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Frontrunning: June 24
- Options Clearinghouse wants access to Fed's discount window (Bloomberg) next up - $1,000 E-trade retail accounts have access to TALF and TLGP
- Jonathan Weil: Pimco's loss is a win for Wall Street crooks (Bloomberg)
- Wall Street reform bill goes into final hours with key provisions still unresolved (Reuters)
- BP relied on faulty US data (WSJ)
- Swiss banks winning funds from investors with weakening euro, buoying franc (Bloomberg)
- China central bank to inject 201 billion yuan into market this week to calm exploding money markets (iii)
- Banks on hook for $6.5 trillion GSEs? Bank execs panic over proposed change to orderly liquidation authority -- Dodd unhappy with Brown -- Zero hour arrives as derivatives, 'Volcker rule' remain unresolved (Counteroffer, Politico)
- Gillard breaks with tax policies that doomed Rudd (Bloomberg)
- The best stimulus: spend less, borrow less (Fortune)
- Venezuela to nationalize set of oil rigs belonging to Helmrich and Payne (Reuters)
- Yuan closes higher after moving in wide daily range of 150 bps (iii)
- Obama approval rating plunges on handling of BP catastrophe (Reuters)
- On Wall Street - so much cash, so little time (NYT)
- Simon Johnson endorses Paul Krugman for head spender, budget director and "quadrillion" redefiner (Baseline)
- The drilling ban is Soros' bonanza (IBD)
»
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well someone is hoping to benefit from the offshore oil ban. george soros. who would have thought?
The Jonathan Weil Pimco story is yet another example of how our federal government has become in my view criminal, corrupt and illegitimate. The interests of the citizens are no longer represented. Time for the voters to revolt come election season!
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Economic Outlook: The sky is weakening Economic Outlook: The sky is weakening
Jun. 24, 2010 (United Press International) -- The U.S. Federal Reserve's communique this week showed a renewed sense of distress in the financial sector where the recovery is far from robust.
If the Fed was to say "the sky is falling," it would come out in codified bank-speak that would sound like, "support for atmospheric structural standards are weakening in the macro-prudential stratosphere." In this case, the message was, "Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad."
That's almost clear. It is understood, of course, that the bank communicates with a crusty, New England style of never getting quite to the point. "It is possible I meant to say something." Sigh.
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Taipan Daily: The Wrong Bankruptcy Thursday, June 24, 2010 5:23 AM From: This sender is DomainKeys verified"Taipan Daily" <taipan@taipanpublishinggroup.com>
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Best of Taipan Daily The Stage Is Now Being Set for Global Mineral War
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Taipan Daily: The Wrong Bankruptcy
by Adam Lass, Senior Editor, WaveStrength Options Weekly
In Middle English, a “bellwether” is a castrated ram with a bell placed around its neck so that it might lead the flock home in the evening. In the investing biz, bellwether can refer to most any leading indicator, really, but is most commonly applied to stocks that tend to predict their sectors’ next move.
I have several such indicative stocks that I keep a steady an eye on, as their actions are always illuminating. For example, the chart for Monster Worldwide (MWW:NYSE) offers a window on hiring practices that updates every 10 seconds. Sure beats waiting for some weekly (and probably cooked) figures out Washington.
Another bellwether I watch is the paper giant, Weyerhaeuser (WY:NYSE). Its packaging materials business is are a good barometer for retail, but it also produces building materials for real estate, and has even been known to sell off land to developers.
Have you heard about “Flash Caps”?
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The Value of Talk
And, as mentioned last week, I use FedEx (FDX:NYSE) as a sensitive “canary in the coal mine” for both retail and industry. So when my search engine kicked out an alarming headline about the express shipper, I clicked on the link with a fair amount of interest.
According to the chat boards, some wag had intimated that FedEx was in real trouble. I do place some value on chat room activity. Not because such talk is ever but so accurate – more often than not, it’s just folks with little to do trying to defend positions that are long-since lost. Rather the boards are just another way to track the movement of memes through the grand public conscience.
Unfortunately this particular thread led to a very uncomfortable end: It appears that I was that wag!
The Wrong Conclusion
After a bit of detective work, I have discovered that my Taipan Daily column concerning the overhang the economy faces from the “Great Recession” has been republished in a number of other locales. Unfortunately, the removal of this one piece from its ongoing conversation has allowed a few folks to draw a completely erroneous conclusion.
So let me be quite clear: I did not say, did not intend to imply and do not believe that FedEx is going bankrupt.
That’s not to say that they don’t have problems going forward. I do believe that they will pay a penalty for borrowing against future earnings by underfunded pensions during the recession. And I do believe that their current earnings guidance is dependent on a rather unlikely “Goldilocks” scenario in which sales will rise, but costs will not.
But I don’t think the shipper is going away anytime soon.
The Right (and Substantially Scarier) Conclusion
There are all sorts of problems with “going viral” in this fashion, not the least of which is that the removal of context has deprived readers of the far more important message in my columns.
Borrowing against the future by leaving driving the national debt to par with our annual GDP, pegging interest rates at zero for years at a time, printing billions of excess dollars and refusing to address such things as our Social Security funding shortfall is driving indeed someone into bankruptcy.
But it’s you. And me. And quite possibly our great grandkids.
The OEX Fails as Forecast
One might hope that this is a long-term issue – but I am starting to have my doubts. Let’s take a gander at another of my favorite bellwethers: the daily chart for the S&P 100 (OEX).
View larger image here
When I spoke to you last I mentioned that a breakthrough at the 10-day average would be impressive but not decisive, that the blue chips would most probably fail at the 200-day moving average, and that this failure would confirm that we are indeed in a bear market.
The OEX did indeed fail at that critical juncture, and is in fact once again below even the 10-day average. So I am utterly sanguine stating that we are once again in a bear market.
Got that?
Good.
The Illusion of Value
Now I’ve got another question for you: “Does the market truly rise if the dollar falls?”
It’s not supposed to be some kind of sophomoric k?an about Maya and life’s illusions. Rather it is an attempt to address the penalty we face for accepting the illusion of value that occurs when a falling dollar raises share prices.
View larger image here
I have posted for you two charts side by side. On the left we have the S&P 100 (OEX)’s all-too-familiar 14.62% drop, 7.82% recovery, and failure at the 200-day average.
On the right, we see the US Dollar Index, which measures the performance of the Greenback against the euro, Japanese yen, Brit pound, Canadian dollar, Swiss Franc and Swedish Krona. Note its eerie inverse lockstep action, with most every rise and dip matching American Blue Chips’ dip and rise.
Not Just Another Rotation
Some say that this is a logical outgrowth of rotation of interest, that is to say, that investors are moving from dollars to stocks and back again. This theory doesn’t account for the myriad other assets available to traders.
To my eye, what’s going on is simple: When Washington can push down the dollar, U.S. stocks appear to have more value, as any given share can be sold for more dollars than it took to buy that share.
But in reality, all we are seeing is the fact that that dollar can only buy a fraction what it could the day before. It is yet another example of robbing Peter to pay Paul, or more properly said, robbing our children to pay for the appearance and accoutrement of success.
How to Legally Trick a Mutual Fund Into Paying for Your Retirement
It’s simple and easy. By using this little-known “siphoning” method, you could collect thousands of dollars every month without paying a cent to the mutual fund industry.
Folks around the country are starting to break free from the high fees and low performance of the mutual fund industry. Like Dave DeRossi, who used “siphoning” to get a check for $74,480 on January 27.
You could collect your first check as soon as July 31.
The Next Victim
I promised to tell you the one sector most likely to suffer from all this. Indeed, this is also the sector that FDX’s bell is warning us against: retail stocks.
Simply put, Wall Street needs that falling dollar in the worst way if it is to have any hope of continuing to secure funding via the markets. And Washington seems all to willing to pull what ever levers it can reach to force the dollar down.
Unfortunately, the end result is a pinch for consumers, who can no longer mimic Wall Street by borrowing and spending strong dollars now, and repaying those loans with weak dollars later. Rather, they are on the other end of that stick now, with much of their loose cash getting sucked up by the taxes required to pay for Wall Street and Washington’s excess.
Next up: Which retail stocks in particular to purge soonest.
Yours truly,
Adam
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Soro's profiting?.Sure, just one of his investments( 933Bln) along with the BHO Admin,is PETROBRAS in Brasil.
(they got 2 Billion of OUR Tax dollars from the Stimulus Bill)
They called the day after the Admin stopped drilling order, wanting the 33 idled rigs.
That EURO buying support has returned ...
http://stockmarket618.wordpress.com
http://www.zerohedge.com/forum/latest-market-outlook-1