Facebook Movie Explained in One Minute (The Social Network)

Weekend entertainment courtesy of NMA.tv: The Facebook Movie in One Minute 臉書傳奇瘋世界

"Homemade Spacecraft", Watch a Weather Balloon Rise to Space

Weekend Entertainment: Watch this amazing video of a homemade spacecraft rising to space. From Luke Geissbuhler's Vimeo. Hat tip Crossing Wallstreet.
"Video from a camera attached to a weather balloon that rose into the upper stratosphere and recorded the blackness of space."

Links: Harrisburg Rehab, Hendry's Bet, Lennar, Flash Crash Report, Corn, Knight Capital, Tea Bubble

powerLiNkS for 10/1/2010. Enjoy the weekend.

IShares LQD Crashed 11 Points In Seconds This Morning (LQD) - Hedge->According.ly (@sellputs)

Harrisburg, Pa., to seek distressed city status - Reuters

Mayor Linda Thompson seeks 'distressed' status for Harrisburg - PennLive

*Hugh Hendry's $2 Billion Short - King World News

Lennar Acquires Distressed Real-Estate Assets - WSJ

Privately held Facebook in 5-for-1 stock split - Reuters

20+ Year Treasury Yield Watch, QE Priced In? (GS) $TLT, $TYX

If TLT (iShares Barclays 20+ Treasury Bond Fund ETF) violates ascending channel support and the 50 day moving average, it could roll down to the 50 week and 200 day moving average (96-97 going forward). TLT is at 104. This is just a scenario to watch. Also keep an eye on the 30-year Treasury Yield (3.73%). Charts after the break...

Russia-Germany Nord Stream Pipeline Under Way - Guest Post

Submitted by Global Intelligence Report

Russia-Germany Nord Stream Pipeline Under Way

SITUATION: Russia has succeeded in getting funding for the Nord Stream gas pipeline (formerly North European Gas Pipeline, NEGP), which will go under the Baltic Sea to Germany. It obtained environmental approvals from the littoral states concerned rather easily and earlier this year began to lay the pipes undersea.

ANALYSIS: The deal is another indicator of ever-growing German-Russian cooperation and reorientation of German diplomacy, even as this takes place against the interests of Germany’s EU partners.

Oil Ripping Tonight (USO, WTIC, XOIL)

Light Sweet Crude Oil and USO could rip through their symmetrical triangles tomorrow based on tonight's action. If they do, the May highs could be in play. I'd rather watch that area for a catalyst/breakout. I'll be watching oil, metals and specifically agricultural commodity prices going forward. If reflation hits with a vengeance I'll have to prepare for cereal box deflation. The November Oil Future CLX10 just broke through its downtrend line ($80.60).

Oil rises to near $81 on US economy, demand signs - AP
Crude Oil Rises to Seven-Week High on China, U.S. Economic Data - Bloomberg
OIL FUTURES: Crude Up On Momentum; Equities, China Data Support - WSJ

See a collabo of charts after the jump..

State Bailouts, Socializing Credit, $50B in Distressed Debt Defaults? Ireland Banks - powerLINKS

powerLINKS of the day

*Hedge funds hold Ireland to ransom over Anglo Irish Bank bail-out - Telegraph.co.uk

Ireland faces "horrendous" bank bill - Reuters

Bailout of Irish Nationwide doubles to €5.4bn - IrishTimes

Whitney Says States May Need Federal Bailout in Next 12 Months - Bloomberg, Video

Tennenbaum Says $50 Bln of Distressed Debt Could Default: Video - Bloomberg

Grant Says U.S. `On the Road' to Socialization of Credit - Bloomberg

Buffett Seeks `Large Investment Opportunities' in China: Video - Bloomberg

Video of Riots in Spain, Moody's Downgrades Credit Rating - Distressed Volatility

9/24 - Chanos Says He's Shorting For-Profit Education Stocks: Video - Bloomberg

Awaiting Multi-Year Trend Confirmation / Big Money Chart Painting (Technical Update 9/30/2010, QQQQ, SPY, DIA, IWM, JJC, UUP/SPY, AAPL, SWKS, NFLX)

Technical Update: 9/30/2010 - Awaiting Multi-Year Trend Confirmation

It's time for the big hedge funds and whoever controls the U.S. equity markets (Waddell Reed?) to paint the charts and confirm the multi-year market trend. Right now there are two camps. The $12 Billion+ hedge funds (Tepper, Paulson) who are bullish on every asset except for bonds and hedged with a rolling prescription by Dr. Bernanke via 24/7 Fedgreens Pharmacy. Or the deflationists who believe the Fed will fail at stimulating the economy, we're in a new market structure, P/Es are going to single digits and debt deflation from the 30-year securitized credit bubble² will persist in real terms.

Video of Riots in Spain, Moody's Downgrades Credit Rating

Here are links to articles and embedded RussiaToday videos. Also street Flamenco music from Barcelona to level the head.

General strike in Spain to protest against austerity measures - Telegraph

Protests Limited To Spain, Brussels. Country-specific campaigns against austerity look set to continue as cuts begin to bite - Montreal Gazette

European Austerity Fuels Tensions - WSJ

Spain's Credit Rating Cut One Level by Moody's; Bonds Rise - Bloomberg

Flying Car Update, NextGen Terrafugia "Transition" Videos 9/30/2010

Get ready for the modern day flying car by Terrafugia for personal air travel. Don't tell me this personal $TRAN trend won't catch on, assh&%#! Hat tip to @p357 for this Fast Company article yesterday. I blogged about Terrafugia last year with videos from their first flight, the press conference and a Fox News interview.

Also info from a johntheadams youtube.
"The Terrafugia® Transition® Flying Car is Here! If you have a regular state-issued drivers license you can obtain an FAA Sports License with no medical exam. Cruising air speed: about 115 MPH (100 Knots). Speed on the ground: 65 MPH. Range: 450 Miles. And YES, it even has an INTEGRATED PARACHUTE that can protect both you AND the aircraft! Price: $190K ($10K deposit held in escrow)."
Recent press releases form their website:

September 8, 2010: "Flying Car" Company Moves into Initial Production Facility (PDF)

July 25, 2010: "Flying Car" Moves Closer to First Delivery (PDF)

See new videos below.

Netflix vs. Gold, NFLX Price/Sales Ratio at 2003 Highs, Going Parabolic!

The Netflix (NFLX) chart is in parabolic mode. It just hit $170, up 209% year to date. Of course with Blockbuster bankrupt and AppleTV streaming Netflix, you can understand why. I embedded a chart of NFLX revenues and its Price/Sales ratio over 5 years. NFLX P/S went from 1.28 in December 2008 to 4.75 today and revenues increased from $359 to $519 million. The NFLX price/sales ratio hit a peak of 5.54 in 2003. This will be a great short on a trend break, but let it ride. Back to my original point. It appears that the the real store of value, for the time being at least, is a basket of paper envelopes backed by DVDs and streaming movies (and TV episodes). In 5 years $GLD returned about 200% and NFLX 820%!

VXX December $19 Calls Active, Out of the Money (35,000/1590 Open)

Interesting day today. I'll look at the actual VIX futures curve chart next and a video from the OptionMonster volatility sonar report on a DEC/JAN 1x2 put transaction in the VIX futures. $VXX is the iPath S&P 500 VIX Short-Term Futures ETN or the first 2 months of the VIX futures curve, which rolls month-to-month. So $VXX is exposed to the curve widening or flattening as the contracts are bought and sold month-to-month. This post is specifically on the out-of-the-money option activity I just saw in the VXX December 19 Call. VXX is currently trading at $16.87. You can watch it stream live on my quote widget.

$DRYS Call Options Spike On MS Upgrade, Drilling Contract (Ocean Rig UDW)

DryShips (DRYS) call options were active on Monday. I originally found this information on Andrew Wilkinson's report on Seeking Alpha. The action could've been related to the Morgan Stanley's DRYS upgrade to "equal-weight" from "underweight" and the $5.50 price target. The chart looked vulnerable around downtrend resistance and the 50 day moving average as well. It took out both of those levels on Monday and is now testing the 200 day. First, the trades:
"Traders scooped up some 2,300 in-the-money calls at the October $4.0 strike for an average premium of $0.45 each. Optimists also picked up roughly 6,700 calls at the higher October $5.0 strike by shelling out an average premium of $0.05 apiece.

"Bulls looked to the November $5.0 strike to take ownership of some 4,000 call options at an average premium of $0.14 a-pop." [Source: Andrew Wilkinson via Seeking Alpha]

So we got all of this call option activity and then boom....

John Paulson: Buy Multiple Homes, Stocks, Gold; Sell Bonds on Double Digit Inflation, Lower Dollar (Courtesy of Fed Policies)

You all saw $12 billion hedge fund manager, David Tepper, say a week ago on CNBC that he was bullish on stocks hedged with a rolling "Bernanke Put" on the economy. Now, according to the articles below, $30 billion hedge fund manager, John Paulson, during a speech at the University Club of New York, said buy stocks (based on earnings yield/10y spread), buy multiple houses, sell bonds, and gold could overshoot to $4,000 on double digit inflation and a lower US Dollar. See Paulson & Co.'s recent letter to investors from Zero Hedge. This is nothing new, Paulson and his book have been bullish on the economy since the bailouts. Did he talk about hedging positions during his speech? I guess that's what the Federal Reserve is for. So I guess socialized greed, for a lack of a better word, is good! Courtesy of freshly printed Federal Reserve Notes, laced with cocaine, yep. Don't forget about the E in P/E if the economy doesn't pick up (via David Rosenberg). If that's the case, equity put options and credit default swaps are just a mouse click and premium installment away.

Articles:

John Paulson: Sell Bonds; Buy Stocks; Double Digit Inflation Coming - Robert Lenzner at Forbes.com

John Paulson Lecture: "Bonds Are Wrong, Stocks Are Right" - Zero Hedge

Gold Price Could Hit $4,000, Says Paulson - GoldAlert

John Paulson's Scary Speech: Double Digit Inflation By 2012, Gold At $4,000 - Business Insider

Sears Offers $665mln Senior Secured Notes, CDS Tightens By 32% (SHLD)

Sears (SHLD) is offering $665 million in Senior Secured Notes (due 2018) to "repay borrowings under our senior secured revolving credit facility, to fund working capital requirements of our retail businesses, capital expenditures and for general corporate purposes, including common share repurchases and pension funding obligations" [full release].

Get the money while it's cheap. Remember Tom Lee of JP Morgan said there would be a giant refi-boom in corporate debt? These unregistered notes are being offered privately to "qualified buyers" and $165 million to the Sears Pension Fund. I was browsing CMA Datavision's CDS market movers and saw that Sears Holdings was the top tightener. Sears 5Y CDS (tightened by 32% in basis points, credit quality improved) to 256bps. Look at all the Sears Roebuck Acceptance Corp bonds outstanding.

Courtesy of CMA Datavision

Gold, S&P vs. Dollar Correlation Back On In September (DXZ, GCZ, ESZ)

Below is a 6 month chart comparing the December Gold Future (GCZ), December E-Mini S&P future (ESZ) and the December US Dollar future (DXZ). They trade overnight. In the beginning of September, Gold pushed away from the US Dollar and moved in tandem with the S&P to the upside.

The "real" crew appears to be back. Since March of this year Gold significantly outperformed the S&P. We'll see if this correlation continues in October. Overnight the Dollar is rallying, ES is down and Gold is down. The S&P and Gold need upside confirmation here after their huge September runs (imo). You can see what a correlation retracement would look like on the chart. The December Dollar Future needs to take out 80 resistance. Charts after the jump.

Interesting currency updates I just came across:

Two currency blocs — same problem, different solutions (EUR, RMB or Yuan) - FT Money Supply
China May Retaliate for Currency Measure, U.S. Businesses Say (Yuan) - Bloomberg (h/t fal)
Brazil's Mantega sees global "currency war" (BRL): FT - MarketWatch (h/t empiractor)

Warren Buffett on Rail Shipments, Carpet Yardage Retracements (CNBC)

On 9/23/2010, Warren Buffett was interviewed by Becky Quick on CNBC and talked about the recession and small business data (specifically Berkshire data).

On the recession: "I think we're in a recession until real per capita GDP gets back up to where it was before. That is not the way the National Bureau of Economic Research (NBER) measures it, but I will tell you that, on any common sense definition, the average American is below where he was before, or his family, in terms of real income GDP. We're still in a recession and we're not going to be out of it for a while, but we will get out of it."

Railroad, carpet, brick and insulation business retracements and employment: "[rail] If you take the peak period per shipments and then you go all the way down to the bottom, we're 61% of the way back up". "Our carpet business, our brick business, our insulation business, they're not back 61% but they are moving back".

"If you take our carpet business, it fell from 13 million yards a week we'll say to 7 million yards a week. That cost 6,500 jobs. We're back up to maybe 9 million yards a week [33% retracement] but we haven't had to add yet. If we get to 10 million we'll start adding people, but it's lagging and it will continue to lag"

Look at the BRKA (Berkshire Hathaway A-Share) chart. It is trading just above the 61.8% retracement level as well, peak to trough. Nice v-shaped recovery for the stock and now it's 21% away from the 2007 high. Now what?

TechCrunch Disrupt 2010 Conference Live Video (SF, #tcdisrupt)

Here is the TechCrunch Disrupt conference live on TechCrunch TV + chat embedded via Ustream. Also this just in from GigaOM, "Breaking: AOL Close to Buying TechCrunch".

David Rosenberg Takes Other Side of David Tepper's Longs Hedged With Fed Put Options

David Rosenberg, Chief Economist at Gluskin Sheff and former North American Economist at Merrill Lynch, wrote a note about David Tepper's CNBC appearance. This is macroeconomic warfare! From Business Insider.
"Too bad we weren’t invited as a guest on CNBC last Friday to engage in a friendly debate with this portfolio manager because he didn’t outline the third scenario, either because he doesn’t believe it or he just plain didn’t contemplate it or he’s simply not positioned for it. That third scenario is that the economy weakens to such an extent that the Fed does indeed re-engage in QE, but that it does not work. So the “E” goes down and the P/E multiple does not expand. [Read more ]

Brace yourself for my EWI Dow 1,000 themed post! So will azazel the deflation demon silently invade the U.S. economy or is that risk officially backstopped by the Fed? It's also interesting that David Rosenberg thinks gold will hit $3,000 an ounce.

David Tepper's Bullish Bet on the Fed's Put (CNBC Video)

This is an interesting story because I blogged rapidly about the 2008 financial crisis. David Tepper, who runs $12.4 billion hedge fund Appaloosa Management, which made investors a 30% compounded annual return since 1993, explained on CNBC how easy it was to make $7 billion buying distressed financial securities (stock and debt) during the 2009 bank bailouts. He's right, it was free money. From what I remember, there was no way in hell the Treasury/Fed would have let more "too-big-to-fail" banks go under after the Lehman bankruptcy disaster.

Trading Update on EWZ (iShares Brazil ETF)

Here's a trading video on EWZ (iShares Brazil ETF) by Adam Hewison over at Market Club. He likes it better than the U.S. market. The chart looks interesting.

News for 9/26/2010

Sunday 9/26/2010 powerLINKS!

Iran Industrial Systems Attacked By Stuxnet Worm (Videos, Links)

Did the cyber-warfare trend just break out? See CNN/Bloomberg videos after the jump featuring experts.

Stuxnet computer worm takes its toll on Iran, where nuclear plant may be target - VentureBeat

Iran Fights Malware Attacking Computers - New York Times

Iran confirms massive Stuxnet infection of industrial systems - Computerworld

How Stuxnet Malware Used AutoRun Trick to Infect PCs (Microsoft Windows) - eWeek

Malware Hits Computerized Industrial Equipment (Siemens AG) - NYT Bits

PressTV - US, Israel behind cyber-attack on Iran?

Al Jazeera - Iran 'attacked' by computer worm