Archive - Sep 2009 - Story

• World Bank chief to take shots at the Fed (WSJ)
• Taleb: "Bernanke, Geithner and Summers didn’t see the crisis
  coming so why are they still there?" (Bloomberg)
• More taxpayer funded bailouts coming up (Bloomberg)
• Andy Xie: When one bubble burst deserves another (Caijing)
• Obama's Too-Big-To-Fail is Too Dumb To Pass (Bloomberg)
• Federal Reserve reverse repurchases (Econbrowser)

• Asian stocks decline on concern at US economy, Yen strength.
• China formally starts investigating some "unfair" imports of chicken products from US.
• China Investment Corp.. to invest about $1B with Oaktree Capital Management.
• Companies indicating willingness to spend more on tech: reports.
• Consumer sentiment, new-home sales showed signs of improvement; while sales of durable goods fell.
• G-20 unites on bank rules, aligning policy as focus moves away from crisis.

Yet another amusing media interlude. Zero Hedge appreciates the gossip pages' attempt at profiling our zany cause. Even if, as the case may be, these particular gossip pages are in fact owned by the very same Establishment that our "conspiratorial" disclosures attempt to represent for the motivated and deeply embedded wealth redistribution enterprise it is. And while it is very late on a Sunday, here are some of our preliminary thoughts...

Zero Hedge has recently presented several declassified documents from the pre-1971 "Nixon Shock" days, that endorse the case for gold as a major historical factor in US monetary and foreign policy, as demonstrated by State Department and CIA disclosure. Gold's special status in policy and administrative decision-making was a direct factor in Nixon's choice to abolish the gold reserve at a time of an exploding budget deficit. Yet what about the days after 1971, and specifically, how did that critical "behind the scenes" organization, the Federal Reserve, perceive and manipulate gold in the post Bretton-Woods world? Was gold, freed from its shackles to the dollar, once again merely a symbolic representation for money? Zero Hedge presents the smoking gun that may provide responses to all the various open questions, courtesy of a declassified memorandum, written by none other than the then Fed Chairman, addressed to the president of the United States.

As a side question: should a proven conspiracy theory be renamed a conspiracy fact? We will leave that to our NY Mag readers to respond.

• Is Jeff Macke the next Lenny Dykstra? (W.C. Varones Blog)
• From the CEO of NYSE: One year later (WSJ), and fully propaganda free
• Kraft set to launch hostile Cadbury bid (Reuters)
• No reform, just a cosmetic patch for a discredited, flawed regime (Telegraph, h/t A.P.)
• John Hussman: Strenuously overbought (Hussman Funds)
• Japan Tankan may show firms to cut spending even amid recovery (Bloomberg)
• China's most famous economist keeps talking (NYT)
• MERS: A system designed to create the mortgage back security bubble (Dr Housing Bubble)

Deep thoughts from one of the premier financial thinkers of our generation (700 pages worth in fact) and a recent recipient of $1 billion worth of generosity from CIC.

While we disagree that Rosenberg has anything to defend against, be it strategy critics or vapid iconoclasts who mimic whatever they overhear during dinner conversations, the report below is a must read for those unacquainted with David Rosenberg's work, who would like to catch up to the key issues that one of the best economists discusses on a day to day basis.

There may be some major changes in the NBC ownership structure according to media and financial pundits. Even as General Electric is dealing with significant balance sheet problems, which have been temporarily swept under the rug compliments of unjustified Goldman Sachs stock upgrades, it may be looking at getting rid of its "vanity play", the NBC TV station family, which of course includes CNBC.

Key capital/fund flow observations from the prior two-week period, as well as a highlight of the Fed's preferred sweet spot (5-7 Years) in Treasury repurchases.

After yesterday we highlighted a declassified document by the Department of State, in which it was made clear just how critical it is for the US to remain "Masters of Gold", today we present a comparable memorandum from the same time period (December 1968) this time by the CIA, which presents comparable key high-level gold-related deliberations by the then-administration.

"When I heard Alan Grayson was running for Congress, I remember thinking to myself, That Alan Grayson? The lunatic? It can’t be, I thought. I kept imagining trails of half-eaten sheep leading to his campaign appearances. But it turned out to be true. And when I checked, his platform turned out to be quite sane and even kind of interesting." - Matt Taibbi

Radio Zero Again. GSE pay limits? Talk to the hand- I've got Radio Zero in my acoustically isolating earbuds.

Meanwhile, chat up the DJ (send your .mp3 files) here: radiozh or EFNet #radiozh (where the cool kids hang out and get the inside scoop on Studio Zero antics in real time).

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West Coast US Mirror with 1000 (!) slots available here: http://216.218.252.88:8000/listen.pls thanks to the ridiculously generous donation of EGI Hosting.

Live program starts at 9:30(ish) ET.

Even as market optimism rages unabated despite the occasional dip in the market (where everyone on the sidelines is buying, buying, buying GE stock), the economic fundamentals continue souring. The latest casualty - legendary movie studio, Metro-Goldwyn-Mayer, Inc. Well, not so legendary these days, with the only consistently profitable venture to come from the studio being the James Bond series, and alas that's the problem. According to Bloomberg, MGM has informed creditors it will skip a $12 million coupon payment (the technical term here is waived, but good luck if you expect to see one penny of that amount). Moelis & Co., whose restructuring division is comprised of the ex-Jefferies Derrough-Carlston dynamic duo (and henchmen), is advising the firm on what will likely end up being a $3.7 billion debt for equity swap.

Spreads pushed wider today with HY actually starting to shiver a little after holding its gains in the face of equity and IG weakness so far this week, as high beta names finally underperformed low beta. IG12 modestly underperformed IG13 once again as the tail names underperformed and HY underperformed IG. Breadth was more negative today in CDS land with wideners outpacing tighteners by around 7-to-1 and a noticeable flattening in the IG12 curve.

The JPY has been considered the weak currency amongst the majors pretty much universally for most of the last decade. The interesting thing is that frankly one cannot really look at the monthly chart and really say the USD has been stronger. There have been spikes of relative USD including lately from 2004 to 2007, but really overall the two currencies have been trading water against one another, and if anything it's the JPY winning.