Archive - Jul 2011

S&P 500, Dow Jones, Nasdaq, Russell 2000, Nymex Crude Oil, Comex Gold, EURUSD, GBPUSD, USDJPY

A snapshot of the European Morning Briefing covering Stocks, Bonds, FX, etc.
Market Recaps to help improve your Trading and Global knowledge

Relevant News by www.thetrader.se

In a must read Op Ed, Bloomberg's Jon Weil takes another long hard look at the balance sheet of the most undercapitalized bank in America (thank would be Bank of America) courtesy of the worst M&A transaction in history, namely its purchase of Countrywide, observes what everyone, even John Paulson now knows, that due to trading at half its book value nobody in the market gives even remote credit to the bank's asset "marks", and concludes that this organization, courtesy of an extremely lax regulatory and audit structure, which continues to allow it to mark any assets at whatever price it desires, could well be the next AIG: "There’s more
at stake here, however, than whether Bank of America’s shares
are a “buy” or a “sell.” The main thing the rest of us care about is the continuing
menace this company and others like it pose to the financial
system, knowing we never should have let ourselves be put in the
position where a collapse in confidence at a single bank could
wreak havoc on the world’s economy. Here we are again, though.
Curse the geniuses who brought us this madness." Indeed: once again, right before our eyes, day after day we allow various higher status quo-embedded individuals to take advantage of the gullible public by misrepresenting the massive risk that the left side of BAC's balance sheet represents, which can have only one conclusion: the same epic implosion that brought down AIG once the market reality caught up the with book myth. Yet in the case of AIG unbridled risk-taking and book mismarking we can at least put the blame on one person: the man at the heart of AIG FP, Joe Cassano, whose reckless bets nearly brought down capitalism. So our question is: is there someone at or affiliated with Bank of America that could soon double as a Joe Cassano for the 2010s? We have one suggestion (although certainly not exhaustive): Brian Lin of RRMS Advisors.

“I have little doubt that most of the silver that is on the SLV’s web site with a bar number is there somewhere. But what I am really concerned about is if it is hypothecated or not, meaning is there more than one owner on that same bar. And I can almost guarantee that there are multiple owners for almost every bar that they report. It does not mean that that bar does not exist. It takes ten contracts to be a market maker. So I have got ten contracts, I have got fifty thousand ounces, and I ship it to my buddy who is a hedge fund manager over in Idaho. That is my silver. I have just sent it over to him on a lease. I have leased it to him. Now he has taken that silver and he has swapped it with somebody at the SLV, so they have got bars there. And he swapped for those and now those are on the exchange showing as part of the deal. So you can have a lease and a swap, so you could have two or three claims on those same bars. And that happens over and over again." So cautions David Morgan, publisher of The Morgan Report on precious metals and proprietor of Silver-Investor.com. More so than perhaps any other, the silver market has been loudly and visibly accused of rampant price manipulation. And more recently, suspicion is growing that the exchanges and ETFs dedicated to trading the metal do not hold sufficient volume of it to meet their obligations. Is the silver market free and fair? Chris delves deeply into these important questions with one of the best-known silver experts.

Wouldn't you be angry if you woke up to realize that Europe's bureaucrats have pledged between a third and a half of your GDP to continue providing lavish socialist entitlement benefits to the citizens of peripheral European countries who have for years lied about their deficit, not paid taxes, and levered themselves into fiscal oblivion?

Following up to the presentation by Gary Shilling at this year's Strategic Investment Conference, we next move on to an old Zero Hedge favorite: David Rosenberg.

Back in April, some of the most prominent economists and market visionaries took part in the annual Strategic Investment Conference among which such luminaries as Marc Faber, David Rosenberg, Gary Shilling, Neil Howe, Martin Barnes and Jean-Vincent Gave. While a few short months have passed since then we are delighted to present our readers with their comprehensive presentations and summary outlooks on the economy, markets and the world. Today we launch part 1 of this series, by sharing the outlook of Gary Shilling of A. Gary Shilling and Company, one of the original bears and a man who was one of the few to foresee the second great depression. In future posts we will complete the series by presentations the opinions and outlooks all of the above financial legends who, unlike 99% of Wall Street, stick with their opinion regardless of where now completely irrelevant intraday market gyrations push the prevailing conventional sentiment.

I'm trying to solve big problems.

RANsquawk Market Wrap Up - Stocks, Bonds, FX etc. – 21/07/11

There's an EMERGENCY ... give us all your money!!!

Gold, silver and the dollar are not the focal point of this email (amazingly). The focal point of this email is what I believe to be the only other major bubble currently in place besides the dollar and that is this absurd view that the “high end” is some sort of great secular investment theme that will carry on forever due to rising incomes in the emerging markets and the bifurcation between haves and have-nots in the West. Like any other bubble, it begins with a real macro trend; a real and powerful story. Then at some point the thing gets stretched beyond its ability to continue and then finally you get to a point where investors confidently extrapolate the trend forever into the future just at the time the trend itself becomes unsustainable. With regard to “high end” I believe we are there now and I think this entire theme will implode on itself in the not too distant future and there are two main reasons why I think this.

For those who may have missed the official statement by the Euroheads and the two official IIF press releases, here they are again. The irony is that far all the pomp, circumstance, and posturing, nobody has any idea how to implement this massive bailout package. And furthermore, if the EURUSD can only ramp to sub 1.44 on this Bazooka plan, the EUR is in very deep trouble.

Visual Combat: "Now, you must remember: the enemy has only images and illusions behind which he hides his true motives. Destroy the image and you will break the enemy."--From Enter The Dragon

Wondering why the EURUSD is surging once again and is now on its way to 1.45? Because as Sarkozy just said Europe is preparing to launch a European Monetary Fund, which would be used to recapitalize insolvent banks and bankrupt countries. In other words Europe just passed its own TARP and trillions and trillions more of taxpayer money about to be sunk down the drain. As the summit has now ended, the Europarliament conference recapping the resolutions of the summit can be watched below. If anyone gets a sense of deja vu from early May when we had an identical development after the first Greek bailout, you are forgiven.