Sears

The market got its schwerve back on today by buying the dip as if the dip were going to cure cancer, reveal the meaning of life, and lead to...

Today's must see TV comes from the following interview of Pimm Fox on the consumer and the economy with retail expert Howard Davidowitz, who in 10 minutes provides more quality content and logical thought than we have seen from CNBC guests in probably all of 2010 (except of course for that one time when Erin Burnett kicked out Mike Pento, but that's a different story). Where does one start? Probably at the end: "I am not surprised by the strength of retail sales, because i knew that 30% of consumers are responsible for retail sales, and these 30% did much better because of the performance of capital markets. I don't think it is indicative of anything going forward. I don't think the economy is going to get any better. If you look at our fiscal and monetary policy, we went two trillion in the hole last year. Two trillion... to produce this... and unemployment went up to 9.8%! We've spent two trillion we're printing money we're going bananas. Our balance sheet, we've got $2.6 trillion on there, and what;s on there government securities, and MBS." And here is the kicker for the world's biggest hedge fund, which at least one person besides Zero Hedge appears to get: "If interest rates go up a point Bernanke's bankrupt. Everything he's bought is underwater. All the MBS are underwater, the whole country is underwater." Does anyone see the issue now with why rising interest rates, aside from predicting a "recovery", may also, courtesy of its now $2 billion DV01, "predict" the insolvency of the Federal Reserve?

The market continued to rise today on volume lighter than Ben Bernanke's private sector experience and even lighter than ad sales for...

Many in our society, instead of taking on the responsibility of preserving their freedoms, have instead handed it over to the trappings of government. The fatal error here is obvious; the corporatized and over-centralized political landscape of America’s government today does not hold the same values as the people it is determined to lord over. We have witnessed the parasitic possession of our system, know it to be corrupt, yet still seem to expect this bureaucratic monstrosity to cradle our liberties in good faith! Government is a tool; a mechanical apparatus that can be used to either preserve freedom, or annihilate it. Its use depends upon those men who wield it, and the men who wield our government today certainly do not have the expansion of freedom in mind. In this article, we will examine the many points of contention (balancing points) brewing as our exceedingly globalist leaning political leaders overstep their bounds. Any one of these points, if allowed to falter by Americans, could throw the whole of our heritage into disarray…

Every year celebrations of Thanksgiving give thanks for the blessings of God for our well-being. As a skeptic, curmudgeon, and capitalist, I attribute my blessings to free(er) market capitalism.

• Asian stocks advance for second day on US economic data, Ireland hopes.
• Bernanke takes defense of monetary stimulus abroad, turns tables on China.
• South Korea to reimpose tax on bonds; first of a possible raft of capital control measures.
• Spain sells €3.7B of bonds yielding less than secondary market.
• Treasuries hold gains as Bernanke says job losses may curb economic growth.
• Air China to buy $4.49B worth of aircraft from Airbus at a discount.
• Arthur J. Gallagher announced acquisition of Behnke & Co. Terms undisclosed.

The market absolutely flew today as if it were late to the only showing of Natalie Portman's first lesbian scene thanks to a European country needing to be rescued from the brink of bankruptcy, retail investors being able to buy stock again in...

• 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.

• Asian stocks fluctuate amid growth concerns; Miners advance.
• Australia set for hung parliament as elections deliver blow to PM.
• China premier: Political reforms needed for growth.
• FDA to find the cause of a salmonella outbreak.
• Mobile operators predict app sales boom; apps expected to outstrip voice services by 2013.
• Nikkei 225 fell to this year's low on European debt concerns.
• Obama considering overhauling 26 troubled federal technology projects valued at $30B.
• Obama admin: Effects of moratorium on deepwater drilling, would cost 23,000 jobs and freeze up to $10.2B in investment.
• Oil rises above $74 in Asia amid hurricane season.
• Weak economy, volatile markets, regulatory upheaval starting to trigger job cuts on Wall St.

The quarterly Goldman Hedge Fund Trend Monitor, aka the HF groupthink update, is released, chock full of HF holding trivia, such as that should Apple ever miss its priced to absolute perfection business model, a whopping 181 hedge funds are going to suffer, and 75 HFs, who have Apple as a top 10 holding, are going to get crushed. Also, we uncover the latest top 10 hedge funds ranked by equity assets (DE Shaw, RenTec and Paulson are the new top 3, although with 2,048 and 2,669 holdings for the first two, they are now receiving 2 and 20 for their quant models which as the NYT highlighted recently no longer work). On the other end of the quant spectrum, are the traditional hedge funds, and as of Q2, the typical fund had an average of 63% of its long-equity assets invested in its 10 largest positions, compared to 30% for a typical large-cap mutual fund, 17% for a small-cap mutual fund, 19% for the S&P and just 2% for the Russell 2000. The top 5 most concentrated hedge fund holdings are AutoNation (46% of market cap held by HFs), Sears (45%), AutoZone (32%), Pactiv (28%) and Novell (27%). Also hilarious perpetual LBO candidate Radioshack has hedge funds make up 24% of its market cap. In other words, any bad news here will kill the stock price faster than a HFT can frontrun the exponential pulling of bids. On the other side, or the names most hated by hedge funds, is Brown Forman, where only 0.2% of HFs make up its market cap, followed by Roper Industries, Stericycle, Hormel, and Praxair. From a surprise upside potential perspective, Goldman estimates that the most HF-shorted names is Crown Media, which has a 99 day short interest ratiom followed by Lifeway Foods, Isramco, K-Fed Bancorp, First South Bancorp, and Costar Group. Shorts Squeezes in these names could be violent. Looking at ETFs, the biggest gross long ETF held by HFs is GLD with $8 billion in long ownership, while the most shorted is SPY with $27.6 billion in shorts, indicating that funds are now "hedging" using this proxy for the entire market. Lastly, in confirmation that hedge funds are for the most part worthless "groupthink" contraptions which merely ride a leveraged beta wave, and suck out management fees, Goldman highlights that the "Most Concentrated" basket of stocks has underperformed the "Least Concentrated" stocks materially since February 2007, confirming that HFs have actually destroyed value in both the past 3 years and YTD, by underperforming the market.

• Asian stocks decline, Yen strengthens on concern global growth is slowing.
• Australia's first female PM faces voter backlash at first election.
• BoJ said to be still assessing economic impact of stronger Yen.
• China shares fall on criticism of local finance vehicle.
• Euro steady above $1.28 in wake of poor US economic data.
• Oil slips below $75 in Asia as economic news renews expectations of weak crude demand.
• U.S. Budget Deficit forecast increased by CBO to $1.066 trillion for 2011.
• US jobless claims climb, Philadelphia factories slump as recovery slows.
• Aeropostale's Q2 net rose 12.9% to $43.6M helped by 9% rise in revs to $494.7M.
• Apple to shut down Quattro wireless Ad network.

• 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.

Spreads tightened across Europe and the US today with indices outperforming intrinsics thanks to rumors of JPY intervention and headlines proclaiming European sovereign fears over, the US recovery still in place, a 'coming' M&A boom, and the start of the Fed POMO encouraging risk-taking. The thinness of markets (given the summer slump and general lack of desire) enabled modest re-risking to move markets rapidly at the index levels across sovereigns, financials, and corporates in the US and Europe. The completion of the Irish and Spanish debt issues today seemed in and of itself enough to get everyone going (despite notably higher yields in the former and suspected 'help' from the ECB in both) and despite a major drop in German confidence, bond spreads and CDS compressed relative to Bunds with a feeling of squeeze to the move in SovX today - 9bps tighter vs 6bps intrinsics and leaving the index notably rich to intrinsics overall.

What are the top hedge funds buying and selling?

John Paulson is a billionaire for good reason: he has been right far more than wrong. Yet is his "recovery" bet premature? Does his entire strategy hinge on a bet on housing, which as Bullard, Greenspan and Shiller all say is very precariously balanced on the edge of another leg down. Will Paulson finally be proven wrong, and if so will he be remember for his one wrong bet far more than for the series of right ones?