Archive - 2011
January 3rd
JPM Attempts To Create An HFT Feeding Frenzy In GM Options At Expense Of Ford
Submitted by Tyler Durden on 01/03/2011 09:02 -0500
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.
Goldman Creates a Facebook Hedge Fund for HNW Clients Historically Ripped Off By Such Vehicles, Spits In Face Of SEC...
Submitted by Reggie Middleton on 01/03/2011 08:29 -0500As 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.
On Fat and Inflation
Submitted by Bruce Krasting on 01/03/2011 08:02 -0500Watch which numbers they are selling you.
Frontrunning: January 3
Submitted by Tyler Durden on 01/03/2011 07:49 -0500- 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)
Tim Mayopoulos' Revenge #1: BofA Takes $2 Billion Q4 Charge For GSE Repurchase Obligations
Submitted by Tyler Durden on 01/03/2011 07:36 -0500Two 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.
One Minute Macro Update
Submitted by Tyler Durden on 01/03/2011 07:35 -0500The key events driving futures where else but, yawn, higher.
Today's Economic Events
Submitted by Tyler Durden on 01/03/2011 07:11 -0500A 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 European Morning Briefing - Stocks, Bonds, FX etc. – 03/01/11
Submitted by RANSquawk Video on 01/03/2011 05:49 -0500RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 03/01/11
2011 Starts With A Fresh Case Of The Commodity Rash: Silver Breaches $31, WTI At $92
Submitted by Tyler Durden on 01/03/2011 05:41 -0500Are 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.
The Scramble By Bank Of America To Negate Wikileaks Upcoming "Ecosystem Of Corruption" Disclosure
Submitted by Tyler Durden on 01/03/2011 04:21 -0500So 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...
Overcomplacency in the Market?
Submitted by Leo Kolivakis on 01/03/2011 01:08 -0500Does the low VIX indicate overcomplacency in the market or is it a shift into a low-vol regime?
George Soros: The United States Must Stop Resisting The Orderly Decline Of The Dollar, The Coming Global Currency And The New World Order
Submitted by ilene on 01/03/2011 00:48 -0500Perhaps 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
Summarizing Obama's Undisputed 2010 Numbers
Submitted by Tyler Durden on 01/02/2011 19:28 -05002010 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.
Guest Post: 2011 - The Year Of Catch 22
Submitted by Tyler Durden on 01/02/2011 18:35 -0500The 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.
Copper Outlook 2011: A Beijing Opera
Submitted by asiablues on 01/02/2011 15:36 -0500If 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.








