Archive - 2009 - Story
December 30th
Clusterfuck Nation ThinkTank's 2010 Forecast: Definitely Not Rosy
Submitted by Tyler Durden on 12/30/2009 12:51 -0500This depression will be a classic deleveraging, or resolution of debt. Debt will either be paid back or defaulted on. Since a lot can't be paid back, a lot of it will have to be defaulted on, which will make a lot of money disappear, which will make many people a lot poorer. President Obama will be faced with a basic choice. He can either make the situation worse by offering more bailouts and similar moves aimed at stopping the deleveraging process - that is, continue what he has been doing, only perhaps twice as much, which may crash the system more rapidly - or he can recognize the larger trends in The Long Emergency and begin marshalling our remaining collective resources to restructure the economy along less complex and more local lines. Don't count on that." - James Howard Kunstler
King Dollar: Don't Call It A Comeback
Submitted by Tyler Durden on 12/30/2009 12:26 -0500
"We have been forecasting and monitoring USD strength for weeks now. Our main focus has been on GBPUSD, EURUSD, and AUDUSD for which we had the most convincing technical arguments for a sell-off. Today USDCAD is joining the band." - Nic Lenoir
US Consumers At Crossroads As Spread Between Visions Of Present And Future At Record Divergence
Submitted by Tyler Durden on 12/30/2009 08:02 -0500
Yesterday's most recent data from the Conference Board's Confidence Index recapitulates very well the Economic Inquisition purgatory that living in America has become: pain and suffering now, coupled with the promise of salvation and financial bliss at some point in the future. Of course, on a long enough timeline we are all dead, so it is only fitting that the administration, whose slogan had something to do with tangible change, is gradually encroaching on the Catholic Church's turf in an all out war for the souls of America's taxpayers as tangible becomes increasingly ephemeral and, well, intangible (save for unemployment and the wads of electronic cash deposited in Goldman Sachs' employees bank accounts - both of those are all too real). While the CBCC number came in at about the expected reading of 52.9 (from 50.6 in November), all of the "improvement" in confidence came from rosy future expectations, which rose to a two year high of 75.6 (from 70.3 previously). As for the present: current conditions plunged to another record low of 18.8. Never before has the differential between present pain and future hope been so wide.
Guest Post: Rethinking The Art Of Military Planning
Submitted by Tyler Durden on 12/30/2009 05:56 -0500It is often assumed that what preoccupies military planners is their attempts to define the shape of future warfare so that they can adequately prepare equipment and doctrine ideal to meet the threat. Evidence, however, shows that what most occupies their attention is how to adapt existing force structures and systems to react to emerging conditions.
The vast bulk of their attention, inevitably, is on the massive capital investment in weapons systems which last, often, a half-century — longer than the span of most political eras — and force structures and doctrine which have accumulated over decades, or longer. There is little scope for innovative, clean-sheet thinking, and even when that occurs, there is little ability to bend the vast bulk of the military and national machinery to the emerging requirements.
Frontrunning: December 30
Submitted by Tyler Durden on 12/30/2009 05:15 -0500- Here comes Spain: Spanish banks start to unload property portfolios (WSJ) Some brilliant insight: "Accumulating properties also stopped a sharp drop in prices, avoiding
the painful write-downs banks are required to book when the value of
their assets falls." The FHA will not be reading this article - How uou like your strong euro now Europe? After two years of crashing banking systems and economic recession, the euro zone enters 2010 with a full-blown debt crisis (WSJ)
- Treasuries set for worst year since 1978 as U.S. steps up sales (Bloomberg)
- First Brazil now Russia: Finance Minister Alexei Kudrin says Russian stocks "too expensive", nobody cares (Bloomberg). In the meantime Templeton's Mark Mobius, who after a 104% rise is still down relative to 2007 (56% decline in 2008) says "If you compare Russian valuations now with
other major countries, it’s not overpriced. There are still
opportunities there" One wonders who is pitching their book - E-mails inside AIG reveal executives struggling with growing crisis (WaPo)
- Just in case you thought the "recovery" was for real, GMAC to demand $3-$4 billion more from the Obama endless bailout fund (Bloomberg)
December 29th
Equities Bumping Heads Into The Lead
Submitted by Tyler Durden on 12/29/2009 19:38 -0500
Last night the nikkei failed to make a high close on the year and we see that S&P futures today failed after barely testing the topside resistance of the channel. We have long highlighted the strong divergence in momentum indicators for S&P futures which in theory is precursor to a 10% correction at least. With Nikkei right on resistance as well we have a compelling case to play a reversal here, and would only consider the trade a failure if we have a daily close above the resistance of the daily channel. We are also almost right at year-end, and if we remember last year the market did not wait for any later vacationers to start 2009. Maybe a reversal of low volume end of year price action is in the cards again, the risk reward certainly is good to trade the market that way.
Still Sitting and Staring
Submitted by RobotTrader on 12/29/2009 16:48 -0500Tape is getting more boring each day. Financials seem to be waffling back and forth, unable to move in one direction or another with any conviction. Meanwhile, traders are restless and bored, and really cannot find anything worth watching other than the anchorettes on CNBC.
General Motors Giving Up the Goat- What's an Incentive Really Worth Anyway?
Submitted by Travis on 12/29/2009 16:08 -0500I have a friend in the car business who loved Pontiacs- in the days before mainstream, popular imports, you were either a General Motors, Ford or Chrysler man; and specifically GM patrons had their own specific preferences to go along with their favorite brands of cigarettes- Chevrolet, Pontiac, Buick- you get the picture. My friend still loves Pontiacs, to this day, reminiscing of the days when he was eighteen, gas was 25 cents a gallon and his ’65 Pontiac GTO “Goat” cost $3,500 out the door. But, those days are over and if you’re a Pontiac man, well, you can just about smell the formaldehyde and see the undertaker coming, leaving nothing but memories and $7,000.
Everything Old is New Again: The Green General Motors?
Submitted by Marla Singer on 12/29/2009 15:08 -0500What a difference a few decades makes?
Guest Post: The Federal Reserve Still Doesn't Know How To Get Rid Of Excess Liquidity
Submitted by Tyler Durden on 12/29/2009 13:06 -0500Jim Bianco submits: "The Federal Reserve owns 80% of AIG. With each passing day it looks like the Federal Reserve is adopting AIG Financial Product’s business practices. That is, when faced with a financial problem, they create complicated tools (like CDS). When critics says these new products will not work, tell them they do not know what they are talking about and create even more complicated tools to dazzle everyone. Once the tools are so complicated that no one understands them, you will be hailed as an expert with no peer. You might even be named TIME’s Person of the Year."
Small Chinese Company Tells Goldman To Take A Hike, Refuses To Pay $80 Million In Derivative Losses
Submitted by Tyler Durden on 12/29/2009 11:53 -0500It appears that even after thoroughly dominating the US legislative, judicial and executive branches, the long tentacles of the squid have been no better than the Mongolian hordes at overcoming the Chinese Wall (which is ironic seeking how easy it is to ignore the same construct internally between the firm's prop and flow traders...and yes, we will be posting our response to Goldman shortly, we have not forgotten). In the meantime, half a world away, a small Chinese power generator, Shenzhen Nanshan Power, is blatantly refusing to honor contracts with Goldman Subsidiary J. Aron for $80 million in derivative losses, and it appears that China itself has decided to stand behind the small company.
The General Growth Properties Valuation Fight Escalates - Hovde v. Ackman Round 2
Submitted by Tyler Durden on 12/29/2009 11:06 -0500The last time we provided Hovde Capital's contrarian perspective to the prevailing opinion on GGP's valuation, there were some stock price fireworks. Is it time for round 2? Over 70 pages recapitulating the short thesis are attached.
AUDNZD: Playing The Range
Submitted by Tyler Durden on 12/29/2009 08:55 -0500
"As volumes are abysmal this week, we continue to think the risk is for lower US Treasury prices as supply chokes the market in low volume/appetite on this holiday week. Equities keep grinding higher and are getting awfully close to resistance levels, with ever lower volumes "supporting" the price action." - Nic Lenoir, ICAP
MF Global's Ten Predicitions For 2010
Submitted by Tyler Durden on 12/29/2009 08:26 -0500The latest in the 2010 forecast series comes courtesy of MF Global. Unlike the trite cheerfest from the sellside bankers (who can blame them, their jobs depend on optimism) which we have been largely ignoring, this piece is certainly worth five minutes of your reading time.
Daily Highlights: 12.29.09
Submitted by Tyler Durden on 12/29/2009 08:16 -0500- Asia commodity stocks, metals gain on China demand; Japan bank shares drop.
- Beaten by cable and the Web, broadcast TV looks to build a new business model.
- Build America Bond subsidy shift to fuel $130 billion in sales.
- Dollar trades at almost two-month high versus Yen on US recovery outlook.
- Fed proposed selling interest-bearing term deposits to banks, to drain some of the liquidity.
- Gold declines, snapping four-day gain as dollar rise saps investor demand.
- Oil closes in on $79 a barrel in Asia after US cold-snap drives energy futures higher.





