Archive - Jan 14, 2010 - Story

RANsquawk 14th January US Morning Briefing - Stocks, Bonds, FX etc.

Situation: You are responsible, either as an agency broker or as a buyside trader, to execute a buy order, monster block of 2,500 shares, in APU, Amerigas Partners. The date is January 14th, 2010. What can you expect to happen should you send 2,500 shares to buy at the market pre-open? It closed at $40.77 on January 13th, and there is no news on the stock.

Multiple choice questions and answers provided inside

Greek CDS hits another all time record at 342.50 bps. Greece is now trading nearly 5 times as risky as the entire universe of investment grade US corporates. In other news, Greek Prime Minister Papanderou repeats for the third time (and fourth, and fifth) that the country will not, repeat not, repeat not, repeat not, repeat not, need a bail out from the EU, and will not (etc) drop the euro or leave the eurozone. If only anyone believed the man. Anyway, where is that damn ESH0 ramp job when you need one? The best way to send a signal that all is good in the world is for Liberty 33 to trade a quadrillion e-mini's with itself.

The notable fudge factor in today's initial claims report had nothing to do with EUCs or continuing claims (people are now rolling off both faster than ever), but the spread between the Seasonally and Non-Seasonally adjusted insured unemployment rate. As the DOL indicates, the Seasonally Adjusted Ins. Unemployment rate was 4.6%, while the Non-Seasonally Adjusted equivalent came in at 3.5%: a 110 bps spread. The last time the delta was so wide was back in January 1992!

I know there is still a great debate on whether the Chinese economy is in a great bubble state. For my thinking, any time private credit is created at such as rapid rate as it was in China in 2009 something has got to give somewhere. I will leave the finer points of the debate to the China watchers, but it is clear where my thinking on this one lies.

Taking a playbook straight from Wall Street, consumers maxed out their store-branded retail cards and decided simply to not pay them in November-December. And even that could not prevent December retail sales from coming it at below expectations: one wonders just what it is that will drive the retail dynamo that ever more clueless pundits on CNBC claim will boost 2010. Here are the facts: "Fitch notes that in December more than one in every eight dollars of receivables was written off as uncollectable during the November collection period on an annualized basis." Well, at least the government got something out of this (if not private retailers) and managed to revise November sales slightly higher. Good luck repeating this.

• Roubini joins the bandwagon: The coming sovereign debt crisis (Forbes)
• So much for a strong showing by the consumer in December: retail sales fall 0.3% on expectations of a 0.5% rise, 2009 retal sales fall 6.2% - biggest drop since 1993 (Bloomberg)
• Initial claims pick up once again, add 11,000 to 444,000 (Bloomberg)
• David Boskin with a frank discussion of economic data manipulation by the government: Don't like the numbers? Change 'em (WSJ)
• No shit Sherlock: Merkel says Greece means Euro faces "difficult" time (Bloomberg) but, but, how will Bernanke kill the dollar then?
• Pin the tail on Blankfein is a game nobody wins (Bloomberg)

RealtyTrac reported its December foreclosure number which came in at 349,519, a 14% jump from the previous month, and a 15% increase from December 2008, and an end to the favorable declining monthly trend July. And according to Rick Sharga, SVP of RealtyTrac, 2010 is expected to see between 3 and 3.5 million foreclosures, which will be another record. Some recovery.

• Asian stocks, Aussie, commodities advance as Australia beats jobs estimate.
• Australia's jobless rate unexpectedly falls to 5.5% in December.
• Beige Book: US economic conditions 'improved modestly' in recent week.
• Budget deficit sets December record of $91.85B reflecting fallout from deep recession.
• Computers shipped to US in Oct-Dec quarter rose 24% YoY - IDC.
• Chavez suspends rolling blackouts in Venezuela's capital, sacks electricity minister.

RANsquawk 14th January Morning Briefing - Stocks, Bonds, FX etc.