Archive - Mar 12, 2010 - Story

Earlier today the Census Bureau came out with its February retail sales announcement which was classified by CNBC's Bob Pisani as terrific on the basis of a 0.3% increase over January. What few point out is the January revision, which changed the January retail sales estimate  from 355,777 to 354,339. As February came in at 355,546, one can see why the government's game of endless data fudging continues. Had January been unrevised, February retail data would have been a drop of 0.1% instead of a rise of 0.3%. We fully anticipate yet another downward revision to February numbers once March data comes out, to make the March increase even bigger. Yet what nobody at all is pointing out is that the Consumer Spending data reported by Gallup, which tracks "the average dollar amount Americans report spending or charging on a
daily basis, not counting the purchase of a home, motor vehicle, or
normal household bills", and whose 14 day rolling average for the month of February came not only at a drop of 5.8% from January's average read of 63.4, but came in at a series low 59.7, which was an improvement only on the 59.1 recorded at the lows of the US market crash in March 2009. US Consumption, when not parsed by the ever so creative eye of the US government, has rarely been as low as it was in February.

Yesterday we asked just who the counterparties on Lehman's Repo 105 transactions were. Today we get our answer: the parties that Lehman used exclusively to mask its true leverage ratio were Barclays, Mizuho, UBS, Mitsubishi, Deutsche Bank, KBC and ABN Amro. This is accompanied by disclosure from the Examiner that these Repos, which should logically have been cheaper to Lehman due to the overcollateralization compared to regular matched repo (remember: 105 instead of 100 plus a minor haircut), in fact were pricier, prompting Lehman staffers such as Mike McGarvey to speculate that counterparties may "try to squeeze Lehman." This is quite a critical development ahead of the lawsuit between the Lehman estate and Barclays (a Repo 105 counterparty), which not only refused to bail out Lehman in the 11th hour, but to subsequently go ahead and in the definition of a fire sale acquire Lehman Brothers' North American brokerage operations for pennies on the dollar, coupled with some serious additional trickery on the side. Another oddity: none of the counterparties were US-based. Did US banks know too well about the imminent collapse of Lehman and thus refuse to participate in the Repo 105 window dressing game? Or, much more relevantly, was Lehman terrified by retaliation of its US-based peers, (be it CDS or stock-based) and as a result refused to open up its deplorable balance sheet to them?

• Built on a lie - the fundamental flaw of Europe's common currency (Der Spiegel)
• It has been a while since we had a Greece rumor: EMU States near €20-25 billion Greece aid accord (Market News. Banking News)
• Germanry and France have decided that Greece needs €55 billion until the end of the year to prevent insolvency (Euro Intelligence, h/t Paul)
• No snow in February - Retail sales in US rose in February (Bloomberg), so did credit card chargeoffs
• IPO window still weak despite melt up: AVEO raises 23% less than sought in first biotech IPO of 2010  (Bloomberg)
• Not so lonesome doves: Janet Yellen to be next Fed vice chair (Reuters)

• Americans' net worth rised 1.3 percent in the fourth quarter to $54.2 trillion.
• Asian shares mixed, Japan stocks gain on speculation central bank to add funds.
• Eurozone industrial output jumps by massive 1.7 percent in January.
• Money fund assets fell by $36.22 billion to $3.090 trillion in latest week.
• Obama to nominate Yellen to post of vice chairman of Federal Reserve.
• Oil drifts above $82 in Asia as month-long rally loses momentum amid weak US crude demand.

RANsquawk 12th March Morning Briefing - Stocks, Bonds, FX etc.

RANsquawk 12th March Morning Briefing - Stocks, Bonds, FX etc.