Monday, December 13, 2010

Cameron Hanover Daily Oil Recap (12/13/2010)

Cameron Hanover Daily Oil Recap (courtesy of www.fmxconnect.com)

"The fact that China did not raise interest rates this morning seems to have buoyed investors’ hopes, and Opec’s decision to maintain quotas at existing levels seems to have given oil traders a reason to be bullish for supply and demand reasons. The US dollar was under selling pressure all day long, starting first thing Monday morning and lasting past noon. In the process, the dollar gave up about 125 points - or 1.25 euro cents. Even the DJIA was higher on Monday, gaining 18.24 to end at 11,428.56. The surprise was that oil prices did not gain more. The bulls were trying to put prices in position to break important resistance as we move through the week."

Gold Makes Record Run (GLD, XAU/USD) - Guest Post

By GIR Analysts for OilPrice.com

Gold Makes Record Run

INCIDENT: On 7 December, gold hit an all-time high above US$1,425 per ounce (London morning fix), after having risen from under $300 per ounce at the beginning of the millennium and from just over $700 per ounce only a little over two years ago (all figures in current dollars).

SIGNIFICANCE: While the recent spike in the price of gold has already been somewhat redressed, new drivers in the market suggest increasing demand for the precious metal.

BACKGROUND: The price of gold is up 27% this year in dollar terms, as worry spreads over the debasement of currency values worldwide following the US Government's decision to pump trillions of dollars into the global economy. About two-fifths of all newly produced gold is used in investment vehicles, but demand is rising not only for that reason. While a tenth of new gold production goes to industrial uses, half is consumed by the jewelry industry. Increasing numbers of middle-class consumers in what used to be called the developing world have helped to drive world demand. The Indian marriage season, for example, exerts regular annual influences on price variation.

Hussman On The Overvalued, Overbought, Rising-Yields Syndrome

From John Hussman's most recent Weekly Market Comment titled "Warning - An Updated Who's Who of Awful Times to Invest" (HussmanFunds.com). I agree, the market is overvalued.

"In recent weeks, the U.S. stock market has been characterized by an overvalued, overbought, overbullish, rising-yields syndrome that has historically been hostile to stocks. Last week, the situation became much more pointed. Past instances have been associated with such uniformly negative outcomes that the current situation has to be accompanied by the word "warning."

"The following set of conditions is one way to capture the basic "overvalued, overbought, overbullish, rising-yields" syndrome:

1) S&P 500 more than 8% above its 52 week (exponential) average
2) S&P 500 more than 50% above its 4-year low
3) Shiller P/E greater than 18
4) 10-year Treasury yield higher than 6 months earlier
5) Advisory bullishness > 47%, with bearishness < 27% (Investor's Intelligence)"


Continue Reading: http://www.hussmanfunds.com/wmc/wmc101213.htm

European Leveraged Loan Market Update (12/10/2010)

Below is an update from S&P/LCD on the S&P European Leveraged Loan Index, new issuance volume for leveraged loans and high yield bonds, sovereign risk volatility, default rates and trends. Video after the jump.

Option Activity In EWJ $11 January 2012 Calls (Japan ETF), NIKKEI/S&P Ratio Update

On Friday (12/10) a trader bought 50,000 $11 $EWJ January 2012 Calls for $0.69 with 18,800 open on the International Securities Exchange (ISE). I first found out about this at Bloomberg.com ("Bullish Japan ETF Options Jump to 2010 High in U.S. Trading on Single Bet"). EWJ closed at $10.58 on Friday. To be profitable, EWJ needs trade above $11.69 before expiration or the calls need an upside implied volatility jolt. See the ISE quote with volatility measures here.

I've been watching the NIKKEI 225 Index and Japanese Yen recently, or mainly the NIKKEI/S&P ratio after it broke above the 50 day moving average. Since then it rallied towards the downtrend line, made a high of 8.557, and sold off. The ratio is back below the 2008 and 2009 lows so there needs to be a confirmed inverted head and shoulders pattern to officially battle that downtrend line. Also, a week ago I saw activity in FXY (Yen ETF) June 2011 Puts. Interesting Japanese market maneuverings going on.

I'm watching the 50DMA and downtrend line on $NIKK:SPX. EWJ looks similar to SPY. Is Japan set to exceed growth expectations in 2011? Read this Guardian article from 12/9/2010: "World's third largest economy grew at an annualised rate of 4.5% last quarter, up from the inital estimate of 3.9%". I charted out EWJ (Japan iShares) and $NIKK:$SPX after the jump.

Sunday, December 12, 2010

Let Citadel Group Electronify Derivatives Trading

From the New York Times: A Secretive Banking Elite Rules Trading in Derivatives by Louise Story
"Mr. Griffin (Citadel Group) said last week that customers have so far paid the price for not yet having electronic trading. He puts the toll, by a rough estimate, in the tens of billions of dollars, saying that electronic trading would remove much of this “economic rent the dealers enjoy from a market that is so opaque.”

“It’s a stunning amount of money,” Mr. Griffin said. “The key players today in the derivatives market are very apprehensive about whether or not they will be winners or losers as we move towards more transparent, fairer markets, and since they’re not sure if they’ll be winners or losers, their basic instinct is to resist change.”

*Read Zero Hedge's response: Secret Banking Derivative Cabal Redux, And Why HFT In CDS Has So Far Been A Failure (CDS contract notional values in $1K increments coming to an online brokerage near you!)

David Einhorn on "Too Big to Bail" and Corn, Oil Bubble Forming Due to Easy Money Policies, Also Long and Short Ideas (Greenlight Capital)

David Einhorn of $7 billion hedge fund Greenlight Capital, who gave reasons to short Lehman Brothers (12/07 VIC, 5/08 Ira Sohn speech6/08 CNBC) and Allied Capital (2002 Ira Sohn Conference speech) before they eventually collapsed, was on CNBC on 12/6/2010 (clips 1, 2, 3, 4), Reuters Insider on 12/8/2010 and Charlie Rose on 12/12/2010 giving views on the market. 

He believes "zero rates are a very dangerous long term policy" and "too big to fail" policies will eventually lead to something that is "too big to bail" (G-3 country or Spain), which could spark the next systemic crisis. He's bullish on gold as a currency alternative: "We're going to continue to own gold as long as we think the monetary and fiscal policies don't make sense" (clip 1 below).

Also, watch Einhorn tell Former Fed Governor Laurence Meyer that he's worried about a bubble forming in corn and oil due to easy money policies (clip 3 below). Fiscal and monetary headwinds aside, he still sees opportunities in stocks (clip 4). His fund is net long 70/30. Einhorn, do you think Shiller's S&P Cyclically Adjusted P/E (CAPE) ratio will hit bottom at 6 like it did in 1932 and 1982? It hit a low of 13 in March 2009 and is now back at 22. Also, how would a systemic sovereign debt crisis affect the pricing of risk assets? Open question..

Long positions mentioned: Sprint (S), Apple (AAPL), Gold, Pfizer (PFE), Vodafone (VOD), CareFusion (CFN), Interest Rates (see Reuters Insider Video)

Short positions mentioned: St. Joe (JOE) Moody's (MCO) and McGraw Hill (MHP)

Friday, December 10, 2010

Critical Decisions Looming for Japan's Nuclear Industry - Guest Post

Guest post by GIR Analysts for OilPrice.com

Critical Decisions Looming for Japan's Nuclear Industry

SITUATION: Japan is advancing with plans to reprocess spent nuclear fuel and boost its external nuclear exports. These decisions will impact the conduct of Japan's global non-proliferation diplomacy.

ANALYSIS: Assessing the degree of salience to Tokyo of non-proliferation goals will be aided by monitoring its policy in two areas: its negotiating strategy in nuclear technology supply talks with other states, and especially India, and its management of its internal nuclear power program. Other aspects of its nuclear diplomacy, including pressure for North Korean disarmament and support for enhanced global nuclear security, are likely to remain robust.

James Altucher Sees S&P 500 At $1,600, Wants Apology From Bears At Bull Market Hors D'oeuvres Party

James Altucher has been right so far with his strong bullish views on the market and economy. For example, watch this CNBC video I posted in July 2010 featuring Roubini and Altucher. On Tech Ticker on Friday, James demanded some credit and an apology from all the bears who disagreed with him (or called him a wacko/douchebag lol) at a bull market hors d'oeuvres party. Hopefully for those long the recovery in size (with help from the Bernank), the S&P hits $1,600+ as he predicts but without hyperinflation attached. See the Tech Ticker video after the jump or go to the post.

Fed Schedule of First $105 Billion in Treasury Purchases (QE2)

From the New York Federal Reserve as part of the planned $600 Billion in Treasury purchases (QE2). Click the image.

"Tentative Outright Treasury Operation Schedule

Across all operations in the schedule listed below, the Desk plans to purchase approximately $105 billion. This represents $75 billion in purchases of the announced $600 billion purchase program and $30 billion in purchases associated with principal payments from agency debt and agency MBS expected to be received between mid-December and mid-January."

If you're still confused about what's going on, here are two articles analyzing QE2:

QE2 Will Either Fix the Economy or Destroy It - Minyanville
Thoughts on "An Open Letter to Ben Bernanke" - Pragmatic Capitalism

John Williams: Panic Selling of U.S. Dollar Will Trigger Hyperinflation

Alert (hat tip Zero Hedge): John Williams, economist at shadowstats.com, said on BNN today that the United States will experience a hyper-inflationary great depression "due to decades of extraordinary fiscal abuse" and actions used to keep the financial system from collapsing. "When you see panic selling of the U.S. Dollar that's when you have to be very careful", he said. To protect yourself, he said maintain your purchasing power. "You look to put your (U.S) Dollars in hard assets like physical gold and silver. Getting the Dollar in other currencies such as the Canadian Dollar, the Australian Dollar, Swiss Franc". He also said, "it's probably a good idea to store goods that you would normally consume for several months, just to protect yourself, your family and have goods for barter". Wow. To see the video click the link below.

http://watch.bnn.ca/squeezeplay/december-2010/squeezeplay-december-8-2010/#clip386602

Also see a video reenactment of what a Dollar collapse/hyperinflation would look like: The Day the Dollar Died (Video by NAI). We are already seeing inflation in commodities. Monitor the U.S. Dollar Index chart at stockcharts.comIt hasn't broken down yet. Stack up on beans!

Related: Gary Shilling vs. Peter Schiff (Deflation vs. Inflation), Charles Nenner sees a deflationary crisis and David Rosenberg predicts a period of price stability. Who will be right.

Thursday, December 9, 2010

Jon Stewart: The Fed Isn't Printing Money, It's Imagineering Money (Daily Show Clip), Morgan Stanley Explanation (BASE, M2, MZM)

After Fed Chairman Ben Bernanke told 60 Minutes on Sunday (12/5/2010) that the Fed wasn't printing money, Jon Stewart of The Daily Show wondered why Bernanke told 60 Minutes 21 months ago that the Federal Reserve was effectively printing money to lend to banks. Stewart described QE2 as "imagineering" money ha. It is confusing. David Greenlaw, Managing Director and Chief U.S. Fixed Income Economist at Morgan Stanley, explained how the Fed wasn't printing money. I added links to charts at the St. Louis Fed. From PragCap.com:
"In the US, the Fed pays for bond purchases by crediting the reserve account of the bank that sold it the securities. Assuming that the rest of the Fed's balance sheet doesn't change, this leads to an increase in bank reserves. So, the monetary base - which consists of currency plus bank reserves - goes up by the amount of the open market purchase. In every textbook written prior to 2009 that we have come across, the rise in the monetary base is assumed to be transmitted into a roughly equivalent rise in the money supply (M2, MZM). But, as we now know, this assumption is not always valid. In the first round of Fed balance sheet expansion, which began in late 2008 and continued into 2009, the monetary base more than doubled and the money supply barely budged. In textbook terminology, the so-called money multiplier - the ratio of the money supply to the monetary base - declined by about the amount that the monetary base rose. The Fed can create excess reserves, but it can't force the banks to turn these funds into loans or securities holdings. In this case, the excess reserves are being stockpiled in banks' cash accounts. " (read more at PragCap, Morgan Stanley)

Also of note, apparently U.S Dollars are committing suicide on the printing press. Watch The Daily Show video from 12/8/2010 after the jump.

Wednesday, December 8, 2010

Blackstone's Steve Schwarzman on Where the World is Headed (Link)

For Schwarzman, the Action Is Anywhere but Here (spoke at the Goldman Sachs U.S. Financial Services conference) - NYT DealBook

Hat tip Business Insider

Janet Tavakoli FHFA Presentation: Repairing the Damage of Fraud as a Business Model - 12/8/2010

Read Janet Tavakoli's presentation to the Federal Housing Finance Agency Supervision Summit. She runs Tavakoli Structured Finance and warned repeatedly about the financial crisis. Here it is: "Repairing the Damage of Fraud as a Business Model" (12/8/2010).

Click for PDF presentation

ht @rcwhalen

Gary Shilling vs. Peter Schiff (Inflation vs. Deflation), How About Hyperinflation in Commodities Causes Hyperdeflationary Collapse?

Gary Shilling (on the deflation side) vs. Peter Schiff (on the inflation side) on Tech Ticker. We at Distressed Volatility believe we see disinflation in the CPI, hyperinflation in commodities and then a hyperdeflationary collapse (a little exaggeration there, but a final reset in asset prices in real, unmanipulated terms). Thoughts? I also added the Todd Harrison vs. Michael Pento debate.

Put Activity In $FXY (March, June 2011), Japanese Yen ETF

FXY (Japanese Yen ETF) puts were active today (read this optionmonster.com article for more information). FXY closed at 118.43 today.

In January 2011 (not pictured), 2,000 $135 Calls traded with 186 open (closed -0.25 to 0.05) and 1,000 $125 Puts traded with 21 open (closed -0.65 to 7.05). In March 2011, 1,500 $119 Puts traded with 137 open (closed +0.35 to 3.05) and in June 2011, 5,000 $115 Puts traded with 106 open (closed +0.65 to 2.55).

Is this trade hedging (or betting on) a continued slide to $115? FXY just rallied to the 50 day moving average resistance level and sold off. I'm also watching the NIKKEI:SPX ratio (and USD/JPY). Optionmonster also mentioned FXY volatility. Charts and option chain snapshots after the jump.

Tuesday, December 7, 2010

Full Obama Press Conference Video on Tax Deal (12/7/2010), Agreement Overview From Fact Sheet

The first video is the full 32 minute press conference by President Obama on the tax cut agreement with a question and answer session (12/7/2010). The second video is the statement made by the President yesterday on tax cuts and unemployment benefits (12/6/2010). I also added the overview of the tax agreement from the fact sheet released today.

David Rosenberg: Equities In Secular Bear Market, Canadian Corporate Bonds Are A Good Investment (Video)

David Rosenberg, former Chief North American Economist at Merrill Lynch who is now Chief Economist and Strategist at Gluskin Sheff, was featured on Consuelo Mack's WealthTrack show on 11/26/2010. Rosenberg believes we are entering a period of price stability (zero inflation) as ongoing debt de-leveraging, excess capacity and high unemployment converge with strong reflationary policies by the Fed. However, there is still a chance we could experience outright deflation, he said. Rosenberg thinks equities are in a structural bear market.
"The story is that in the secular primary uptrend in the stock market, sell-offs are opportunities to get in the better price. Now, we’re in a secular bear market where it’s different, and it means you are going to get rallies, but these are rallies that you rent. You don’t own them." (source)
He didn't completely write off equities though. He said he'd still be 20% allocated toward equities but only in safe sectors like utilities, staples, health care and stable industries that "spin off an income stream". He is taking the other side of the bond bubble trade! He favors high quality corporate bonds backed by strong balance sheets. During the interview he recommended high quality Canadian corporate bonds which would benefit from a lower U.S. Dollar (USD/CAD). He was also bullish on gold for a variety of reasons. Watch the video after the jump.

Governor Schwarzenegger Declares Fiscal Emergency, 12/6/2010 Press Release, Expenditure Reduction Proposal #California

Read the $7.4 billion expenditure reduction proposal in the report below from the Department of Finance. For more information on California's fiscal crisis ($20 billion annual operating shortfall through 2015/2016) read this post from 11/17/2010.

"Governor Schwarzenegger Presents Special Session Budget Plan

Declares Fiscal Emergency, Calls Legislature into Special Session to Address Deficit

Governor Arnold Schwarzenegger today declared a fiscal emergency and called the legislature into a special session to address California’s budget deficit and presented a package of solutions to help solve it.

“Our state is again facing a budget deficit that will force difficult decisions by California’s elected officials. If there is one thing we have learned over these past few years, it is that the longer we wait to tackle the problem, the larger and more difficult it is to solve,” said Governor Schwarzenegger. “That is why I have called a special session today, so the legislature can get a head start on the problem. California taxpayers cannot afford another lengthy delay. I look forward to working with Republicans and Democrats to get this done.”

Monday, December 6, 2010

Market in Process of Forming Top, Deflation Coming (Charles Nenner Video)

Charles Nenner, technical analyst and founder of the Charles Nenner Research Center, is confident the U.S. will experience a deflationary crisis even with strong reflationary policies in place by the Federal Reserve. From Bernanke's speech in Jackson Hole a few months ago: "the FOMC will strongly resist deviations from price stability in the downward direction". Also don't forget the trillions in Fed loan programs, TARP bailouts and securities purchases that helped reflate the economy and asset markets. Watch Bernanke on 60 Minutes last night. He's leaving the option open for additional Treasury purchases.

Nenner believes additional Treasury purchases won't make a difference. So, add Nenner to the deflation camp with Robert Prechter, Gary Shilling, and David Rosenberg. He didn't mention commodities but he sees a stronger Dollar. So I assume commodities would fall with the market. If that's the case, it will be interesting to see how commodities and the Dollar react during a deflationary crisis and forceful policy response.

Nenner mentioned on CNBC last week that the NASA sunspot cycle forecast was predicting another major crisis in 2013. On Tech Ticker, Nenner gave a more detailed outlook on Gold, the U.S. Dollar, Dow, S&P, semiconductors, 10-year Treasury bonds, deflation and geopolitical conflict down the road. Below are important points he made and the embedded videos from 11/30/2010.

Sunday, December 5, 2010

Video: Ben Bernanke on 60 Minutes (12/5/2010)

Full video after the jump courtesy of CBS/60 Minutes.

Video: Facebook's Mark Zuckerberg on 60 Minutes (12/5/2010)

Parts 1 and 2 are after the jump featuring Mark Zuckerberg, Kara Swisher of All Things D, the Winklevoss twins on the lawsuit and a tour of the new Facebook redesign.

Hugh Hendry's December 2010 Report (Eclectica Fund)

The Eclectica Fund, Manager Commentary - December 2010 at Zero Hedge

Saturday, December 4, 2010

Make Free Calls From iPhone Using Viber App (Free SMS Coming Soon)

Check this out. The free, ad-less, Viber application on your iPhone allows you to make free phone calls to other iPhone users with the Viber app installed. Free calls are made using your 3G data plan or Wi-Fi network. You can also make free calls internationally and they say the sound quality is better than your cell service. Android and Blackberry versions are coming soon, as is free SMS (text messaging). Could Viber put a huge dent in phone bills every month? I guess it all depends on data plans. It fuses with your iPhone and contacts perfectly it looks like. How will the whole world not use this? Watch the intro videos below via Youtube.

Chris Whalen on Dylan Ratigan Show (Fed Bailouts, Banks and Spain)

Chris Whalen of Institutional Risk Analytics was featured on Dylan Ratigan's show on MSNBC on 12/3/2010. Here are key quotes by Chris Whalen on the recently released details of the Fed bailouts. The video is after the jump.
"Goldman would've failed"

"The Fed is now there to support the speculators and they let the real economy go to hell, that's the bottom line"

"The impact, the negative effect of the speculation, especially in residential mortgages, was so awful that the Fed had to come to the aid of big corporations too which were cut off from commercial paper"

"Wait til we get to Spain. Spain is worse than Ireland"

Friday, December 3, 2010

Groupon Rejects Google's $6 Billion Bid, Coupon 2.0 Wave is Here

I just read that Groupon rejected Google's $6 billion bid. Read more at ChicagoBreakingBusiness, All Things Digital, BusinessWeek, WSJ, Dealbook, CNNMoney.

Couldn't Google build their own location based coupon service?Coupons would pop-up on your phone if you pass a store or restaurant based on search history, purchase history or personal settings. You'd pay with your e-coupon on your phone (phone = new credit card). Your phone would analyze purchase history to help make coupons more relevant. Also a search algorithm could provide real-time competitive coupon deals when a product, store or restaurant is searched for on Google. Local and nationwide businesses would be forced to provide the best deals. The coupon flood is just getting started in my opinion. Especially with the unemployment rate at 9.8%.

Analysis of November HSBC China PMI, OECD Leading Indicator Trending Down Since February (Charts)

From the November HSBC China Manufacturing PMI release at www.markiteconomics.com (the service sector and composite output PMI declined, see below):

"The Chinese manufacturing sector strengthened further in November, with overall business conditions improving at the strongest pace in eight months. This was signalled by the headline HSBC Purchasing Managers’ IndexTM (PMITM) posting 55.3, up from 54.8 in October. Considerable price pressures were also indicated by November’s survey, with both output and input prices rising at substantial and accelerated rates."

A read above 50 means the Chinese manufacturing sector is growing. Under 50 means contracting. Price pressures were expected as consumer prices in China rose 4.4% in October, a 25 month high. Also read: China 'set to tighten monetary policy' (BBC News 12/3/2010). In a similar fashion, the official China PMI reported by the "China Federation of Logistics & Purchasing and National Bureau of Statistics" hit 55.2 in November, up from 54.7 in October. See the chart and data at Bloomberg.com - CPMINDX.

Wednesday, December 1, 2010

Details of Liquidity Facilities Used By the Fed During Financial Crisis

The Federal Reserve released "detailed information about the liquidity and credit programs and other monetary policy tools that the Federal Reserve used to respond to the financial crisis that emerged in the summer of 2007".Find it all at http://www.federalreserve.gov/newsevents/reform_transaction.htm.

"Facilities and Programs
Agency Mortgage-Backed Securities (MBS) Purchase Program
Term Auction Facility (TAF)
Central Bank Liquidity Swap Lines
Primary Dealer Credit Facility (PDCF)
Term Securities Lending Facility (TSLF) and TSLF Options Program (TOP)
Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF)
Commercial Paper Funding Facility (CPFF)
Term Asset-Backed Securities Loan Facility (TALF)
Money Market Investor Funding Facility (MMIFF)
Bear Stearns, JPMorgan Chase, and Maiden Lane LLC
American International Group (AIG), Maiden Lane II and III
Bank of America
Citigroup"

And check this out... "@WSJ: We've created a searchable database of the Fed's emergency lending data. Every loan: http://on.wsj.com/geMgP4"

Tuesday, November 30, 2010

Bank of America Broke Support, CDS Up, Wikileaks? [BAC Charts]

BAC closed at $10.95, -3.95% and just below support. BAC 5Y CDS (credit default swap) was up 7.21% at 214.338 basis points (+114% YTD).

Is Bank Of America WikiLeaks’ Next Target? (Forbes)

Bank's Stock Declines on WikiLeaks Anticipation (WSJ)

BofA Mortgage Morass Deepens After Employee Says Trustee Didn't Get Notes (Bloomberg)

WikiLeaks Says It Holds Documents From Bank of America Executive - (Bloomberg)

Wikileaks: 5GB of Dirt on Bank of America - (The Big Picture)

Wikileaks chief said he has 5GB of secret docs on Bank of America - exclusive - (Raw Story)



BofA CDS 5Y - CBAC1U5 (Bloomberg)


Charles Nenner: Next Crisis Hits in 2013 When Sunspot Cycle Peaks, Predicts Dow 5,000 (Video)

Did you know sunspot cycles move in tandem with the stock market? You learn something new every day. Charles Nenner of Charles Nenner Research believes the market will "muddle through" until 2013 when the sunspot cycle peaks. He then predicts the Dow will drop to 5,000 (break the March low).

The less sunspots there are, the more depressed people are, and that in turn affects the economy. Was there a Sunspot/Dow divergence from 2002-2007? Here's the actual prediction by NASA/Marshall Solar Physics which was updated on 11/3/2010:

"Current prediction for the next sunspot cycle maximum gives a smoothed sunspot number maximum of about 66 in June of 2013."

Click on the chart for a closer view of the sunspot forecast. In the first segment, Nenner said EUR/USD will move lower as the U.S. economy grows faster than Europe. Watch the CNBC video after the jump.

Monday, November 29, 2010

George Bush Talks His Book at Facebook HQ With Zuckerberg (Video)

I'm watching former President George W. Bush shamelessly promote his new book, "Decision Points", with Mark Zuckerberg at Facebook headquarters. Good marketing move. Video after the jump.

WikiLeaks' Next Target is a Major Bank!

Prepare yourselves... From Forbes.
"In a rare, two-hour interview conducted in London on November 11, Assange said that he’s still sitting on a trove of secret documents, about half of which relate to the private sector. And WikiLeaks’ next target will be a major American bank." (full story)

Spain Government Bond Yields Spike, 10-Year at 5.42%, EUR/USD at 200DMA

The European debt crisis is hitting Spain. Spain Government Bond yields and credit default swaps made new highs today. Spain's 10-year bond yields 5.427%, which is up 122 basis points or 29% in a month. Spain's 5-year bond yields 4.81%, up 168 basis points or 53.6% in a month. Data and snapshots are courtesy of Bloomberg.com. I added news links at the end of the post. EUR/USD (Euro/US Dollar) is currently testing the 200 day moving average and Dennis Gartman told CNBC today that any Euro rallies should be sold (video after the jump).

Spain 5y Bond Yield (GSPG5YR:IND)


Spain 10y Yield (GSPG10YR:IND)


EUR/USD (Euro/US Dollar)


Sunday, November 28, 2010

Reads: Sheila Bair's Warning, Russell on Equities, Ireland Gets Bailout, Korea Conflict, AAII Elevated

Continued from the 11/24/2010 powerlinks fest.

Will the next fiscal crisis start in Washington? by Sheila Bair (FDIC Chairman) - Washington Post

Lee Myung Bak (South Korea President) Vows to Make North Korea Pay for Attack as China Urges Talks - Bloomberg

Richard Russell - Stocks Repeating 1930, Gold Building Base (Dow Theory Newsletter) - King World News

Ireland gets a $113 Billion bailout; Germany Drops Threat on Bonds - Bloomberg

Irish to Pay 5.8% for Bailout as Taxes, Senior Debt Protected - Bloomberg

Following Hungary And Ireland, France Is Next To Seize Pension Funds - Zero Hedge

Robust Sales for Holiday Weekend - NYT

AAII Bullish sentiment rebounded to 47.4% (remains elevated) - PragCap

Saturday, November 27, 2010

The Day the Dollar Died (Video by NAI), Bernanke Beware of This Hyperinflation Scenario!

Watch this fictional yet horrifying video made by the National Inflation Association (inflation.us) depicting a hyper-inflationary Dollar collapse. It is titled: "The Day the Dollar Died: The first 12 hours of a U.S. dollar collapse". The NAI believes there's a serious risk of hyperinflation in the U.S if the Fed keeps pumping trillions in excess reserves into the banking system (we're at QE4 in the video). Watch it after the jump. They did another video in August on the similarities and differences between Japan in 1990 (beginning of Japan's lost deflationary decade) and the U.S. today. Some economists, like David Rosenberg, believe ongoing debt de-leveraging will outweigh reflationary policies for many years, which will force price stability. Bernanke has everything under control, right?

Protests Against Austerity in UK, Austria and Ireland (Videos, 11.27.2010)

On Friday, in the UK, there were violent student protests against the proposed tuition hike that would triple fees. People then took to the streets in Ireland and Austria protesting against tax hikes and budget cuts (protest reflexivity). See videos after the jump. People protested against bailouts as well (related: Ireland Bank CDS widened on Friday). So, when does the austerity party and protests start in the U.S.? On a currency note, BlackRock's Larry Fink thinks the Euro (EUR/USD) could hit 1.20 as a result of the EU debt crisis and contagion (Telegraph.co.uk). Watching Portugal and EspaƱa.

1) Students in UK rioting proposed tuition hike (courtesy of RussiaToday)
2) 50,000 people march through Dublin protesting austerity measures (speeches)
3) Thousands protest proposed budget cuts in Vienna, Austria (courtesy of Press.tv)

Friday, November 26, 2010

Ireland Credit Default Swaps Widening (Bank of Ireland, Allied Irish Banks, Irish Life and Permanent)

Snapshots from CMA Datavision's largest widening spreads from today (11/26/2010). Charts after the jump. Junior bondholders at Anglo Irish Bank "already have been forced to accept losses of 80%-95%" (AP link).

Related news:

"Allied Irish, Bank of Ireland May Buy Back Subordinated Bonds" - Bloomberg.com

"S&P cuts ratings on Irish banks; Anglo deemed junk"- AP

"Claims Allowed on Anglo Irish Default Insurance" - WSJ (11/24/2010)

Wednesday, November 24, 2010

Projections for 2011: Dennis Gartman, Jim Rogers, Gary Shilling (Videos)

Macro views and projections for 2011 - 11/24/2010

Dennis Gartman's top trades for 2011. He likes Gold in Euros (XAU/EUR), Australian Dollar in Euros (AUD/EUR), corn and soybeans.

Reads: Soros Gold Holdings, Louise Yamada on Technicals, Eurozone Crises, Jim Rogers (11.23.2010)

Powerlinks for 11/24/2010

Louise Yamada (technical analyst) - Caution on the Stock Market - KingWorldNews (11/23/2010)

Howard Lindzon and Jim Rogers on StockTwits.tv

Poverty Soars in California - Gregor.us

Soros says conditions "pretty perfect" for gold - Reuters (11/16/2010)

Tuesday, November 23, 2010

Text of FOMC Minutes; GDP, Unemployment, PCE Projections (11/3/2010)

Below is an excerpt from the Federal Open Market Committee (FOMC) Minutes on 11/2/2010 and 11/3/2010. The quoted text does not include staff reviews. Here is the FOMC Statement.


"Participants' Views on Current Conditions and the Economic Outlook
In conjunction with this FOMC meeting, all meeting participants--the six members of the Board of Governors and the heads of the 12 Federal Reserve Banks--provided projections of output growth, the unemployment rate, and inflation for each year from 2010 through 2013 and over the longer run. Longer-run projections represent each participant's assessment of the rate to which each variable would be expected to converge, over time, under appropriate monetary policy and in the absence of further shocks. Participants' forecasts are described in the Summary of Economic Projections, which is attached as an addendum to these minutes.

XRT/HYG (Retail Index/High Yield Bond ETF) Testing April High - Chart

XRT/HYG, what do you think y'all. Can the ratio pry through April, 2010 resistance? Or will retail sales disappoint and stocks fall faster (or rise slower) than high yield bonds.

Futures Down, Dollar Up on South Korea Attack (ES, USDJPY, EURUSD, EURJPY - Charts)

S&P futures are down and the US Dollar is up on Korea tensions. EUR/JPY is testing the downtrend line. See charts after the jump (ESZ10 -0.73% at 1,189.25). Will provide an update after the close.

North Korea Fires at South Korean Island (Video and Links)

Update: North Korea attacked a South Korean Island. Below are links and a video clips after the jump (added a live MBC News stream).


N. Korean attack sets S. Korean island ablaze, at least 1 dead - BNO News
S. Korea Scrambles Jets, Returns Fire After North Shells Island - Bloomberg
Marines killed one person, injured 13 people.. army on alert - YTN.ko.kr (title translated)
NK Fires Coastal Artillery at S.Korean Island (Yeonpyeong) - KBS World (kbs.co.kr)
North Korea fires on South Korea – live coverage - Guardian
North and South Korea Exchange Dozens of Artillery Shells - New York Times
North Korea and South Korea exchange fire, raising tensions - FT/BeyondBrics Blog
North Korea bombs South Korean island - The Telegraph
North Korea Fires Rockets at Island - WSJ
Two Koreas exchange fire across maritime border - Reuters
'Artillery firing' on Korea border - Al Jazeera English

Analyst Mary Meeker on Internet Trends at 2010 Web 2.0 Summit (Video/Slides)

The Web 2.0 Summit is great. See web venture capitalists Fred Wilson and John Doerr battle it out in my previous post. Mary Meeker, an technology analyst at Morgan Stanley, did a presentation on "internet trends" (globality, mobile, social ecosystem, advertising, commerce, media, pace of change etc). I embedded the video and presentation slides after the jump. Mobile is blowing up..


"Global Unit Shipments of Smartphones > Desktop/Notebook PCs by 2012". Also, internet ad spending is "out of whack" with consumption, using TV, print and radio as comparables (chart in the report).

Other interviews at the Web 2.0 Summit include Eric Schmidt (CEO of Google) and Mark Zuckerberg (Facebook).

Monday, November 22, 2010

Gregor Macdonald on IEA's Oil Projection (65% of Future Supply Coming From Fields Not Yet Discovered)

Gregor Macdonald of Gregor.us and Macrotwits Hour was on Max Keiser's show on 11/20/2010 talking about the IEA's recent world oil production projection (w/ chart) out to 2035. I embedded Part 1 after the jump, see parts 2 and 3 at MaxKeiser.com. IEA = International Energy Agency.
"The IEA very surprisingly and I must say rather strangely, has forecasted that the bulk of future oil supply will come from fields not yet discovered or developed" (65% of that future oil)

Has The Market Been Rigged For Decades? (Hedge Fund Raids/Tech Ticker Video)

"The most valuable commodity I know of is information" -Gordon Gekko. Nothing new going on here people.

1) U.S. in Vast Insider Trading Probe

2) FBI Visit Exposes Trade-Probe Tactics

3) FBI Raids Two Hedge Funds (Diamondback Capital Management LLC and Level Global Investors LP) Amid Insider-Trading Case.

4) FBI raids Loch Capital

5) SAC Capital, Janus, Wellington Receive Inquiries on Insider Trading, SAC Discloses Government Subpoena

6) Citadel Receives Subpoena

Expert Networks:

1) Expert-Broker Chu Steered Hedge Fund to Asia, U.S. Says
"Don Ching Trang Chu, the “expert- network” executive arrested yesterday on insider-trading charges, had a roster of Asia-based employees of North American technology companies to feed information to clients, according to court documents."

2) U.S. Trading Probe Puts Research, Expert Networks in Spotlight

3) Consultant of 'Expert Network' Gerson Lehrman Group May Be Drawn Into Insider-Trading Probe (*update 11/30/2010)

Tech ticker video talking about it after the jump.

Sunday, November 21, 2010

Energy Tells Tale of Fading West, Booming East - Guest Post

Guest post courtesy of OilPrice.com

Energy Tells Tale of Fading West, Booming East

The patient is the United States and the diagnosis is "Asia shock."

It is a psychological disease with physical symptoms and no known cure. However there are therapies, therapies of trade, diplomacy and fiscal restraint at home.

As President Barack Obama jetted around Asia, he may have pondered not so much the economic power that waits East of Suez, but why it took so long to emerge. And why the patient is in denial.

In the 18th and 19th centuries, Asia was for the taking by the European colonialists; and take they did.

Bernanke's ECB Speech: Global Imbalances, Unemployment Pose Risk to Recovery, Defends Policy (11/19/2010)

Bernanke gave an interesting speech at an ECB conference on Friday. He mentioned a few things that could "undermine" the global recovery: global trade imbalances, currency undervaluation, temporary cyclical unemployment turning into long-term structural unemployment and further disinflationary pressures (source: federalreserve.gov). I also embedded a video clip from EUX.tv.

Chairman Ben S. Bernanke
At the Sixth European Central Bank Central Banking Conference, Frankfurt, Germany

November 19, 2010

Rebalancing the Global Recovery

The global economy is now well into its second year of recovery from the deep recession triggered by the most devastating financial crisis since the Great Depression. In the most intense phase of the crisis, as a financial conflagration threatened to engulf the global economy, policymakers in both advanced and emerging market economies found themselves confronting common challenges. Amid this shared sense of urgency, national policy responses were forceful, timely, and mutually reinforcing. This policy collaboration was essential in averting a much deeper global economic contraction and providing a foundation for renewed stability and growth.

In recent months, however, that sense of common purpose has waned. Tensions among nations over economic policies have emerged and intensified, potentially threatening our ability to find global solutions to global problems. One source of these tensions has been the bifurcated nature of the global economic recovery: Some economies have fully recouped their losses while others have lagged behind. But at a deeper level, the tensions arise from the lack of an agreed-upon framework to ensure that national policies take appropriate account of interdependencies across countries and the interests of the international system as a whole. Accordingly, the essential challenge for policymakers around the world is to work together to achieve a mutually beneficial outcome--namely, a robust global economic expansion that is balanced, sustainable, and less prone to crises.

Friday, November 19, 2010

Fred Wilson vs. John Doerr at 2010 Web 2.0 Summit, sFund Announcement Video

The E-mini Nasdaq, S&P and Dow futures are unchanged tonight. Here's an update on the 15-min $SPY chart. I will report on the market tomorrow after travels. For now, watch this clip from the 2010 Web 2.0 Summit featuring venture capitalists' Fred Wilson (Union Square Ventures) and John Doerr (Kleiner Perkins Caufield & Byers - KPCB). They are early stage venture capital funds that invest in internet companies. For example, Union Square funded Twitter and Zynga and KPCB funded Google, Zynga and the sFund (Facebook is a partner, see KPCB video). Watch both videos for a good perspective on what's going on in web finance.

Both Fred and John think the web market is overvalued (volatility coming?). Fred dissed Apple's mobile platform (vs. Android), Google and Facebook as well! John Heilemann brought up that Fred said "Facebook is a photo sharing site with some chat attached". Fred responded:

Thursday, November 18, 2010

Jim Chanos on China; It Is Using Price Controls to Tame Inflation (11/17/2010) FXI, SSEC)

Jim Chanos, who runs hedge fund Kynikos Associates and is openly bearish China, was on Fortune TV on 11/12/2010. He's been bearish on China for a while now. See his presentation from last year. China is enacting price controls to tame inflation (CPI +4.4% in October). $SSEC, the Shanghai Composite Index, is right above the 50 and 200 day moving average (chart). Video after the jump.

China to auction state sugar reserves to curb price rises - Gov.cn (Chinese Government website)
Chinese government announces guidelines to tame price rises - Gov.cn
China targets liquidity to cool inflation - Gov.cn
China imposes price controls to stave off inflation - CNN Money
Chinese consumers blame US as prices spiral up - AFP
Related: Cotton ETN $BAL Up 63% in 3 Mos, Cotton Price Inflation Hits China - Post, 10/15/2010


EIA: Crude Oil Inventories Declined By 7.3 Million Barrels, 1.2 Million Rise Expected, Still Above Average Range (11/12/2010 Report)

Below is an excerpt from the 11/12/2010 Weekly Petroleum Report via the Energy Information Administration (EIA). I noted the drop in oil imports and inventories. U.S. crude oil stocks (inventories) were down on the week but remained above the average range.

"U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 7.3 million barrels from the previous week (Analysts polled by Platts expected a 1.2 million barrel increase). At 357.6 million barrels, U.S. crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories decreased by 2.7 million barrels last week and are in the upper half of the average range. Both finished gasoline inventories and blending components inventories decreased last week. Distillate fuel inventories decreased by 1.1 million barrels and are above the upper boundary of the average range for this time of year. Propane/propylene inventories increased by 0.9 million barrels last week and are in the lower half of the average range. Total commercial petroleum inventories decreased by 9.1 million barrels last week."

"U.S. crude oil imports averaged 7.9 million barrels per day last week, down by 225 thousand barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged 8.5 million barrels per day, 64 thousand barrels per day below the same four-week period last year."

Read the full report with data tables and charts at EIA.gov

More Analysis:
UPDATE 2-US crude stocks plunge most in over 14 months-EIA - Reuters
EIA ANALYSIS: Product stocks drop on abnormally low imports - Platts.com

Michael Steinhardt: Debt Markets Are Overvalued (2-year Treasury Price Chart)

Yesterday on CNBC (11/16/2010) former hedge fund manager, Michael Steinhardt, discussed QE2, inflation, GDP, municipalities and the overall run in commodities, stocks and bonds. He is currently short the 2-year Treasury Note and believes debt markets are overvalued.

In the second video, David Faber and Gary Kaminsky asked Steinhardt what he'd do if his firm was allocated GM shares in the IPO. He said, "(I'd sell out) as quickly as I can. Well, I don't think one should be a long term holder in Government securities, particularly Government equity securities". Ouch.

*Larry McDonald talked about GM convertible bonds in the second video

Wednesday, November 17, 2010

Reading Reports by Knight Research, Hussman and Albert Edwards

"The Game Is Over" by Knight Strategic Research @ zerohedge.com
"The Cliff" by John Hussman @ hussmanfunds.com
China/U.S's global game of chicken by SocGen's Albert Edwards @ zerohedge.com

$SPY Trading Channels to Watch on 15-Min Chart (11/17/2010)

If interested, below is the $SPY (SPDRs S&P 500 ETF) 15-min chart from 11/8/2010-11/17/2010 courtesy of freestockcharts.com. SPY is at the channel inflection point in the immediate term. Here is a link to the layout: http://www.freestockcharts.com?emailChartID=4c7efba9-e30e-40b7-8681-28dfbd8894d7

$SPY Click for larger view

Chris Whalen: California Will Default On Its Debt, Eventually They'll Have to Restructure, CA$ (Pension Funds Hold California Debt)

First read California's Fiscal Outlook (2011/12 Budget). LAO expects a $20 billion deficit through 2015/2016 (operating shortfall). Chris Whalen of Institutional Risk Analytics was on Tech Ticker yesterday and said California will default on its debt and "force their creditors to come to the table and talk". Or they will issue their own currency again like they did in the 1840s! Cali-bucks. CA$/IL$ coming soon? Whalen said "I think eventually the debt will have to be haircut and pension obligations are going to have to be repudiated". "If there's even a hint of a bailout, you're going to have Illinois, New York, several other states right behind California". The "IOU game" will continue until people don't take the "funny money" anymore. Crazy times. Video after the jump.

Nikkei/S&P Ratio Technical Analysis ($NIKK/$SPX), Nikkei Outperformed S&P and Shanghai Since 11/1/2010 - Charts

Ratio Technical Analysis for 11/17/2010: Anyone watching the Nikkei/S&P ratio? $NIKK:$SPX broke above the 50DMA, a descending channel and pierced ceiling resistance from November, 2009. Is NIKK/SPX positioning to test that ultimate downtrend? If so, i'm thinking it would coincide with USD/JPY strength. But would the S&P correct further and Nikkei rally? For NIKK/SPX to test that uptrend, the Nikkei must either rise faster than the S&P or fall slower from here. Interesting, I'll be watching this.

Since 11/1/2010, the Nikkei has outperformed both the S&P and Shanghai Index. However, on a longer term basis $NIKK has underperformed. We shall see how the gap closes. The Nikkei recently gathered strength after putting in an inverse head and shoulders pattern. It hasn't participated in the recent sell off. See both charts after the jump. Thoughts?

California's $20 Billion Annual Operating Shortfall Through 2015/2016 (Fiscal Outlook, 2011/2012 Budget Report) CMF, CXA, BFZ, PCQ, PCK

LAO just released California's Fiscal Outlook, 2011/2012 Budget, and the State has a "$25 billion budget problem that needs to be addressed in the coming months". The California Legislative Analyst Office, who released the report, also forecasts a $20 billion annual operating shortfall in their General Fund through 2015/2016 (chart below). Cali should have legalized it. Also, these forecasts don't include underfunded pension liabilities.

California municipal bond ETFs (CMF) sold off last week, as did the National muni-bond ETF (MUB). Muni-bond credit risk and perhaps interest rate risk is being re-priced. This action wasn't a surprise (tax-base/pension fund update 10/26, California Comptroller on 8/20 and Meredith Whitney said States may need a Federal bailout in 12-months on 9/30/2010). California is in process of selling $10 billion of short-term notes.

Tuesday, November 16, 2010

Cameron Hanover Daily Oil Recap (11/16/2010)

Cameron Hanover Daily Oil Recap (courtesy of www.fmxconnect.com)

Oil prices were significantly lower on Tuesday as a tidal wave of asset liquidation hit the markets. It started with a stronger US dollar, which poured cold water on commodities, and it spread into equities, which were down substantially on Tuesday. The DJIA ended the day down 178.47 to 11,023.50. The two “back” stories were the possibility of a eurozone bailout of Ireland, which was in ongoing negotiations, and the very real likelihood of Chinese monetary tightening. The first feature, the concerns over an Irish bailout, helped boost the US dollar. The fear of Chinese tightening helped raise worries over the world’s economic locomotive.

Turkey Deepens Strategic Relationship with China (Guest Post)

Submitted by Global Intelligence Report (11/16/2010)

Turkey Deepens Strategic Relationship with China

INCIDENT: The visit by Turkey's Foreign Minister Ahmet Davutoglu to Beijing a week ago, follows by a scant three weeks the visit by China's Prime Minister Wen Jiabao to Ankara on 78 October as part of the latter's European diplomatic tour also including Belgium, Germany, Greece, and Italy in the margin of his participation in an EU-China summit.

SIGNIFICANCE: The reciprocal visits become, in context, a sign not just of increasing economic ties between the two countries but moreover their foreign policy and strategic cooperation.

BACKGROUND ANALYSIS: The modern Turkish and Chinese states established diplomatic relations only in 1971 but these remained unimportant to both sides side during most of the Cold War. By the turn of the millennium, however, the Kurdish insurgency had sensitized Ankara to Chinese concerns about Uyghur separatism, notwithstanding the latters' cultural community with Anatolian Turks. The Turkish government progressively narrowed the margin of maneuver open to Uyghurs and Uyghur sympathizers in Turkey.

SPY Approaching 50 Day Moving Average 116.7, Trading at 118.23 -1.5% (11/16/2010)

Yesterday Jim Iuorio and Katie Stockton said on CNBC that the S&P correction would continue towards the 50 day moving average (116.7). With the S&P 500 ETF ($SPY) down 1.5% right now at 118.23, 50DMA/SPY convergence could come in a matter of days (or hours, who knows). The Ireland debt-crisis (bailout rumors), Greece aid (Austria holding out?), China inflation controls, Fed comments and muni-bond madness are dominating my Twitter news stream. Crazy day today. I'm going to dissect what's going on and put up a links post, chart out ETFs and currencies, and then do a long post on the municipal bond market (California, MUB, GO Bond 20 Index, Muni-Treasury spread etc). For now here is a chart of $SPY showing 50DMA support and the ascending channel it just broke. Hopefully you have puts riding the volatility. Last time I checked the volatility index ($VIX) was up 13% at 22.86.

*See an index of $SPY posts since 10/21/2010 to see the action and analysis that led up to today.

Cameron Hanover Daily Oil Recap (11/15/2010)

Cameron Hanover Daily Oil Recap (courtesy of www.fmxconnect.com)

Crude oil prices ended mixed, with the first two months lower and the deferred months higher. Heating oil prices were higher and gasoline prices were lower. Traders and investors were trying to figure out which factors were important to the oil markets, even as those “leader” markets or “bellwethers” struggled to figure out what factors would make them rise and fall. The US dollar had not been a major bellwether for oil in more than a week and yet we feel obliged to start there. Concerns over Ireland’s sovereign debt were paramount in investors’ thinking on Monday and these investors were buying US dollars and avoiding riskier asset plays.

Congressional Oversight Panel Examination of Foreclosure Crisis (11/15/2010 Report, Video)

The Congressional Oversight Panel released a report (pdf) on 11/15/2010 titled: Examining the Consequences of Mortgage Irregularities for Financial Stability and Foreclosure Mitigation (hat tip Housing Wire). Below is an excerpt from the executive summary and a video with Senator Ted Kaufman giving an introduction.

"Executive Summary*

In the fall of 2010, reports began to surface alleging that companies servicing $6.4 trillion in American mortgages may have bypassed legally required steps to foreclose on a home. Employees or contractors of Bank of America, GMAC Mortgage, and other major loan servicers testified that they signed, and in some cases backdated, thousands of documents claiming personal knowledge of facts about mortgages that they did not actually know to be true.

Monday, November 15, 2010

Spot Gold Technical Update, Consolidation? (XAU/USD Video)

Adam Hewison over at MarketClub did a video on spot gold and I embedded it below. Are we seeing consolidation in an overall uptrend? He shows you the MACD momentum indicator below XAU/USD price action and divergences. Video after the jump.

Gary Shilling on Deleveraging, 30Y Bond, Stocks and EUR/USD (Tech Ticker/Bloomberg Video Links)

Below are links to Tech Ticker videos and a Bloomberg video featuring Gary Shilling who runs economic consulting firm A. Gary Shilling & Co. He still likes the 30y Treasury Bond for appreciation not yield and sees EUR/USD and stocks lower from here.

Sovereign Debt Crisis Redux? "Tough Medicine" Isn't Curing Europe's PIIGS, Shilling Says - Tech Ticker

Of Course The Fed's Latest Plan Won't Work, Says Gary Shilling--We're Still Deleveraging! - Tech Ticker

Middle Class in Crisis: America Needs a Reality Check, Gary Shilling Say - Tech Ticker

Gary Shilling: Fed "Losing Credibility" as It Becomes "an Arm of the Administration" - Tech Ticker

Gary Shilling Sees `Significant' Stock Selloff Within 12 Months (11/12/2010) - Bloomberg.com 

Facebook's New Messaging System (Zuckerberg Presentation, 11/15/2010) $FBOOK

Here is Mark Zuckerberg presenting Facebook's new messaging system [1) Seamless messaging 2) Conversation history 3) Social Inbox] via FacebookLive.



S&P Correction Could Hit 1,155-1,160 (Jim Iuorio on Options, Katie Stockton on Technicals - CNBC Video)

11/15/2010: Jim Iuorio of TJM Institutional Services and Katie Stockton of MKM Partners believe the S&P could correct to 1,155-1,160, which is around the 50 day moving average. Iuorio is basing his case on the options market, mainly the reaction in the VIX (volatility index) last Friday, and Stockton on technicals. Iuorio correctly called for a U.S. Dollar spike in November 2009 and was bullish on Silver in May 2010 before its massive move. They both think this pullback is a buying opportunity (Jim mentioned Fed support). Interest rates vs. dividend plays, utilities, oil and tech are also mentioned during the segment. For more potential support levels see my previous post. The CNBC video clip is after the jump and the S&P is at 1,199.80 (+0.05%).

Leveraged Loan Market Update (S&P LCD Analysis, 11/5/2010)

Below is an update on the leveraged loan market by S&P LCD for November. It was posted on 11/5/2010. The S&P/LSTA U.S. Leveraged Loan 100 index is around the April high (92.39), new-issue clearing yields were at a 5-month low in October (6.7%) and the default rate was at a 22-month low (2.3%). Loan players expect new-issue yields to "grind tighter" but "accounts are eyeing 2012-2013 with caution". View the video and chart after the jump.

Chesapeake Energy CEO on Shale Gas in U.S. (60 Minutes), Pros/Cons CHK

Chesapeake Energy's CEO Aubrey McClendon was featured 60 Minutes last night. He said the U.S. has two Saudi Arabia's worth of natural gas. Chesapeake Energy (CHK) is the biggest independent natural gas producer in the U.S.. Natural gas extracted from shale rock is making millionaires all over the country (shaleionaires). They extract gas by fracking the rock (hydraulic fracturing). There are cons to this practice though, like when gas leaks into the water supply. Related news: (Chevron bets on shale gas with $3.2 billion Atlas buy 11/9/2010).

Sunday, November 14, 2010

Technical Update: S&P Back Under 50 Month Moving Average (GLD, FXY, UUP, EUR/USD Charts) 11/14/2010

Technical market update for 11/14/2010 by dvolatility: The S&P 500 is back under its 50 month moving average after selling off at the 61.8% retracement level and ceiling resistance from the April high. GLD (chart 5) is riding an uptrend from the beginning of 2009 and close to testing multi-year ascending channel resistance (if you have a better GLD chart post it in the comments).

The first chart is of the S&P 500 (monthly) which features the $1,000 support level where $12B hedge fund manager David Tepper told CNBC he'd be long 100% equities hedged with the "Bernanke Put". The S&P closed at 1,199 on Friday. I'm reading headlines that Tepper sold some financials and bought tech in his Q3 13F filing. I'll look into that further. I also added Jeremy Grantham's fair value target on the S&P which is $900 (cnbc video). The blue line is the 50 month moving average.

Cameron Hanover Daily Oil Recap (11/12/2010)

Cameron Hanover Daily Oil Recap (courtesy of www.fmxconnect.com)

We should almost start handicapping this market by starting each week with a number of unlikely scenarios, and examine their most likely responses, followed by a comparison with that week’s most likely scenarios, with an analysis of their least likely responses or reactions. We should then mix these together and construct an imaginary committee’s most implausible combination, from which we would choose the least desirable from both bullish and bearish perspectives. Where they intersect is what we should expect to see. And, no, we are not just trying to vaporize in an amusing way. We will actually go through it to show how we got the week that has just concluded.

Inflation vs. Deflation Debates (Shilling vs. Pento, Prechter vs. Schiff)

Links to Schiff Radio.
Gary Shilling vs. Michael Pento (11/10/2010)
Robert Prechter vs. Peter Schiff (11/8/2010)

Pento: Japan is Next Sovereign Debt Crisis (Savings, JGB Yields), U.S. is Next, Gold vs. Real Rates - Tech Ticker, 11/12/2010

Michael Pento (Euro Pacific Capital) thinks Japan is the next sovereign debt crisis after Ireland. And then the United States. Here are a few important points he made on Tech Ticker with Aaron Task.

Japan: "I think Japan because their savings rate has plummeted from 15% to 2%. Very soon they're going to have to tap the outside sources other than the Japanese to finance their debt. And that's when interest rates soar and that's when they become insolvent." [Related: Hedge fund manager Kyle Bass is short Japanese Bonds (CNBC video, 8/18/2010), see Japanese Government Bond quotes/charts]