Credit Suisse

As part of today's subpoena of Credit Suisse over mortgages (which is yet another reason why when this is all said and done MBIA CDS will be back to trading spread from points), we encountered the following stunner. We won't bore you with details, so here is the gist: in a series of emails, represented below, we discover the beyond ridiculous story of a Charlotte stripper who had a Stated Income Loan with Credit Suisse, and when the Swiss bank decided to start backing into her actual income, which goalseeked to $12,000 a month (read the analysis on how this was achieved), which apparently raised some internal flags, and demanded that the loan be investigated, the broker claimed that the stripper's never formally disclosed income is credible and her loan should remain Stated. The last email in the thread: "Someone needs to go to jail on this one." And yet, nobody, not even Angelo Mozillo has, courtesy of the SEC. If there is one email thread that encapsulates all the excesses in the housing bubble, this is it. As for the rhetorical question at the end, we are confident that absolutely nobody will ever go to jail "on this one" or any other one for that matter.

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.

The latest survey conducted by Credit Suisse's FX Sales team confirms our conclusion from reading yesterday's bearish report on the USD from Goldman, namely that the time to buy the dollar is here. Per CS: "Our clients’ most bullish currency views seem to be AUD, EUR and CAD. For the first time since December 2009, our sales force thinks clients have turned net bullish on the euro. Our clients’ top bearish currency views seem to be the USD and NZD. In terms of client flow, our sales team witnessed net buying of EUR and AUD, and net selling of USD and MXN over the past two weeks." We are confident today's CFTC COT report will confirm the recent collapse in speculative EUR bias, indicating that it may well be time to go long the EURUSD, if only for the contrarian play, now that everyone is once again on the other side of the trade, presumably based on the silliest of catalysts, the "stress test" circus.

During his testimony before the House Budget Committee, when asked about the recent move in the price of gold to a fresh all time high, the Princetonian, who usually has an answer for everything, was stumped: "the signal that gold is sending is in some ways very different from what other asset prices are sending" he said, adding that "the spread between nominal and inflation-indexed bonds, the break even, remains quite low, suggesting that markets expect about 2 percent inflation over the next 10 years." The fact that TIPS are linked to the most manipulated indicator in the government's arsenal the CPI, was not mentioned. But back to gold, Ben Shalom concluded "gold is out there doing something different from the rest of the commodity group." Yes, Ben - it is indicating that your policy of endless fiat dilution is about to come to a forced end. But don't take our word for us. Here is a report from Credit Suisse which explains not only why the firm sees gold rising promptly to $1,360 but possibly going much higher - and this is from a bank whose very existence is contingent on gold prices staying sufficiently low for some marginal credibility in fiat to still remain.

From Fox Business News and its latest addition, Charlie Gasparino:

[Erin Callan] went to Credit Suisse and then she went on a lengthy leave of absence.  It was pretty bizarre—she was gone from the scene, until, from what I understand—I checked yesterday—December 31st she’s officially out of there.”

Note: not a single mention of this on CNBC yet. Of course, nobody gives a rat's ass about Lehman's former CFO, or this news in particular. What is interesting, are the dynamics at play now that CNBCOMASTAGANDA (49/51) is stuck without even one investigative reporter in possession of even half a rolodex. Sure, flashing wire headlines are great, but anybody can do that, even fringe bloggers. Absent Rick Santelli (and on occasion David Faber), the network does not have a single person worth unmuting the TV for. And if we want to listen to propaganda ad nauseam we are sure someone will recreate Goebbels constant radio droning on some 24/7 stream relatively soon. And this is precisely what Bloomberg TV and Fox Business are waiting to pounce on.

We are of the view that the gold market will likely be dominated mainly by the demand side of the equation in 2010. We believe that the likely decline in investment demand for ETFs, year on year, will play a pre-eminent role as a swing factor in our supply-and-demand balance in 2010. Jewellery, industrial and dental demand will likely strengthen marginally year on year. The secondary supply of scrap will depend on the gold price but will likely remain above 50% of mine supply. Central banks will likely become net purchasers while de-hedging will reduce significantly as the major players in this arena accelerate their 2009 de-hedging activities. Our calculations show a large oversupply of around 420 tonnes in our supply-and-demand equation for 2010." - Credit Suisse

The recent focus on the dangers of HFT algos gone wild was validated earlier today when the NYSE slapped Credit Suisse with a massive $150,000 fee for "failing to adequately supervise development, deployment and operation of proprietary algorithm, including failure to implement procedures to monitor certain modifications made to algorithm." The action involved Credit Suisse algorithm known as SmartWB, implemented by the Swiss firm in 2007, whose function is to "examine the closing imbalances of various exchanges and to attempt to trade profitably based on the algorithm’s assessment of the imbalances and other market data." Yet on November 14, 2007, something went wrong... In fact quite a few somethings...

With UBS out, and CS to follow, how the hell will the ultra upper middle class continue not paying their taxes?

Read on for some major exciting changes to market structure.

Credit Suisse's global risk appetite index is now at "Euphoria" levels, matching the highs from November 2007, and has retraced from "Panic" at the fastest rate since the October 1987 crash. Next official stage on this index: "Irrational Exuberance" although at least now it has gripped the entire market, not just tech stocks.

"We may not directly respond to flashed order, but for the allotted time, which is milliseconds, that destination would be heavily weighted if we have an order on the opposite side of the flashed order." - Credit Suisse

Well, the "for broke" part is hopefully a pun. But based on their most recent holdings, which among others include 104% of the IYR Real Estate ETF, Credit Suisse is certainly ploying something here (one hopes, or else that is one big fat finger). When you have the balance sheet of the Swiss National Bank to back you up, you don't really care much if you overload the boat. Of course, this is excatly what Boaz Weinstein was thinking when the world blew up in his face.

Well, the "for broke" part is hopefully a pun. But based on their most recent holdings, which among others include 104% of the IYR Real Estate ETF, Credit Suisse is certainly ploying something here (one hopes, or else that is one big fat finger). When you have the balance sheet of the Swiss National Bank to back you up, you don't really care much if you overload the boat. Of course, this is excatly what Boaz Weinstein was thinking when the world blew up in his face.

Well, the "for broke" part is hopefully a pun. But based on their most recent holdings, which among others include 104% of the IYR Real Estate ETF, Credit Suisse is certainly ploying something here (one hopes, or else that is one big fat finger). When you have the balance sheet of the Swiss National Bank to back you up, you don't really care much if you overload the boat. Of course, this is excatly what Boaz Weinstein was thinking when the world blew up in his face.

Well, the "for broke" part is hopefully a pun. But based on their most recent holdings, which among others include 104% of the IYR Real Estate ETF, Credit Suisse is certainly ploying something here (one hopes, or else that is one big fat finger).