- High pressure on Sarkozy-Merkel talks (Reuters)
- Noda to "watch" "one-sided moves" in the USDJPY to parity soon enough - Yen to Reach Record Amid ‘Downfall’ of West, Sakakibara Says (Bloomberg)
- Eurobond Debate Rises in Germany, France (WSJ)
- China official paper calls for widening of yuan trading band (Reuters)
- China Economy Slowing ‘Significantly,’ Conference Board Says (Bloomberg)
- BOE's Miles: No Need for More QE (WSJ)
- Christine Lagarde: Don’t let fiscal brakes stall global recovery (FT)
- Zoellick: Governments should deal with global debt woes (Reuters)
- On Midwest Bus Tour, Obama Jabs at GOP (WSJ)
- U.S. debt still safest place for China reserves: top banker (Reuters)
As if hedge funds did not have enough to worry about with redemption requests galore after last week's epic rout and vol surge, today's Google stunner acquisition of MMI caught a near record number of them with their pant down. The company, which had over the past year, ever since its spin off, become one of the most despised public companies, saw a 250% increase in its short interest since December, peaking at 25 million shares short, dropped to just under 20 million shares, or essentially the second highest to date. These are precisely the institutional shorts who are hating their live right now as they are sitting on a $260 million paper loss, enough to wipe out several mid-size hedge funds. Speaking of, following rampant rumors spread by CNBC's strategy session last week that various funds were blowing up left and right (in addition to perennial bete noire Paulson & Co of course), we have yet to hear of even one casualty. Just how tight of a lid are prime brokers keeping on their hedge fund client casualties if not one peep has been uttered about who blew up? Following today's trouncing in MMI, we doubt this secret will be such a secret for much longer.
If history is any indicator, Google may be poised to hit the ball out of the park with the Motorola Acquisition. Remember Moto has more patents than all phone manufacturers (nearly combined - Nokia, RIM, Apple). Motorola made 1st mobile phone - that briefcase-like device - as well as the first 2nd generation banana phone, then early flip phones. Assume the possibility to break many other vendor strategies, revenue streams and business models with their patents.
Markets remained volatile during the European session amid thin trade owing to a European public holiday, together with indecision regarding the issuance of Eurobonds to help troubled Eurozone nations. During the weekend several German newspapers reported that in their upcoming meeting tomorrow, Chancellor Merkel and President Sarkozy may discuss the issue of Eurobonds, which observed some appetite for risk during early trade. However, as the session progressed both the German and French governments denied the news, saying that the issue of Eurobonds is not on the agenda, which weighed on the EUR and equities, thereby providing support to Bunds. Elsewhere, GBP received a boost following comments from BoE's Miles, who said this is not the right time for more asset purchases. Moving into the North American open, the economic calendar remains thin, however markets look ahead to Empire manufacturing and TIC flows data from the US later in the session.
Why did Google just pay a 60% premium for MMI? One word: iPhone - "Motorola Mobility's total commitment to Android has created a natural fit for our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers....We expect that this combination will enable us to break new ground for the Android ecosystem. However, our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community. We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices."
Relevant News by www.thetrader.se
JP Morgan Follows Goldman’s Steps In Issuing Utter & Complete Bullsh1t In The Guise Of Equity Research: I Call Them On It!Submitted by Reggie Middleton on 06/06/2011 10:25 -0400
This is a very, very important article. It is important enough that it should easily go viral, for it clearly and meticulously illustrates both the ease of perpetuating inaccurate information through the mainstream media (in this case, the venerable NY Times) while simultaneously demonstrating the blatant conflicts of interest, the “profit off of the client’s back” mentality and the piss poor performance of Wall Street’s biggest and most well respected (well, at least some of them) investment banks.
European sovereign and contagiously financial risk was the major underperformer of May but the clear preference for IG credit over all and risk aversion towards high yield credit remains worrisome. Up-in-quality and up-in-capital structure along with the new-issue/curve steepener/basis trade in IG are solid themes but the last few days have seen a mad scramble for high beta equities into month-end salvage an otherwise dismal month.
I Absolutley Dare Anyone To Read This And Still Not Consider The Probability (Not Possibility) Of Apple Suffering From Margin CompressionSubmitted by Reggie Middleton on 05/26/2011 12:40 -0400
It's amazing what one can discern from a leisurely walk through the local big box electronics retailer. I reiterate - the wholesale assumption that Apple can defy the basic rules of business, economics 101 (supply and demand) and common sense, combined with a near-nonsensical lovefest for this admittedly very impressive and innovative company will result in some very bad days for the NASDAQ (wherein Apple is one of the, if not the, heaviest weighting) in the future.
More spying on elite funds like Paulson & Co., Soros Fund Management, SAC Capital Advisors, Citadel Advisors, Renaissance Technologies and Baupost Group...
- French government says China backs Lagarde for IMF (Reuters)
- ...but, China has actually not backed Lagarde (WSJ)
- “You Americans Are Funny” — You Start an IMF (Forbes)
- Norquist Emerges as Barrier to U.S. Debt Deal (Bloomberg)
- Scarcity, Usefulness, and Getting an Edge (Hussman)
- Bullard Says Fed May Keep Rates, Balance-Sheet Steady to Assess Economy (Bloomberg)
- For Global Steel Industry, China Poses Guessing Game (WSJ)
- Goldman Finding Third Time a Charm in Russia (Bloomberg)
- Greece Will Accelerate State Asset Sales to Stem Debt Crisis as Bonds Drop (Bloomberg)
- It can go wrong? It will go wrong (WaPo)
Could a masterfully marketed toy run with the big boys at premium prices if the truth were to leak out? Ask iPad buyers this time next year after the next 400 tablets are released on various platforms for much less money sporting that much more functionality.
The recent correction in the commodities markets may be providing Bernake, Geithner and their easy money acolytes with a sense of relief given the relentless run up in prices of raw materials since the announcement of QE back in 2008, but they should not sleep tight just yet. As anyone in the markets will tell you, when any underlying has a price move so vertical in its trajectory it’s bound to face a correction as the smart money, having gotten in for fundamental reasons much earlier along the trend line now wait for the panic buyers or the Johnny-come-lately’s to give the rally that last unsustainable spike to unload their longs and leave the suckers holding $40.00 silver in their purses. So one must step back and take a long view. Although it would appear that those of us who warn that inflation is not just a threat but very much a fact of life now were knee-jerk pontificators jumping on the commodities rally trend for political (read: Fed/Obama bashing) reasons, the analysis is quite sound. Most important, it is methodical not emotional as price surges tend to make investors and analysts from time to time. Here are some facts: even with the inevitable correction in commodities, as of this writing crude oil is 35% more expensive than it was a year ago…advancing with ups and downs along the way from as low as $17.50/bbl in November of 2001 to its current level of over $100/bbl or around a 19% annual appreciation in a decade since the Fed started giving away dollars. Silver 93% Wheat 84% Cotton 100% Coffee 55% Cattle 10% etc etc. Gold is up 22% for the year. More revealing, it is up an astonishing 450% since 2001. In that same decade the USD index against all currencies shed 40% of its value.
Even With Apple’s Successful Launch On Verizon, Google Continues To Increase It’s Lead In The Smarthphone SpaceSubmitted by Reggie Middleton on 05/06/2011 12:20 -0400
A amazing as Apple's growth was last quarter during the iPhone release on Verizon's network, Google's Android still gained market share and the two main Android handset vendors doubled and tripled Apple's handset growth. It's fair to say that Android is to Google in 2013 as Windows is to Microsoft in the '90s. Network effect, y'all hear?
The mobile computing field is growing by leaps and bounds bringing the more innovative along with it, while potential casualties are already limping across the battle field before the second round of ammunition has been fired.