Archive - Aug 2009 - Story

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

The Clearing House Association, another name for all the banks that were bailed out over the past year with the generous contributions from all of you, dear taxpayers, are now threatening with another instance of complete systemic collapse if Bloomberg's lawsuit is allowed to proceed unchallenged.

Ladies and Gentlemen, I present to you: AIG

All you ever wanted to know about one of the top High Frequency Trading firms.

As Zero Hedge previously disclosed, when Judge Rakoff told the SEC to promptly reevaluate its Wall Street pandering ways, one of the notable highlights was his suggestion that the lawyers advising Bank of America themselves may "be held legally responsible" for the creation of the fraudulent proxy statement which blatantly misrepresented the reality over Merrill's bonuses. And the question then becomes: who were the lawyers representing Merrill? Why Bank Of America's darling law firm Wachtell Lipton, and specifically legendary partner Ed Herlihy.

"We at the RateLab have long been fans of Ben Bernanke, as such, we are cheered that politics did not trump competence and Bernanke was officially nominated for another four year term as Chairman of the FED. What follows is a linear thought process of what this means for the markets." - Harley Bassman

With ever increasing interest in the Fed's (in)direct monetization strategies, Zero Hedge is presenting detailed data highlighting the specific of all the 50 POMOs conducted to date. We are now compiling cost-basis information to determine what the cumulative hit to the Fed may have been as a result of price fluctuations of the repurchased Treasuries since issuance.

• In defense of "Flash" trading - now the blame is shifting back to the NYSE (WSJ)
• Jobless claims at 570,000, higher than 565,000 forecast (Bloomberg)
• Swiss negotiator for UBS says IRS may seek more data (Bloomberg)
• Must read: Boycott the market: How Goldman problems are hurting you (Post)
• Roubini: The Spend-And-Borrow economy (Forbes)

• Asian markets fall on Chinese plans to curb capacity in steel, cement industries.
• China said it may curb overcapacity in the steel and cement industries.
• 'Clunkers' lifts foreign cars; Toyota comes out on top as consumers trade in vehicles.
• FDIC cuts required capital ratio to 10% for buyers of failed US lenders.
• FDIC may need to draw cash from banks or government.

With many pundits extolling the inventory pick up and the imminent exponential growth of US GDP, it probably makes sense to observe demand for primary raw materials for durable goods. Or, rather, the lack thereof. July US Steel imports were at the second lowest reading in over three years, at 0.9 million tonnes, well over 50% below the average monthly import total of 2.5 million tonnes. One would presume an inventory pick up would be preceded by a pick up in steel imports. Alas, the facts do not back up that assumption.

The first fully blown subsidy program in the form of Cash for Clunkers is now over. Many more undoubtedly will follow, with Cash for Woodshed Plasma TV likely to appear in 3 to 6 months. As it will facilitate Made in Taiwan and Japan exports to the US, one does not anticipate any WTO trade wars. Some observations on the consequences of CfC.

Some assembly required.