Archive - Jan 2010 - Story

The Nobel laureate points out the obvious: with the stimulus coming to an end and states facing major shortfall, the president's actions are a "big move in the right direction but not enough." Stiglitz calls for more intervention, and the real question is how to spend the money: says critical rate of return on public investments to have lower long-term national debt is only 6%. Therefore must direct money on technology, infrastructure, education. Yet by plowing money into banks, the return was zero (if not negative). "When putting banks on welfare, there were no condition like -they out to lend." Another observation: banks which borrow at zero rates, "look around the world where to invest and put their money abroad- they create bubbles in emerging markets, earning the angst and anger of people in those countries as the same time as they earn the angst and anger of people in the US."

Lastly, to the question if the president is being too populist with his approach, Stiglitz responds with a resounding no.

Stale quotes are impacting the validity of the DJIA per the NYSE. In as much as quotes are correct in realtime, the DOW reflects those properly.

More change you can believe in. Hopefully the NYSE can get their house in order in advance.

StandardStandard & Poor's Ratings Services no longer classifies the United Kingdom (AAA/Negative/A-1+) among the most stable and low-risk banking systems globally due to our view of the country's weak economic environment, the reputational damage we believe has been experienced by the banking industry, and what we see as the high dependence on state-support programs of a significant proportion of the industry.

12:12 pm update: NYSE gives all clear

12:10 pm update: Openbook trades reported fine, not crossing

11:47 am update: Openbook server being rebooted

11:38 am update: Quote from NYSE Call "BAC, JNJ, F, British Airways - they are all fucked"

11:16 am update: DOW index number is incorrect per the NYSE due to wrong input quotes

11:07 am update: Reinstating A thru H has not cured random quote dissemination.

11:06 am update: Quotes in the alphabetic symbol range A through HZZ for NYSE & NYSE Amex cash markets are being removed from the National Best Bid and Offer in the Consolidated Quote System (CQS). Standby for updates.

Update: NYSE rebooting servers, going through process of pulling national quotes.

RANsquawk 28th January US Morning Briefing - Stocks, Bonds, FX etc.

Damn it people, did you not hear to the Prime Minister "This is just empty speculation. The country is fine, I promise, fine, I promise, fine, I promise..." ad chapter 11.

10:32 am update: The NYSE & NYSE Amex cash markets are experiencing delays in delivering current quote information to the Consolidated Quote System (CQS). This may result in crossed quotes with other Exchanges in a limited set of symbols. Updates to follow

Yesterday's uptick in the housing inventory backlog (from 7.6 months supply to 8.1) has another corollary, which, as David Rosenberg points out, is the median amount of time it takes builders to sell a completed unit. The number is now 13.9 months: an all time record, and 50% higher than a year ago. Good thing all that shadow inventory is nothing to be worried about as Cramer says.

Initial claims for the week ended January 23 were second consensus miss in a row, coming in at 470,000 (SA), a decline of 8,000 from the prior week's downward revised 482,000 (to 478,000), however 20,000 higher than the consensus of 450,000. The comparison of SA and NSAinitial claims can be seen on the chart below. A dig through the data indicates that probably the entire spike in claims can be attributed to some strange moves in Initial Claims coming out of California, where initial claims surged to an all time high of 115,462. Is there more than meets to eye to the "rosy" picture in the Golden State.

At this point using the words "Greece" and "record" in the same sentence is starting to get uncool. Alas, today, it has to be said one more time. The country's CDS is now at 387 bps, another all time wide, while the spread to Bunds is just getting plain silly. Of course, the chorus of voices begging for calm is increasing, with Spain's prime minister the latest to claim that "nobody will be leaving the euro." It is unclear at this point if he is referring to Greece or Spain. This is coupled with Papandreou saying that he is "seeing speculation in world financial markets" regarding his country's risk, and the ever ubiquitous " rumors can create problems." Dick Fuld surely can sympathize.

• Meltzer: The Fed's anti-inflation exit strategy will fail (WSJ)
• It's time for Bernanke to move on (MarketWatch)
• Bernanke is unfit to be reconfirmed: "If nothing else, Mr. Bernanke has proved to be a consummate bureaucrat,
  spending most of his time in recent months lobbying for major
  expansions in the Fed's regulatory powers, which, if granted, would
  take it far beyond the purposes for which it was created in 1913." (Washington Times)
• Goldman viewed as favored by regulators, Fed says (Bloomberg)
• Quantitative easing: we are all central bankers now (Jesse)
• Here comes the new temporary debt thatch roof: Democrats to raise debt limit $1.9 trillion to $14.3 trillion (The Hill)
• Darling to hold secret talks with bankers in Davos (Guardian)

• Asian stock markets were broadly higher following a rise on Wall Street.
• Brazilian Central Bank keeps its benchmark interest rate at a record low of 8.75%.
• China sets up energy policy body headed by premier amid growing demand, shortages.
• China shares rebound on bargain-hunting after a 4-session decline, led by developers.
• China’s banking regulator told lenders to step up scrutiny of property loans.
• Dutch state and ING appeal EU ruling on payback of aid given during financial crisis.

There is a rumor of a bailout going around. It is worth watching as the Greece/Germany spread was wider by 17bps on the day again. It may be worth looking at shorting some bunds here, especially given that 10s rejected their 118-10 resistance yesterday in the US. - Nic Lenoir

RANsquawk 28th January Morning Briefing - Stocks, Bonds, FX etc.