Archive - Jan 2010 - Story

• Hussman - Tim Geithner meets Vladimir Lenin (Hussman Funds)
• Oil nears $82 as commodity bubble roars back; watch the gas pump next (Bloomberg)
• Is Japan the correct analogy? (Grey Owl Capital Management)
• Global bear rally will deflate as Japan leads world in sovereign bond sales (Telegraph)
• Emerging markets to lose 20% as IPOs backfire according to Mark Mobius (Bloomberg)
• Optimist? Or pessimist? Test your 2010 strategy (MarketWatch)

• Asian stocks advance to 16-month high on US manufacturing, commodities.
• Brazilian stocks closed at a 20-mt high on a raft of positive economic data at home.
• Crude-oil futures jumped to a 15-mt high on colder weather, economic optimism.
• Euro zone's mfg sector purchasing managers' index rose to a 21-mt high in Dec.
• US manufacturing expanded in December at the fastest pace in more than 3 years.
• US Treasury plans to sell $16 billion in four-week bills on Tuesday.
• Agricultural Bank of China plans to raise $22B via dual listing in Shanghai, Hong Kong.

TrimTabs' Charles Biderman discusses the flow of funds, and the interest rate outlook for 2010: nothing too outlandish - the Treasury bubble thesis revisited, as well as the biggest issue of all - the roll (much more on this from Marla soon). Also some observations on the interplay of money markets and alternative funds, extensively discussed here. Also, according to TCW's Chief Global Strategist the treasury bubble will burst in a few months, coupled with a collapse of the dollar. What this means is that rates will surge. What this also means is that once rates surge, equity values will be whacked as the cost of capital will no longer be zero (sorry Zimbabwe Ben, but you are completely wrong - a cost of capital of zero is the number one reason for pretty much all bubbles). So what do futures do? Up, up, up. The stocks-bonds divergence trade is alive, schizophrenic, utterly insane and well.

RANsquawk 5th January Morning Briefing - Stocks, Bonds, FX etc.

"As you know I strongly believe in respecting market price-action, and I will update market scenarios and price targets across asset classes as trading unfolds and supports or resistances are met or broken. Let’s brace for a choppy 2010 as I think it is our greatest certitude: volumes will remain relatively low and the markets will therefore be chaotic. The only case where we see volumes picking up actively is a strong rebalancing towards risk aversion as the world economy relapses, so I guess we should welcome ranging choppy price action for now as we cannot hope for much better given none of the fundamental problems with the world economy have been resolved." Nic Lenoir, ICAP, 2010 Outlook

Greenspan’s error in judgment, conceived from his Ayn Rand based view of the World, was not that people would act in their own self-interest (they do), but rather that removing all the rules was a required pre-condition for this to occur. It is not a mutually exclusive situation where you can only have personal freedom/responsibility with no rules. On the contrary, real freedom is the ability to act on your own within the confines of the rules. Without a set of rules, there cannot be a game, only chaos. Hopefully, the new Financial regulations being discussed will focus upon creating rules that motivate behavior that benefits the public good as opposed to focusing on micro-managing the actions of the individual. This concept is certainly the basis for the old saying: “Good fences make good neighbors”. - Harley Bassman, ML RateLab

Zero Hedge readers will miss out if they fail to carefully study Matt Taibbi's piece on Fannie, Freddie, and the mortgage bubble (as well as a number of other tangential but critically important topics).  Mr. Taibbi makes much of being delicate with me over what he sees as our disagreement on the issues, but I think he mistakes a few (and generally minor) differences in our conclusions for a real divide on the facts.  We are, as near as I can tell, in pretty violent agreement on the substance of the argument: The present exploding bubble is the result of mis and malfeasance on all sides.

Well, despite some brutal holiday travel, international airports, flight delays and exciting weather for our psychotically committed staff, the machine rolled on (albeit a bit more slowly) at Zero Hedge. So if you were off coping with in-laws and children not-your-own with as much liquor as you could consume, you might have missed out on quite a lot. Don't worry. We have the cliff notes for you here, and we've got things revved up again for 2010. So take a quick look at the past week or so, and then brace yourself for the months to come. We've got a wealth of things planned for you. It promises to be a rather interesting year.

After last year's debacle, most hedge funds feel lucky to still be alive. After suffering through the steepest, fastest bear market in history, many lessons were learned. And I'm guessing that many hedge fund gamblers are starting out in January with some New Year's trading resolutions.

At this point is the United States even capable of permitting bubbles to deflate without a massive run-up to a desperate crash? Probably not.

Someone in France has seen "Heat" too many times.

RANsquawk 4th January US Morning Briefing - Stocks, Bonds, FX etc.

RANsquawk 4th January Morning Briefing - Stocks, Bonds, FX etc.

Inside Beltwayistan, a number of Bushevik oil patch zombies still roam the recession-blasted landscape mindlessly chanting their Caspian mantra, "Happiness is multiple pipelines" - with the caveat that they flow westwards and bypass both Russia and Iran. They've now added a new word to their vocabulary, "Nabucco," and worse, have bitten a number of Obama administration officials and visiting European politicians, who have joined their shuffling ranks.

• Martin Whitman to relinquish Third Avenue Chief Investment slot. (End of an era) [reuters]
• Greece prepares fiscal plan for EU.  (Write "I will not forge GDP numbers" 200 times first) [bbc news]
• Burj Dubai occupancy may reach 75 percent this year.  (And Dubai's GDP growth may reach 75 percent too).  [bloomberg]
• Bernanke: "Low rates didn't inflate housing bubble." (Alan: "Check is in the mail Ben!") [bloomberg]