October 18th, 2010
Industrial production, homebuilder sentiment, the TICS data, and a Fed speech…
RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 18/10/10
SmartKnowledgeU Managing Director JS Kim's third appearance On the Edge with Max Keiser this year. This time around JS and Max discuss the fraudulent nature of the global monetary system and the failure of the rest of the world to connect the fraudulent monetary system with many of the world's other significant problems.
Once again, art imitates life...(any resemblance to actual jackasses and economic events is not a coincidence)...
This daily report is designed to help traders find opportunities to trade against this group. The premise is very simple we are looking for 66% of retail traders to be trading either long or short a currency pair, we then look for opportunities to fade (trade against) this group. For example if 72.99% of traders are long the USD/CHF we look for opportunities to short that pair.
The next big focus in the foreign exchange markets will be a strengthening US economy and another slow down in Europe. After one last gasp, that could take the euro as high as $1.45, and a great shorting opportunity will set up that could take it as low as $1.10-$1.15 next year. The US elections will remove much uncertainty from the dollar just when American growth is reasserting itself, opening the way for another down leg in the European currency. (FXE)
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Zero Hedge has obtained Wells Fargo's brand new confidential protocol guidelines on loan repurchase demands by investors and mortgage insurers, sent out on October 15, and which becomes effective tomorrow. We have reproduced these below to see just how much more "streamlined" the process is, now that the bank is fully aware of the massive liability it faces as a "loan puttable" entity in a world that is suddenly replete with pervasive and rampant title fraud. Amusingly, in the CIM, Wells states: "Wells Fargo is committed – just
like you are - to honoring contractual obligations with investors and
mortgage insurance (MI) companies*. We want to ensure that the
resolution process for Repurchase and Rescissions is as smooth and swift
as possible." And even so, Wells continues to refuse to halt foreclosures knowing full well it would face billions in impairments should it do so voluntarily, even though as we confirmed Warren Buffett's pet bank was recently caught with its robosigning pants down as well (an event which was sufficient for everyone else to invoke a self-imposed moratorium, even Goldman, whose Litton Loan Servicing unit was rumored to have serviced about 4 or 5 mortgages in the past century... but not the California real estate monster). What is critical, is that Wells Fargo admits that should all avenues under existing legal guidelines be exhausted, and robofraud is certainly a dealbreaker that can not be "explained or validated away", then the bank will be forced to repurchase the loan. In other words, starting tomorrow Wells is preparing for the loan repruchase tsunami to hit the fan as investors and insurers everywhere swamp the bank with tens if not hundreds of billions of repurchase and recissions demands. Suck it in, Wells investors.
Following the IMF and G7 meetings last weekend, most markets continued along the patterns seen in recent weeks. Stocks continued to grind higher, the Dollar weakened, and Asian currencies strengthened. Four issues will likely preoccupy markets in the upcoming week. QE2, Asian FX, business surveys, and maybe French politics. Market participants will continue to scrutinize any news relating to the upcoming Fed decision on QE2 and the extent to which the FOMC will manage to surprise markets, given that a fair amount of QE appears priced across asset classes.
This is the introductory article for my JP Morgan quarterly opinion, which asks questions that will probably piss off management but I haven't heard anyone else ask them. I will be presenting views on this topic on CNBC's Squawk on the Street tomorrow (Monday) morning. I urge all to tune in.
Now that they passed their high-water mark, are hedge funds going to crank up the risk?
The Commitment of Traders Report is created by the CFTC – The Commodity Futures Trading Commission and is published weekly every Friday. This body gathers and publishes the open futures positions on all publicly traded US futures contracts as well as the corresponding options. The data consists of 3 main categories.
The phrase of the week comes from The Privateer's Bill Buckler, who has coined the one term that best describes the lunacy that has gripped the world: "Beggar Thyself." Unlike the 1930s when the theme of the day was "beggar thy neighbor" and which culminated in World War 2, this time the emerging paradigm is one in which the first to defect wins... if only for a few seconds. Because when the "beggar thyself" process is complete, it will mark the end of not only the central banking regime, and the days of excess wealth accrual to the financiers of the world, but also the termination of the 140 year old Bismarckian "welfare state" which is the primary culprit for the creation of trillions of imaginary wealth out of thin paper. When the fiat system ends, so will end the hallucination that developed societies are capable of providing for their hundreds of millions of existing and future retirees. And with that will come the "social instability" that always marks the closure of a failed monetary regime and the admission of global bankruptcy.
Remember when the pathetic farce that was the stress test presumably prevented Europe's collapse, and served as the inflection point preventing the EUR from hitting parity with the USD? Well, one of the banks that the "stress test" uncovered to be solvent was the recently insolvent Allied Irish Bank, which earlier this month needed a taxpayer injection of billions to presumably make sure that European creditors (and likely Goldman Sachs, very much like the case in Anglo Irish) never see even one dime lost. And today, an Irish Member of the European Parliament Alan Kelly said he intends to write to the EU Competition Commissioner to discover just how it is that one of Ireland's top banks slipped through the stress test cracks only to require a bail out mere months later. It appears that slowly everyone in Europe is starting to turn against the trillions in German bank liabilities that stand to be impaired, and lead to a systemic collapse, unless local taxpayers dutifully reach into their back pocket and make sure fat bankers continue their worry-free existence.