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Fed Splurges on Freddie Gold

Here we deconstruct the largest of the AAA rated Agency MBS offerings that the Fed just bought (at the bargain price of just under $9B). No mortgage insurance and no verifiable assets or income are all highlighted features for a non-trivial portion of these CA-dominated loans, 18% of which are cash out refis. Who says the taxpayer isn't getting his money's worth?

Dear Middle Class: Thanks To You, Hamptons Sales Surge 32% To Five Year High On Upcoming Record Bonuses

CNBC has been trying hard to make everyone forget last year ever happened, and that the global financial system is one big ponzi scheme. And by the look of luxury home sales in the Hamptons they have finally succeeded. Bloomberg reports that "home sales in the Hamptons, the Long Island beach retreats favored by Hollywood celebrities and Wall Street financiers, surged 32 percent in the third quarter as deal seekers landed discounted properties."

Frontrunning: October 20

  • 20 reasons why capitalism is now dead (MarketWatch)
  • Galleon's traders seek legal advice, share stock tips, update resumes as firms like Dick Bove's Rochdale pulls their money from Galleon (Bloomberg)
  • Sarkozy calls dollar move against euro a "disaster," says an exchange rate
    of $1.50 per euro “is a disaster for the European economy and
    manufacturing sector” (Bloomberg)
  • PPI down -0.6 on flat expectations: looks like deflationary bonds will be right as always, or at least until the SPARC cores are turned on (Bloomberg and AP)
  • New home construction at 590,000 below 610,000 expectation, new apps for building permits down 1.2% (AP)
EB's picture

Waltzin' Matilda up the S&P Ladder

True to form for 2009, anyone trading with a close eye on the fundamentals is getting a major hurt put on, while buying any dip to minor support, such as the 50 day MA, remains as viable a strategy as the most sophisticated SPARC assembly language-optimized HFT algorithm. The order has come down from above, once again today (as it did yesterday), that sellers ain't welcome.

The CRFB Sees Locusts, Plagues And Lots And Lots Of Budget "Impossibilities" In America's Future

"This situation is economically impossible; at some point, U.S. debt would reach a level so high that creditors would stop lending us money. The question, though, is how the situation will be resolved. Will politicians confront the policy choices or delay them to the point where they will be forced upon us due to a fiscal crisis? The longer we wait to take on these issues, the worse they will get and the more painful it will be to change course." - CRFB

Let's Short Some Dollars

Same short different day. Cross asset alpha is back to SPARC acceptable levels.

The $500/Email Bankruptcy Bonanza, Or Does Capstone Heart Flight Club

Bankruptcy advisors are increasingly having to defend the exorbitant fees (expenses, not so much - see below) that they are charging from their zombied clients, which in the absence of traditional banker products has become one of the primary sources of revenue for whatever is left of the financial advisory industry. A wonderful case in point is today's defense by Evercore of the ridiculous fees they collected for quote-unquote advising on the most predetermined and advice-remote transaction in the history of bankruptcy, i.e. the nationalization of General Motors via the stalking horse legitimization mechanism.

Latest DTCC CDS Update (Week Of July 31)

Due to popular demand, Zero Hedge is happy to bring back the weekly DTCC CDS gross/net open interest recap. The primary reason we dropped coverage of CDS data over the past month was/is our belief that both fundamental and technical analysis, in the face of a rapturous market is pointless, and the only thing that matters is the ticking sovereign debt timebomb, as indicated by various Federal Reserve disclosures such as the H.4.1, H.3, and Z.1. If you don't believe me, please call any fundamental analyst at either a sell or a buy side firm at 4:00:01 pm. Nine out of ten times you will get voicemail (which, all else equal, is better than a vibrating dildo). Nonetheless, for the sake of completeness, it is useful to see what this formerly very useful data point from the world of CDS indicates: so here is what the latest out of 55 Water street says.

Mid Day Musings

  • What is good for the US apparently doesn't work for the UK: PIMCO refuses to buy BOE's gilts (Bloomberg)
  • And speaking of PIMCO, the "frequent flier miles accumulation facilitating" bond manager will not be in the PPIP: hopefully due to pressing conflicts of interest arising from participation in every other single alphabet soup ever created. (Bloomberg)
  • One man's personal account of the UBS tax follies (Bruce Krasting)
  • Chinese rioting subdued for now (Bloomberg)
  • And Chinese full scale intervention has resulted in a 48% jump in car sales. Oh yeah, and new loans have jumped five times since June. Can the world ever operate anymore witout a credit bubble somewhere? (Bloomberg)

My Immoral Beluved (Sic)

Some afternoon levity: now that Madoff is set to spend the remainder of his life behind bars, the public's attention is shifting to whatever other scandal will fill the pages of the yellow press. And as this summer has progressed very slowly, with the SEC cowering in its cave, afraid to do anything about the unprecedented market manipulation evident to anyone but the market regulator, the general public likely will have to make do with the tryst of Gov. Mark Sanford and his Argentinian beau as the topic de jour.

VWAP Close

SPARC computers are taking the SPARC bus to the SPARC hangout in the Hamptons after another job well done.