Archive - Aug 27, 2009 - Story

Each year, generally in May, the Energy Information Administration publishes a less-than-eagerly-anticipated tome called the International Energy Outlook, 250+ pages of mind-numbing text, charts, graphs, and tables. No one reads it. The mainstream media ignore it. It’s the product of the best prognosticators in the Department of Energy. Okay, that may be what puts most people off. But if you’re patient enough to dig into it, it will cough up some fascinating nuggets of information.

Dear bankers of The Clearinghouse Association: it may be time to send in a few more ultimatums.

Spreads were mixed in US credit today with most of the major indices as good as unch by the close but modestly nearer their tights than wides, much like the equity market. Less than 30% of single-names moved more than 3bps as liquidity was very low there although we did hear some 'more normal' two-way flow in IG and HY but certainly not in size as credit stuck in tight trading ranges in both. Breadth was negative in credit though as wideners outpaced tighteners and more curves flattened that steepened. As a side note, IG12 has closed within a 1.5bps range for the last 5 days and intraday peak-to-trough has been 4.5bps in the last four days!

"One might argue there was no Fed bailout involved with Bank of America’s purchase of Merrill Lynch, but I am not the one to make that argument. Merrill’s purchase by Bank of America at a premium price seems to only make sense with the huge assist of the Fed’s largesse in suddenly agreeing to accept lower quality collateral for its loans."

"The main beneficiaries are the insiders who have Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke on speed dial. The Fed has undertaken a massive bailout using U.S. taxpayer dollars."

- Janet Tavakoli

"The purpose of the meetings is to facilitate controlled, supervised dialogue between client-focused professionals about investment ideas, news flow and market events so we can better serve [TD: some of] our clients. A "huddle" is not a forum for sharing stock or sector "tips."

"We offer some of our clients customized services..."

- Goldman Sachs

Force them to open the kimono and, like the vagabond winos they are, the fumes will so overwhelm passers by that the United States will devolve into chaos and ruin.  How about a bit of early Radio Zero to help you choke down the stink?

5:15 ET back here for the URL.  Till then, chat up the DJ / send .mp3 files (to which you own the rights, of course): via AIM here.

Update: Pull our bits off the interweb: http://cdo.zerohedge.com:8000/listen.pls

Hilarious. Unemployed bums now becoming expert "daytraders". Two days in a row, during my lunch break at Starbucks, I found young, slacker, unemployeds huddled around a table with their laptops daytrading stocks.

The CFTC has earned its stripes by allowing speculators to take the oil to natty relationship to unprecedented arb levels. Represented in energy content equivalents, where oil traditionally has been in the 6x-12x range for gas, the most recent reading is 26.36! This is, as the chart indicates, your six sigma event for the day.

Back in early July, the FDIC submitted a policy statement proposal to establish guidelines for private equity investment in failed financial institutions. At the time we wondered if the proposal wasn't designed to exclude private equity entirely, as the ownership structure and capital requirements (in addition to She Bear's attitude) seemed to rule out the participation of any sane entity that could reasonably consider itself engaged in "private equity."

Congratulation Ben - thanks to you those ZH t-shirts just got more expensive. Dollar carry traders everywhere rejoice.

"Not withstanding, of course, a tapped out private sector, lingering high levels of unemployment, capacity utilisation levels which never rally sufficiently to raise industry profitability, a speculative orgy in China which is likely to burst at some indeterminate moment and the complete uselessness of fundamentals in determining turning points."

Could it be that after several months, the "sophisticated" investors are betting on a high-correlated event? One thing to keep in mind as one follows the meanderings of the VIX.

• Yield 3.092% vs. Exp. 3.124%
• Bid-to-cover 2.74 vs. Avg. 2.5 (Prev. 2.63)
• Indirects 61.2% vs. Avg 44.6% (Prev 62%)
• Indirect bid-to-cover 1.40x
• Allotted at high 46.29% (BBG)

Lots of debate lately on the nature of the liquidity provided by HFT. Yesterday we presented the views of Pipeline and Reuters, today we highlight the opinion of Themis Trading.

...or not