Archive - Aug 2009 - Story

Today. Mark it down. Another banner trading day for Goldman, who pocketed another $50 -$100 million shanking the tape today to knock off all the Mo-Mo Monkeys who bought yesterday's breakouts. Its going to be a good weekend at the Hamptons for the Prop Desk traders.

Bank of America stock up 2% at last check, while CDS is 5 bps wider. Someone please explain that one to us.

HFT 101

Ken Griffin's recent announcement that he is divesting a major portion of his E-Trade holdings presumably demonstrates a divergence of the paths of the two firms, while in fact Citadel is getting ever more intertwined with the online broker's operations, in fact giving the Chicago firm almost exclusive control over E-Trade's customer trade flow.

Or the purest definition thereof seen in a while. In the meantime dollar, bonds and equities seem to be dislocating.

"Sources close to the Carroll Foundation Charitable Trust board of trustees have confirmed that compelling criminal evidence Carroll Trust Dossiers have been submitted to Scotland Yard and the FBI surrounding the fraudulent incorporation of dummy Gerald Carroll Trust HSBC bank accounts and the resultant embezzlement of over $150,000,000, (one hundred and fifty million dollars) of Carroll Trust liquid funds located and held in offshore tax havens within the framework of an international criminal syndicate operation."

A lawsuit filed several months ago by R2 Investments puts activist investor Carl Icahn on the defensive for once.

We've opened up the Zero Hedge tips line and our (one-person) satellite offices in Zurich and London. Just in case you happen to come across something Zero Hedge worthy when your Blackberry is on the fritz.

Down-day volume dominating. How long before some exchange breaks again?

The recent release of the Michigan consumer confidence numbers tells a mixed story on current consumer psychology.

The Deposit Insurance Fund must be so happy it won't be depleted today. Who will buy Corus next?

"While the worst of the current US recession appears to have passed, we caution that CRE trends are just starting to soften and will remain weak into 2011; as such, REITs should underperform the broader equity markets during the next stage of the recovery (6-9 months). In fact, we anticipate a decline in FFO of more than 10% for REITs next year, on top of the 15-20% expected decline in 2009. Hence, 2011 should be the bottom with growth resuming thereafter. Over the next 12-24 months, we see the combination of rising CRE loan defaults, deteriorating fundamentals (similar to the 2001 downturn), and more stringent lending standards (50% LTV loans at higher rates) resulting in a “challenging road ahead” for REITs." - Goldman Sachs

It seems consumers are focusing on more than merely their 401(k) these days. Now it may be time for the administration to focus on jobs, wages, deflation, budget deficits, tax rates, burgeoning sovereign debt, sticky consumer debt,bankrupt states dispensing IOUs, wealth destruction and other items that actually impact the day to day lives of the US public.

In April Zero Hedge discussed the potential conflict of interest of secured lenders providing equity financing to companies in which they are the primary secured lender, with a "debt repayment" use of proceeds, in essence using the raised equity to pay down the debt on which the underwriters themselves are on the hook for. Not surprisingly, this was all occurring in the context of REITs - the same companies that face a massive credit crunch as numerous CRE loans come due for refinancing in the 2011-2014 timeframe. It seems this game of "bait and switch" continues unabated.

• Toxic loans topping 5% may push 150 banks to point of no return (Bloomberg)
• Aussie dollar hits new 11 month high (FT)
• California to redeem IOUs early (WSJ)
• Floyd Norris: Teetering on failure but meeting standards (NYT)
• No new normal as JP Morgan sees V-shaped recovery on robust growth (Bloomberg)