Archive - 2011

January 3rd

Tyler Durden's picture

JPM Attempts To Create An HFT Feeding Frenzy In GM Options At Expense Of Ford





In a bid to preserve groupthink, and to finally let Getco off the hook from going chapter if GM's price were to ever drop below $33, JPM's Equity Derivatives desk led by Adam Rudd, who is recommending a trade based on Himanshu Patel's view that GM is massively undervalued, has just come out with a trade recommendation to buy GM March $38 calls funded by selling Ford $17 calls. After all can't let a government funded post-reorg story ever go to waste. And for JPM's functioning retard clients, here is the trade's explanation: "We believe that this trade may be particularly attractive for those investors who anticipate outperformance of GM relative to Ford." One quick look behind the scenes indicates that this call is nothing more than a less than glaringly obvious attempt to recreate the options trading frenzy seen in Ford stock in mid/late October in GM, now that Ford derivatives mania is over.

 

Reggie Middleton's picture

Goldman Creates a Facebook Hedge Fund for HNW Clients Historically Ripped Off By Such Vehicles, Spits In Face Of SEC...





As of right now, there are not a lot of places to go for the skinny on things such as this Facebook investment (or BPSV, not special purpose vehicle but "Bonus Pool Support Vehicle"), at least in my not so humble opinion.

 

Bruce Krasting's picture

On Fat and Inflation





Watch which numbers they are selling you.

 

Tyler Durden's picture

Frontrunning: January 3





  • Hedge funds offered weak returns in 2010 (Reuters)
  • Wishful thinking: China's Inflation May Cool With Factory Slowdown (Bloomberg)
  • And some more: Big Firms Poised to Spend Again (WSJ)... then again they have been poised for about a year now...
  • And a little more: Investors' Forecast: Sunny With Chance of Overheating (WSJ)
  • Albert Edwards, SocGen bear, takes a bite out of China (Guardian)
  • Australia Hit by Devastating Floods (FT)
  • Congress Targets Spending (WSJ)
  • Euro Falls Most in Two Weeks on Concern Debt Crisis to Hamper Fund Raising (Bloomberg)
  • Manufacturing activity helps European rally (FT)
 

Tyler Durden's picture

Tim Mayopoulos' Revenge #1: BofA Takes $2 Billion Q4 Charge For GSE Repurchase Obligations





Two years ago, Ken Lewis decided to scapegoat then General Counsel (and incidentally the guy who just happens to know more about BofA's dirty laundry than almost anyone else in the world, most certainly including Julian Assange - and that two year non-disparagement clause is pretty much over...) Tim Mayopoulos for no reason whatsoever, resulting in the termination of the latter without cause. Subsequently, we learned that this action was taken purely to prevent then head of Investment Banking at the world's laughing stock of a C-grade investment bank, and current CEO, Brian Moynahan, from going somewhere (rumor has it the 4th Bangalore Bank of Junk Bond underwriting had expressed a preliminary interest, and even provided a $0.69 retention bonus). Subsequently, Mayopoulos ended up as GC at perpetually insolvent GSE Fannie Mae. And since then, the bad blood has been flowing, most recently involving the dust up between the GSEs which have been demanding legal action against the zombie mortgage lender (BofA for the cheap seats) accusing it of Reps and Warranties breaches (and as the recent filing by Allstate showed, there sure are many of those). And this is just the beginning. As of a few minutes ago, we have learned that Fannie and its scorned GC just scored another victory against that other just-as-insolvent organization.

 

Tyler Durden's picture

One Minute Macro Update





The key events driving futures where else but, yawn, higher.

 

Tyler Durden's picture

Today's Economic Events





A day which is a market holiday for many parts around the world, see the US reports its ISM and construction outlays… Also, since it is a day ending in "y", Goldman FX desk protege Brian Sack will be buying stuff: formally, $7-9 billion bonds due 2/15/2018 – 11/15/2020. Informally: 4.0x+ beta stocks.

 

RANSquawk Video's picture

RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 03/01/11





RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 03/01/11

 

Tyler Durden's picture

2011 Starts With A Fresh Case Of The Commodity Rash: Silver Breaches $31, WTI At $92





Are silver and crude just happy to see 2011 or is that a tent in their minute charts? Silver briefly traded above $31 earlier, then penetrated the new magic number with aplomb, as investors had a chance to sit down over the weekend and realize that Bernanke, as we wrote over the past few days, has no choice but to start infusing his favorite WSJ with wafts of Large(r) Scale Asset Purchases via Goldman liaison Bill Dudley. Amusingly enough, we hear that Jon Hilsenrath has now developed a bit of cult following. Literally. Several "expert networks" are now rumored to be hot on the heels of the WSJ reporter as a leading indicator to the upcoming QE2extension . It is expected that his upcoming frequent visit clusters to the FRBNY, of which there have been many in the past two years, will be the best sign of when "the article" is about to go to print. And while we noted that it does appear to be mostly smooth sailing for PM longs, the same is the case for oil. WTI just hit $91.99 before backing off briefly. Look for $92 to be taken out cleanly and clinically as crude presses on to $100 some time in the next two weeks.

 

Tyler Durden's picture

The Scramble By Bank Of America To Negate Wikileaks Upcoming "Ecosystem Of Corruption" Disclosure





So far, Bank of America has been aggressively denying it will in any way be compromised by any possible Wikileaks disclosure. After all the bank claims it has done nothing to merit a take down based on what Assange has claimed is an "ecosystem of corruption." As everyone knows, Bank of America is the most non-MERS abusing, bonus non-extracting, putback over-reserved, and otherwise law abiding bank in existence. Which is why we are just modestly troubled by the fact that this innocent not until proven guilty but in perpetuity bank is doing all it can to demonstrate that there is in fact a very disturbing ecosystem just below the surface. The NYT reports that "a team of 15 to 20 top Bank of America officials, led by
the chief risk officer, Bruce R. Thompson, has been overseeing a broad
internal investigation — scouring thousands of documents in the event
that they become public, reviewing every case where a computer has gone
missing and hunting for any sign that its systems might have been
compromised.
" What goes unsaid is that BofA is really looking for what the disclosed dirty laundry is. Which really makes no sense: after all, for that to be the case, there would have to be dirty laundry in the first place, which would mean Bank of America is lying. How does one go about reconciling these two mindbogglingly contradictory facts...

 

Leo Kolivakis's picture

Overcomplacency in the Market?





Does the low VIX indicate overcomplacency in the market or is it a shift into a low-vol regime?

 

ilene's picture

George Soros: The United States Must Stop Resisting The Orderly Decline Of The Dollar, The Coming Global Currency And The New World Order





Perhaps you believe that integrating our economy, our currency and our government with the rest of the world would be a wonderful thing. If that is the case, please feel free to leave a comment explaining exactly why globalism is such a wonderful thing for all of us....

 

January 2nd

Tyler Durden's picture

Summarizing Obama's Undisputed 2010 Numbers





2010 was not a kind year to the president. While Obama's economic policy was prevented from being an all out catastrophe courtesy of two last minute fiscal and monetary stimuli, US unemployment ended the year virtually where it started, a whisper away from 10%: a fact which many believe resulted in the democrats' rout following the midterm elections. And with the unknown variables surrounding the economy on par with a year ago levels, there are a few certian numbers that can be used to describe Obama's term in 2010. Marc Knoller of CBS News breaks down pretty much all of them.

 

Tyler Durden's picture

Guest Post: 2011 - The Year Of Catch 22





The United States and its leaders are stuck in their own Catch 22. They need the economy to improve in order to generate jobs, but the economy can only improve if people have jobs. They need the economy to recover in order to improve our deficit situation, but if the economy really recovers long term interest rates will increase, further depressing the housing market and increasing the interest expense burden for the US, therefore increasing the deficit. A recovering economy would result in more production and consumption, which would result in more oil consumption driving the price above $100 per barrel, therefore depressing the economy. Americans must save for their retirements as 10,000 Baby Boomers turn 65 every day, but if the savings rate goes back to 10%, the economy will collapse due to lack of consumption. Consumer expenditures account for 71% of GDP and need to revert back to 65% for the US to have a balanced sustainable economy, but a reduction in consumer spending will push the US back into recession, reducing tax revenues and increasing deficits. You can see why Catch 22 is the theme for 2011.

 

asiablues's picture

Copper Outlook 2011: A Beijing Opera





If you think Gold's 30% gain last year is impressive, one base metal--Copper--even outshined the precious metal by rallying 33% on the year. After a short cover rally in Dec., looking ahead into 2011, the price direction of copper will likely still hinge on supply, and mostly China demand, but it also depends on a couple of new market factors emerged just within the last year or so.

 
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