Archive - Nov 20, 2009 - Story

Goodbye John Horseman: too bad you were right all along.

Some crazy action today on the CME around 7 am Eastern when dollar index futures surged an unbelievable 9% from 75.38 to 82.18. As apparently the CME has never seen what happened to VOW stock when the short squeeze was recreating Armageddon over at permabull Larry Robbins' office (i.e. stock moved up 100% in about an hour), we can see why they would be confused by what could have been the start of the dollar short unwind when the second leg of the Ukrainian plunge occurred earlier. So instead of validating these trades, the CME has decided to simply cancel them: because fat fingers in billions worth of futures are just so prevalent. The dollar "plunge enforcement team" has been promptly woken up from its Larry Summerseqsue narcolpetic slumber and will rectify any and all attempts at a returns to fair market value.

• Bloomberg censorship alert? (see inside)
• Goldman stock holders miffed at bonuses (WSJ)
• White House rebuke: angry Democrats shut down vote (HuffPo)
• Fed makes monitoring bank capital foremost concern (Bloomberg)
• Risk fatigue sparks correction speculation (FT)
• Treasury yield plunge sends warning (Barrons)
• Trichet says not all measures to be needed in the future (Bloomberg)

Are the dominoes about to start falling? From Morgan Stanley's London desk:

Ukrainian Railway defaulted on a Barclays bond. They have another, government guaranteed obligation with DB. If DB accelerates the payment & IF it is then not paid, it will count as a government default.

We are closely following the releases out of S&P and Moody's analysts to see if they have gotten into the office after their leisurely orgy at the nearest Turkish bath insider info leak session. Potentially nothing actionable just yet, but that a government-backed bond can't make its payments, should prompt the IMF apparatchiks to promptly take the next Textron Cessna straight into Kiev (after they get 20 Goldman flu shots each) and spend a few more billions in US taxpayer money and/or sell more gold to quickly stuff even more corpses under the carpet.

• Asian stock markets fell Friday on concerns over the U.S. economy.
• Asia considers capital controls to stem bubble danger.
• Bank of Japan leaves key rate at 0.1% as government urges deflation fight.
• China raises nonresidential electricity rates; more hikes to promote savings.
• China rebuffs Yuan criticism as Zhou says government is passive on dollar.
• China stocks fell after govt hikes electricity rates - first in 16 months - fuelling concern that recent gains outpaced prospects for earnings growth.