamal vs. Omar debate, more than anything, highlights the low expectations ordinary Egyptians have for a democratic succession to Hosni Mubarak's 28-year reign. Those low expectations come with their own quiet tyranny, too."
Egypt Spy Chief Omar Soliman Named Vice President
Submitted by Tyler Durden on 01/29/2011 10:32 -0500
Some developing news out of Egypt, where president Mubarak has just appointed Omar Soliman as vice president. This is a notable event as it is the first time since 1981 that Egypt has a Vice President, indicating just how much of a pseudo-dictatorial system the Mubarak regime has been. We are rather confident that the people will not be all that excited about getting the former head of the country's intelligence (read spying) service as the second in command. And just like in Russia during the Yeltsin-Putin succession, we are confident that Mubarak will promptly fade from the scene as soon as Soliman gives him reps and warranties (preferably better than those by Bank of America) that he will not be prosecuted. Incidentally, the last time Egypt had a VP was when Anwar Al Sadat appointed Mubarak as VP. Al Sadat was assassinated shortly thereafter.
Did The Market Top Out on Friday?
Submitted by RobotTrader on 01/29/2011 10:17 -0500With "billions under management" at risk and thousands of nervous hedge funds playing with 3x leverage (thanks to Bank of America Prime Brokerage), everyone wants to know if now is the time to "make a killing" by going short stocks. After reviewing many charts, it sure looks like another "Get Out of Dodge" day.
January 28th
ReGiMe CHaNGe RiSK-oN!
Submitted by williambanzai7 on 01/28/2011 23:26 -0500The brand new game everyone is talking about...
David Freedom's Vision of 2011 and Beyond
Submitted by Michael Victory on 01/28/2011 21:57 -0500David Freedom's portfolio is 30% Cash and 30% Gold.
Is he buying the dip?
Guest Post: America Needs Community, Not Collectivism
Submitted by Tyler Durden on 01/28/2011 21:10 -0500Tyranny thrives by feeding on human necessity. It examines what sustains us, what we hope for, what we desire, what we love, and uses those needs as leverage against us. If you want safety, they will take it away and barter it back to you at a steep price. If you want success or respect, then you must bow to the existing arbitrary pecking order and play the game nicely. If you want to raise a family, then you must accept the state as a part-time parent. If you want kinship, then you must settle for a thin veneer of empty pleasantries and insincere associations. If you want independence, then you are simply labeled as a threat and done away with altogether. Autocratic rulers are first and foremost salesmen; they convince us that life itself has a “cost”, that we are born indebted, and all bills must be made payable to the establishment. First and foremost, we are sold on the idea that in all of this, we are ultimately alone… It is within these manipulated concepts of cost and isolation that we discover the foundation of all totalitarian cultures: Collectivism.
Federal Reserve Balance Sheet Update: Week Of January 26 - $1.129 Trillion In UST Holdings
Submitted by Tyler Durden on 01/28/2011 21:05 -0500
The steady climb in Fed assets continues, with the left side of Bernanke's balance sheet swelling to just under $2.5 trillion, as US Treasury holdings hit $1.13 trillion, implying that the Fed's DV01 continues to increase on a daily basis with every single POMO, as we have been pointing out since last summer, and which the Fed decided to address last week by changing its "accounting" rules and guaranteeing its assets can never decline. The differential between the US and China is now $233 billion and rising. We expect our now second-largest creditor to realize the game theory balance of leverage (no pun intended) is shifting away from its favor (and to the Fed), and to respond accordingly. Alternatively, maybe someone will finally readjust the UK's holdings to properly reflect what could very likely be simply Chinese debt accumulation.
Inequality In America Is Worse Than In Egypt, Tunisia Or Yemen
Submitted by George Washington on 01/28/2011 20:34 -0500Stunning numbers ...
The Light Sweet Dire Divergence: Just Another Paper vs. Physical Disruption?
Submitted by Tyler Durden on 01/28/2011 19:52 -0500Over the past few weeks we have dedicated quite a few articles to the WTI-Crude spread which today once again hit an all time record wide (here and here). Yet no matter the reason for the divergence, what is certainly lacking are explanations for why arbitrageurs have not stepped in to take advantage of this mispricing. While there has been much speculation, nobody has provided a comprehensive answer. Until today. Below we present the Weekly Tanker Opinion from Posen & Partners, "Light Sweet Dire Divergence" which gives what we believe could be the most credible explanation. Bottom line: just like in gold, there appears to be a dramatic divergence being created between the paper and physical markets in WTI. "The Brent crude oil benchmark currently represents the pricing benchmark for over 65% of the world’s traded physical crude oil. The WTI contract represents a pricing benchmark for about 30% of the world’s traded physical crude oil, while physical supplies of WTI are quite scarce. It should be noted, most of the crude oil being priced off the WTI contract is already trading at a significant premium to the contract itself implying that the market has already compensated for WTI’s lack of physical relevance. This could explain why shipping rates have remained depressed in the face of such a dramatic price discrepancy between the two contracts. It would also support the growing chorus of analysts, traders, and pundits calling for the Brent contract to be more indicative of fundamental demand for physical crude oil (versus speculative demand for paper WTI contracts)." Much more in the full note...







