Archive - Feb 4, 2010 - Blog entry

Today's price action registered extremely bearish readings across the NYSE TICK and NYSE VOLD (Up-Down Volume Difference). In our oh-so-very-humble opinion ~ equity markets are about to enter the Temple of Doom.

The first covered bond deal of 2010 is very simple in its terms and still, alas, a 144A deal. Notice four ratings firms were retained to provide ratings.

The market action today makes me wonder if FX intervention is in the cards. A long shot that might happen.

One of the regular reporters on CNBC was comparing Greece to the subprime "crisis" of 2007, in that "investors" (I am sure that term is being used very loosely) are not going to make the same mistake as they did in 2007 by underestimating the "contagion" that subprime contained.

I feel compelled to correct him.

The more I look into the China, the stronger the short thesis becomes. With my China shorts performing quite well as they are, I have decided to spread the thesis around.

One of these things is not like the other...

The trends below bear watching as they served as important leading indicator of things to come in 2008.

Unemployment isn't falling below 9% for at least a year. Those jobs exported to China aren’t coming back. Consumer spending is unsustainable. The loopholes in the proposed financial regulations are big enough for bankers to drive their Ferraris through. Trouble for Obama in November.

5.7% GDP growth for Q4 2009 is a phantom. Understand that a normal part of the business cycle is to replenish shelves when retailers realize that 90% (or 84%, depending on what you believe) of Americans are working and buy some stuff. But the fundamentals are still bad. It's just the foam off the stimulus brew.

James Bullard,president of the Federal Reserve Bank of St Louis, told the FT that the US has escaped the danger of a Japanese-style deflationary trap. He may be right, for now...