Archive - Feb 15, 2011

Leo Kolivakis's picture

Pension Managers Face Firing for Badmouthing?





Some people just don't know when to keep their mouth shut...

 

williambanzai7's picture

HaVe SoMe BoeRSe SH%T





Concerning the NY Brat Exchange...

 

Phoenix Capital Research's picture

How Higher Interest Rates Could Trigger Another 2008-Type Event





In 2008, the entire financial system nearly went under due to the Credit Default Swap market which was $50-60 Trillion in size. In contrast, the interest-rate based derivatives market is $196 TRILLION in size: more than THREE times larger than the credit default swap market at its peak.

 

Phoenix Capital Research's picture

The Markets Are On Borrowed Time





Emerging Markets, which have lead the S&P 500 for years are flashing MAJOR warnings signals. Remember, the Emerging markets bottomed before the S&P 500 (November 2008 vs. March 2009) during the Crash.

 

Tyler Durden's picture

Rioting In Bahrain Escalates, Third Protester Dies In Police Clashes





The small country of Bahrain has promptly been displaced in the docket of revolutionary news, by recent developments in Iran. Yet the peace on the Saudi island neighbor is deteriorating as demonstrations escalate. According to ABNA.ir, "Tens of Bahraini Army jeeps surrounded the main square and attacked the protesters. Thousands of Anti-Government protesters filled a main square in the Bahrain capital due to discriminations posed by the government. Security forces at first appeared to hold back as the crowds poured into Pearl Square in Manama. After a while, in an extreme violent action the army released more than 50 war vehicles to the square, which resulted in shameless and violent attacks against the righteous freedom seekers. The dramatic move Tuesday comes just hours after a third protester died in clashes with police in the strategic Island Kingdom, which is home to the U.S. Navy's 5th Fleet." So while we wait for Al Jazeera or anyone else for that matter to start covering the protests in Manama (which could be a while: the world has suddenly developed revolution burn out), below we present a photographic update from the island nation.

 

Tyler Durden's picture

Advance Look At The January FOMC Minutes: Is The Fed Starting Exit Strategy Discussions?





In advance of tomorrow's FOMC minutes releasae (2pm Eastern) Goldman shares some interesting thoughts on what may be disclosed. The key variable is whether, just like in the minutes from early 2010, the Fed will once again jump the shark (what is the creature of jump choice when jump is done twice in one year?) and commence discussions of exit strategy. If, as Goldman expects this might be the case, expect the market to plunge as there is nothing organic about this Fed liquidity driven pump of over 600 S&P points. To wit: "Is the FOMC turning its attention back to its ultimate exit strategy?  It is premature to assume that the FOMC has any preset schedule for the “exit strategy” that was discussed widely—inside and outside the Fed—in early 2010.  After all, the LSAP program is only about half completed, and the default assumption appears to be that it will run its course until mid-2011.  That said, it is never premature for the committee to revisit its options, particularly during the longer two-day sessions that allow time for more strategic thinking.  Thus, we would not be surprised to see some discussion, if only a brief review of familiar tools and strategies for the exit strategy that will ultimately be needed.  The mere existence of such a discussion would not be meaningful in itself, though obviously the language surrounding it would have the potential for market impact, whether justified or not."

 

Bruce Krasting's picture

Backward Silver & Forward Weather





Swaps logic,logic of weather?

 

Tyler Durden's picture

Bloomberg Interviews Goldman's Rapaciously (For The Time Being) Bullish Jan Hatzius





Jan Hatzius is the bellwether of the sellside economist crowd. When he was bearish (2009), most were bearish, when he turned bullish (early half of 2010), everyone else followed suit. Then he turned bearish again (early August 2010) and convinced his friend and former co-worker Bill Dudley to launch QE2. Then, in December, he turned very bullish again. And now we are here. We expect Hatzius to be fake bullish for another 3 months max, at which point he will have no choice than to start telegraphing to Jon Hilsenrath that it is time for QE3. In the meantime, for those who are not too familiar with his work, here is an extended interview with Bloomberg TV, in which the GS head economist talks about Goldman's call for 18% gain in stocks this year as well as trends in jobs, inflation and other data indicators.

 

Tyler Durden's picture

Oaktree's $10 Billion Distressed Fund Returns Investor Capital, Runs Out Of Investing Ideas





And so our bureau of central planning has once again made distressed investing a relic of the past. Famous distressed PM Bruce Karsh, who runs Oaktree's distressed investment fund, has just decided to return $3 billion of the fund's $10 billion previously raised from investors due to a lack of investing opportunities. Basically, in preventing failure for a select few, Bernanke made failure impossible for everyone (which begs the question: how long before the specialized restructuring boutiques of the world - the Houlihan Lokeys, the Miller Buckfires, and the Alix Partners, continue to exist, let alone sustain on IPO any time now hopes). So after Bernanke destroyed long/short, sometimes incorrectly called "value", investing, he has now eliminated another formerly profitable vertical of the market that rewarded spotting arbitrage opportunities. The only funds that will remain soon as the Long-onlies and the momos of the world - also known the dumbest money imaginable. And when this whole thing crashes, and only shorts would be able to make money, there will be no-one making money, as there will be no capital available to short strategies. Bernanke's plan of killing all the bears has succeeded. Next up: it's the bulls turn.

 

Stone Street Advisors's picture

John Paulson's Interview With The Financial Crisis Inquiry Commission





All the signs of a housing/credit bubble were there, but no one was looking...

 

Tyler Durden's picture

Nelson Peltz Revives "Highly Contingent Letter" Acquisition Gimmick With Family Dollar





After close today, Trian Fund Management, Nelson Peltz' asset management company, filed a 13D indicating the fund had amassed a 10 million (7.9%) share stake in FDO, and more importantly, expressed a vague, preliminary, non-binding and highly-contingent interest in acquiring discount retailer Family Dollar (closing regular hours at $44). As the proposed price indicated in the letter is $55-60, the shares are expectedly surging, meaning the letter alone resulted in nearly a 20% ($13) gain for Peltz 10 million share investment: $130 million for a few minutes worth of work: not bad. Yet is this anything more than a red herring? After all these kinds of fully contingent letters were all the rage during the bubble years, when funds would "express a purchase interest" with so many contingencies Arnold could drive his Hummer through all the "outs." As soon as the stock surged, the letter writer (and more often than not, the cabal of silent co-investors) would cash out, and slowly the buying interest would evaporate, with the price slowly dropping back to historical levels. In fact, for Trian this is not the first time - the company did an almost identical thing with Chemtura back in 2008, only to completely leave the company in March of 2009, months ahead of CEM's filing for bankruptcy (resulting in major losses for Trian). Which is why we urge readers to be very careful before chasing into FDO stock here: we are very concerned that this is nothing more than simply another attempt on behalf of Trian to stir up buying interest in which to sell its 10mm holdings with no real acquisition interest, since with all the non-binding clauses it is extremely difficult to take this letter seriously.

 

Stone Street Advisors's picture

This Week in the "We Are So Screwed!" Department...





The "Youth of America" is dumber than rocks, especially in Math & Science...

 

Tyler Durden's picture

Jack Daniels Explains The Budget Deficit





Still hungover from Saturday to comprehend what happened with the Great Obama Budget presented yesterday? Then this video is for you. Using shot glasses of Jack Daniels it takes just under two minutes to lay out in layman's terms not only the essence of the proposed budget, as well as the "Draconian" cuts contemplated, but also insinuates heavily about the level of blood in the alcoholstream of those government workers who came up with the "50% rise in government revenues over 2 years" assumption.

 

Tyler Durden's picture

Stand Up To NIMBY - And Create Jobs





In Britain, they call it "DADA." It means Decide. Announce. Defend. Abandon. In America we call it "NIMBY" - "not in my back yard." It applies to all kinds of infrastructure construction, from airports to roads. But it is electric and gas utilities that feel the brunt of local opposition. These localized forces of "no" have caused the buildup of a substantial backlog of infrastructure projects, not only for sexy green-energy technologies but also for the traditional needs of energy production and distribution - pipelines, power lines, replacement of aging equipment and the construction of new facilities to meet new loads and move the energy infrastructure into the 21st century. It also includes old-fashioned technology - meters, switches, transformers - to get new green electricity to the consumer. A new study, from a group advocating upgrading energy facilities, says the pent-up need for utilities to start these projects is so great that if the impediments can be dealt with, 250,000 jobs can be created almost immediately, without action from Congress or a raid on the federal treasury.

 
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