Archive - Apr 2011

April 29th

Tyler Durden's picture

Today's Economic Docket: Personal Income, Chicago PMI And UMichigan Wall Street CEO Sentiment





Data on Personal Income should indicate another reduction in the savings rate, Chicago PMI will miss consensus confirming economy is in Japan-induced freefall, UMichigan will poll a couple of Wall Street CEOs who have never seen Jeeves happier, and lastly Bernanke will speak in some televized conference and not providing any new data as usual.

 

Tyler Durden's picture

GoldCore Questions On Comex Silver Default Due To Secret Buying By Russian Billionaire, Chinese Traders and People's Bank Of China





Let us reiterate a COMEX default on delivery of precious metals and specifically of silver bullion bars is far from “noise”. It is of significant importance and that is why we have covered its possibility for some months. A COMEX default would have massive ramifications for precious metals markets, for the wider commodity markets, for the dollar, for fiat currencies and for our modern financial system. Silver surged 3.4% yesterday to settle at a 31 year nominal high and rose by $1.55 on the day. Silver is up some 28% in April alone. The last time this happened is when Warren Buffett took a large stake in silver in 1987 and there were rumours of Buffett “cornering the market”. Silver remains in backwardation and the possibility of a COMEX default cannot be ruled out – especially as silver bullion inventories are very small vis-à-vis possible capital allocations to silver in the coming weeks and months. The possibility of an attempted cornering of the silver market through buying and taking delivery of physical bullion remains real and would likely lead to a massive short squeeze which could see silver surge to well over its inflation adjusted high of $140/oz. Indeed, a recent article in the Financial Times suggested that private or state interests with very deep pockets are attempting to corner the silver market. Bizarrely, this massive story which mooted the possibility of Russian billionaires, Chinese traders and even the People’s Bank of China and other central banks secretly buying silver, has subsequently been barely reported or commented on. There are now two “conspiracy theories”. One is the long side conspiracy theory which claims, a la the FT, that there are foreign private and state actors attempting to corner the silver market through secret buying.

 

Leo Kolivakis's picture

Are States' Pensions the Next Crisis?





Earlier this week, the Pew Center on the States issued the results of its “fiscal stress test” of the 50 state pension programs, and the results are troubling to say the least. But is this really the next crisis or just more fear mongering?

 

Bruce Krasting's picture

Sen. Kohl to Geithner - "I want a Sweet deal"





Same old same old in D.C. thinking.

 

Tyler Durden's picture

As First Suggested By Zero Hedge In 2009, Massive CDS Price Manipulation Scandal Erupts, Everyone Implicated





Back in March of 2009 Zero Hedge, once again a little conspiratorially ahead of its time, solicited reader feedback on a key topic: CDS pricing manipulation, involving in addition to key cartel banks, such "independent" pricing services as MarkIt. We said: "Zero Hedge has received some troubling info (like there isn't enough)
regarding major pricing discrepancies between certain securities pricing
services. The services include companies such as IDC, Advantage Data,
Markit and others. While I will not disclose which one may be a culprit,
the allegation is that one (or more) are providing substantially above
market pricing levels, specifically as pertains to distressed
securities." Then back in August 2010, we followed up by explaining that it is the ongoing price manipulation scheme, in addition to other factors, that allows Goldman Sachs (and other CDS dealers to a much lesser extent) to constantly generate massive profits from trading an opaque off-exchange product like CDS. It took two years and a month for others to take notice of this inquiry, although naturally not in that slum of corruption and market manipulation, the United States of America, but in Europe. Bloomberg reports: "Goldman Sachs Group Inc. (GS), JPMorgan Chase & Co. (JPM) and other 14 other investment banks face a European Union antitrust probe into credit-default swaps for companies and sovereign debt, regulators said. ...The European Commission said it opened two antitrust probes. It will check whether 16 bank dealers colluded by giving market information to Markit, a financial information provider." So while some post flow charts explaining the hilarity behind conspiracy theories, others actually expose the facts that today are a conspiracy and tomorrow are a full blown criminal investigation.

 

williambanzai7's picture

THe WeDDiNG GueST





The wedding guest here beat his breast, For he heard the loud bailout bassoon...--Samuel Taylor Coleridge

 

Tyler Durden's picture

Follow The Royal Wedding Here





For some reason this is the biggest news of the day. Feel free to follow it live via Sky News below.

 

Tyler Durden's picture

Swiss Franc Hits All Time High Against Dollar After SNB Books Profit From UBS Bad Bank, Warns On Inflation





And the parade of dollar negative news continues this morning. First the USDCNY an 18 year low, now the USDCHF hit an all time low, trading as low as 0.8675. This is astounding considering the pair had traded north of parity for pretty much all time until last summer when the USD succumbed to Bernanke's strong dollar policy. The reason for the record surge is attributed to comments by SNB president Philipp Hildebrand who, in observing the economy, says that the "inflation outlook still in range of price stability and Swiss economy grows more vigorously than anticipated." Translation: record CHF has killed off all our exports, and Nutella is about to picket our offices. And in other related, and very entertaining news the SNB said that posted a first-quarter profit of 1.9 billion Swiss francs ($2.18 billion), thanks to gains from currency transactions and a fund in which it parked toxic assets from banking giant UBS. In other words, SNB has now become AIG, booking MTM profits on its literally toxic subprime assets (thank you Brian Sack and Chicago permabid IWR algos), all the while ignoring the 220 billion in USD backing the "asset" side of its balance sheet, which if fairly marked would likely bankrupt the central bank overnight. And people say we can't teach the euros a thing or two about banking...

 

Tyler Durden's picture

Chinese Yuan Hits 18 Year High Against Dollar





The world's most anticipated currency revaluation continues at its traditional glacial pace. And while it is not a surprise to anyone, the overnight PBOC fixing for the CNY dropped below the psychological 6.50 level (or 6.4990 to be precise) for the first time since 1993. Granted, if the US and Chuck Schumer in particular were to stop pushing China to revalue, it would have long since done so at a faster pace, however in light of the diplomatic effort to force it to do so, the ongoing snail's pace shift in FX will continue (and may well reverse now that even more legislation is introduced to the "enforce" China's currency manipulator status). Yet what is notable is that over the past 4 days the CNY has seen a dramatic 0.75% appreciation: easily one of the most aggressive weekly moves by PBoC bands. Is this move merely a political ploy to silence the critics, or is China truly starting to crack under the weight of its own inflation? We shall know soon enough.

 

RANSquawk Video's picture

RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 29/04/11





RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 29/04/11

 

George Washington's picture

Gallup Poll Shows that More Americans Believe the U.S. is in a Depression than is Growing … Are They Right?





How can so many Americans believe that we’re in a depression, when the stock market and commodity prices have been booming?

 

April 28th

Tyler Durden's picture

This Is What A $130 Million Market Levitating Fat Finger Looks Like





Earlier we reported on a completely inexplicable 10% surge in the IWR ETF resulting from a whole lot of busted trades. We didn't know precisely how many trades were involved until the kind folks at Nanex sent us this cheat sheet. The answer: 1,379,128 shares of IWR! Which, at the prices crossed, amounts to just over $130 million. We wonder: which algo could afford to lose $130 million on what in retrospect was a busted fat finger, and just what is the purpose of lifting every single offer into an offerless market beyond the point of ridiculousness? Luckily, the trades, which crossed just after close, did not happen 5 minutes earlier, or the market would have seen a fully blown inverse flash crash, carrying across all asset classes. On the other hand, we know of one person who is very focused on the Russell 2000 as an indication of the overall strength of the economy. Is the Fed now, in perpetuating its 3rd mandate, solely focused on buying IWR (and/or other) ETFs?

 

ilene's picture

Student Loan Debt Hell: 21 Statistics That Will Make You Think Twice About Going To College





Posted below are 21 statistics about college tuition, student loan debt and the quality of college education in the United States….

 

Tyler Durden's picture

Second Silver Margin Hike In One Week... Is Now Priced In





As vaguely rumored earlier, and largely anticipated, the CME instituted another margin hike, presumably for a broad swath of commodities but apparently focusing on one particularly: silver, this time 10%. This is on top of the 9% margin hike from Monday. If anyone was wondering the reason for silver's swoon earlier (and subsequent jump) was, now it's clear. By now it is becoming rather clear that all the CME does is provide ever better reasons to BTFD. As always, we continue to hold our breath until there is a comparable maring hike for the ES. We may soon run out of oxygen.

 

CapitalContext's picture

Capital Context Update: Observations and Other Greeks





While stocks seemed in a world of their own today relative to Treasuries, FX carry, PMs, oil, and even the USD, they managed to make solid gains amid above average volume following a series of dismal macro prints this morning. Credit outperformed but we outline why the velocity of moves may slow a little here.

 
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