Archive - Sep 29, 2009 - Story

So Does the Future Look as Good as the Past? Not in a million years. The Bubble fuelled car sales numbers of 2000-2007 now look to be permanently relegated to the rearview mirror. Since March 2009, amidst all the cries of a V-shaped economic recovery and a booming stock market, car sales have lagged badly. For almost all months of 2009, with the exception of July and August U.S. car SAAR has been stuck in the mid to high 9’s, their lowest levels in a decade. Now that the July-August cash for clunkers is gone, car sales are trending back to their low 9’s trajectory.

The FDIC's attempts to lure away Goldman's Managing Directors has so far met with mixed to quite mixed success...

How many times can one of the world's worst-managed and toxic-laden companies be on the verge of bankruptcy? As long as Obama is president, one could answer "in perpetuity" although CIT may finally be on its last breath. According to the WSJ: "The fate of CIT Group Inc. was hanging in the balance Tuesday as the large commercial lender readied a plan that would likely hand control of the company to its bondholders" and "Under either the scenario of a bond exchange or a bankruptcy, the shares in CIT would lose all or most of their value." In other news, Jim Cramer does not understand how debt-for-equity works

According to Nielsen, CNBC's annual decline in total September viewership was a massive 37%: the worst YoY performance in 2009. The decline in the demo audience also hit a high of 27%. The dilemma for Jeff Immelt is the following: do CNBC pundits keep pumping GE (which everyone ignores, as CNBC's credibility is practically nonexistent), or, at the expense of marking a few hundred billion assets at GECC to fair market value, incite another major market crisis. Perhaps, just perhaps, if the later were to occur, CNBC would have some chance of salvaging its prior year numbers. Although with CNBC now spending hours a day advertising GE engines, it seems like external advertisers couldn't care less: after all, GE is subsidizing its own station by selling them ad space. Business schools have a word for that: vertical integration. Sane people have another word: biased reporting.

An attempt to explain some pretty strange AXP call action.

It would appear that employees of the NY Post can do more than merely plant stories and spread unfounded rumors. Some of them actually do investigative work. Case in point - John Crudele, who has compiled FOIA reports to create a chronological narrative of Hank Paulson's speed-dialing in the days after the Lehman collapse, in a piece titled "The secret to Goldman Sachs' good fortune." The net result: more communication between Paulson and Blankfein during the heart of the crisis than anyone else (including then-President Bush), with the only exception of Ben Bernanke. Just what were these two people talking about so frequently in the two days when the Dow made an 800 point round trip? And just who was leaking the rumors that ultimately were based on information sourced by Hank Paulson himself? Crudele's chronology presents a relevant framework for analyzing just who the critical decision-makers are in US financial markets. Hopefully one day phone transcripts will be released and the full picture of just what information Blankfein was getting straight from his former boss can be reconstructed.

Normally, I look past the Chicago ISM reports, but that may not be so wise to do this time as tomorrow’s number may give us a big clue as to what to expect from the Sept ISM report as well as the Sept NFP report. Moreover, a rotten Chicago ISM for September can give a nice kick in the head to equities and a shot in the arm for treasuries.

"This country's founders built an ingenious system of checks and balances for a reason: to ensure that no special interest or group could use government power to commandeer the creative and economic wealth of our nation to their own ends. How much longer must we live in a country where the citizens are subservient to the banks, health insurance companies and any other special interest able to control our government at the expense of our the most basic principles of fairness, our future as a nation and, as a result, our freedom?" - Dylan Ratigan

Pretty boring day overall, looked as if the entire fund complex honed in on CIT to jam that stock in the last minute Hail Mary play in order to "make the quarter". Simultaneously, bond yields plunged again, to make certain that the next container ship of U.S. Treasuries is sent overseas on schedule.

The gig may be up for what was to many a sure thing. Cover a position. Get a few extra points, do a favor and make a deal. The once very lucrative area and niche player known as Securities Lending may be changed forever.

Matt Taibbi has put together a very informative piece on Goldman's lobbying attempts, specifically in the context on the upcoming discussion over naked short selling. The contention here by the majority is that naked short selling, or NSS, promotes bear raids on crippled companies which tend to feed upon each other, with CDS traders also joining in the fray. The argument is a dramatic oversimplification and has little substantiation by facts. "Bear raids" occur only and exclusively in financial stocks: why can't you have a bear raid on a firm like Coke or Johnson and Johnson, or even some leveraged behemoth like Hertz.

"We have been concerned about use of the TARP funds since the program’s enactment in October, 2008. We are deeply troubled by the lack of oversight of $700 billion in taxpayer dollars, with billons of tax payer dollars ultimately going to financial institutions without restrictions or accountability. As a result, billions have been poorly spent, used to support bonuses to failed executives, or simply gone to uses that banks cannot account for when asked by the American people.” Congressman Paul Hodes

One of the most recent statistical aberrations to be noted by Investment Research firm Oscar Gruss and subsequently referenced by Bloomberg highlights the dramatic disconnect between raw and seasonally adjusted continuing claims numbers. The divergence has manifested itself in a discrepancy of nearly 900,000 people.

Dear FINRA,

We know you are busy, we also know you are hell bent on intercepting IOI manipulation as per Mr. Jon Kroeper's recent media appearances. Which is why we kindly request that you get back to us at your earliest convenience with information on how many of the IOIs disclosed below are, in fact, "natural." We will make this a recurring topic on Zero Hedge until such time as you respond to our information request. You can contact us at outsourcefinra@zerohedge.com

We appreciate your prompt attention to the matter

Zero Hedge staff.

The monetization continues: today's $3.5 billion POMO was practically all used to repurchase CUSIP LM0, a 3 Year Note auctioned off by the treasury a whopping 20 days ago: this one. Recall that the auction had $16 billion of Primary Dealers interest accepted. Not a bad way for PD's to offload 21% of their allocation in less than three weeks. Any questions why there was $81 billion in PD bids tendered?