Archive - Jul 19, 2011

Phoenix Capital Research's picture

How Greece Could Create Another Round of Systemic Risk Pt 2





To say that systemic risk is a MAJOR problem for the EU would be the understatement of the year. For instance, if Portugal defaults, Spain’s banks will get taken to the cleaners. This in turn could trigger a HUGE systemic collapse as exposure to Spanish debt is equal to 4% or more of GDP for Switzerland, France, Germany, the UK, and the Netherlands.

 

Tyler Durden's picture

Time For Tim Geithner's Annual Top-Ticking Op-Ed, In Which We Learn That It Is Time To Panic About America's Banks





When just under a year ago, Tim Geithner penned "Welcome to the Recovery" he top ticked the zenith of the business cycle to the day if not the hour, with the economy finding itself in a straight line contraction ever since then, blissfully delayed by a 9 month QE2 detour. Now that the QE2 is no longer a factor, we are already seeing economists everywhere cut their Q2 GDP forecasts to sub 2%, an effective stall speed for the economy in real terms, and reducing their full year economic forecasts. Which is why we were delighted to learn that today Geithner has just released his latest iteration of a top-ticking missive, this one titled inappropriately enough "Dodd-Frank Has Made Our Banks Stronger" which is supremely ironic because not only has Dodd-Frank not made anything stronger as it has not even been remotely implemented, but as Bank of America, Goldman and Citi's Q2 results have just confirmed, the US bank sector is now the weakest it has been in years. Thus, when accentuated with a Geithner adminition to not panic our only advice is to do precisely the opposite. Oh yes, it took precisely 25 days between Geithner's heartfelt appeal to America's idiot class last year and Bernanke's Jackson Hole appearance. We wonder if this year it will be shorter.

 

Tyler Durden's picture

Exposing China's Mysterious Multi-Trillion Shadow Banking System





Precisely a year ago, a summary report by Fitch shone the first, if relatively weak, light on the massive Chinese securitization industry which had for years allowed the country to fund its housing bubble without forcing the banks to actually take much if any of the loan risk associated with this unprecedented expansion. At the time of the Fitch report, the securitization discrepancy was not deemed to be excessive and at about RMB 1 trillion in annual issuance it was promptly swept under the rug. Nonetheless the key statement remained: "Fitch believes the vast majority of these transactions are not publicly disclosed by Chinese banks, and few, if any, traces of the loans remain in financial statements." More recently, and long overdue, Moody's took a refresh look at the same problem and on July 4 released a rather disturbing report which found "that the Chinese audit agency could be understating banks' exposures to local governments by as much as RMB 3.5 trillion." At 10% of GDP, the number sure is starting to get larger. Today we present what we believe is the most comprehensive report we have seen to date on the matter of the Chinese "Shadow Banking" industry courtesy of SocGen. For those who enjoy putting things into perspective, SocGen quantifies the total shadow banking system in China to be as large as RMB10 trillion (or 55%, of the Total Social Financing of RBM18 trillion): nearly USD1.5 trillion. While the number is not massive (considering that the most recent corresponding shadow banking number for the US is well higher at about $16 trillion), it keeps increasing as a portion of GDP. Why is this important? Because as SocGen's Wei Yao says, "The currently unsupervised development of the informal financing market delays the intended impact of monetary policy tightening, but adds to the risk of precipitating a liquidity crunch of the entire financial system later." So it this Chinese shadow banking system a potential monetary time bomb, destabilizing the PBOC's efforts at normalization and adding materially to systemic risk? Read on.

 

Bruce Krasting's picture

A Trillion of revenue is on the plate





Any of this money yours?

 

Tyler Durden's picture

Oops: Boehner Says Gang Of Six Proposal "Appears To Fall Short"





No, the soap opera is not done just yet. According to The Hill the office of John Boehner has said that the Gang of Six proposed $3.7 trillion fluff "settlement" appears to fall short of goals set by House Republicans. "This plan shares many similarities with the framework the Speaker discussed with the president, but also appears to fall short in some important areas. The House is voting today on our 'cut, cap, and balance' plan, and we hope the Senate will take it up soon. That remains our focus,” a Boehner spokesman said. As expected the kicker is the impact on Social Security which will see drastic changes if Chained CPI is implemented in conjunction with cost of living adjustments: "They also are wary of the plan's complicated mechanism for dealing with Social Security. The plan states that Social Security reform only be taken up once the rest of deficit-reduction plan is completed. If Social Security reform is not passed by a 60-vote margin, the earlier vote on the rest of the deficit-reduction package is nullified." The actual impact on COLA was not mentioned by Boehner's office. We expect the AARP will require clarification on the speaker's stance on that issue shortly.

 

Tyler Durden's picture

Guest Post: Iran Opens Oil Bourse - Harbinger Of Trouble For New York And London?





The last three years of global recession have dealt a major blow to American capitalist ideas trumpeted throughout the world on the value of “free markets.” Wall St has been revealed as a form of casino economy, with the bankster insiders gambling with other people’s, and eventually, the government’s money in the form of bailouts. As the Republicans in Congress, scenting victory in the 2012 presidential elections, hold a gun to the Obama administration’s head and rating agencies consider downgrading U.S. government bonds in light of Washington’s possible defaulting, many ideas around the world that previously seemed implausible because of the dominance of the U.S. economy are garnering renewed interest.

 

Tyler Durden's picture

Charting Apple Cash In The Bank vs. Cash Taxes Paid





Yes, we know Apple is a cash juggernaut, and could easily lever up its cash and equivalents balance, retain a 10% Tier 1 Capital Ratio and be one of the largest (and perfectly solvent) banks in America (just think of what $760 billion in fractional reserve power would do). But what about the benefit to Uncle Sam? Well, we decided to pull the cash taxes paid Apple disclosed on its cash flow statement for the purest definition of actual taxes paid each quarter, avoiding all that GAAP vs Tax accounting mumbo jumbo, and compare it to the cash the company has had at any given quarter end period. Prepare to be surprised...

 

4closureFraud's picture

Anonymous Foreclosure Mill Attorney Responds to the FL Bar Ethics Opinion Approved by the FL Bar’s Professional Ethics Committee





So you see, Florida Bar, you are wrong, wrong, wrong when you say I have to bestir myself and do a darn thing about the fraud I helped my clients commit on the court. Because, I’ll tell you one thing, if one of those nice people’s affidavits was phony, they were all phony! Geez, give me a break. Seriously, whose side are you on???

 

Tyler Durden's picture

Presenting Apple's Historical Cash.... In Billions





Presented without comment

 

RANSquawk Video's picture

RANsquawk Market Wrap Up - Stocks, Bonds, FX etc. – 19/07/11





A snapshot of the US Afternoon Briefing covering Stocks, Bonds, FX, etc.

Market Recaps to help improve your Trading and Global knowledge

 

Tyler Durden's picture

Apple Crushes Earnings, As Usual Guides Below Expectations, 62% Of Sales Come From Abroad





Here is the summary of the beat:

  • Revenues: $28.6 billion on Exp. of $25.02 billion
  • EPS: $7.79 on Exp. of $5.87
  • Q3 Gross Margin of 41.7% on exp. of 39.2%
  • Sold 9.25 million iPads on expectations of 7.8 million
  • Sold 3.95 million Macs on expectations of 4.2 million
  • Sold 20.34 million iPhones
  • Sold 7.54 million iPods
  • International sales account for 62% of total revenue
 

Tyler Durden's picture

Apple Earnings Preview





Here is what the street expects:

  • Revenue:$25,020.4
  • Operating Income: $7268.8
  • EBITDA: $7869.9
  • EPS GAAP: $5.87
  • EPS: $5.87

The actual results are due out any minute.

 

thetrader's picture

Nasdaq to test resistance levels (on no volume)?





Equities up, gold down. Are we up for a false break out on the upside? by www.thetrader.se

 

Reggie Middleton's picture

Did Reggie Middleton's BoomBustBlog Best Wall Street's Best of the Best In Guaging The True Value of Google? We Have To Think More Like An Entrepeneur & Less Like A Wall Street Analyst





OTM Google calls purchased a couple of weeks before earnings returned roughly 10-20x the original investment. How did practically the entire Sell Side of Wall Street miss this opportunity while we screamed on the undervaluation of Google since last quarter? Well, you just can't plan or measure the domination of mobile computing 3 months at a time (and of course, front running clients make for more profitable trades)!

 

Tyler Durden's picture

What Volume?





Those hoping for some relative distribution in this rally will have to do what they always do on up days: wait until a down day. The chart below shows cumulative divergence from average volume. Ever since yesterday's late ramp on hopes for yet another European solution through today's so called debt ceiling resolution, when we have seen 30 points surge in the ES on no actual news, the volume has been well below average for two consecutive days in a row. Yes: the move is once again based on marginal churning courtesy of HFT vacuum tubes and the occasional day trader. Everyone else has already tapped out their margin account.

 
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