Daily Highlights: 9.14.09

  • Asian stocks fall amid valuation concerns; drags MSCI index from a 1-yr high.
  • Baucus health care plan raises plenty of concerns despite major concessions to industry.
  • Britain's Conservative Party considering bank privatization plans in case of election victory.
  • China starts probe of US auto, chicken imports after US imposes tariffs on tire imports.
  • China 'strongly opposes' Obama's tire import tariffs, may appeal to WTO.
  • China’s electricity usage rose 8.22 percent in August from a year earlier.
asiablues's picture

The market's upward momentum this year has hordes of investors still looking for opportunities with good entry points. With crude prices hovering around the $70/bbl range, even with reduced demand, oilfield services remains one of the more promising sectors still with room to grow.

Bill Gross Chastizes The Children Of The Bull Market, Excludes Itself

"This “new” vs. “old” normal dichotomy was perhaps best contrasted by Barton Biggs, as I heard him on Bloomberg Radio in early 2009, when he said he was a “child of the bull market.” I thought that was a brilliant phrase, and Barton is a brilliant phrase-maker. He went on to say though, that his point was that for as long as he’s been in the business – and that’s a long time – it has paid to buy the dips, because markets, economies, profits, and assets always rebounded and went to higher levels. That is not only the way that he learned it, but that is the way, basically, that capitalism is supposed to work. Economies grow, profits grow, just like children do. I think that’s why he said he was a child of the bull market, not just because he had experienced it for so long, but also because economic growth and higher asset prices are almost invariably a natural evolution, much like the maturation of a person. That’s how people grow, and so I think Barton was saying that capitalism just grows that way too. Well, the surprise is that there’s been a significant break in that growth pattern, because of delevering, deglobalization, and reregulation." - Bill Gross

Daily Highlights: 9.1.09

  • Asian shares were mixed Tuesday, with Shanghai's 0.3% gain supporting some markets.
  • Australia's performance of manufacturing index rose 7.2% to 51.7 in August.
  • Brazil’s top sugar region may miss output forecast: reports.
  • China’s manufacturing expanded at the fastest pace in 16 months in Aug. with record lending.
  • Consumer prices in the euro zone fell 0.2% in August from a year earlier.
  • Eurpoean and US share prices are under pressure today.
  • German retail sales rose 0.7% in July after tumbling in the preceding two months.

Latest DTCC CDS Update (Week Of August 14)

After several consecutive weeks of equity market mimicking and rerisking, the CDS market finally saw a net derisking in the week ended August 14, across virtually sectors, with the biggest action concentrated in the financials arena. Total net notional change was substantially higher than last week's -$14.5 billion, increasing to $66.1 billion, with a marked derisking in financials at $62.6 billion. Other notable derisking spaces were Consumer Services at $27.6 billion (again) and Utilities at $20 billion.

Guest Post: China And Brazil

I'm reading two books right now, which I will deal with in two posts. The first is The Forgotten Continent by Michael Reid, the former bureau Chief for Latam at The Economist about modern Latin American history and development.

Frontrunning: June 19

  • Dick Bove, who still may be bullish on Lehman, says to Buy Citigroup, $4 Target, sees 2010 EPS of $0.13!

Frontrunning: June 19

  • Dick Bove, who still may be bullish on Lehman, says to Buy Citigroup, $4 Target, sees 2010 EPS of $0.13!
  • Companies of Commercial real estate "billionaire" Halabi default on $1.9 billion in debt after 50% drop in property value (Bloomberg)
  • E.U. leaders say no more stimulus (Marketwatch)
  • The two sides of the inflation debate (Morgan Stanley)

Daily Highlights: 6.16.09

  • Asian markets fall as pessimism about global economy spreads.
  • BOJ’s Shirakawa says that corporate financing has improved but the bank must monitor market developments before to extend measures to ease credit strains.
  • Geithner: Risks of deeper recession in US are 'dramatically' lower.
  • New-car registrations in Europe dipped to 1.27 million vehicles in May.
  • Nikkei 225 Stock Average tumbles 2.9% Tuesday, its biggest one-day loss since March 30.
  • Obama's financial overhaul could reshape Fed; some worry about `supercop' role.
  • Russia may put part

Overalottment: June 10

  • Largest smuggling bust ever: $134.5 billion in bonds seized from Japanese nationals in Italy (AsiaNews hat tip Gayle)
  • Must read Jonathan Weil: Nouveau DeTARPed ETF traders rejoice - Banks trade TARP for bonuses, debauchery, jets (Bloomberg) [Scores reopened?]
  • Retail landlords need a "reality check" (R

Thinking The Unthinkable: The Treasury Black Swan, And The LIBOR-UST Inversion

The below piece is a good analysis of a hypothetical Treasury/Dollar black swan event, courtesy of Eugenio Aleman from, surprisngly, Wells Fargo. Eugenio does the classic Taleb thought experiment: what happens if the unthinkable become not just thinkable, but reality. Agree or disagree, now that we have gotten to a point where 6 sigma events are a daily ocurrence, it might be prudent to consider all the alternatives.

Thinking the Unthinkable

Latest DTCC CDS Update (Week Of June 5)

After many weeks of cumulative derisking, the CDS market rerisked violently, most notably in the Consumer Goods and Consumer Service sectors, where a total of $169 billion in net notional open interest rerisking occurred. One explanation is that the big move is due to unwinding of new issue basis trades put on over the past month as horrendous companies issued all sorts of garbage debt.