Archive - Dec 2009 - Story

Farewell IPO window. European infrastructure company Hochtief was forced to cancel the IPO of its concessions business once investors became unwilling to pay more than €20 for the new shares, with the bottom of the range at €24 previously. Furthermore, according to market participants, the company was able to only fill half a book, after a hatchet job by Credit Suisse analysts, as well as management disclosure during a roadshow lunch that the Dubai jitters made finding investors complicated (to say the least). Watch for some material downside to HOT GY when it opens in Europe tomorrow.

These days catching the Fed chairman telling the truth as opposed to a b(a)ld faced lie is in itself a six sigma event. Sadly this post will continue with hugging the median. Some observations on the most recent fabrications by the chief money printer himself, which go to show just how willing Bernanke is willing to bend reality and/or his perception of it as the occasion suits.

Shockingly, Bank of America's ability to pay massive bonuses (i.e. TARP repayment) was not quite the market positive event CNBCOMCAST thought it would be. On the bright side, at least BAC first year analysts will be able to afford their own island in Nakheel's "The World" artificial archipelago.

Senator Jim Bunning (R-KY) conveys to Ben essentially our view, but does it with an absolutely blistering delivery. Ouch.

Per the WSJ, looks like this whole "halting" thing may be useful after all.

Funny how Bernanke was skewered today on his inept mismanagement of the credit crisis and subsequent bust and bailouts. Of course, in order to avoid outright humiliation and embarrassment, he ordered the boys at Goldman to vacuum pump some key stocks in order to stave off an unfriendly market reaction to his miserable testimony.

"Maybe it is related to the recent situation with Dubai's debt, but in any case we have noticed a lot of economic forecasters point out a risk of sovereign default for an EM or even maybe a G10 country as the wild card for 2010. The anti-fiat currencies pro gold trade has been raging on. Because of its role as leader of the free world and excessive 2009 deficit, the US has been in the eye of the storm. Shorting the USD has also been a popular trade to express discontent towards Washington. However, it is hard to imagine a currency crisis in the US without starting with one in Japan or the UK. GBP has been relatively weak since 2007 compared to the rest of the G10." - Nic Lenoir

Unprecedented economic collapse? €0.69...

Unsustainable budget deficits? 1 ounce of gold...

Immaculately inexperienced administration? One Larry Summers bowel movement...

For everything else there is Tim Geithner.

Even as CNBC, which seems to be unaware it is now under new ownership and can stop selling GE stock all day, every day (will Cramer be allowed to pump the worthless equities of competitor cable and satellite companies going forward? Inquiring minds want to know), could not stop praising the fabulous improvement in continuing claims which plummeted by a whopping 5,000 from 462k to 457k, one number that everyone ignored, is the explosion in Emergency Unemployment Compensation - yes, the same name for insurance benefits as they roll beyond their standard expiration horizon, and which the Administration is set on extending to cover a period from now to infinity. That number skyrocketed by 265,300 in one week to an all time record of 3,859,553 for the week ending November 14, from 3,594,253 in the prior week.

It appears another Republican, identity as of now unknown, is expected to join Socialist Independent Bernie Sanders in placing a hold on the Bernanke confirmation hearing.

In case you were curious how Goldman Sachs is axed vis-a-vis the dollar, we present the firm's complete Commodity Outlook, which among other things sees another $250 increase in gold, and thus continued dollar destruction which of course is wonderful for Goldman. Then again, Goldman has had an abysmal and permabullish commodity prediction track record: reader beware.

Modest menu sampler

APERITIFS & HORS D'OEUVRES - Minted-Green Dacquiris Flowing From a Kozlowski-Inspired Ice Sculpture Fountain. (Holy Water or non-alcoholic beverages available on request)

FIRST COURSE - Shark-Fin Soup

MAIN COURSES - Roasted Market Goose Entier with "Couilles Brasse" With Scalped Pototoes

DESSERT - Gaffes with a Blanc-Fine Syrup

PETITS-FOURS - Bittersweet Karma Cookies

Major negative surprises by virtually all retailers with two exceptions, indicate that the consumer is becoming increasingly tapped out into the holiday season. Black Friday sales which were not too bad are likely merely another unsubsidized (yet) Cash For Clothing program with substantial demand being pulled forward: at this rate December sales will likely be an even greater negative surprise.

Developing story from Market News

I have been bullish on the Japanese currency since March 2007. What I think defines broad movement in currencies is perception along with broad relative monetary actions. The expansion or contraction of monetary aggregates in one currency versus another is in essence its purest denominator. We show today such a timing model in the yen/usd rate of exchange. Notice that timing simply based on monetary aggregates can be not forgiving for quite some time until the new trend establishes itself.