Frontrunning: October 26

Tyler Durden's picture
  • Fed's `Pit Bull' Takes on Bank of America in BuyBack Battle (Bloomberg) - "Kathy Patrick can be as frightening as a pit bull on steroids."
  • High US Unemployment, Chinese Growth May Spur Trade War (WSJ)
  • Japan's Igarashi Says Yen Sales Most Effective When 'Surprise' (BusinessWeek)
  • Debt Sales Highlight Abnormal Conditions (FT)
  • Asia's economic history foretells Chinese slowdown (Reuters), compare to Is China's Growth Rate Destined To Be Cut In Half? (Zero Hedge)
  • End Bailouts—No Ifs, Ands, or Buts (BusinessWeek)
  • Malcolm Gladwell: Who really rescued General Motors? (New Yorker)
  • Meet the leading contender to manage Berkshire's billions (Fortune)
  • Greece Likely to Default Within Three Years, El-Erian Says (WSJ)
  • China can no longer plead poverty (FT)
  • Protests Against Sarkozy Pension Plan Ease; Students to March (Bloomberg)
  • Bernanke Leaps into a Liquidity Trap (Hussman)
  • UBS bank sees return to positive net money flows (FT)
  • ASX Tumbles as Singapore Exchange's Bid Opposed by Lawmakers (Bloomberg)
  • Pandit and King Clash Over Basel III (FT)
  • Weber Says He Won't Change His Stripes to Become ECB President (Bloomberg)
  • Tax Curbs Foreign Trading (Bangkok Post)

Economic Highlights:

  • France Consumer Confidence Indicator October -34 - higher than expected. Consensus -37. Previous -35.
  • Germany GfK Consumer Confidence Survey November 4.9 - lower than expected. Consensus 5.1. Previous 4.9.
  • Sweden PPI Sept 0.4% m/m 2.6% y/y - higher than expected. Consensus 0% m/m 2.2% y/y. Previous -0.5% m/m 1.3% y/y.
  • Sweden Riksbank Interest Rate 25bps hike to 1% - in line with expectations. Consensus 1%. Previous 0.75%.
  • Sweden Trade Balance September 8.1B - higher than expected. Consensus 5.0B. Previous -3.0B.
  • UK Q3 GDP 0.8% q/q 2.8% y/y - higher than expected. Consensus 0.4% q/q 2.4% y/y. Previous 1.2% q/q 1.7% y/y.
  • Japan Corp Service Price Index -1.1% y/y – lower than expected.Consensus -1.0% y/y. Previous -1.1% y/y.
  • Australia NAB Business Confidence 9. Previous 3.

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99er's picture


"The Fed cannot wave a magic wand and make the problems remaining from the preceding period of excess vanish immediately," Dudley said. "But we can provide essential support for the needed adjustments."

Magic Ben!

DormRoom's picture
There's a structural trade imbalance between the US & China.  America consumes.  China produces.

Americans need to borrow more & more, to keep up their standard of living, due to stagnant income (adjusted to inflation).  Fortunately for them, China has been wiling to lend America from its huge trade surpluses.  But that just causes Americans to consume/borrow more, creating a greater trade imbalance, and increasing China's ability to lend.

The problem is that corporations are multi-national now, and most of Americans middle class jobs have been globally outsourced.  So more Americans can't afford to consume like they did, forcing them to borrow.  This is the root cause to the stock, and housing bubble, otherwise known as the debt bubble.  People borrowed to consume, or speculate.  But the bubbles popped, and the debt had to be repaid.  The private & public sectors couldn't. Neither could the consumer.  So there was only one way to alleviate the problem, unless the American economy was going into a depression, which was to offload the debt onto the Fed; an entity that could amortize the debt over centuries, or devalue it with monetary expansion.

Fortunately for Americans there are still smart people (Democrats) who recognize the problem, and are taking action, despite being c*ck blocked by Republicans.  The long term solution is for China to increase its domestic consuption, and the US to export more.  Therefore the USD needs to go lower.  And China has to incentivize its public to consume.  This structural change can't happen over night.

Quantative Easing 1 main objective was to ensure the global economy didn't head into a depression.

QE2 gives the American & Chinese economies time to adjust to a new equilibrium state where China consumes more and revalue its currency higher, and a low USD helps American exports.

HOwever if REpublican take over Congress, they may due f*cked up things like abolish the Fed, or pick a fight with China over its currenty, which will lead to greater financial instability.

So for the love of god, if you have American friends, facebook them, and remind them that hope & change sometimes takes a bit longer than we expect, but you need faith.  And which party do you have more faith in?  The party that got you into this mess (Republicans).  Or the party that is coming up with solutions to get you out of it (Democrats)

TheSettler's picture

Learn to spell Troll. And get the FUCK off here.

primefool's picture

Glad buffett has chosen an "all american" "regular guy" - as long as he likes to wear baseball caps and eat hot dogs at ball - games - what else matters?

Blues Traveler's picture

Dont forget the requirement of a mistress either

Djirk's picture

And on another note: "The valuation is not that crazy"

I wonder how POMO effects the valuation of virtual goods? They have a lot in common.



SWRichmond's picture

The rest of the week, according to one attorney who knows her, she can be “as frightening as a pit bull on steroids.”

What a revealing comment.  She doesn't look that scary to me.  A pit bull on steroids that is really scary to...people who value their precious goddamned wealth above all else.  People completely in the thrall of Mammon.  What a revealing way for Bloomberg to choose to describe her.  Does this one attorney who describes her that way, and whom bloomberg chose to quote, also pray to Mammon?

Why am I asking this question...of course he does.

primefool's picture

beacuse , Iam sure Buffett well knows - if you are a regular Guy" - all your lapses will be forgiven . You can break laws, challenge the SEC , wear dresses at home - whatever. Just so long as you are a "regular All-American Guy".(defined by choice of clothing and food).

lilimarlene1's picture

Hey DormRoom, is that where you are writing from? Did Krugman write your econ book?

Careless Whisper's picture

today's word of the day comes from karl denninger



99er's picture


The U.S. ranked 22nd on the list, down from 19th last year, with a score of 7.1 out of 10, compared with 7.5 in 2009, the Berlin-based group’s Corruption Perceptions Index showed. That’s its lowest ranking since the index began in 1995. Denmark, New Zealand and Singapore maintained top positions on the list with 9.3, showing low levels of corruption, while Afghanistan, Myanmar and Somalia came last with scores as low as 1.1.

The aftermath of the financial crisis and the effects of the decline on American homeowners have intensified skepticism of public integrity and hurt the country’s ranking, said Nancy Boswell, president of Transparency International-USA. She cited foreclosure procedures, in which financial institutions employed so-called robo-signers who pushed through hundreds of repossessions a week without verifying documents.

“The drop is disturbing,” Boswell said in an interview by phone from Washington. “The American public is concerned that there is an integrity deficit here, that ethics isn’t as foremost as it should be.”

primefool's picture

No no no - its NOT a problem at all. POTUS can simply get Bennie to print up some dollars " at no cost" to buy free ukeleles for all - so we can beg harmoniously when the tourists come ( hint - the best banana republicans also use gittars om occasion - depends on the mood of the tooorists)

Blues Traveler's picture

Dorm Room - "aren't you a little old to believing in Leprechauns?"

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