Bank of America

Swiss Parliament Examines ‘Gold Franc’ Currency Today

A panel of the Swiss parliament is discussing the introduction of the parallel ‘Gold franc’ currency. Bloomberg has picked up on the news which was reported by Neue Luzerner Zeitung. The Swiss parliament panel will discuss a proposal aimed at introducing a new currency, or a so-called gold franc. Under the proposal, which will be debated in the lower house’s economic panel in Bern today, one coin in gold would be worth about 5 Swiss francs ($5.30), the Swiss newspaper reported. The Swiss franc would remain the official currency, the paper said. The proposal may lead to a wider debate about the Swiss franc and the role gold might again play to protect the Swiss franc from currency debasement. The initiative is part of the “Healthy Currency” campaign which is being promoted by the country’s biggest party – the conservative Swiss People’s Party (SVP).

JPM Halts Share Repurchase Program

Remember when Jamie Dimon showed the Fed who's boss and preannounced it was starting a share repurchase program? Turns out the Chairsatan will have the final laugh:

  • DIMON SAYS JPM IS SUSPENDING SHARE REPURCHASES
  • DIMON SAYS SUSPENDING REPURCHASE PROGRAM ISN'T RELATED TO LOSS
  • DIMON SAYS SUSPENDING REPURCHASE PROGRAM ISN'T RELATED TO LOSS
  • JPM'S DIMON SAYS THERE'S UNREALIZED $8B IN PROFIT FROM CIO
  • JPM'S DIMON: DOESN'T SEE INVESTIGATION TO UNVEIL BIG SUPRISES
  • DIMON SAYS LOSS IS AN ISOLATED EVENT

And the joke of the day:

  • DIMON SAYS FORTRESS BALANCE SHEET REMAINS

Overnight Sentiment: A Summit Here, A Summit There, A Promise Of Growth And QE Everywhere

In continuing with the 2011 deja vu theme which has become the norm at this point, nearly half way into 2012, the key overnight events driving sentiment and futures higher (if not the EURUSD which despite a record number of shorts appears to have once again decoupled with the US stock market), were a statement following the latest G-8 summit (penned in the brief time when the world leaders were not watching soccer) that Greece should stay in the Eurozone (as opposed to?), and yet another promise from China's Wen Jiabao that the world's fastest growing economy would focus on growth (what a truly radical shift in policy for the country which needs GDP growth over 8% just to avoid riots and civil unrest). And in continuing with the "summit" theme so well exhausted back in 2011, and mocked by David Einhorn (see below), let's recall that there is yet another summit on May 22, this time where the European heads of state will sit down and also decide that, shockingly, they want Greece in Europe, in response to which stocks will surge, then be very confused just why they surged, and promptly tumble. Sadly, by now we have seen it all since 2012 continues to be a carbon copy replica of last year. We can only hope the powers that be infuse at least some originality before we are forced to start recycling headlines from the summer of 2011. In the meantime, futures are green, especially since Dennis Lockhart unleashed the QE bomb hours ago in Tokyo, saying that more easing should not be ruled out amid European risks. Wink wink.

smartknowledgeu's picture

Currently, there is massive negativity surrounding gold and silver and in particular, gold and silver mining stocks. At times like this, when gold and silver have taken a fairly brutal hit in a condensed period of time thanks to low daily trading volumes both in PM futures and PM stock markets that make it very easy for the banking cartel to manipulate them, it can be difficult not to sell out of everything and run for the hills if one allows emotions to dictate one’s decisions (always a bad move).

Overnight Sentiment: More Of The Same

Overnight: just more of the same, as markets collapsed, first in Asia, then in Europe, on ever more concerns what a Greek exit would do to Europe. The most important story of the night was a report in Dutch Dagblad claiming that ECB has turned off the tap for Greek bank liquidity: "At the end of January, Greek banks had received EUR73 billion in liquidity support from the ECB, but this amount has dropped by more than 50% now, according to the newspaper. The ECB is cutting back support because Greece has been holding off on recapitalizing its banking system, despite receiving EUR25 billion in funds for that purpose, the paper says." Whether this move is to force Greece to blink (even more) by making the previously reported bank run even more acute, or just general European stupidity, is unclear but it is certain to make the funding stresses across all of Europe far more acute. The news sent all peripheral bond yields soaring, and the EURUSD tumbling to under 1.27 briefly. 

David Tepper Goes On Buying Spree, Top-Ticks Financials And Tech Stocks

Sometime around March 31 the market was soaring, and there were still those naive, clueless ones, who thought that 2012 would not be a carbon copy of 2011. Rumors of more QE were becoming quieter and quieter as the S&P was on a rampage, the economy was humming along (courtesy of the reacord warm winter as ZH predicted in January, but this would not be widely accepted for at least 2-3 more weeks), Europe was "fixed" and the world was a lovely place. It is right there that everyone's favorite "baller to the waller" David Tepper went all in and bought anything that moves, or doesn't, in financials and tech. As the chart below shows, after having a mere $764 million in equity AUM at the end of December 31, Appaloosa went on an epic liftathon, and increased its AUM to a whopping $4.1 billion in the span of 3 months.

James Montier On "Complexity To Impress", Monkeys With Guns, And Why VaR Is Doomed

"One of my favourite comedians, Eddie Izzard, has a rebuttal that I find most compelling. He points out that “Guns don’t kill people; people kill people, but so do monkeys if you give them guns.” This is akin to my view of financial models. Give a monkey a value at risk (VaR) model or the capital asset pricing model (CAPM) and you’ve got a potential financial disaster on your hands." - James Montier, May 6

Spot The Odd One Out

The major US financial stocks have generally rolled over heavily post their stress-test exuberance, catching up to credit's much more sombre reality the whole time, however - who is right? There remains massive divergences among stock performance, e.g. Morgan Stanley -4.9% YTD or Bank of America +35% YTD and while some individual names have caught up to their credit pricing, US financial stocks have yet to catch up to the reality that broad US financial CDS markets have been pricing for two months...

Daily US Opening News And Market Re-Cap: May 14

The failure to form a coalition government in Greece this weekend has prompted risk averse trade across the asset classes this morning with publications across Europe continuing to speculate about the potential exit of Greece from the Euro-area. As a result of this the Spanish 10yr yield touched 6.2% and the respective spreads over benchmark bunds in Spain and Italy have traded as wide as 30bps so far today. The knock on effect has been a sell-off in the financials which has seen the IBEX and FTSE MIB under perform in the equity markets with a relative safe-haven bid into the USD weighing on crude futures and precious metals. Spanish t-bill auctions and a variety of lines tapped out of Italy did stem the tide after selling around the top end of their indicative ranges but focus will remain solely on Greece given a lack of tier 1 data out of the US. Moving forward the next meeting of party heads in Greece is scheduled to commence at 1730BST, however, the head of the Syriza party has already indicated he will not be attending with the leader of the democratic left suggesting he is doubtful that a coalition can be formed.