Archive - Jun 2011

Prior to the reception, Thigpen will be attending a special policy briefing with senior White House and Administration officials on topics including housing, immigration reform, innovation, energy, and job creation.

In a very surprising move, the AP reports that the UK finance minister George Osborne has announced a major overhaul of British banks, the key provision of which will be the separation of bank retail and investment business "in order to help avoid another financial crisis" - an act which is in essence a reintroduction of Glass-Steagall. What is stunning about this development is that the banking cartel has allowed the UK to get so far as to effectively repeal Gramm-Leach-Bliley, the act that ended Glass Steagall and allowed unprecedented deregulation to convert formerly safe banks into the mastodon, 50x levered, TBTF hedge funds they are now. And if this is happening in the UK, how long before Europe adopts the same overhaul in order to placate its austerity-ired population, and deflect populist anger where it belongs: the banking oligarchy which continues to defy nature, and the simple laws of bankruptcy, and demands that there is never even the smallest impairment of senior claims. All this may very soon be changing.

But so far, no evidence of a crisis ...

Well, all that bitching at the Comex over PM manipulation has paid off. The Chicago exchange just lowered its initial and maintenance margins by 10% from $6,751 to $6,075 and $5,001 to $4,500 respectively. In addition to GC, the CME lowered MGC, CGT, QO and 8Q contracts. Yet while it also dropped a bunch of irrelevant petroproduct margins, the CME is now targeting the Corn and Hogs speculators, apparently doing China's job for it, by hiking margins by 50% for the same crop year in C and lean hogs LN all months by 66%. Other products that saw a margin hike were Wheat, Soybean, Lumber, Dry Whey and Live Cattle. But back to gold: is this the catalyst for the next big move up? We should know within a few days...

The one and only data point that has given the bears pause is the extremely bearish sentiment readings. As an example the AAII survey recorded its highest bullish view on December 21, 2010 at 63.3% bullish to 16.4% bearish whereas on June 15, 2011 those readings were 29.0% bullish to 42.8% bearish. Bulls have argued this contrarian indicator says to buy stocks while bears have scratched their heads questioning why sentiment is so bearish with the VIX below 20 and equities only 7% off their multi year highs. Makes no real sense or does it?

• RESEARCH IN MOTION SEES 2Q REVENUE $4.2B-$4.8B, EST $5.47B
• RESEARCH IN MOTION 1Q REVENUE $4.91B, EST. $5.15B    
• RESEARCH IN MOTION SEES 2Q ADJ. EPS 75C-$1.05, EST $1.40
• RIM SEES YEAR OPER EPS $5.25-$6.00, HAD SEEN $7.50; EST. $6.24
• RIM SEES 2Q GROSS MARGIN 39% VS EST. 41.5%
• RIM CUTS YEAR FORECAST, SETS BUYBACK, JOB CUT PLAN

RANsquawk Market Wrap Up - Stocks, Bonds, FX etc. – 16/06/11

aka/A Deep Troika...

While the furious tape painting attempt into quad witching continues courtesy of a surging EURUSD, which we anticipate will sell off shortly once again, as tomorrow brings absolutely nothing actionable out of Greece, a better indication of what is happening in the market are the High Yield ETF JNK/HYG which both were just been punched out. It is unclear if this ETF was the plaything of some HFT algo (we will follow up with Nanex shortly), but it appears that these ETFs would have been a direct casualty had the sell off continued after 3pm, at which point the bidside of the Level 2 order book essentially disappeared, and the only thing that prevented an epic collapse was central bank purchasing of the EURUSD which lifted the entire market. Yet what is nonetheless quite bad for holders is that the JNK/HYG has now taking out not only 2011 lows, but lows unseen since September 2010. The ETFs tend to be a good proxy of the actual cash HY market as can be seen in the second chart below. Which is why we send our condolences to all HY fixed income hedge funds which are about to be dealing with some very substantial margin calls. The crash may have been delayed but has not been prevented.

You can look at the Dow which is hilariously green on the day despite the now doubly confirmed contraction of the US economy. Or you can look at the VIX which is now surging in what can be classified as an offerless market, and up well over 10% at last check. NYSE Circuit breakers now off.

Will you own your own body? Or will that be privatized, too?

While I spend a lot of time highlighting TPTB’s plan to form a world government, currency and central bank that doesn’t mean I think they will succeed. In fact, just as Wall Street played their hand too aggressively after being bailed out and are now going to go down for the count this round, The Powers That Be have also played their hand way too aggressively and not only will their dream of planetary control through a global fiat money system run by them completely fail, but their policies will fail so spectacularly and publicly that it will lead to what I call ”peak government.” Governments right at the moment are as big as they will ever be in our lifetimes. This is in my opinion a great thing for humanity and freedom but the transition to more localized rule of law will be tricky. We must be rational and help the sheep out as their world crumbles around them. They will be scared and looking for mommy. Governments won’t be in a position to help so we will need to do the heavy lifting.

Update: Well that was quick - Weiner lasted just 4 minutes. Speech over.

Watch it live. Elsewhere, InTrade about to commence cash settlement on Weiner resignation contracts.

It is hard to believe that the first dot com bubble, so vivid to most semi-veteran traders, occurred over a decade ago. What is even harder to believe is that courtesy of the record liquidity bubble created by the Central Planning mafia, 2011 has already seen not only the second dot com bubble, but as the table below demonstrates, its bursting. Of all the dot com 2.0 IPO to hit the market in the past 3 months, the average return is now down 20%, but that has not prevented an underwriting syndicate comprised of the TBTFs to make billions in underwriting fees. Luckily, the fervor that previously had gripped some of the more volatile precious metals, and since spilled over into new public issues, has popped. Incremental cash will now be nearly impossible to get. To all companies that managed to take advantage of momo traders who have a memory of 15 minutes or less, congratulations. To everyone else: get in line for QE3. Wink, wink Groupon.

The Greek people UNDERSTAND how they are being screwed over while it's the Americans who are bending over and taking it from the Banksters without complaint.