Archive - Jan 2010 - Story

• Securities
  held outright: $1,913 billion (an increase of $67 billion MoM,
  resulting from $64 billion increase in MBS and $3 billion in
  Agency Debt), or a $7 billion increase sequentially. 
• Net
  borrowings: $165 billion. Number for the January 28th week has not been updated.
• Float,
  liquidity swaps, Maiden Lane and other assets: $196
  billion. The CPFF program was was at $11.2 billion, another fresh all time low. FX liquidity swaps declined
  by $1.075 billion to practically 0. Maiden Lane I
  and Maiden Lane II were at $26.8 and $15.4
  billion, while Maiden Lane III continues pretending it has value and came at $22.5 billion.

Chairman Bernanke was voted back in today. Interestingly the markets reacted very little to it, and if anything equities showed renewed weakness after the official confirmation whereas they had bounced from their lows earlier in the session. I think it was as much due to late stops into the close than anything but after hours will tell us the true story. - Nic Lenoir

Chairman Bernanke was voted back in today. Interestingly the markets reacted very little to it, and if anything equities showed renewed weakness after the official confirmation whereas they had bounced from their lows earlier in the session. I think it was as much due to late stops into the close than anything but after hours will tell us the true story. - Nic Lenoir

You mean not every American bought 10 kindles last quarter? $116 better hold or then it is straight down to $100 and lower. And just in case the shorts don't get squeezed, the management announced the oldest trick in the book: a $2 billion share buyback. At 40x forward PE this seem like a total steal for management.

Never seen so many eyeballs watching the same microticks on 5 charts simultaneously and seeing virtually everything move in perfect lockstep tick for tick. Everyone waiting and wondering about when and if Bernanke is going to make the cut or not. Meanwhile Obama was desperately on the phone, attempting to get a post-SOTU "resubstantiation" rally in play.

Ben Shalom Bernanke reconfirmation now guaranteed. Sorry America - your senate has failed you. Enjoy the asset bubble and the coronation of the opaque US balance sheet as the biggest receptacle of toxic assets while you can - the next implosion will be the last.

The large gates of New York’s largest prison open and today’s group of newly released emerge. They pass a guard who lifts up a copy of The USA Today to reveal the headlines and date that tells us it’s 2002. Amongst this group we find a man carrying a small duffel.

And we know this man.  He is Gordon Gekko.

Yet another rumor denied vehemently by the Greek Finance Ministry, which automatically means it is 100% true, is that Greece rescue talks are reaching a fever pitch, and according to FT-Deutschland, Germany is seeing increasing pressure to bail out the struggling country. As Dow Jones reports "rescue talks are being held in the EU and with certain capitals about aid for Greece, according to the sources, the report adds. Several options are being discussed, one of which being bilateral loans from some euro zone countries, where Germany would have to shoulder a major part as the euro zone's largest economy."

While Tim Geithner may hope the AIG situation is now dead and buried, it is likely anything but, with the recently launched investigation into disclosure fraud by the SIGTARP, and the relentless efforts by Darrell Issa to metaphorically crucify the tax-challenged treasury secretary currently ongoing. As these noble pursuits continue, we ask two simple questions.

The past week has seen a material break from the long-term support ever since the March lows. After peaking a short week ago, the market has found it impossible to rally on even the "great news" of earnings beats and on what is supposed to be a Bernanke reconfirmation today (should this "given" not transpire, or if even a vote delay is proposed, we hope everyone has an assortment of puts to hedge the fall). The more relevant question from a short-term trading exposure is whether the buying programs that emerge on every low-volume lull after a major selloff will be capable to sustain the increasingly shaky upward trajectory.

After several weeks of driftless correlation between stocks and the DXY, stocks are once again correlating almost perfectly with the critical EUR-JPY pair. Due to the acute impact on the DXY via the EUR-JPY, this is the easiest way to push around the DXY levels. Furthermore, the correlation return could be indicative that the JPY is once again the carry currency of choice. Couple this with a weakness in the short-end of the UST curve, and one can speculate that carry traders are quietly repurchashing dollar shorts and selling Bill positions, meaning that the Yen will likely be seeing rather substantial weakness in the coming weeks.

Once again, the presumably mysterious direct bidders take down well above their historical average.

• Yields 3.127% vs. Exp. 3.153%
• Bid To Cover 2.85 vs. Avg. 2.73 (Prev. 2.72)
• Indirects 51.1% vs. Avg. 57.94% (Prev. 44.83%)
• Indirect bid to cover 1.31
• Allotted at high 36.66%
• Indirect take down 51%
• Direct take down 11.8%

The Bernanke debate in the senate has started. Readers can watch it live on CSPAN. The latest Bernanke tally is as follows.

A mere three hours before the Bernanke cloture vote, America just got permission to hit 100% Debt/GDP. Thank Senate Democrats who just approved an amendment increasing the US debt ceiling by $1.9 trillion. The 60/40 vote was across party lines and only successful because Republican Sen.-elect Scott Brown has yet to be seated.

Not good for Europe: all the posturing about how Greece will never, ever be bailed out was just destroyed courtesy of a few words out of place by the IMF. IMF Managing Director John Lipsky just noted that the International Monetary Fund is ready to help Greece "in any way necessary." The quote comes from a Bloomberg TV interview conducted earlier.Perhaps that is why Greek CDS just hit another all time wide at 410 (+35). And joining the foot in the mouth crew is ECB president Trichet who said that "Debt on both sides of the Atlantic are unsustainable." So should we now assume that even Central Bankers admit we are headed for a brick wall at 120 mph?