Credit Suisse

• Asian stocks rise to five-month high, Japanese bonds rally.
• Central banks of SKorea, S'pore, Thailand & Indonesia suspected of intervening in foreign exchange markets.
• China’s manufacturing activity accelerated in Sept - the second straight month.
• Gold for December delivery rose to a fresh record above $1,313.00 an ounce.
• Japan's Tankan Index rises least in 18 months as Yen gains, Economy slows.
• US Home prices rose for the 4th straight month in July, but at a slower pace.
• AOL acquires social software start-up Thing Labs; Terms were not disclosed.

Unbeknownst to most investors, last week Ben Bernanke pumped an additional $11.05 BILLION into the system ON TOP of the $11.15 pumped via the POMOs. In plain terms, the Fed juiced the system by $20+ billion in a single week, bringing its liquidity pumps RIGHT BACK QE 1 LEVELS.

Simply said, nobody is trading... and it is causing massive pain for parasite volume-churning traders and HFT firms.

My meeting with Petros Christodoulou, the man in charge navigating Greece through its 300 billion euro debt storm...

You know times are bad in the housing industry when home builders hang up the hard hat and take to running leveraged hedge funds. Hell, they don't even have to be any good at it, because they are using 0%, non-recourse loans with very little of their own capital (bubble style leverage), thanks to YOU, Mr. and Mrs. Taxpayer bitching about unemployment and higher taxes. I hope this doesn't piss anybody off,,, again!

A cursory review of RIM's blowout earnings actually confirm my suspicions that the company is looking at material margin compression and significantly slower revenue growth as competition continues to eat Blackberries. Yes, the company looks fundamentally strong on the surface, but a broader perspective shows that it is weakening at a an ever quicker pace.

I mention all of this, because the European banking system seems to be repeating the exact same policies today, only two years later.

We’ve already seen the phony “stress test” charade along with the “all is well” proclamations. Now, the largest, most venerable European banks are starting their own version of the “we need capital, but all is well” tightrope act.

A report out of Swiss paper NZZ am Sontag cites analysts who see top Swiss Banks UBS and Credit Suisse as needing to follow in DB's footsteps, and raise CHF 20 billion (a little under that in USD). With DB already well ahead of the pack with its capital raise announcement last week, expect rumors of the Swiss banks underwriting their own equity raises to prevent them from this morning's financial euphoria.

And you were wondering why the SEC and certain politicians with extensive connections to the financial services lobby are starting to stir now that it is common knowledge that every single hedge fund and trading desk's woes are a function of HFT run amok (which is exaggerated BS of course, but from Wall Street's darling, HFT has now become the one thing everyone loves to hate, and blame their own underperformance on). And as we suspected, there is a far more structural issue underlying the recent faux-move to restore confidence in markets, namely imminent pain for Wall Street headcounts... and bottom lines. According to Meredith Whitney, who had been relatively quite in recent weeks, Wall Street faces the departure of about 80,000 staffers, or 10% of all, within 18 months, not to mention a major drop in Wall Street compensation. The reason is the same as the one we pointed out earlier: slowing revenue growth, primarily due to the complete collapse in trading volumes, as computers have used their binary elbows to push everyone else out of the markets, and with Wall Street's primary revenue model now being exclusively reliant on trading, this is equivalent to a partial extinction event as many trading firms will have to close. This also means that the New York City economy is facing another major solvency crisis as tax receipts are sure to plummet.

• Asian stocks fall on signs global recovery slowing; Yen weakens, Oil gains.
• British nightclubs shut shops as economy forces revelers to stay home.
• Demand for gold surges 36% in Q2 to1,050.3 metric tons: World Gold Council.
• India's Central Bank says curbing inflation is its top priority.
• Japan's July imports rise 15.7% while exports rise 23.5% year-on-year - beating f'casts.
• Japan's Nikkei 225 average falls to 16-month low on US home sales data.
• Markets jittery over growth; UK and German bond yields at record lows.
• US Existing-home sales plunge 27.2% in July.
• Yen falls from 15-year high on speculation Japan will intervene.

It's not a bull or bear market, it's a "wolf" market, and it's scaring retail investors away. How long before the "wolves" end up cannibalizing each other and we end up paying a high price for their reckless greed?

It looks like an M&A boom is on the horizon and it might provide a much needed lift to sagging markets.

• Sarkozy Calls Crisis Meeting to Avert Loss of AAA Rating (London Times, subscription required)
• Spain just says no to austerity - after all the bankrupt country can place Bills at 4% so all is good: Spain Restores €500m of Spending (FT)
• US Banks Receive Basel III Boost (FT)
• Citigroup's Sweetheart Deal Flunks Smell Test (Bloomberg)
• BOJ May Expand Corporate Loan Program to Help Weaken Yen, Sankei Reports (Bloomberg)
• Goldman's 2027 Call Means China Must Get Busy (Bloomberg)
• Double-dip recession talk will be heating up (Post)
• China Says Local Govt Borrowing Risks Manageable (Reuters)
• U.S. Must Tackle Deficit Without Denting Recovery (Reuters)

• Asia stocks rise on Applied Materials outlook; Ringgit, Taiwan Dollar gain
• Asian computer shipments signal extended consumer spending slump in US.
• China allows Ringgit to trade vs Yuan in domestic market.
• China may ban copper producers who violate environment rules for two years.
• Clinton to urge global aid for Pakistan to match Haiti response
• SEC will vote next week on rules that may make it easier to oust directors.
• Treasury 10-Year yields near 17-month low as Fed, Japanese investors buy.
• US banks receive Basel III boost, Rewrite of rules could cut in half new capital required.
• AIG sets stage for first bond sale since bailout.
• Applied Materials guides Q4 EPS, revs above consensus.

The latest Philly Fed professional forecaster (whose members are such resolute permabulls as Moody's Mark "How the Stimulus Worked" Zandi and BofA's Ethan "Goldman cutting estimates means I am raising mine" Harris) survey has been released and it is looking notably gloomier than before. "The outlook for growth in the U.S. economy looks weaker now than it did just three months ago, according to 36 forecasters surveyed by the Federal Reserve Bank of Philadelphia. The forecasters see real GDP growing at an annual rate of 2.3 percent this quarter, down from the previous estimate of 3.3 percent. On an annual-average over annual-average basis, the forecasters expect slower real GDP growth in 2010, 2011, and 2013.The forecasters see real GDP growing 2.9 percent in 2010, down from their prediction of 3.3 percent in the last survey." The economists also see the chance of a negative Q3 and Q4 rising to 14% and 16.8%. So what they're really telling us is Q2 GDP was likely negative and going rapidly downhill from there.