Archive - Apr 2011 - Blog entry

Google's post Q1 earnings reaction is one of the most blatant examples of nearsightedness I have seen for awile, rivaling the S&P AAA rating of subprime NINJA loan CDS writing monoliness using 120x leverage at the top of the housing market in 2007.

One would think that with the bail-out of Portugal, even more downgrades of Irish government bonds and Greece a Dead Man Walking, the euro would get hammered with this tsunami of gloom & doom news from the European markets. But, on the contrary, the euro is going strong… very strong!

On April 19, 2011 (20:11 Eastern Swindler Time)) a vast network of computers, known as Scamnet, became self-aware. It would eventually take over the planet, set about wiping out the middle classes, and send a robot which looked like Warren Buffet back in time to kill Benjamin Graham...

If the world is coming to an end, why is the VIX making new multi-year lows?

The reason that the 2008 debacle happened was very simple. The derivatives market, the largest, most leveraged market in the world. Today, the notional value of the derivatives sitting on US banks’s balance sheets is in the ballpark of $234 TRILLION. That's 16 times US GDP and more than four times WORLD GDP. Of this $234 trillion, 95% is controlled by just four banks. And they are... the TBTFs.

S&P futures managed to creep up to the pre-USA outlook change lows of early yesterday amid the lowest volume day in over two weeks and while HY and IG credit also managed gains on the day, we note some interesting shifts under the surface that should be considered less sanguine.

A broad commodity selloff was partly attributed to Goldman's rare and surprise crude oil bear call, but BofA Merrill Lynch says not so fast, while gloves are off at BarCap.

Who needs lighter fluid? Just throw 'em on the bbq and step back!

A bunch of questions re: the Annual Report of the FFB.

So, have you checked your "Satisfaction" of mortgage?

And now we learn that Standard & Poor’s, the same unprincipled hacks whose grossly inflated triple-A ratings made America’s real estate boom and still-busting bust possible, has downgraded the USA itself. And whose payroll is S&P on, we wonder?

Some thoughts on active management from Neil Petroff, Ontario Teachers' CIO...

Let’s parlay the publicity given to the recent University of Texas endowment fund’s decision to convert all of their paper gold to physical gold into a campaign to convince large endowments/foundations all over the country to follow in their very wise footsteps. Here's how everyone can do their small part to break the banker shackles that have been imposed upon our financial freedom.

Yields on Greek government bonds are soaring, with the 2-year yielding over 20% and the 10-year firmly on its way to 15 percent! Who will be paying up for all this mess?

So, which is it? Who is lying?