Archive - Oct 2009 - Story

He was going to Europe for an extended period and my lawyer thought it would be a good idea after the whole New York Mag thing.

Almost a month ago to the day, Silver Lake Co-CEO Glenn Hutchins revived an only briefly lost concept: The "Golden Age of Private Equity," with a quip to Reuters that “the financial markets may be on the cusp of a new ‘golden age’ for private equity...."  You needed only go to the Private Equity Analyst Conference a bit before to find that Benjamin Jenkins of Blackstone was caught pronouncing "private equity can thrive in the new world order," around the same time David Rubenstein chimed in with "...we're back."

Can someone please explain why Mr. Bove noted on CNBC that Wells Fargo is proving "itself to be a standout" in the banking industry (2:30 into the clip), that it would help push the market higher, and that is it the big winner in today's earnings derby, a mere nine hours before he ends up downgrading the company to a SELL? Perhaps, the SEC can advise on that particular conundrum.

Most market commentators attribute the sharp reversal of fortunes of the equity markets in the afternoon to a downgrade of WFC by Bove. That definitely is a factor, but what is a bit puzzling is that every bank earnings coming out are usually put under a lot of scrutiny, maybe not on CNBC, but definitely amongst the financial community. Today's late sell-off is more reflective of the paper thin liquidity out there and how trading is become a ping-pong match between high frequency traders.

Submitted By: Geoffrey Batt

No one rings a bell at the top?  Watch CNBC.  There may not be a better counterexample.   Late to just about every party, CNBC’s favorable coverage of a stock, commodity, ETF, etc., typically presages a turn and subsequent decline in the asset(s) in question.  Think wildcat oil in June 2008- to select one out of uncountably many examples.

Disclosure: I am long equities listed on the Iraq Stock Exchange, having made my first investment in January 2008.

Disclosure: upon learning CNBC’s Erin Burnett would spend the week highlighting ways to invest in Iraq, I threw up a little in my mouth.

There were no notable movers in the September BLS State unemployment report: the worst states were the usual suspects: Michigan, Nevada, Rhode Island, California, and South Carolina, while the states that have 8 people to share among them, North and South Dakota, Nebraska, Utah and Iowa, continued being the best performers.

If this is the kind of garbage data that moves the market, then fuck this shit. Click here for a primer on Dick Bove.

"There is a sense that if you make money you are going to give. Making money, however, is different from stealing money. If you steal the money, you are not expected to give it to a charity my friends. If you steal the money we will take the money back from you, by way of the government, and put you in jail. The American taxpayer in fact has given trillions of dollars, billions directly to Goldman Sachs so that Goldman can use the taxpayer subsidy to play a parlor game and pay themselves record bonuses." - Dylan Ratigan

Same old battle being played out by the Robots gunning "inflation" or "deflation" on a 15-min. chart in real time. Huge herds running back and forth, being spooked by various Fed Head jawboning, Central Bank threatening, financial channel chattering, etc.

Mark the date: October 29, 2009. It will be characterizied by a drop in futures for a few minutes followed by a rapid and inexplicable pop on no news, courtesy of last ditch attempt by the Fed to "liquify" the market thanks to $1.6 billion devalued portraits of George Washington. And poof, just like that... Treasury purchases are gone (until Bernanke wakes up on the wrong side of the bed and wants to see Dow 36,000).

The weakest sector was commercial real estate, with conditions described as either weak or deteriorating across all Districts. Banking also faltered in several Districts, with Kansas City and San Francisco noting continued erosion in credit quality (often with more expected in the future). One bright spot in the banking sector was lending to new homebuyers, in response to the first-time homebuyer tax credit. Finally, labor markets were typically characterized as weak or mixed, but with occasional pockets of improvement.

"Banning flash orders and imposing limits on dark pools should not be the end of the story, nor should they be seen as sacrificial lambs offered up by a substantial majority of Wall Street players as the price to ward off deeper review. Chief among the systemic issues that must be carefully reviewed is high frequency trading, which now makes up over 70% of the daily market volume. The SEC needs to closely review these strategies -- whether employed in dark pools or the public markets -- to ensure that high frequency traders are not able to take advantage of the long-term investors who are the backbone of our capital markets. It is the SEC’s mission to protect long-term investors, who care about the valuations of the underlying companies, not those who quest for trading profits achieved in milliseconds." - Senator Ted Kaufman

No sooner than we took note of the sudden appearance of Fortune's puff piece on the restructuring genius embodied in Steven Rattner, the man himself appears on Bloomberg Live TV (adroitly brought to you by the new E-Class by Mercedes Benz!) almost literally reading word-for-word from a cutout of the Fortune article.  Why, one wonders, the sudden push?

DXY Breaks 75, No Statement From White House Over Dollar Coma Forthcoming

S&P futures put on another nice intraday bear trap today. As we had discussed in the morning, 1,082 was partially violated but we needed a quick acceleration and a break of 1,075 to confirm the break on the Dax of the 5,750 level. As we are getting used to this kind of bear trap, we had indicated that the market should move down quickly, otherwise any hesitation would result in testing and breaking 1,091... As always the market does not fail to disappoint.