Archive - Nov 3, 2010 - Story

It hurts to be wrong. Not just emotionally, but physically, especially when it’s public, like swimming headfirst into a school of very ill-tempered jellyfish…..or maybe piranha. The horror of it is almost cinematic. The more artificially pumped your ego, or the more brainwashed with academic pretension, the more terrifying that moment of realization is, that moment when all your assumptions are dashed aside like a three-year-old’s alphabet blocks. To a certain point, it is understandable why so many people live in such violent denial, however, this does not detract from the perils of that denial…

Goldman's Richard Ramsden has released another report whose only purpose is to prove that the market is wrong and that banks are angles, that putbacks already priced in by the market for the TBTFs are far greater than even the worst downside case, that business models are "robust", that Basel concerns are overrated, and more such things which, of course, are a self referential plea not to sell Goldman.... Oh yes, and despite all this he cuts the price target for WFC, PNC and, oops, Bank of America, from $19 to $16/share. If Goldman cuts Price Targets when all it sees are pots of gold and unicorns, one dreads to think what may happen if the bank was actually concerned about the fraudclosure situation that according to some rumors has brutalized the banks' October (and now November) mortgage-related cashflow.

Where does one start here? The massive revision (from -39K to -2K), the constant flip flopping (from -2K to +43K), the fact that every single time the consensus was missed lead to a jump in the NFP (expectations this time were +20K), or that nobody cares about ADP anymore as it is merely noise?

• Election reaction: GOP Wins House in Huge Swing (WSJ); El-Erian: We've Voted. What's Next For The Economy? (WaPo), Obama Confronts Setback to Agenda (FT), Obama's Window for Change May Close With Republican Win (Bloomberg), G.O.P. Captures House, but Not Senate (NYT), Republicans to Take On U.S. Health Law, From Taxes to Insurance (Bloomberg)
• Bernanke Bond Buying May Risk Rise in Prices Similar to 2004 (Bloomberg)
• Straight from the Fed via Hilsenrath: Central Banks in Rate Clash (WSJ)
• Business Looks to Republicans to Block Obama on Rules, Taxes (Bloomberg)
• Borrowing Costs Rise for Weak in Europe (WSJ)
• Greece Suspends Outgoing Airmail After Wave of Bombs (NYT)
• Markets like divided government but real problems will go unaddressed (Barrons)
• The Fed at Jekyll Island: 100 Years Later, They're Baaack! (Economic Policy Journal, h/t John)

• API: Crude supplies decline 4.1 mln barrels - larger than expected decline.
• CFTC to probe range of natgas derivatives-trading activity spanning parts of 2008, 2009.
• R&D spending drops for the first time in a decade at major firms: Booz & Co.
• World Bank: China should raise interest rates, allow a stronger yuan to damp inflation.
• Aetna Q3 profit jumps 53% to $497.6M on lower costs.
• BP: Dividend policy to be reconsidered in an effort to restore growth.
• GM to save up to $45B in taxes under an unusual provision of its govt-funded bailout.

An incredibly busy day today, with labor market data, a refunding announcement, and various reports on business conditions, factory orders, and vehicle sales leading into the FOMC announcement at 2:15.

RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 03/11/10