Archive - Feb 2011

For all those who were wondering why someone just bought a massive 75,000 put spread block on JPM earlier, here's the reason. Just out from the NYT, disclosing a suit filed previously against JPM by Madoff trustee Irving Picard under seal: "Senior executives at JPMorgan Chase expressed serious doubts about the legitimacy of Bernard L. Madoff’s investment business more than 18 months before his Ponzi scheme collapsed but continued to do business with him, according to internal bank documents made public in a lawsuit unsealed on Thursday. The lawsuit against the bank was filed under seal on Dec. 2 by Irving H. Picard, the bankruptcy trustee gathering assets for Mr. Madoff’s victims. At that time, David J. Sheehan, the trustee’s lawyer, bluntly asserted that Mr. Madoff “would not have been able to commit this massive Ponzi scheme without this bank.” But with the case under seal, there was no way to gauge the documentation on which the trustee based his $6.4 billion in claims against the bank — until now."

How does NFP effect a market?

Some observations from Credit Suisse

Traders take note. The inflation trade is back in full effect. It is overstretched in some areas, but that state can last quite a while. And we you consider the idiocy coming our of the Fed (QE 3!?!?!) and the ECB, it’s not surprising. Until someone reigns these lunatics in, commodities will be ramping higher, trumping even stocks’ performance.

The firm which exposed RINO for the fraud it is has released its latest Chinese scam target: China MediaExpress Holdings (Nasdaq:CCME)."Muddy Waters LLC has initiated coverage on China MediaExpress Holdings, Inc. (CCME) with a Strong Sell rating and an estimated value of $5.28."

Sorry, we can't take credit for "chairsatan" - that one has Bill Gross written on it all the way... What can we say: the man sure can be a genius, especially when he isn't buying government subsidized BAB bonds. And when subsidies no longer work out, coming up with creative epithets sure is a great way to let off steam. That said, watch the full Bernanke NPC Q&A at the link below.

The lies come hot and heavy:

• Initial claims for unemployment insurance have generally been trending
  down, and indicators of job openings and firms' hiring plans have
  improved
• QE 'Effective at easing financial conditions'
• Recovery likely to be 'more rapid' in 2011 than 2010
• 'Overall inflation remains quite low'
• Recovery in consumer, business spending may be solid
• Economy seems to have strengthened in recent months

But here's the only one that matters:

• Unemployment, inflation likely to defy Fed mandate

Which mandate is that Genocide Ben: would that be the mandate to kill off half the world with your revolutionary policies before the Russell hits 36,000?

Perhaps those 2 days of December 1,800 gold call purchases we discussed yesterday indicated someone (not Doug Kass mind you), knew something...Gold has just surged by $20 in minutes. Unless Blythe can find a way to contain this, this could get very ugly, very fast.

And so the tide rising all commodities keeps coming: rough rice has just passed its December 2009 high and is now at its highest since October 2008. When we predicted on Monday morning that "rice is next", little did we think that it would be up by 11% in 4 days. And with this important resistance level broken, it is smooth sailing to the next two resistance levels of $20 and $24. Of course, Bangladesh will be in flames long before any of those are hit. But a speculator has to eat, right. After all, none of this is Gen Ben's fault.

The Criminal Reserve once again lives up to its name...

RANsquawk US Afternoon Briefing - Stocks, Bonds, FX etc. – 03/02/11

I wonder when the WSJ will eat crow? Sooner than you might think.

43 obvious signs of what everybody in central banking says is not their - Inflation. Next up: currency volatility?

Want to know how to keep internet access when your government shuts it down? Then read this article from Patrick Miller and David Daw.

"Based on our research, China Agritech, Inc. (listed on NASDAQ as CAGC) is not a currently functioning business that is manufacturing products. Instead it is, in our view, simply a vehicle for transferring shareholder wealth from outside investors into the pockets of the founders and inside management. Our price target of $2 is based on the cash currently reported on CAGC’s books—$45.8 million—divided by the number of shares outstanding. The company’s remaining business does not, we believe, exceed $7.5 million in revenue per year. If the overhead associated with maintaining a listed company is taken into account, there is no profit. Since we believe China Agritech has no valuable technology, intellectual property, customer relationships, or capital assets, there is no value to the company other than dissolution value." LM Research