Archive - Feb 2011

February 25th

Tyler Durden's picture

FMX Connect Afternoon Gold Fix: "Yesterday’s Sell Off From The 1415 Area Seemed Almost Orchestrated"





It’s becoming increasingly annoying watching dealers buy call and sell puts the day before we rally $20, and then the next day buy put and sell call the day before we drop $20. Yesterday’s sell off from the 1415 area seemed almost orchestrated. At the very least, the futures selling came in during the thinnest trading hours. While exchanges herald the benefits of electronic trading there is one thing wrong with it. Electronic trading minimizes the information leakage associated with using brokers, for sure, but it is also allows oligarchic organizations to anonymously manage price movement while hiding behind digital displays. We won’t use the word manipulate, in part because of our libertarian bent, but it’s getting ridiculous. Where there used to be 50 5-lot thieves on the floor now there are 5 Too-Big-To-Fail banks with infinite fed-sponsored balance sheets doing whatever they please. The idiot locals on the floor, fragmented as they were, served to keep the big banks in check because there was transparency of price and to a large extent, the players were known. This doesn’t exist anymore and we don’t see an end to it. Instead of thinning the forest for the trees, technology, regulatory and economic factors have killed the saplings and destroyed market diversity. This translates to a narrow and deep liquidity pool in trading venues; god forbid if one of them fails.

 

Tyler Durden's picture

Silver Retraces Entire Post Crude Margin Hike Loss, Even As General Collateral Rates Rise On Broad Liquidity Withdrawal





While the equity market resumed its now traditional (for the past 6 months) smooth levitation, with little to no volatility and even less volume, the most interesting asset class was silver, which after dropping to under $32 yesterday, following the various attempts by the administration to kill assorted commodities, rose by 4% today, closing at the day's highs and wiped out the entire loss from yesterday. Ironically, this happened even as general collateral rates rose today. "The reason for the rise is an increase in the volume of Treasury securities available to be used in the repo market as general collateral. The Treasury Department on Friday settled an issue of $25 billion in 49-day cash management bills, and the $99 billion in new notes it auctioned this week will settle on Monday." Of course, this was offset by another 56-Day CMB offsetting the winding down SFP (total SFP holdings are now cut in half to just $100 billion). So despite a major liquidity extraction from the market, not only did stocks rise (which can traditionally be attributed to POMO in a low volume environment), but the biggest beneficiary was silver, meaning that even in a tight liquidity regime, most investors now prefer to pursue commodities as an investment class, something which had not happened previously.

 

George Washington's picture

Politicians Slash Budget of Watchdog Agencies ... Guaranteeing that Financial Fraud Won't Be Investigated or Prosecuted





How does D.C. address the infinitesimally small nano-level of change included in FinReg? Defund it, of course ...

 

RANSquawk Video's picture

RANsquawk Market Wrap Up - Stocks, Bonds, FX etc. – 25/02/11





RANsquawk Market Wrap Up - Stocks, Bonds, FX etc. – 25/02/11

 

Tyler Durden's picture

Guest Post: 2011 Tipping Points





Throughout my 2010 article series "Extend & Pretend" and "Sultans of Swap" I stressed that we were rapidly moving from the Financial Crisis of 2008, through the Economic Fallout of 2009 -2010, towards a Political Crisis in 2011 -2012. We are now clearly beginning to see the early emergence of the final part of this continuum. From North Africa to Wisconsin all are fundamentally based on the single insidious underlying problem - excessive global debt and credit levels. It is now time to revisit our Tipping Points framework to see where this is leading. A framework that is clearly pointing to a global fiat currency failure and an emerging new world order which is detailed in our "2011 Thesis - Beggar-thy-Neighbor". Our Tipping Points which are outlined below are adjusted continuously based on daily news flow analysis. Through a proprietary 'Process of Abstraction' news is tracked and consolidated around these potentially critical flash points.

 

williambanzai7's picture

ARe You ReaDY To PLaY ReGiMe CHaNGe CLueDo?





Was it Mugabe in the abattoir?

 

Tyler Durden's picture

Ted Butler Urges Everyone To Submit A Response To The CFTC On Silver Manipulation Schemes





On several occasions over the past couple of years, thousands of you have taken the time to write to The Commodity Futures Trading Commission (CFTC) concerning the issue of position limits in COMEX silver. Now the CFTC has solicited your opinion again for what will be the last time. The current open comment period, through March 28, is the culmination of all the public hearings and commentary over the past two years. Your comments on silver position limits make a difference. Private legal counsel and even sources within the Commission have assured me that there can be serious consequences for the CFTC should they ignore the will of the public, when that public opinion is reasonable.

 

Tyler Durden's picture

The Truth About Your Politician: An Interactive Guide





Curious to know just how liberal or conservative your representative politician (either in the Senate or the House) has been in the past year? Courtesy of the National Journal, now you can. In the following list, members and senators are assigned separate scores for their roll-call votes on key economic, social, and foreign-policy issues during 2010. The senators are rated in each of the three issue categories on both liberal and conservative scales, with the scores on each scale given as percentiles. An economic score of 87 on the conservative scale, for example, means that the senator or member was more conservative than 87 percent of his or her colleagues on the key votes in that issue area during 2010. Composite scores are calculated based on the issue-based scores. Members with the same composite scores are tied in rank.

 

Value Expectations's picture

Retailers That Beat on Earnings – Are Target Corp. (NYSE:TGT) & Kohl’s Corp. (NYSE:KSS) Attractive Investment Opportunities?





Target Corp. (NYSE:TGT) & Kohl’s Corp. (NYSE:KSS) reported yesterday that revenues and profits rose in the 4th quarter behind strong holiday season sales, helping lift their share prices in yesterday’s trading. Shares of Target rose 3.5% to $52 and shares of Kohl’s rose 3.4% to $53.80.

 

Tyler Durden's picture

Why The Pacific Decadal Oscillator Means Five More Years Of Very Bad Fed Luck





These days the Fed is blamed for everything: from liberating the world from oppressive regimes, to the resultant genocide that accompanies such a process, not to mention to reflating record bubbles that guarantee to wipe out another generaton's wealth as soon as this latest and greatest episode of central planning fails. Yet one thing the Fed can not be blamed for (yet) is the weather. And unfortunately for the Chairsatan, storm clouds are (literally) building up for the next five years. While some have blamed the recent surge in food prices on inclement weather, including floods here, droughts there, and massive conflagrations in Russia, the case is, as UBS points out, that weather over the next five years will likely be very unpredictable, and result in increasingly supply shocks and commodity price imbalances (at least for those commodities that are harvested; that the Fed's liquidity is at base reason for the surge in everything not nailed down, just look at the price action in items that do not need watering, or direct sunlight). Enter the Pacific Decadal Oscillator, and if UBS is right, things will continue to be ugly at least until 2016.

 

Tyler Durden's picture

Citi On The Euro's Surprising Resilience And Why "At These Prices We Are Not Buyers"





While over the past week we finally got confirmation that while the Swiss franc reserved its place at the top of the foreign exchange pantheon as the last flight to safety currency (with dollar concerns expressing themselves in the form of accelerating DXY selloffs predicated by fears of QE3 should oil continue rising higher or the world economy deteriorating), the one surprising discovery has been the stunning resilience of the Euro in light of relentless bad news. We have already noted our concern that March is rapidly coming, and brings with it a vicious calendar of European political upheaval and debt maturities, which should only be ignored at the peril of other people's money. Confirming our Euro-skepticism is Citi's Steven Englander who has released an extended note earlier titled "EURUSD - why so strong" which seeks to explain why the EURUSD is not trading a few hundred pips lower. Englander's conclusion: "we still find it hard to sweep away sovereign issues, especially if private sector positions continue to creep up. Under a benign global outcome, we continue to see better currencies to buy than the EUR, and under a not-so-benign outcome, we expect that the run-up in risk aversion will be a significant EUR negative. At these prices we are not buyers." Yet someone is...

 

asiablues's picture

Top 12 Countries Most Likely To Go Belly Up





An interesting take at measuring global fiscal risk and why France and Germany are more screwed than Greece and Japan

 

RANSquawk Video's picture

RANsquawk US Afternoon Briefing - Stocks, Bonds, FX etc. – 25/02/11





RANsquawk US Afternoon Briefing - Stocks, Bonds, FX etc. – 25/02/11

 

Reggie Middleton's picture

Reggie Middleton ON CNBC’s Fast Money Discussing Hopium in Real Estate





A significant extension to my 3 minute Q&A on CNBC's Fast Money show yesterday that, in my opinion, provides irrefutable evidence that commercial real estate is about to enter a cyclical bear market. Then again, what do I know...

 

Tyler Durden's picture

Interactive Chart On The Oil Price To Global GDP Correlation





After we presented a micro-themed, static primer on the impact of the price of oil on the US consumer earlier, here is a macro picture perspective from Reuters, which correlates the change of oil prices to the corresponding change in world GDP (indicatively every $10 change in in crude results in an estimated range of 0.5-1.0% inverse change in global GDP).

 
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