Archive - Nov 2010 - Story

Nothing quite like the billionaire whose entire fortune is invested in the successful perpetuation of the ponzi, thanking the administration for taking trillions of dollars out of the taxpayers' pocket and preserving the broken system for a few more years, just so said billionaire can wax holier than thou on the pages of the administration's newspaper and thank the administration for allowing him to swim in his nickel pool through expiration. If one tries hard enough, one can almost spot a ridiculously hypocritical vicious loop in there somewhere...

• API reports surprise decline in crude-oil supplies.
• Asian stocks, commodities drop as China drafts price curbs; Won, Euro fall.
• EU starts work on Irish bank aid package, stops short of immediate bailout.
• FDIC is conducting abt 50 criminal investigations of directors, employees at US banks.
• NAHB index rose to 16 in November from a downwardly revised 15 reading in Oct.
• Amgen Inc. is studying a takeover offer for Actelion Ltd.
• Boeing to buy privately-held CDM Technologies. Terms undisclosed.
• Carlyle's Booz Allen Hamilton raises $238M in IPO.

Data on consumer prices and housing starts, plus a couple of Fed speeches. Fourth POMO in a row better do something about finally getting a green close or stat arbs will lose all faith in Brian Sack.

RANsquawk European Morning Briefing - Stocks, Bonds, FX – 17/11/10

A combination of Fed front-running and perspectives of a more fiscally conservative Federal government (including the ever so independent Federal Reserve Bank) has had the bond market on the backfoot the past few days with a lot of stops being run through. As we discussed last week, how the market digests the actual liquidity injections by the Fed and the buybacks is what will drive all other asset markets. Indeed liquidity injections by central banks has been the sole driver of asset prices with the shadow credit markets contracting. - Nic Lenoir

The city of Hamtramck, desperate for cash, has asked the state for permission to take an unprecedented step: filing for bankruptcy. City Manager Bill Cooper said the city of roughly 20,000 people is staring at a $3 million deficit, fueled by a dispute with Detroit. Unless Hamtramck files for bankruptcy, it won't be able to pay its nearly 100 employees or 153 retirees, he said

The city sent a letter to the state Department of Treasury last week asking for approval to seek bankruptcy protection. It has not received a reply, Cooper said. "I'm going to run out of money Jan. 31," Cooper said. Bankruptcy would allow the city wants to stave off creditors and force its unions to consider concessions.

After watching the total pandemonium and maelstrom of lies out of Europe today, some may have forgotten that our own rulers are among some of the most incompetent, corrupt, and stupid people on earth. Luckily, here is Dick Durbin to remind us that nothing compares quite to the chaos emanating from D.C. - it appears the extension of the Bush tax cuts which until early this week was taken for granted, until yesterday when Moody's implied a permanent extension of such cuts would lead to a rating cut, may have been all but killed after preliminary discussions between Senate Majority Leader Harry Reid, and Mitch McConnell, the chamber’s top Republican, “did not go well.” Bloomberg reports that not only is the Senate's #2 Democrat "not very optimistic" about the option of extensions, but nobody even has a clue what is going on: "I don’t even know what the options are at this moment,” said Washington Senator Maria Cantwell, a Democrat who serves on the tax-writing Finance Committee." Tangentially, the question of how this economy continues to chug along courtesy of central planning by an administration and a monetary institution, both of which are beyond clueless, will some day be the topic of extended Ph.D. papers (of course, by then having a Ph.D. will be perceived as the vilest form of socio-educational stigmata).

Some delightful observations on two sets of bubbles by United-ICAP's Walter Zimmerman: one are those blown with impunity by the Federal Reserve; the other are those that put even the Greenspan-Bernanke legacy to shame, with a diameter of 50,000 light years. The latter are entertaining, but the former are far more relevant to our everyday lives. And on those, Zimmerman says the following: "Now if one studies history one finds out that the Federal Reserve was formed to prevent speculative panics, to maintain the value of the dollar, to preserve the purchasing power of the consumer, and to responsibly manage the nations money supply. Has an organization ever strayed as far from accomplishing its goals as the Fed?" We can only hope Princeton's cosmological program is subpar (unlikely), as otherwise Bernanke may decide that 50,000 light years across is a perfectly reasonable number for a bubble. The next question, of course, is what amount of dollar bills would fill up a sphere with a radius of 25k light years...

EUR came under renewed selling pressure on Tuesday in spite of the fact the Irish government continued to argue that it does not need to tap the primary markets until next June. Still, given that the Irish banks are plagued with soar loans, which as a result is expected to lead to another liquidity injection suggests that the country may be forced to tap the stability fund just to save its beleaguered banks. GBP posted heavy losses against the USD on Tuesday which rose sharply amid renewed uncertainty over the Eurozone and further tightening moves in Asia. The USDJPY continued to edge higher and moved to mid-83.00 levels and toughed on highest levels since October the 5th amid a stronger USD which rose following ongoing uncertainty over the Eurozone, as well as potential monetary policy tightening moves by the PBOC.

RANsquawk Market Wrap Up - Stocks, Bonds, FX etc. – 16/11/10

CNBC's Diana Olick reports that the investigation into the biggest financial fraud in recent history is about to be shelved: the reason, state AGs are nearing a settlement with banks, which will slap a few wrists, will see banks put some lunch money in a settlement fund, will result in some principal reductions, and everything will be well again, as banker bonuses surpass 2009 levels (as noted previously). Retroactively in perpetuity. In other news, state sponsored fraud in America is alive and well.

Live coverage of the Senate Banking Committee's make believe grilling of Bank of America representative Barbara Desoer over fraudclosure starts live at 3:15pm, or was supposed to: just like the EU Press Conference, it is also late.

This is so deja vu of the EU press conference when the Greek bailout was announced on Sunday, May 9. Although this time there is no silver lining, as no deal has been reached. Anyway, here is the link for the EU press conference which so far is agenda-less so anything could be announced... or nothing.

On one hand you have Phil Lebeau. On the other you have legendary hedge fund investor Mike Steinhardt. When asked whether he would sell a hypothetical allocation of GM stock, Steinhardt's response is about as priceless as it gets: "As quickly as I can. I don't think one should be a long-term holder in government securities, particularly government equity securities." q.e.d.

Once again Zero Hedge pulls a fast one on the MSM. We highlighted this earlier today, but it bears repeating: in a post yesterday we asked rhetorically: "Are republicans preparing for a push to eliminate the "maximum employment" part of the fed's dual mandate?" As of a few minutes ago, Reuters has answered: "Republicans want Fed focus solely on inflation." Those who have read us will find absolutely nothing new here, but here is the gist of the Reuters piece: "Two U.S. Republican lawmakers said on Tuesday the Federal Reserve should focus solely on inflation and ditch its "dual mandate" to promote both price stability and full employment. The pressure from Senator Bob Corker and Representative Mike Pence adds to the pile of international criticism over the central bank's plan to buy an additional $600 billion in government bonds to try to speed up a sluggish economic recovery." As we stated before, while we ridicule the fact that Bob Corker is suddenly all about curbing the Fed, despite that 5 of his top 15 contributors are banks, and last year did his best to make the Paul-Grayson "Audit the Fed" initiative disappear, the fact that this idea is finally making the rounds should be endorsed by all those who believe that a bankrupt America is a bad America. As the Fed will not cease from doing everything it can to boost banker recoveries, under the guise of stimulating employment, the only way to curb its central planning aspirations is to pass legislation that will make it focus solely trillions of excess dollars creating asset bubbles across the global economy.