'Meltup' (National Inflation Association Video), $TIP ETF Chart (Treasury Inflation Protected Securities ETF)

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If you're concerned about potential inflation (higher prices) down the road, watch the video below from the National Inflation Association.  Also you know what else is interesting?  The iShares Barclays TIPS Bond Fund is at all time highs.  TIPS are Treasury Inflation Protected Securities.  See the NIA press release, Meltup video and $TIP chart below.

RBS's Bob Janjuah: Gold to 1,500, Euro/Dollar Parity, S&P 850 Fair Value, Treasuries Long Term Problem

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Bob Janjuah, RBS (Royal Bank of Scotland) Chief Market Strategist, was on Bloomberg TV (Youtube, Bloomberg.com) last week and gave his views on the S&P, technicals, EUR/USD (Euro-to-US Dollar), Treasury yields, inflation and gold. I posted links to some of his recent reports here but he pretty much covered everything in this video.

Below are highlights and the embedded video.

Skating The California Foreclosure Monster

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This is an interesting video called "Cannonball" about skating the pools of foreclosed homes in Fresno, CA. It's a deep video about the housing / economic crisis in California and has some strong language FYI. Thanks Reformed Broker for the video (via Good Magazine and originally Californiaisaplace.com).

Distressed Volatility Links 5/16 (Rosenberg, Roubini, Jim Rogers, El-Erian, Shiller, Chavez)

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PIMCO's El - Erian Says U.S. Inflation May Accelerate - Reuters/NY Times
David Rosenberg Part 1: "Why The Depression Is Ongoing" - Zero Hedge
David Rosenberg Part 2: "Gold Increasingly Being Viewed As Currency Of Its Own" - Zero Hedge
Bloomberg's Tom Keene interviews Pimco's El-Erian - Zero Hedge
Robert Shiller: Fear of a Double Dip Could Cause One - NYT
Bailout Is ‘Nail in the Coffin’ for Euro, Rogers Says - BusinessWeek
Roubini Says Greece May Lead Euro Exodus, China Faces Slowdown - BusinessWeek
NYU’s Roubini Says ECB Has ‘Room to Maneuver’ to Back Recovery - BusinessWeek
Loan on mall partly owned by Simon about to default - Reuters via The CRE Review
Biggest Tea Grower Plans ’War Chest’ for Acquisitions (Update2) - Bloomberg
Greece Considering Legal Action Against U.S. Banks for Crisis - Bloomberg
Newest Addition to the Team, Taste_Arbitrage: Flash Crash - Stone Street Advisors
Bangkok fighting leaves 30 dead, 232 injured - AP
‘Iron Man 2’ Tops Box Office for 2nd Weekend With $53 Million - Bloomberg
Skateboarders’ Paradise Amidst the Real Estate Carnage - Reformed Broker
Banks Embrace ‘Extend and Pretend’ as U.S. Hotels Await Rebound - Bloomberg
Funding Curves Update and A Curious Observation - Professor Pinch
Chavez asks Venezuelans to tweet on speculators - AP

Welcome Back Volatility, Where Does SPY Bottom? 200DMA, May Crash Low OR June 2009 High/Support (Charts/Videos) (SPY, DIA, XLF, VXX, LDQ, TLT, IEF, UUP)

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In the short term it looks like SPY (SPDR S&P 500 ETF) broke the uptrend from March 2009 AND near term $115 support. So technically support is yet to be seen. That is the question of the day. Where will SPY (S&P 500 ETF) find confirmed support?  Today (Friday, May 14) $SPY closed down 1.80% to $113.90 on worries over Euro sovereign debt. Check out the flight to investment grade bonds (LQD), Treasuries (IEF, TLT), US Dollar Index ETF (UUP) and Volatility Index (VXX). Gold (GLD) closed down slightly.

Diaspora (Personally Controlled Social Web Server) vs. Facebook

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Check out Diaspora, "an open-source, privacy-aware, personally controlled do-it-all web server". It seems like you're centralizing all your social data and have ultimate control on your own server. Is this a Facebook killa? Students at NYU are behind this and it looks like they raised $100,000. I'm down. Check out the introduction videos, presentation to ISOC-NY and recent articles.

GLD, SLV, GDXJ Above Resistance, Why Art Thou Lagging GDX? (Also Check Out Implied Volatility)

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The fundamentals for precious metals continue to look good. The EU/IMF backstopped European sovereign debt with a trillion dollars of Euros, the Euro continues to sell off against the Dollar and gold (currency volatility), Freddie Mac needs an additional $10.6  billion in aid, Fannie Mae needs $8.4 billion and I'm starting to think municipalities might need help paying their bills as well (watching MCDX).  There is no doubt that fiat money dilution is putting a bid under precious metals, whether as a currency crisis hedge, inflation hedge or sh* hits the fan hedge.  Check out the charts of $GLD, $SLV, $GDX, $GDXJ, $HL and GLD, SLV implied volatility.

Jim Iuorio Likes Silver, Not Just Catch Up Trade to Gold (SLV, GLD)

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Jim Iuorio of TJM Institutional Services (who called the massive US Dollar rally in November - video) had some words about gold and silver today on CNBC.

Irene Aldridge (Able Alpha) Explains High Frequency Trading Strategies and What Could Have Caused the Crash Last Week (BNN, 5/7/2010)

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The Terminator Irene Aldridge, of high frequency trading firm ABLE Alpha, was on BNN (Business News Television in Canada) discussing high frequency trading, different strategies (market making, statistical arbitrage, event arbitrage) and what could have sparked the crash last week.  She thinks a giant order in the futures market by a human or computer was responsible, whether erroneously ("fat finger") or purposely to manipulate the market.  She said these trading algorithms are only as good as the person who programs them.  Go ahead, trade against her.... Make her day.
Irene Aldridge on BNN (5/7/2010 - link)

High Frequency Traders Are Like Hackers (Mark Cuban's Thoughts On Wall Street)

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Read Mark Cuban's blog post about Wall Street, it is interesting.  What Business is Wall Street In? - BlogMaverick, May 9, 2010.

Gold, Dollar Futures Diverging With S&P E-Mini Future (ES_M, GC_M, DX_M, GLD, SPY, UUP, May 11 Charts)

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Since April 27, the June Gold and Dollar Index future have been diverging with the June E-mini future.  This marriage looks familiar.  I'm charting out the gold and silver ETFs tomorrow and watching resistance (GLD, SLV).

E-mini S&P June Future vs. Dollar Index Future vs. Gold Future

Euro Going To 1.20 By 4th Quarter (FX Concepts John Taylor), EUR/USD Technicals (Chart)

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John Taylor of FX Concepts, the biggest currency hedge fund in the world, thinks the trillion dollar European bailout will just delay the fall to 1.20 on EUR/USD.  He thinks it will hit 1.20 in the 4th quarter and potentially lower.  Taylor is a Dollar bull favoring US over European economic growth and I'm sure forward looking US/EU interest rate differentials are part of the equation.  The chart does not look healthy.

Nothing Fazes Barton Biggs, Next Move in US Market is Up 15-20% Led By Technology, Sees Lower Euro

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Nothing fazes Notorious B.I.Ggs (Barton Biggs of Traxis Partners) when it comes to US stocks. He was on Bloomberg last Monday thinking 2010 S&P EPS would hit $88-90. That translates to $1424 with an average 16 multiple. That's also 23% above today's close ($1159). $PG broke through the March low 3 days later (lol) and that didn't even faze him (see chart).  On Bloomberg Biggs said the next move in the market is 15-20% higher led by technology stocks.

Greenland Proceeds with Plans for Offshore Drilling in Arctic Waters - Guest Post

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Guest post by OilPrice.com

Greenland Proceeds with Plans for Offshore Drilling in Arctic Waters

While the oil spill from a sunken drilling rig in the Gulf of Mexico threatens to become an environmental disaster, plans are proceeding for opening up new drilling territories in the iceberg-infested waters off Greenland.

Rep Alan Grayson: Federal Reserve Owns Red Roof Inn Through Bailed Out Bear Stearns Commercial Mortgage Securities Trust

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This is interesting, we own a hotel chain. Watch Rep. Alan Grayson explain how the Federal Reserve owns the Red Roof Inn through a bailed out Bear Stearns CMBS.  I remember on 3/31/2010 Crain's Chicago reported that a Chicago (Streeterville) Red Roof Inn was hit with a foreclosure suit and the debt was part of a $455 Billion CMBS in default.  I did a search and found the actual mortgage in a Bear Stearns CMBS Trust:  Bear Stearns Commercial Mortgage Securities Trust, Series 2007-PWR17 (sec.gov) and Bear Stearns Commercial Mortgage Securities Trust, Series 2007-PWR18 (sec.gov). The New York Fed recently disclosed their holdings and BSCMS_07-PW17 A4, BSCMS_07-PW18 A4, BSCMS_07-PW18 A3 were on the list. Also remember in October 2009 I blogged that the Fed owned and was trying to sell the Crossroads Mall in Oklahoma for $24 million?

Insuring USO From Oil Volatility Monster w/ Put Options ($OVX) - Reflection of April Complacency Capitulation and Failed Breakout (May/July USO Puts)

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Look how put options on the Oil ETF $USO actually made long portfolios MORE money on the failed ceiling breakout. In other words, if traders were trying to time an oil spot spike above that 6-month ceiling resistance level and hedged against oil volatility monster risk ($OVX was at 2 year lows, as far as the chart can see), they not only protected their capital (depending on hedge ratio) but made more money on the other side of their own trade, Goldman RMBS desk style!

Reading: David Rosenberg on 3,000 Gold, JPM Silver Probe, Squawking the S&P Crash, Copper Pierced 200DMA, Venezuela Inflation Hits 30%

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News you can use for Sunday May 9, 2010

Venezuela inflation rate hits 30%, highest in Latin America -
USA Today h/t @futureshock
JP Morgan silver probe by CFTC, DoJ - Zero Hedge
EU Preps Euro Fund to Fight ‘Wolfpack,’ Debt Crisis - Bloomberg
Britain rejects Eurozone bailout fund - ABC.net.au (h/t market ticker)
Indonesia Hit by Magnitude 7.4 Quake, USGS Says - BusinessWeek
Copper future pierces 200DMA - chart at Pragmatic Capitalist
Ben Lichtenstein of TradersAudio squawking the crash from S&P 500 pit! - Zero Hedge (mp3)
David Rosenberg: The Case For Gold Going To $3,000 Is Getting Stronger - BusinessInsider
ECB advises Spain to make tough economic reform - Reuters
BP Oil-Collection Chamber Clogs, Removed From Leaking Gulf Well - Bloomberg
Oil at $65 a barrel may sound alarm bells for OPEC - Reuters
Rogers, Faber Advise Paring Investments as U.S. Stocks Slump (5/7) - Bloomberg

What Do These 8 Technical Indicators Mean for the Markets? - Guest Post

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What Do These 8 Technical Indicators Mean for the Markets?
May 7, 2010

Editor's Note: The following article is excerpted from Robert Prechter's April 2010 issue of the Elliott Wave Theorist. For a limited time, you can
visit Elliott Wave International to download the full 10-page issue, free.

By Robert Prechter, CMT

Technical Indicators

It is rare to have technical indicators all lined up on one side of the ledger. They were lined up this way—on the bullish side—in late February-early March of 2009. Today they are just as aligned but on the bearish side. Consider this short list:

    Germany Approves Greek Aid, Moody's on Italy, Portugal, Spain, UK, RMBS, BP and EUR/USD Rallies (5/7/2010)

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    Since hedge funds are gaming the hell out of credit ratings agencies, like the US subprime mortgage crisis back in 2007, below are a few updates from Moody's this week. By the way, Economist William Engdahl does not see any EU contagion risk. We'll see what happens. The German Parliament today approved their portion of the Greek aid package, which is 22.4 Billion Euros out of 110 Billion (read full article at NYT Dealbook).  EUR/USD rallied to 1.2705 from 1.261 earlier in the morning.

    Joe Saluzzi, Irene Aldridge, Santelli on The Crash of May 6, 2010, High Frequency Traders Shut Down Amid Turmoil

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    Remember all the drama with high frequency trading last year? Well today saw the second largest intraday market swing (1,010) since 1987.  October 10, 2008 came in first place during the financial crisis. Irene Aldridge of Able Alpha, Joe Saluzzi of Themis Trading and Rick Santelli spoke about the intra-day crash in the video below. The WSJ reported that big HFT players (Tradebot Systems Inc, Tradeworx) shut down during the market turmoil, pulling liquidity/"buyers of last resort" out of the market, which is what Joe Saluzzi and Dennis Dick of Bright Trading have been warning about.  There's always the Fed though!  By the way look what happened to PG. Insane..

    PG Loses 30%, But Closes Down 2%! (Chart), NYSE CEO on Sell Off (Video)

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    The chart of the day is $PG (Procter & Gamble), which lost 30% at one point but rallied back to close down only 2%! It even took out the March 2009 low! Some say it was a trader's fat finger (ordering a billion shares instead of a million) combined with high frequency traders taking out stops. The NYSE CEO explains what happened in the CNN Money video below. The market took a surprise hit as well, down 9% at one point. Who knows what happened, but check out the print on the chart and read the articles.

    The Cover-up: BP's Crude Politics and the Looming Environmental Mega-Disaster - Guest Post

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    Guest Post by OilPrice.com

    The Cover-up: BP's Crude Politics and the Looming Environmental Mega-Disaster

    We have been informed by sources in the US Army Corps of Engineers, Federal Emergency Management Agency (FEMA), and Florida Department of Environmental Protection that the Obama White House and British Petroleum (BP), which pumped $71,000 into Barack Obama's 2008 presidential campaign -- more than John McCain or Hillary Clinton, are covering up the magnitude of the volcanic-level oil disaster in the Gulf of Mexico and working together to limit BP's liability for damage caused by what can be called a "mega-disaster."

    Interesting Reads at Zero Hedge Today (5/6/2010), SPY Lost 9% at One Point

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    Interesting reading at Zero Hedge today giving the scoop. I'm going to write about $USO/$OVX, $USO puts gone wild, ETF ratios and currencies tonight. EUR/USD fell off a cliff today and is testing support in the descending channel as well as the 1.24 floor. Also at one point today $SPY, the S&P ETF, lost 9% (fat finger?, hedge fund liquidation? or.... weakness ahead for the economy).

    $SPY Intraday 5/6/2010 (FreeStockCharts.com)

    Google Chrome Browser Speed Test Video, Faster Than Potato Bullet, Sound Waves and Lightning

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    The Google Chrome browser is faster than a potato bullet, sound waves and lightning. I might have to download Chrome, I currently use Firefox and Safari on a Macbook. Thoughts? Find more videos at their Youtube channel. I added the behind the scenes segment (hat tip fbonacci).

    Economist William Engdahl Does NOT See Greek Contagion Risk, Compares Eurozone Crisis to 1997 Asian Financial Crisis

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    On 2/16/2010 I put up a video with economist William Engdahl (see here) talking about the Greek fiscal debt crisis and complex derivatives partly responsible for the eventual €110 billion IMF/EU bailout a few days ago. Here he is 3 months later on RussiaToday.

    Engdahl compares what's going on in Europe to the 1997 Asian Financial Crisis when the "smallest weak link" in the chain was targeted. In this case it's Greece in the Eurozone chain. He still blames Goldman for designing the special derivatives that allowed Greece to hide their true debt/deficit back in 2002.

    Engdahl DOES NOT see Greek contagion risk infecting Spain and Portugal. The credit default swaps (held by America and City of London? lol) of Spain and Portugal are moving higher though.

    Brown Brothers Harriman: Euro to 1.18, Greek Bailout is Disguised Bank Bailout (Marc Chandler)

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    Marc Chandler, global head of currency strategy at Brown Brothers Harriman, was on Bloomberg on May 4 talking about the Euro and Greek debt bailout.  By the way, rioters tried to storm parliament today protesting the austerity measures and EUR/USD broke below 1.31 support.


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    The large speculative S&P E-mini future shorts (see April 28 post) and the $IWM puts opened on April 15 are making loot or successfully hedging this breakdown. The 61.8% retracement definitely had a say in this sell off, imho. I've been behind the curve reporting on $SPY but as you can see it formed a head and shoulders top, took out the $118 floor and today broke through the 50 day moving average and long term uptrend from March (see charts below). Now $SPY bears have to battle the strong $115 support level.

    Thousands of Greeks Riot Against Austerity Package (Videos, 5/5/2010)

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    Greeks continue to protest against the austerity package. Watch the videos below.

    Marc Faber: China Looks Weak Technically, Could Crash in 9-12 Months, State Street Rates China Tactical Underweight (FXI, EWH)

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    Feeding off my previous post full of goodies on China (FXI, EWH charts, Jim Chanos on Fox etc), Marc Faber of the Gloom Boom & Doom Report thinks the Shanghai and Hong Kong stock indexes look weak "technically" (lower highs during 2009 and below resistance). He also mentioned that industrial commodity prices, industrial sensitive currencies (Aussie) and related equities (Freeport, Rio-Tinto) are all acting "heavy".  He then dropped the "crash" call.

    Mahmoud Ahmadinejad on Charlie Rose and RussiaToday (May 4)

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    Watch interesting interviews with Mahmoud Ahmadinejad (President of Iran) on Charlie Rose and RT America (embedded below) while he was in New York for the UN Nuclear Conference.

    Clear Resistance Above $FXI, April China PMI, Jim Chanos on Fox, Vitaliy Katsenelson Report, Charts (Shanghai Composite, Hang Seng, $FXI, $EWH)

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    Jim Chanos was on Fox Business last week chatting with Charlie Gasparino about the potential property bubble forming in China. He thinks China's growth is on a treadmill to hell and the property boom is a house of cards.  It might be time to hedge China or potentially ride a retracement (in my opinion).  Options are getting more expensive though.  Implied volatility on FXI and EWH (option premium) has been creeping up since March, FXI (25 to 33), EWH (19 to 24).  Way off the peak though.  The Government is tightening up and could affect growth going forward. People talk about Greek contagion affecting Europe, what about China contagion (US market, commodities)?  I charted out the Shanghai Composite, Hang Seng, Hong Kong ETF (EWH) and China FXI and they broke the uptrend line.

    Deepwater Horizon Oil Spill Explained, Ways To Contain Leak (Video)

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    Al Jazeera explains the Deepwater Horizon oil spill.

    EUR/USD Support Hits at 1.31 or 1.24, Euro Shorts Hit Record (COT)

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    Support for EUR/USD hits at 1.31 or 1.24 imho, if it stays inside the descending channel.  It's currently trading at 1.31576, -0.35%. We'll see who in Euro-land is on deck after the IMF/EU bailed out Greece.  The immediate term April low to test is 1.31147 (from 4/28).  1.31 must hold here or EUR/USD will hit the 20s.  I've been watching EUR/USD sell off since late 2009 when the US Dollar broke out.  It's been one hell of a ride for the Euro.  Maybe shorts will target the US Dollar soon to give Europeans a break.  Large speculators in the Euro are still piling on the short side.
    "Hedge funds and other large speculators raised net wagers on a euro drop by 25 percent to 89,013 contracts in the week ended April 27, Commodity Futures Trading Commission data shows".  [Bloomberg]
      Below is the monthly chart. 

    EUR/USD (Euro/US Dollar - Courtesy of FreeStockCharts.com

    NYU's Altman Sees High Yield Bond Correction (JNK, HYG), Plus Greek Contagion Risk (Spain and Portugal) Feeding Into Euro

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    Edward Altman, a finance Professor at NYU, thinks a correction is near for high yield bonds.  Below are quotes, the Bloomberg Video and charts of HYG and JNK (high yield bond ETFs) in a rising wedge, waiting for a catalyst.
    "I'm concerned that it's come back too fast and too furious and the spread between high yield bonds and 10-year Treasuries now below 4.5% is too low given the risks in the market. So, it's very nice to see this recovery. The world was on a verge of elimination of its financial markets and now its come roaring back. But I think too fast, too furious and there will be a correction".

    Ahmadinejad, Clinton Full Speech Videos at UN Nuclear Conference, US and Others Walk Out (New York)

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    Iranian President Mahmoud Ahmadinejad spoke in New York at the United Nations Nuclear Non-Proliferation Treaty (NPT) Review Conference. The first video is his full speech. The next video shows US Reps and other countries walking out and the last video is Hillary Clinton's speech. It was Ahmadinejad vs. Hillary Clinton. If interested Mahmoud Ahmadinejad spoke at the Tehran, Iran Nuclear Conference a few weeks ago (videos).

    Barton Biggs of Traxis Sees $88-90 EPS in 2010, $100 in 2011 (Video)

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    Barton Biggs aka Notorious B.I.Ggs of Traxis Partners thinks US earnings momentum will continue. He sees 2010 and 2011 S&P EPS (earnings per share) between $88-90 and $100 respectively. So.... 89 * 16 multiple = $1424 S&P in 2010 and 100 * 16 multiple = $1600 S&P in 2011. The S&P is currently trading at $1,204. JP Morgan's US Equity Strategist Thomas Lee thinks 2010 S&P EPS could hit
    $81, which would equal $1,296 on a 16 multiple.   Hmmmm... What do you think folks?  The video below is courtesy of Bloomberg.

    Lloyd Blankfein CEO of Goldman Sachs on Charlie Rose (April 30, 2010)

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    Here is Lloyd Blankfein (CEO of Goldman Sachs) on Charlie Rose on 4/30/2010. Berkshire Hathaway's Warren Buffett (owner and client of $GS) still thinks highly of Lloyd B and recently said he should not step down.
    "Asked whom he would like to see run Goldman if Blankfein were replaced, Buffett said: "If Lloyd had a twin brother, I would vote for him. I have never given that a thought." "[MSNBC]

    If interested here is the video of Lloyd Blankfein during the congressional testimony.  For the Charlie Rose video click here.

    JNK (High Yield Bond ETF) and Credit Spread Analysis, How High Does JNK Go? (IEF, TLT, LQD, JNK)

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    [Update: I originally started this post with $JNK option activity but the massive call volume didn't transfer to open interest. I'm thinking it could have been gaming the monthly dividend (dividend capture using covered calls)]

    In my opinion, these high yield ETFs aren't worth the fight until yields break out or people re-price credit risk on an event. These rising wedges and ceiling tests keep breaking out to the upside.  I was surprised to see HYG (more liquid high yield ETF) and the S&P leveraged loan index so resilient during all of 2009. You have to respect ZIRP (zero interest rate policy)! By the way, the Fed Funds rate is still lounging between 0-0.25% (Fed statement, April 28). So how high does the value of junk go from here?

    Mergers, Liquidations, Bailouts and a Mining Tax (Sunday Night News)

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    Continental and United to combine- Associate Press
    Greece Gets $146 Billion Rescue on EU, IMF Austerity Package - Bloomberg
    Movie Gallery to close all U.S. stores, shutting 2,415 Stores - Reuters
    Australia unveils mining tax - Reuters
    TEXT-Rio Tinto says concerned about Australia mining tax - Reuters
    Australia Opposition Leader Abbott: Deeply Hostile To New Mining Tax - WSJ
    IMF/EU Bails Out Greece (€110 billion), Papandreou Text - Distressed Volatility
    Faber Says China's Economy May `Crash' in Next 12 Months - Bloomberg Video
    Senate's Goldman Probe Shows Toxic Magnification - Wall Street Journal
    China Raises Banks’ Reserve Ratios to Cool Economy (Update2) - BusinessWeek
    Update to Fed Rent-to-House Price Graph - Calculated Risk

    IMF/EU Bails Out Greece (€110 billion), Papandreou Text, Greek Finance Minister, Riots (Videos)

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    Greece got a bailout Sunday from the IMF (International Monetary Fund) and EU (European Union).  There will be harsh austerity measures (increase in taxes, lower public sector wages, pension reform), read this Reuters article: Greek cabinet to discuss tough new austerity steps and listen to the Greek Financia Minister speak below.  Specifically on the bailout, WSJ reported that,
    "Greece reached a historic deal with other euro-zone countries and the International Monetary Fund for a three-year, €110 billion ($146.5 billion) bailout". [full WSJ article]

    Roubini On Greece Debt Restructuring, Second Half US Growth, Euro (Bloomberg - 4/28/2010)

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    Nouriel Roubini (Prof at NYU, RGEmonitor.com) was on BloombergTV with Willow Bay on 4/28/2010. Here are a few key points he made about restructuring Greek debt, Euro-Zone contagion risk, potential double dips, the Euro and US growth in the second half of 2010 (+ the video). This just hit the wire: Greece Reaches Bailout Deal With EU, IMF - WSJ.

    On Greece/Euro-Zone

    Dow 61.8% Retracement Level In Play, Could Pose Challenge To Market (DIA, DJI)

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    In the video below, Adam Hewison of MarketClub points out that the Dow (DJI) is trading at the 61.8% retracement level (2007 peak/2009 trough). This area could pose a challenge to the market, in his opinion. I will zoom in on short term support levels later that must hold.

    Eric Sprott Talks Up Silver on CNBC, Silver Ready For Big Breakout? (SLV, GLD, PHYS)

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    Eric Sprott on CNBC 4/15/2010
    Eric Sprott, who runs Canadian hedge fund 
    Sprott Asset Management, was on CNBC a few weeks ago talking with Maria Bartiromo.  He is bullish on silver and gold and bearish on the market and cyclical metals.  His firm just started a new gold ETF in March called the Sprott Physical Gold Trust ($PHYS) which offers a "physical delivery option", unlike GLD.  I will chart out SLV and the silver future tomorrow and look at the options.  Unlike GLD, SLV hasn't broken through the 2008 highs yet.  Longs are closing in on the big battle though.  Below is the CNBC video and key points he made during the interview.

    FOMC Statement April 28, Expects Low Rate For Extended Period, Closed All Special Liquidity Facilities Except CMBS TALF (Federal Reserve)

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    Release Date: April 28, 2010
    For immediate release

    Private Greece Bailout?, Chicago Pensions Lack Assets, Buffett Defends Goldman, Pensioenfonds Vervoer Dumps Goldman, Housing Recovery vs. Tax Credit End

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    Interesting news for 4/30-5/2/2010

    SOME CRACKS IN THE FOUNDATION? (David Rosenberg Market Update) -
    Aust unveils mining tax, cuts company rates - NZHerald
    Update: Greece poised to sign rescue deal with EU, IMF - Reuters
    Germany sees private sector helping Greece - Reuters
    Greece sees rescue deal on Saturday, thousands protest - Reuters
    Why SEC Has Strong Case Against Goldman, Part 1 - Suna Reyent
    Greece Faces `Unprecedented' Cuts as $159B Rescue Nears - Bloomberg
    Buffett strongly defends Goldman; Berkshire net up - Reuters
    Chicago Pensions Lack Assets to Ensure Payment, Commission Says - Bloomberg
    Faber Says Greece Needs Debt Writedown of as Much as 50% - Bloomberg
    Euro Falls Versus Dollar for Fifth Month as Greece's Budget Crisis Spreads - Bloomberg
    Paulson Saw Trading Risk At Goldman, Other Brokers in 2007 - Forbes
    Housing Recovery Won't Be Derailed by End of U.S. Tax Credit, Agents Say - Bloomberg
    FDIC concerned with swaps rules in Democrats' bill - Reuters
    Pension fund set aside Goldman Sachs - Telegraaf.nl (translated to English)
    Dutch plan dumps Goldman Sachs from €7 billion portfolio - Pensions & Investments
    16 Crafar-owned farms receivership sale ($100M) attracting buyer interest in Asia - NZHerald

    Video of Greeks protesting Government measures (via Reuters).

    25,000 Barrels of Oil Per Day Could Be Spilling Into Gulf Coast (#OilSpill UPDATE, 4/30/2010)

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    This could be the worst oil spill in history after the "Deepwater Horizon" oil rig exploded in the Gulf of Mexico. 5,000 25,000 barrels of oil per day could be spilling into the Louisiana coastline. Eleven people remain unaccounted for after the explosion. It will impact fisheries, seafood prices, bird population and could take up to 3-months to plug the leak. Below are video updates from France24, AP and KXAN Austin-NBC along with an Aerial photo from NASA and recent articles.

    Check Out Price Volatility In EuroBancshares (EUBK), FDIC Closes Three Puerto Rican Banks: Eurobank, Westernbank, R-G Premier Bank

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    Three Puerto Rican banks closed down today, Eurobank, Westernbank and R-G Premier. They were pretty big. Westernbank had $11.9 billion in assets and $8.6 billion in deposits.  Look at the chart of EuroBancshares (EUBK), it went from $0.30 to $1.30 and hit 0.19 during after hours today, all during the month April.  Oriental Bank ended up buying the assets.  Below are press releases from the FDIC.

    Goldman Implied Volatility Up 49% to 51.66, ISEE Ratio Up 139% to 223

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    $GS Implied Volatility,
    ISEE value snapshot at ISE.com 
    Continued from my previous
    post, here is info on GS implied volatility and ISE put/call data today. GS implied volatility (wikipedia) spiked 49% to 51.03 which is a new 52 week high. What's interesting is the ISEE ratio (customers on the ISE opening calls vs. puts) had big volume on the call side, 31,000 calls vs. 13,900 puts which netted an ISEE ratio of 223 (up 130 or 139%) (calls/puts*100). 721,000 options traded way above average (121,000). Just like a severe weather alert, implied volatilty using option premiums change. It will be interesting to see what catalyst peaks out GS volatility.

    Oklahoma Teachers Retirement System Puts Goldman On 90-Day Alert, $GS -9.4% to $145 on Criminal Probe, Channel Support Violated (Charts)

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    James Wilbanks of the Oklahoma Teachers Retirement System put Goldman Sachs Asset Management on alert for 90-days as it reviews the fraud allegation.  GSAM manages $500 million for them so there's definitely client withdrawal risk if sh-- hits the fan, not saying it will. Dick Bove thinks their clients are a non-issue and thought it was a buy after the charge (video).

    SecondMarket CEO Barry Silbert Interview Video at "Rising Stars" Executive Council Event

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    Could this mark the end to non-transparent OTC transactions on Wall Street?  SecondMarket is a global platform for trading illiquid assets.  The auction-rate securities freeze in 2008 put them on the map, CEO Barry Silbert he said.  You can trade just about anything, from private company stock, LLP interests, mortgage back securities to collateralized debt obligations.  Below Barry Silbert spoke with Walter Kiechel at the "Rising Stars" Executive Council event in New York.  I just signed up and see RMBS and CDOs for sale!  I don't see any CDS (credit default swaps) available though.  There should be an insurance subsidiary....

    "As the marketplace for illiquid assets, SecondMarket's mission is to not only provide sellers with increased liquidity and qualified buyers with unique investment opportunities, but also to keep them informed on public issues regarding illiquid assets."

    Bob Janjuah Sees $2,000 Gold, $100 Oil (Chief Credit Strategist at RBS)

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    Bob Janjuah, the Chief Credit Strategist at RBS (Royal Bank of Scotland) put out an interesting note giving his views on the Greek credit crisis, US/UK/Euro-zone/Japanese debt and currencies, the ultimate bubble forming in Government debt/fiat currencies and how he likes gold, oil, and prime property.  Here are quotes from the note, read it in full at Zero Hedge.
    "10 - What I really want to own in a world of reckless policy, debasement, more debt, inflation etc, are PHYSICAL ASSETS like Gold, Oil and PRIME PROPERTY. I can see GOLD @$2k/oz in the next yr or so, Oil north of $100, and when I say Prime, I really mean SUPER PRIME - location and quality are key."

    In the end he thinks we're screwed if we don't change policies.
    "We seem to be stuck in an era where policymakers only understand more debt, more deficits, & more debasement. This IS gonna come back and savage (forget 'bite') us real hard unless our policymakers turn abruptly towards Voluntary Austerity/Deflation. As I've said before, we do NOT have the luxury of time here - it is simply not feasible to continue on the current policy paths for much more than a few qtrs. We do NOT HAVE years. And the longer we wait, the worse the unwind will be."

    In the short term he thinks a breakout in the 10-year yield could knock 10% off global markets.

    Oil Spill in Gulf, $USO Trading at $41 Ceiling (Oil ETF Charts, Pentagon Video)

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    USO (US Oil ETF) is bumping up against ceiling resistance again, up 2.68% to $41.04.  Also an offshore oil rig exploded in the Gulf of Mexico, see the news clip below from the Pentagon. If $USO breaks out here it will rally to at least $47, which is resistance from 2007. IF there's a forceful breakdown to the 38.2/50% retracement level, a volatility hedge in some form would protect long positions (shorts, USO puts, watch oil volatility index OVX). There's also a multi-year trend decision approaching.  Charts below are courtesy of FreeStockCharts.com.  For recent posts on USO and oil click the labels.

    Goldman Sachs Congressional Hearing Video 2 [CFO, CRO]

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    Below is the second video from the Goldman hearings featuring CFO David Viniar and CRO (Chief Risk Officer) Craig Broderick.

    Goldman Sachs Congressional Hearing Video 3 (Lloyd Blankfein CEO)

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    Below is CEO of Goldman Sachs, Lloyd Blankfein, before Congress on April 27, 2010. See Video #1 featuring Goldman employees Tourre, Sparks, Swenson, Birnbaum.

    S&P Downgrades Spain to AA, 10Y-Note Yields 4.12%, CDS Tightens to 187bps and $EWP Testing $37.5 Support

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    Along with
    Greece (to junk) and Portugal (A-), S&P downgraded Spain's credit rating to AA from AA+.  The market reaction wasn't very extreme. The Spanish 2 Year Note hit 2.09% (which is still below the February high), the 10 Year Note hit 4.12% and Spain's credit default swaps (CDS) tightened 10.53% to 187 basis points (1.87% insurance premium on debt).  Off topic, why did Saudi Arabia's CDS widen by 17% today?  Here is the S&P release and below that an Associated Press video. 

    Milken Institute Panel On Financial Journalism, Bloggers (4/2010)

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    The Milken Institute Global Conference had a panel on financial journalism featuring well known journalists/bloggers John Carney, Heidi Moore, Stacy-Marie Ishmael (FT Alphaville) and Felix Simon (Reuters). The funny part is I first found out about this at Zero Hedge and they all dissed the blog! There's way too much player-hation going on. They all make interesting points. Find the full video here or click the picture.

    Goldman Sachs Congressional Hearing Video 1 [Tourre, Birnbaum, Sparks, Swenson]

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    This hearing was actually very boring. The Goldman Sachs employees (former) managed risk pretty well though during the hearing. Here is the video with CEO Lloyd Blankfein, CFO David Viniar and Chief Risk Officer Craig Broderick. Goldman should start a reality show.

    Joshua Birnbaum: Former Goldman Sachs Managing Director, Structured Products Trading
    Daniel Sparks: Former Goldman Sachs Department Head, Mortgages
    Michael Swenson: Goldman Sachs Managing Director, Structured Products Trading
    Fabrice Tourre: Goldman Sachs Executive Director, Structured Products Trading

    E-Mini S&P Large Speculators Net Short, ES Breaks Down During Goldman Hearing, VXX Spikes (Videos of Chartcast, COT Chart, SPY)

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    I remember a week ago Zero Hedge wrote about the E-mini S&P commitment of traders (COT) report for April 20.  Every week the CFTC (Commodity Futures Trading Commission) reports net holdings of large speculators, commercials and small speculators in the futures market.  The next one should be coming out soon.  For free commitment of traders charts visit cotpricecharts.com.  Remember this is backward looking data.

    Portugal Bond Yields, CDS Spike on S&P Downgrade, Fighting Greek Contagion Risk (Charts)

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    Portugal is trying to fight off Greek debt contagion risk.  Today Greece and the National Bank of Greece (NBG) were both downgraded and Government yields/CDS spiked while equities took a hit (see post).  As many have said, including Pimco's Mohammed El-Erian recently on  CNBC, sovereign and corporate credit risk could spread into other European countries which is putting a bid under the US Dollar and Gold, and killing the Euro. I'll post charts out later.

    S&P Downgrades Greece to Junk, Greek 2Y-Bond at 15%, CDS at 787bps, National Bank of Greece -14.24% (NBG)

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    S&P downgraded Greece to junk.  The Greek 2-year bond yields 15.07%, Greek 10-year bond yields 9.76%, CDS (credit default swaps) are at 787 basis points (highest default probability on CMA Datavision sovereign monitor), the Dow Jones Greek Equity Index is -6.65% (below support) and NBG (National Bank of Greece) is -14.24% to $2.66.
    "Greece's debt has been downgraded to junk status by Standard & Poor's amid concern it was not able to take steps needed to tackle its economic crisis." [source: BBC]
    Looks a lot like the pattern of Lehman Brothers.  Who will bail this country out... or is a default actually coming.

    Moody's Downgrades Greece, 10Y Bond Yield 8.84%, CDS 633bps, Greek Shares Testing February Low, Euro Needs Help (Charts) (April 23, 2010)

    Pricing of Greek CDS, 10Y Bond Yields Sense Risk (CDS 399bps, 10Y 6.85%) (January 31, 2010)

     NBG (National Bank of Greece (Courtesy of Stockcharts.com)

    $GRDOW (Dow Jones Greece Stock Index)

    Citadel's Ken Griffin, Marc Lasry and Mohamed El-Erian at Milken Conference on 4/26/2010 (Video Link)

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    Must see video featuring Ken Griffin of Citadel Investment Group, Marc Lasry of Avenue Capital, Mohamed El-Erian of Pimco and Steve Forbes at the Milken Institute Global Conference (from April 26).  They talk about trade, unemployment, fiscal policy, bank reform, recent credit card regulation, manufacturing base, education and give short and long term outlooks.

     Click here or the picture

    Time For Oil ETN, ETF to Make a Decision (USO, OIL, OVX, USD/CAD Charts)

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    The oil exchange traded note ($OIL) and oil exchange traded fund ($USO) are both in a boring battle with resistance, while oil volatility ($OVX) is sleeping at multi-year lows (28 v. 100 in late 2008).  Dullness could flip at any moment though.  The June oil future is at $83.75 testing the 50 day moving average.  Is the Goldman hearing tomorrow and Greece scaring everyone away? USD/CAD is below support but rallied back to 1.  Protect yourself from the oil volatility monster with a cheap Kevlar vest.

    Peter Schiff vs. James Galbraith on US Government Debt (CNBC)

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    h/t Business Insider

    Here is Peter Schiff and Professor James Galbraith debating about our Federal debt and interest rates going forward.
    • James Galbraith:  "The United States Government does not have and is not going to have a problem financing its public expenditures and its deficits. It's simply not an issue that should be on our list of things that we really care about right now". 
    • Peter Schiff:  "The US Government is making the same mistakes that sub-prime borrowers did when they were using teaser rates on their mortgages".

        Gizmodo Exclusive of iPhone 4, Jason Chen's Computers Seized (PBS Video)

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        I remember coming across Gizmodo's site (link: This Is Apple's Next iPhone) when Jason Chen found Apple's next iPhone lost in a bar in Redwood City, CA, which he said was camouflaged to look like an iPhone 3GS. I thought it was some kind of joke or a fake. Today on Gizmodo they said "California's Rapid Enforcement Allied Computer Team" seized his computers and two servers in his home. Crazy stuff going down... I guess Gizmodo paid $5,000 for the device. Well here's a video of supposedly the next iPhone via PBS Newshour and Gizmodo.

        Mary Schapiro, Larry Tabb on SEC Large Trader Reporting Proposal Videos (Tabb Group)

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        Larry Tabb, the CEO of Tabb Group talked about the new "Large Trader" reporting proposal by the SEC.  If you remember back in 2009, high frequency trading, flash orders and dark pools were all big topics for regulation.  In my previous posts (click links above) I linked to interesting Zero Hedge articles you should read.   First is a video link to the proposal by SEC Chairman Mary Schapiro and then the Tabb Group video.

        I See XLE Made New Highs Last Week, Will It Lead USO? (Oil ETF/Energy Sector SPDR)

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        This is an addition to my previous post on the June Oil Future and before that the post revisiting XLE vs. USO (Oil ETF) at the 2008 peak. I'll send you straight to the source, at the 2008 oil peak ($147) I saw that XLE led USO to the downside. Will the same thing happen this time on the upside? XLE broke out on Friday.... H/T Iron100.

        XLE (Energy Select SPDR ETF) - Courtesy of Stockcharts.com

        XLE Short Term

        USO (US Oil Fund ETF)

        June Oil Future at $85 Resistance, Rig Count Down 9 to 1482 On Week, Up 524 Annually, Watching Spreads (WTIC, USO, CLM10, UNG)

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        June Crude Oil (courtesy of optionsxpress)
        June oil (CLM10) looks cautiously decent here in my opinion, if hedged with volatility.  It could fail again and hit channel support aka continue trading in this long sideways channel. See INO's recent video on my previous
        post, we could continue sideways.  The June oil future tonight will feed into ETF action tomorrow ($USO, $OIL) if it holds up (+0.39% at $85.48).  RSI is at the mid-point and the future is testing resistance again after a failed break-out.  Not sure how high oil can go here before the big "income" squeeze.  The US Dollar, oil, gold and S&P relationship will be interesting next week.  Add the Euro to that.  I'm going to mainly look at the oil ETFs tomorrow and perhaps the options.  I actually looked at XLE's chart the other day when revisiting the USO/XLE correlation during the 2008 oil peak.  The Goldman charge could throw oil prices a curve ball....

        Goldman Executives, "Fabulous-Fab" Emails (Released By Senate)

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        Find the 100 page document at New York Times featuring e-mail exchanges among Goldman executives, CDO banker Fabrice Tourre and Exhibits 101-104 released by the Senate Permanent Subcommittee on Investigations (link). Goldman CEO Lloyd Blankfein and Fabrice Tourre, the former VP who constructed the $2 Billion ABACUS CDO in early 2007, which was recently part of Goldman's fraud charge, will appear before Congress on Tuesday (Cspan.org).  I'll embed that video after the hearing.  For recent information on the Goldman case click the labels at the bottom.  Where the hell was the Fed during all of this?  Seems like this Fab dude was just doing his job for the squid.  Read this interesting article from Roubini.com on 1/20/2010:  Credit Derivatives, Hedge Funds and Leverage Ratios of 50: The Credit House of Cards (h/t Business Insider).

        New Home Sales Up a Whopping 27% In March, November BZH Call Rips 59%, Stock Testing Resistance, Beazer Downgraded To Hold By Citigroup Citing Valuation

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        Someone positioned well buying those 3,000 BZH 7.50 Calls on Thursday for $0.63 before this release.  On Friday it closed up 59% to $1.0 (chart below) with positive volatility from the new home sales release and BZH rip.  The trader also sold the $5 BZH puts.  Watch daily option activity at crimsonmind.com.  Here is the new home sales release from census.gov.  *Update: It appears that Citigroup downgraded Beazer Homes on 4/22 to "hold" (from buy) citing valuation. It reached Citi's price target of $6.25. For proof I embedded the update from Market News Video.

        Speech By Kiyohiko Nishimura on Japan's Economy, Monetary Policy (Bank of Japan, 4/21/2010)

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        Below is a speech on 4/21/2010 made by Kiyohiko Nishimura, Bank of Japan's Deputy Governor on Japan's economy and monetary policy.  It was a meeting with business leaders in Miyagi.  I quoted below the paragraph on recent price developments but find his outlook on current economic conditions in the PDF.
        "Price Developments in Japan

        I will now talk about price developments.

        The year-on-year rate of change in consumer prices has been declining, while the pace has been moderating since last August to around -1 percent recently.

        We hear from firms that it is difficult to raise sales prices as consumers are sensitive to prices due to their tight purse strings, and as competition is harsh among firms. The Tankan showed that output prices have not risen, compared with the improvement in business sentiment and the rise in input prices.

        Nevertheless, it can be said that some beams of light are starting to break through a thick cloud of deflation.

        First, there is a subtle change in firms' price-setting behavior and consumers' purchase behavior. With your cooperation, the Bank conducted a survey on firms' price-setting behavior at the beginning of this year. The results, which were published in our January Regional Economic Report, showed that there were signs in some firms to avoid endless price competition and try to differentiate in aspects other than prices. The impression obtained through various surveys and interviews is that there are subtle and gradual signs on the consumers' front to purchase quality products by paying reasonable prices.

        Lionsgate vs. Icahn, Video of Live 13D War On CNBC, Icahn Owns 19%, Mark Cuban Owns 5.4% and Technical Analysis ($LGF, $IEP)

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        It's been an interesting few months for Carl Icahn and Lions Gate Entertainment. The televised 13D war on CNBC made history. 13Ds must be filed with the SEC within 10 days of owning 5% or more of a company. Carl is trying to buy Lionsgate for $7 and remove management but there's a poison pill potentially blocking him. The Icahn entities own about 19% of the company. You know what else is interesting, Mark Cuban just scooped up a 5.4% position and sold 20,000 puts to counterparties at $7.50 expiring January 2011 (he'll buy 2 million shares if they exercise). For more information on poison pills see the recent Stock Wars episode (7 minutes in). Enjoy the Icahn fight vs. Michael Burns below on CNBC and the LGF chart.  Along with chart break outs and option activity, 13Ds, takeovers and value plays are also interesting to watch. If you didn't already know, "Lionsgate is the leading next generation studio with a major presence in the production and distribution of motion pictures, television programming, home entertainment, family entertainment, video-on-demand and digitally delivered content." (Lionsgate).

        Lions Gate to allow Icahn vote on poison pill - April 23, 2010/Reuters
        Icahn Lifts Lions Gate Bid to $7, Says Management Should Go - April 15, 2010/Bloomberg
        Lions Gate drops out of bidding for MGM - March 25, 2010/LA Times
        Lions Gate drops bid for MGM: report - March 25, 2010/MarketWatch
        Lions Gate Exec Michael Burns vs. Carl Icahn March 24, 2010/CNBC

        Pimco's El-Erian On Greece Debt Contagion Risk (CNBC Video)

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        Pimco's El-Erian thinks the Greek debt / Euro Zone crisis could mimic the sub-prime mortgage crisis in the US.  He said there's contagion risk, meaning credit/interest rate risk could spread into other European credits.  See my previous post showing charts of Greek CDS, 10 Year Yield, Greek equities and the Euro.  Watch them.

        $3 Million Jacked From Detroit Pension Funds (Fire, Police and General Retirement)

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        Updates on more financial shadiness in the D. Three Detroit Pension Funds (Fire, Police and General Retirement funds according to Detroit News) had $3 million jacked by private equity firm Onyx Capital Advisors with help from friend Mike Farr.  Below is part of the SEC press release and a few local articles.

        Mike Farr, firm accused of bilking local pension funds - Detroit News
        Ex-Lion, money manager stole $3M from Detroit, Pontiac pensions, U.S. says - Detroit Free Press
        Asset freeze ordered in pension fund case - Detroit News
        SEC: Former Lion Mike Farr, partner stole more than $3M from Detroit-area pension funds - MLive

        SEC Charges Private Equity Firm and Money Manager for Defrauding Detroit-Area Public Pension Funds

        Washington, D.C., April 22, 2010 — The Securities and Exchange Commission today charged a private equity firm, a money manager and his friend with participating in a fraudulent scheme through which they stole more than $3 million invested by three Detroit-area public pension funds.

        Abacus 2007 CDO Pitch Book Referenced Securities One Notch Above Junk Four Months Before Two Bear Stearns Credit Funds Blew Up

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        Look at the securities or reference entities in the Abacus 2007-ACI $2 Billion Synthetic CDO. Every underlying residential mortgage-backed security in the CDO was rated Baa2 by Moody's or one notch above junk (high yield status) at the time. The mortgages were securitized in 2006 to early 2007 (see initial reference entities on page 56-57). You have to admit this was an amazing trade by Paulson & Co, shorting a pool of RMBS one notch above junk four months before two Bear Stearns credit funds blew up! These subprime RMBS and CDOs trading over-the-counter were ultimately backed by......Confessions of a Former Mortgage Broker: What We Did Was Criminal - Tech Ticker. Not that it matters now, but I find it funny that there's still zero price transparency with OTC debt securities and derivatives after what happened.

        U.S. Housing Data Spurs Late Gains in Oil Prices after Mixed Week (Oil Market Summary) - Guest Post

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        Guest post by Darrell Delamaide originally for oilprice.com.

        U.S. Housing Data Spurs Late Gains in Oil Prices after Mixed Week

        OilPrice.com Oil Market Summary for 04/19/2010 to 04/23/2010

        After languishing most of the week, crude oil prices galloped to the finish line on Friday, tacking on 1.7% and recouping most of last week’s losses as positive new-housing sale data spurred most markets forward.

        The decision by the Greek government on Friday to activate a bailout plan from the European Union and the International Monetary Fund eased pressure on the euro, contributing to oil price gains as the dollar slipped against the joint European currency.

        The benchmark West Texas Intermediate contract gained $1.42 Friday to end the week at $85.12 a barrel, compared with the benchmark’s finish of $83.24 in the previous week.

        Moody's Downgrades Greece, 10Y Bond Yield 8.84%, CDS 633bps, Greek Shares Testing February Low, Euro Needs Help (Charts)

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        Moody's downgraded Greece's credit rating to A3 from A2 on higher debt servicing costs and the revised budget deficit. They need to refinance an $8.5 billion bond by May 19.  Hard money bridge loan?  Read these articles:
        Greece’s Credit Rating Lowered One Step by Moody’s - BusinessWeek
        Greece May Seek Bridge Loan as Bond Redemption Looms - Bloomberg
        Greece seen with little choice other than to activate aid plan - MarketWatch
        Moody's cuts Greece's sovereign ratings to 'A3' - MarketWatch
        Greece faces tight timeline before May debt crunch - Reuters
        Greece Problems Spreading on Credit-Risk Selloff, El-Erian Says - Bloomberg
        The Greek 10-Year Bond yield hit a new high of 8.84% and 5-Year Greek CDS (credit default swaps or default insurance) on Greek debt hit 633 basis points according to CMA Datavision.  Remember my post from January [Pricing of Greek CDS, 10Y Bond Yields Sense Risk (CDS 399bps, 10Y 6.85%)].  You can see how important this data is.  In 2.5 months the Greek 10-Year yield is up 200 basis points (2%) and CDS is up 234 basis points (2.34%).  Market participants are pricing the risk of default.  The ultimate bailout event or default risk reversal will be interesting to watch.

        Greek equities are testing the February low.  If Greek shares don't hold support here I don't see support until the early 2009 bottom (see chart below).  The Euro Index is also testing lows.  Judgment day is near but someone will bail them out. Click charts for larger view.

        President Obama's Speech On Wall Street Reform (Video, Cooper Union)

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        I'm going to find the full financial reform bill and also look at the "Large Trader" proposal by the SEC. Below is Obama's speech on Wall Street reform at Cooper Union (New York).
        "The President speaks at Cooper Union in New York City, where he spoke on the need for reform two years earlier, and tells Wall Street and Republicans to support these common sense reforms to end bailouts, close loopholes and protect consumers." [Whitehouse.gov]

        Options Active In Homebuilders $XHB, $BZH, $HOV, Existing Home Sales Up 6.8% In March, Inventories At 8-Months

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        Options were active in XHB (Homebuilders ETF), BZH (Beazer Homes) and HOV (Hovnanian) today. This comes a day after hedge fund manager John Paulson said in a conference call that home prices will increase 8-10% in 2011.  His $30 billion hedge has been involved in distressed real estate since early 2009 (or earlier) through a real estate recovery fund.  His firm was also bidding on bankrupt TOUSA land in February (Reuters). If you can scoop up decent bankrupt land for 20 cents and sell it to a homebuilder for 40 cents it's a decent play. I also posted a chart of lumber yesterday which is up 93% over the year, see my previous post with a chart. Here's the existing home sales press release, BZH, HOV and XHB simple technical analysis and the option action. *I embedded a video with Lawrence Yun (NAR chief economist) explaining the existing home sales data in depth.

        Lumber Contract In I-Shaped Recovery, Up 91% On Year (Chart)

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        The Lumber contract is up 91% on the year, outperforming the S&P, Nasdaq and Gold. John Paulson said in a conference call today that housing prices could increase 8-10% in 2011.  Yale's Robert Shiller said there's a 50/50 chance of another housing downturn.  Who is bidding up lumber futures?

        1-Year Lumber Continuous Contract (Courtesy of Stockcharts.com)

        Lumber vs. SPY, GLD and QQQQ

        Will Gold and Oil Continue Trading Sideways In 2010? (Videos)

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        Adam Hewison of Market Club thinks oil and gold trade sideways for a while. I embedded videos below from their Youtube channel. I posted a few days ago that oil and $USO failed to break above resistance in a sideways channel. Is there pent up demand or pent up supply forming in this channel? I'm watching soporte y resistencia. Find updated videos at their trading blog (http://club.ino.com/trading).

        Anton Valukas, Dick Fuld, William Black Congressional Testimony On 2008 Lehman Failure (Videos)

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        Here is Lehman Brothers bankruptcy examiner/Attorney Anton Valukas, former Lehman Brothers CEO Dick Fuld and Professor/former bank regulator William Black at the 2008 Lehman Brothers Failure House Financial Services Committee hearing. The videos are from Cspan.org. Here is the Lehman bankruptcy examiner's report featuring the famous "Repo-105" transaction. William Black was also on Tech Ticker recently.

        Miami Businessman Charged With $900 Million Ponzi Scheme

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        The Madoff aftershocks continue...  Not quite $50 billion but it's up there.
        "SEC Charges Prominent Miami Beach Businessman in $900 Million Ponzi Scheme

        Washington, D.C., April 21, 2010 — The Securities and Exchange Commission today charged a prominent Miami Beach-based businessman and philanthropist with fraud for orchestrating a $900 million offering fraud and Ponzi scheme.

        The SEC alleges that Nevin K. Shapiro, the founder and president of Capitol Investments USA, Inc., sold investors securities that he claimed would fund Capitol’s grocery diverting business. Shapiro told investors that the securities were risk-free with rates of return as high as 26 percent annually. Instead, Shapiro was actually conducting a Ponzi scheme and illegally using investor money to pay for other unrelated business ventures and fund his own lavish lifestyle. When investors questioned Capitol’s business, Shapiro showed them fabricated invoices and purchase orders for nonexistent sales."

        [read full at SEC.gov]

        Paulson Sees V-Shaped Recovery, Housing Recovery in 2011 (Video)

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        This is interesting, John Paulson (Paulson & Co.) during a conference call today said he saw a v-shaped recovery and that housing prices could rise 8-10% in 2011. Read his quotes at MarketWatch and watch the WSJ video below. Remember in December 2009 he said he had the "highest net long exposure ever? He's riding the wave... Not sure why $TLT broke out today if the v-shaped reflationary recovery has legs. Perhaps it will be a technical fail. Also here is the letter he sent to investors regarding the Abacus CDO (PDF at Big Picture).

        TLT (20+ Treasury ETF) Chart Broke Out Of Downtrend From October 2009

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        TLT (20 Year + Treasury ETF) broke out of the downtrend from October, 2009. There's congressional hearing volatility going on (financial regulation, Lehman bankruptcy hearings) and I'll embed a bunch of CSPAN videos in a bit. The next area of resistance on $TLT is around $92.23 (November 2009 lows/Februrary highs). It is trading at 90.74.  The ultimate level of support on $TLT is $87.42 which would be a short in size below that level (imho).  Watch $92.23 resistance.

        CDS 101 By Goldman Sachs (Education on Credit Default Swaps)

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        For those who want to learn about credit default swaps, Goldman explains it in this document from October 2009 [CDS 101].  The PDF file was in this press release when responding to a New York Times article.  Goldman, when will I see an exchange traded CDS index fund? We have $VXX to hedge volatility, why not CDS ETFs to hedge the next credit crisis? Aren't there futures on the CBOT CDR LIQUID 50 NAIG Index and HY? Put some options on that ETF as well, derivatives of derivatives of derivatives. UPDATE: The document got removed from Scribd, as well as the press release. See it here: http://www2.goldmansachs.com/media-relations/comments-and-responses/archive/state-of-the-market-cds-101.pdf

        Goldman Sachs Initial Defense From SEC Wells Notice (9/2009)

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        Here is Goldman's initial defense or response to the Wells Notice (potential charge) in September 2009. Below I quoted the first page of the Preliminary Statement for an introduction. I found the documents at NYT DealBook. Sullivan & Cromwell is Goldman's law firm.

        In early 2007, Goldman Sachs acted as the underwriter of privately-placed notes issued in a synthetic CDO transaction known as ABACUS 2007-AC1 (“2007-AC1”). There was nothing unusual or remarkable about the transaction or the portfolio of assets it referenced. Like countless similar transactions during that period, the synthetic portfolio consisted of dozens of Baa2-rated subprime residential mortgage-backed securities (“RMBS”) issued in 2006 and early 2007 that were identified in the offering materials (the “Reference Portfolio”). As in other synthetic CDO transactions, by definition someone had to assume the opposite side of the portfolio risk, and the offering documents made clear that Goldman Sachs, which took on that risk in the first instance, might transfer some or all of it through a hedging and trading strategies using derivatives. Like other transactions of this type, all participants were highly sophisticated institutions that were knowledgeable about subprime securitization products and had both the resources and the expertise to perform due diligence, demand any information that was important to them, analyze the portfolio, form their own market views and negotiate forcefully at arm‟s length. And like other transactions with similar lower-rated subprime portfolios, 2007-AC1‟s performance was battered by the unprecedented subprime market meltdown, which has impaired cashflow to countless noteholders in such transactions and caused many participants in the market to fail altogether.

        Now, with the benefit of perfect hindsight about the magnitude of the market downturn, the Staff proposes to charge Goldman Sachs with misrepresenting material facts relating to the offering. Notably, the Staff does not contend that anything about the Reference Portfolio itself was incorrectly disclosed. Rather, the Staff‟s theory relates exclusively to the role of Paulson & Co., Inc. (“Paulson”) – now recognized as a heavy bettor against the subprime market but at the time a relatively unknown hedge fund manager – in making suggestions to the" [........] 
        Continue reading at NYT Dealbook.