GroupThink! GroupThink! GroupThink!
The real outlook of Monetary Easing vs Treasury Yields
While much will be made of the spurt in volume today - to its highest of the year - we present without too much comment the comparison to last January's OPEX volume. Today's volume is an incredible 27% below the January 2011 Option expiration volume...
Gold and Silver Mining Stocks Offer the Best Value of any Sector in the Stock Market By Far and By a Wide MarginSubmitted by smartknowledgeu on 12/07/2011 07:07 -0500
Today, gold and silver mining stocks offer the best value by far of any sector in any stock market anywhere in the world. Due to the recent massive volatility that bankers have introduced into the PM stock sector, and the fact that commercial investment advisers worldwide have erroneously re-educated millions of people with the concept that volatility equals risk, the majority of people worldwide will miss a massive opportunity in gold and silver mining stocks over the next several years due to their misguided belief that gold and silver mining stocks cannot escape the throes of banker manipulation.
The middle of the week appeared to be the storm before the quiet of today before the potential storm of next week with aggressive action by the ECB this morning seeming to calm fears (and raise hopes of more) as risk assets were generally calmer today. Amid dismally low volumes, ES ended the day very marginally lower (led by Tech and Energy), commodities were mixed, IG credit outperformed TSYs and HY credit, and FX vacillated back to unchanged in general capping another week of strengthening USD vs the Majors (except JPY). US equities shrugged off a broad risk-off shift early in the day (driven by Oil and TSYs mainly) as OPEX seemed the focus of controlling intraday vol with CONTEXT and ES closing the week in almost perfect agreement (leaving cash S&P -3.3% YTD vs Gold +21.3% YTD).
While little has really been said or done this week with regard to solving any of the structural issues facing Europe, macro data globally has hardly been encouraging, and micro (earnings) have not aggressively beaten earnings, the equity and credit markets have ripped higher. While many have talked of short squeezes, which obviously are at the heart of every trend turn (whether micro or macro), we thought it useful to get some context on this move to judge when/if it will ever stop.
Did Reggie Middleton's BoomBustBlog Best Wall Street's Best of the Best In Guaging The True Value of Google? We Have To Think More Like An Entrepeneur & Less Like A Wall Street AnalystSubmitted by Reggie Middleton on 07/19/2011 14:57 -0500
OTM Google calls purchased a couple of weeks before earnings returned roughly 10-20x the original investment. How did practically the entire Sell Side of Wall Street miss this opportunity while we screamed on the undervaluation of Google since last quarter? Well, you just can't plan or measure the domination of mobile computing 3 months at a time (and of course, front running clients make for more profitable trades)!
Did Goldman Just Rip Its HNW and Institutional Clients Once Again? Facebook Growth Slows Pre-IPO, Just As We Warned!Submitted by Reggie Middleton on 06/13/2011 11:08 -0500
Summary: As our research illustrated in explicit detail 5 months ago, Facebook’s growth is slowing after an outrageously rich offering of private shares. Now, I’m sure that GS can put on the ole’ shuck & jive show to garner enough interest to cause an initial IPO pop, but then you are basically gambling on - I mean,,, investing in Goldman’s marketing talents and not the fundamental prospects of Facebook, no?
HY credit reached its widest level of the year today as IG and HY intrinsics are now unch YTD! Significant decompression since mid Feb in HY spreads, increasing amounts of net selling in secondary bonds, and a clear preference for up-in-quality and up-in-capital-structure leaves equity valuations looking precarious.
Bottom-up saw equity underperform credit but the S&P seemed to have a mind of its own into the last hour (as credit closed near its wides and stocks at their highs). Low beta outperformed in stocks and credit. Most notable was the huge jump in USA protection costs in the last two days!
Activity in spread land was very muted today with only a handful of names really making any moves. Equity outperformed credit but single-name credit was disappointing as up-in-quality continued. Primary issuance dominated thoughts today as 2s10s30s seemed to run S&P futures nicely up as credit ignored it.
As promised, I am presenting historical justification of the logic behind my call of absurdity in the drastic drop in share price after Google announces a redoubled effort in investment and marketing of its nascent businesses.
At the current rate of collapse, in a few more days the dollar will take out all time lows. Currently holding at 73, after hitting 72.8 overnight, the DXY appears set to test the last support from when the dollar carry trade was all the rage again back in 2008. Of course, for that to happen crude will have to be north of $130, which not even the most incompetent CNBC pundits will be able to spin as positive for corporations (let along the US consumer). It will also mean that any opex inspired corrections in precious metals will not be a frequently recurring phenomenon. But at least Bernanke's plan of inflation our way out of insolvency through a complete currency devaluation is working: after all for all who listened to the Bernanke conference, the only way to rescue the flailing dollar, is first to kill it...
It appears the market is in a festive mood today, just 8 hours ahead of the first largely irrelevant FOMC press conference (yes, Bernanke has fielded irrelevant Q&A before, and yes, whenever he met a question he did not like, he disagreed with it and moved on). As a result the long-suffering US Dollar, which continues to be down YTD as much as the market is up, confirming that in real term there has been absolutely no gains in the stock asset class, has just hit a 3 year low low and just a little more to go until the all time low is breached. And this is in addition to the just announced S&P outlook cut on Japan, which has seen some incremental shorting of the Yen which unfortunately now is a secondary carry funding currency, and you can see that while the dollar should be getting at least a modest push higher the EURUSD is now toying with 1.47. The biggest winner in FX land continues to be the USD-backed CHF, which is outperforming every other pair. And elsewhere, after doing its all too usual OpEx shenanigans, gold is also back in fine form, over $1,506 and going higher now that the shakeout of the latest batch of weak holders has taken place. All in all, a perfect day for nobody to ask whether it is US policy to destroy its own currency.