Will be? Has this woman, or anyone else who is cheering the wonderful recovery in the US economy which is literally based on massive, and unrepayable, borrowing from the future, seen a chart of the exponential US federal debt? And another tidbit from a speech Yellen is currently presenting: "Fed's Yellen says long term securities buys "actually quite similar" to the Fed's traditional monetary policy approach." Well, of course: whenever the Fed does not get the desired result it merely goes in the market and buys various assets, monetary base be damned. As to how distorting the Treasury curve and all equity marrkets is part of the Fed's mandate, we leave to Ron Paul's first debate with Bernanke which is coming up soon.
One part of Mark Pittman's legacy is about to come to fruition. At noon today, the Fed will provide an information dump identifying recipients of $3.3
trillion in emergency aid which it dispensed as per its interpretation of its mandate following the Lehman collapse. From Bloomberg: "The data will probably show the magnitude of central bank support to companies including Bank of America Corp. and General Electric Co. after the collapse of Lehman Brothers Holdings Inc. spurred a surge in private borrowing costs. Lawmakers demanded disclosure after the Fed approved aid dwarfing the federal government’s $700 billion Troubled Asset Relief Program." Not all data will be available, however: all important discount window information will not be included as part of this package: "Congress excluded one Fed program from disclosure, the discount window, which is the subject of a 2008 lawsuit filed by Bloomberg LP, parent of Bloomberg News, against the central bank. A group of banks is appealing to the Supreme Court over lower-court decisions ordering the Fed to identify loan recipients. The program peaked at $110.7 billion in October 2008." Since today’s information relates to aid from Dec. 1, 2007,
through July 21, 2010, there will be enough information to satisfy the most detail-oriented forensic reverse engineers.
- Euro-Zone PMI Manufacturing for November 55.3 - lower than expected. Consensus 55.5. Previous 55.5.
- Hopes of ECB bond buying calm markets (FT)
- Fed Will Name Recipients of $3.3 Trillion in Emergency Aid During Crisis (Bloomberg)
- China goes deeper into price controls: "China, the world’s biggest
cooking-oil user, has ordered four suppliers including Wilmar
International Ltd. and Cofco Ltd. not to lift product prices to help
slow inflation, the National Business Daily said, citing people it
didn’t identify." (Bloomberg)
- The ongoing saga of Sergey Aleynikov: Goldman challenged on trading code (FT)
- Contagion May Force EU to Expand Arsenal to Fight Debt Crisis (Bloomberg)
- The perilous condition of Portugal's banks (BBC)
More Economic Churn: Challenger Announces "Surge" In Planned Job Cuts As Noisy ADP Private Payroll Beats ExpectationsSubmitted by Tyler Durden on 12/01/2010 09:29 -0400
Another day, another set of completely contradictory economic numbers. First, in an earlier release Challenger announced that employers planned on firing 48,711 people in November compared to 37,986 in October, led by a "surge" in the non-profit sector where 10,761 layoffs were pending. "Government and non-profit job cuts are down 16 percent from a year ago, but that is probably little consolation to employees in the sector, which is still struggling despite signs of recovery in other areas of the economy," John A. Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement. This was the highest downsizing number reported in 8 months. And then less than an hour later, ADP comes out with its traditionally noisy number that tends to have zero correlation to the upcoming NFP result, and observes that the churn in the labor force is starting to pick up, with a change in private payrolls of +93K compared to expectations of 70K, and a prior revised number from 43K to 82K. This was the highest since November 2007. Net net: more people hired, more people fired. Judging by the futures response, this is good.
Portugal Sells 12 Month Paper At Disappointing 5.281%, As Germany Holds Another Failed 5 Year Bond AuctionSubmitted by Tyler Durden on 12/01/2010 09:16 -0400
Today's much anticipated Portuguese T-Bill auction carried some good and some not so good news. While the Bid To Cover on the €500 million 12 month paper improved from 1.8 to 2.5, the rate on the 1 year issue surpassed 5% for the first time, and came wide of analyst expectations, pricing at 5.281%, compared to 4.813% previously. Per Reuters: " That was higher than the roughly 5 percent that dealers and analysts had looked for ahead of the sale, though the rise in short-term borrowing costs was much smaller than a more than 150-basis point jump at the previous tender in November. "There is no place to hide on the curve for Portugal anymore. Once again, the auction increases pressure to find a circuit-breaker to limit the damage, which is most likely to mean asking for aid," said David Schnautz, debt strategist at Commerzbank in London." Filipe Silva, debt manager and Banco Carregosa explains why contrary to the EUR's reaction, this is not good news: "This rate is very high and Portugal cannot keep raising its rates at this pace, 47 basis points in just two weeks." Yet despite the weak auction, Sovereign spreads tightened modestly after rumors that the ECB would announce an expansion or a new program to buy peripheral sovereign debt. Which was to be expected: the Portuguese auction was quite irrelevant compared to what happened in Germany earlier, when the country held its weakest 5 Year Bobl issuance in 6 months: in an auction of €4.13 billion in paper, the government saw a mere 1.1 Bid To Cover, the weakest since May, and forcing the government to retain 17.4%, or €0.87 billion of the auction to make it not appear that the auction was a failure.
- API: Crude inventories down 1.14 mln barrels.
- Australia’s GDP expanded 0.2% in Q3 - half the pace economists estimated.
- Bernanke: US growth too slow to dent unemployment.
- China's official manufacturing PMI rose to 55.2 in November from 54.7 in October.
- Consumer Confidence in US rises more than estimated to a five-month high.
- Euro trades near 11-week low as Europe debt crisis prompts risk aversion.
- Real-estate prices in 20 US cities rose in Sept at the slowest pace in 8 months.
A ton of data today, covering the labor market, conditions in manufacturing and construction, auto sales, and productivity. We also hear from Vice Chairman Yellen, two other members of the FOMC (Gov. Tarullo testifying on mortgage servicing at 10:00; Dallas Fed President Fisher speaking on the economy at 13:00), and the beige book. And, as always, most importantly today's POMO is at 11:00 am. Additionally, the Fed releases a data dump of information on bailed out banks at noon.
RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 01/12/10
Portugal placed on negative credit watch as Euro-drivers take a breather and large wave of dataflow takes the wheelSubmitted by naufalsanaullah on 12/01/2010 04:38 -0400
But while everyone’s eyes are on Portugal, the action is starting to really brew in Belgium and Hungary/Austria, all three of which I’ve mentioned as “potential next legs” in recent pieces. Belgium’s €1.425b 3mo bill auction saw a menial bid-to-cover of 1.48 today, much lower than the 3.52 last month, and yielded 86.4bps, almost 10bps higher than prior. Six months of no government and a 101% debt/GDP aren’t helping to remove Belgium from the cross hairs.
While everyone knows that it was two and a half decades of imbecilic monetary policy courtesy of the Monstro [sic] that caused the credit bubble, few things were as much of a direct proximal cause of the market crash as the August 2007 quant collapse. And few indices tracked the obliteration of the M/N quant landscape that followed as well as the HSKAX (below). Well, after two years of painful grinding (for the market neutrals), the HSKAX is back to the same level to which it plunged in that week in early August 2007. What does it mean? Who knows, suffice to say that the market not only stopped working when the quants were all briefly destroyed back in 2007, but it marked the all time high in the S&P. We are now back to those same levels.Only this time instead ot the Market Neutrals providing the traditional market liquidity it is the HFTs, the NYSE DMMs, and the New York Fed. What happens next is anyone's guess.
Following Wikileaks Revelations, The Tricky Dick Rushes To The Rescue, Sees Bank of America Worth $21 In BankruptcySubmitted by Tyler Durden on 11/30/2010 23:02 -0400
This is certifiably one of those days when the insanity refuses to end. The latest laugh out loud episode come from the lunatic who has outstayed his "analytic" welcome by about 2 years following his Buy recommendation on a soon to be bankrupt Lehman Brothers (sorry Dick, nobody will ever let it go): The Rochdale analyst, continues to reprise the role of the evil grandpa-in-law who just. refuses. to. leave. even though it is about 12 hours past his credibility-time, now sees Bank of America as worth $21 in bankruptcy. You really can't make this shit up. To wit: from a very funny Dick: "In death, this company would be worth 91% more than it is worth in life." You may laugh now.
Per BreakingNews.com, Interpol has just issued an international arrest warrant for Julian Assange. The offense listed: SEX CRIMES. And somehow Interpol does not have access to the Internet and is unable to pull an image of the wanted criminal. Unclear if Ben Bernanke will follow suit in the same Sex Crime category for repeated involuntary fornication with the world's middle class. In other news, we are now taking odds on a dramatic, globally televized slow speed chase on a California highway in Julian Assange's future?
In what is becoming a very sad development, the more money (pardon, monetary base) Bernanke prints, the more silver coins Americans buy. According to the US Mint, November sales of silver just hit 4.16 million ounces or coins, an all time record, since the introduction of the coin in 1986, and that does not even include the last day of the month. The number is roughly a 30% increase to the 3.15 million one-ounce Eagles sold in October, and well above the previous 2010 record of 3.6 million sold in May. So far in 2010, the mint has sold 32.8 million ounces of silver, higher than the previous full year record of 29 million coins set in 2009.
There was a time when the SEC at least tried to pretend the market is safe and efficient for investors. That was before Reg NMS, ATS and who knows what other mandated changes to market structure made a once stable marketplace into a labyrinth of fragmented sub-markets, exchanges, ATS, OTC venues and dark pools, where flash crashes, sub-pennying, HFT scalper algos, feedback loop generating synthetic CDOs aka ETFs, bank internalization and rampant outright fraud made the market into a sad and pale imitation of what it used to be. Of all this, May 6 was merely the culminating point. It is no wonder that since the first of many Flash Crashes investors have pulled money in 29 consecutive weeks: the message is all too clear - the retail participant has left the building...and the market. And to put the final nail in the coffin of investor confidence, we present the following detailed analysis from Nanex, which proves that in the past 5 years trading is nothing short of a travesty. The market analysis firm has conducted the definitive exchaustive analysis of "mini crashes" and has found a whopping 18,209 events of either mini melt downs ot melt ups. We hope Mary Schapiro reads this report and provides us with a refutation of either the analysis or the conclusion. We will gladly provide her the venue she so desperately needs to address an infinitely skeptical public that she has anything under control at this point.
Of course, he will need not only help, but a bailout, in one week when his bonds are trading a 10%+. In the meantime, let the comedy continue.