Archive - Feb 2011

The Chinese New Year interest rate hike, as expected was just the beginning. China has just announced it is hiking the Reserve Requirement Ratio for select small and medium banks. This is merely an escalation in what is now becoming an open trade/monetary war between China and the US, which will be lost... by both.

The purpose of this paper is to draw particular attention to the recent disparity in crude oil prices – namely the difference between two benchmarks - West Texas Intermediate [WTI] and Brent [North Sea] Crude. Historically the price of WTI trades at a premium to lesser quality Brent North Sea Crude. This paper lays out the case that the extreme, existing, observable price discrepancies is likely the result of engineered and arbitrary market manipulations – to be discussed below. Such arbitrary price manipulations in the oil markets impact negatively on the oil exporting economies and show favor to oil importing economies.

"In mid-December, we published a lengthy article on why Netflix was our largest bearish bet at the time. With the stock up nearly 25% since then, one might assume that we’d think it’s an even better short today, but in fact we have closed out our position because we are no longer confident that our investment thesis is correct." Whitney Tilson

The $70 billion dollar man would be wise to heed JFK's words ...

RANsquawk Market Wrap Up - Stocks, Bonds, FX etc. – 10/02/11

Wonder where the 3 million strong crowd is going? Wonder no more. It is going here...

In the meantime, it begins:

EGYPT SECURITY HQ IN RAFAH ATTACKED BY ROCKET PROPELLED GRENADE

In the meantime, for those who remember what happened to Romania in 1989, get ready to for a Bucharest rerun in Cairo. CL is very cheap here as the march to the presidential palace begins.

Mubarak announces he will not step down. 3 million very angry protesters coming up next.

Well, they threaten to sell our crap, we punish them for pegging to the world's most manipulated currency. Quid pro quo Clarice.

This is an almost identical replica table to the one we posted three months ago when CSCO experienced its most recent plunge, which however paled in comaprison to today's. Following yesterday's abysmal results, here are the biggest losers now that CSCO is trading at the lowest price since July 14, 2009. The usual biggest loser suspects are not surprising. Neither is #16 Goldman Sachs Asset Management with $142 million in losses in one day in one stock.Way to go GSAM: reputation well-deserved.

This just in...

The Treasury has released its monthly deficit numbers, and while revenues this January came at a robust $226.6 billion (compared to $205.2 billion a year earlier), the outlays exploded to $276.3 billion compared to just $247.9 billion a year ago. The net result was a deficit of $49.8 billion in January, $7.2 billion more than a year earlier. And the number that all are watching (increasingly more irrelevantly by the way, as the Fed now owns almost 15% of marketable debt) - interest on debt securities, was $21.1 billion, or 7.6% of all outlays. Since the Fed's holdings will never be reduced, and in fact will continue growing with QE3, 4, and so forth, soon all the interest on marketable debt will be paid to Ben Bernanke, who will promptly remit it back to the Treasury in the epitome of the biggest ponzi scheme ever conceived by man.

The REAL lessons of the Egyptian revolution ...

The New York Fed has just released its latest POMO schedule for the upcoming month, and it may make some market members unhappy. Unlike the previous several monthly monetization dockets, this one will only see the Fed pump $97 billion in the market consisting of $80 billion in USTs from the QE2 mandate, and $17 billion in Treasurys due to MBS putback issues per QE Lite. This is $15 billion less than the last POMO schedule which saw $112 billion scheduled to be monetized. The schedule runs through March 9, and the next schedule will be presented on March 10 and 2 pm. There are no double POMO days in the current schedule. Of course, with $195 billion in incremental liquidity from the SFP program winddown, the Fed likely does not need to drown everything in its relentless liquidity.

From Stratfor, citing BBC Arabic: "Egyptian President Hosni Mubarak has reportedly already left the country, and his speech scheduled for the night of Feb. 10 has been pre-recorded, BBC Arabic reported. Some reports indicate Mubarak will speak within two hours, while other unconfirmed reports say he left the country as early as yesterday."