Groupon (GRPN) Options Arrive On Monday At CBOE

FYI, Groupon (GRPN) options arrive on Monday 11/14/2011.
"CBOE AND C2 TO LIST OPTIONS ON GROUPON, INC. (GRPN) ON MONDAY, NOVEMBER 14

CHICAGO, November 11, 2011 – The Chicago Board Options Exchange (CBOE) and C2 Options Exchange (C2) today announced they will list options on Groupon, Inc. (GRPN) beginning Monday, November 14.

Citadel Securities, LLC will serve as the Designated Primary Market Maker (DPM) for GRPN options at CBOE. C2 does not use a DPM system.

The contract specifications for GRPN options are as follows:
Initial strike prices: 15 to 35, in $1 increments
Position limit: 200,000 contracts
Expiration cycle: January, with initial months of December, January, April and July

For more information on new listings, visit the Trading Tools section of the CBOE website at: http://www.cboe.com/NewListings."

Links: MF Global Drama, Italian Debt Crisis, Jefferson County Bankruptcy, Fannie Mae Aid

MF Global drama

Chicago's Harris Bank plays role in MF Global mess (Reuters)

MF Global Assets Have Left The Building: How, When, Where by Francine McKenna (Forbes)

MF Dumped European Debt at Loss Before Bankruptcy (WSJ)

MF Global's Customer Assets - STOLEN - And Nothing You Hold In This System Is Safe (Jesse's Café Américain)

Two MF Global Clients Spill About Their Frozen Accounts -- "It Was Like Being In The Twilight Zone." (Business Insider)

Wolfman Wednesday- Elvis (MF funds) have left the building (OptionMonster TV)

Chris Whalen on MF Global, Repo-to-Maturity and Large Bank OBS exposures (Zero Hedge)


Italian sovereign debt crisis and European news

Italy Bond Attack Breaches Euro Defenses (Bloomberg)

Crisis in Italy spurs fears of euro zone break-up (Reuters)

Italy’s Senate Speeds Austerity Vote (Bloomberg)

BlackRock Responds To Zero Hedge Query On Its Italian Debt Exposure (Zero Hedge)

France Extends Short-Selling Ban on Banking Shares (CNBC)

Italy 2s10s Inverts For First Time Since August 1994 As French and Spanish Spreads Widen To Records (Zero Hedge)

ECB's Stark warns EU govts against seeking ECB help (Reuters), needs fiscal union (Bloomberg)

Euro zone has no plans to rescue Italy: officials (Reuters)

Soros: European governments have the bazooka (7:56) (Reuters Video)

Lagarde Sees Risk of 'Lost Decade' for Global Economy (Bloomberg Video)

EU sees euro zone growth slowing sharply, recession risk (Reuters)

Italy CDS vs bonds: CDS win! (FT Alphaville)

Moody's assigns Aaa rating to EFSF's new 10-year benchmark bond (for Ireland) (Moody's)

Volatility Sonar Report - 35ish to 45ish November 9, 2011 (OptionMonster TV)

Guest Post - U.S. Government Confirms Link Between Earthquakes and Hydraulic Fracturing

Oklahoma Seismicity via USGS.gov
Guest post by John Daly of OilPrice.com

U.S. Government Confirms Link Between Earthquakes and Hydraulic Fracturing

On 5 November an earthquake measuring 5.6 rattled Oklahoma and was felt as far away as Illinois.

Until two years ago Oklahoma typically had about 50 earthquakes a year, but in 2010, 1,047 quakes shook the state.

Why?

In Lincoln County, where most of this past weekend's seismic incidents were centered, there are 181 injection wells, according to Matt Skinner, an official from the Oklahoma Corporation Commission, the agency which oversees oil and gas production in the state.

Cause and effect?

The practice of injecting water into deep rock formations causes earthquakes, both the U.S. Army and the U.S. Geological Survey have concluded.

The U.S. natural gas industry pumps a mixture of water and assorted chemicals deep underground to shatter sediment layers containing natural gas, a process called hydraulic fracturing, known more informally as "fracking." While environmental groups have primarily focused on fracking's capacity to pollute underground water, a more ominous byproduct emerges from U.S. government studies - that forcing fluids under high pressure deep underground produces increased regional seismic activity.

Italian 10-Year Note Yield Spikes to 7.41%! Italy-German Spread is At 5.67 +14%, EUR/USD Smacked Down

EUR/USD (courtesy FreeStockCharts.com)
Italy's 10-year Note Yield rose 64 basis points to 7.41%, which is a new record high. It's been rising since it broke out in June-July and hasn't stopped. According to WSJ, Italy has $200 billion of their $2.63 trillion debt load maturing next year with a Debt/GDP ratio of 120%. Italian bonds are also selling off because LCH Clearnet SA, a clearing house, raised its margin rate on Italian bonds (read more at FT Alphaville). In addition, Italian Prime Minister Silvio Berlusconi offered to resign yesterday, so there is political drama as well (Bloomberg). As you can see, the Euro-zone crisis is in full effect, and everything is riding on the EU bailout plan (leveraged EFSF) to contain it.

An hour ago Ran Squawk reported that Italian CDS hit a record high at 536bps. See the CDS trend here, but it's delayed a day. The 10-year Italian-German Bond Yield Spread rose 14% to 5.67; EUR/USD is down 1.19% at 1.36615; and the December E-Mini S&P future is down 2% (via ino.com). Check out the charts below of Italian activity and the Euro/Dollar. It's getting interesting. Listen to what CLSA's Chris Wood said yesterday on Bloomberg. He thinks we're "reaching an end game in the Eurozone, but the only issue is how long it takes" (for fiscal union). He then said, "we still have the risk of a euro quake to force the Europeans over this hump." He also talked about the Fed, I will watch it again later. Zero Hedge has a post out titled: Barclays Says Italy Is Finished: "Mathematically Beyond Point Of No Return"", which says the ECB will need to print euros.

ROBOT WATCH: PETMAN, Asimo and Watson (Videos)

PETMAN (Boston Dynamics)
Check out what's new with humanoid robot technology and artificial intelligence natural language computer systems. First, I embedded a video of a computer named Watson, designed by IBM, beating human beings (former champions I believe) at a game of Jeopardy. When asked a question, Watson's algorithms analyze relationships between words within its knowledge base (source documents), and then it ranks the best answers based on evidence. See the second video for a better understanding. People at IBM working on Watson believe it will transform the customer service, finance (banking) and health care industries.

Next, I embedded a new video of Boston Dynamic's PETMAN humanoid robot, which is essentially a terminator that can walk on a treadmill, get down on one knee, and even do push-ups. It is amazing. They need to put Watson's brain inside PETMAN's head. How will human labor survive this? I also embedded a new video of Honda's Asimo running around. Cool technology.

Sunny Egypt Interested in... Wind Power - Guest Post

Zafarana, wind farm
Zafarana Wind Farm in Egypt (Flickr)
Guest post by John C.K. Daly of OilPrice.com

Sunny Egypt Interested in... Wind Power

Egypt currently has a total electricity capacity of about 23,500 megawatts, which the government hopes to increase to 58,000 megawatts by 2027.

A prime potential element in increasing this electrical output?

Renewables.

One might think, given Egypt's climate, solar?

Wrong again - wind power, which currently contributes less than 1 percent to Egypt's energy mix.

In 2003 Egypt had its wind potential assessed and published a wind atlas, which found that with wind speeds of 7-10 meters per second, almost the entire nation was ideal for wind power installations, with the country's best areas being along the Gulf of Suez coast. Two years later the atlas's coverage was expanded to mapping the country's wind potential in detail and determined that large desert regions both to the east and the west of the Nile River, as well as parts of Sinai, have average annual wind speeds of 7-8 meters per second.

Three years ago, the government of former President Hosni Mubarak approved a progressive and ambitious project by 2020 to produce 20 percent of its energy from renewables, with 12 percent being generated by wind power. Mubarak's cabinet approved incentives for wind power development, including exemption from customs duties and 20 to 25 year power purchase agreements with government guarantees, a policy that the country's new transitional government has endorsed.

According to the World Bank, if the policy comes to fruition, then Egypt will realize a 7,200 megawatt wind power capacity, cut vehicle emissions through improved public transportation, and make industry more energy efficient.

Jonathan Walters, transport and energy manager for the World Bank's Middle East and North Africa regions, said that "high and persistent" winds in the Gulf of Suez suggest Egypt has "excellent potential for wind power - among the best in the world."

Ray Dalio's 2009 Hedge Fund Award Speech On Bridgewater, Uncorrelated Alpha and Beta

I found a video of Ray Dalio, founder of the $125 billion hedge fund Bridgewater Associates, giving his acceptance speech after receiving the Lifetime Achievement Award at the 7th Annual Hedge Fund Industry Awards in 2009, which is run by Institutional Investor. He first talked about Bridgewater's culture and then the hedge fund industry. He said there needs to be more "uncorrelated alpha" and less beta replication. Watch the speech after the jump. Dalio's fund performed very well this year while other large funds collapsed (as of September). Related: Dalio Returns 25% With Diversified Bets as Markets Convulse (Bloomberg, 9/7/2011); Ray Dalio On Diversified Uncorrelated Bets and How The Machine Works (BloombergTV Interview, 9/15/2011).

Ray Dalio on Charlie Rose: We Have a Public and Private Sector Debt Issue, Deleveraging, Tapped Out Stimulus

Source: Charlie Rose
Ray Dalio, founder of Bridgewater Associates, the biggest hedge fund in the world with $125 billion under management (via pensions, endowments, foundations, foreign governments, central banks and other institutional clients), was interviewed on Charlie Rose on 10/20/2011 and said he's concerned about the overly indebted public and private sectors of the U.S. and Europe (debtor-developed economies) during this deleveraging period.

Dalio's main concerns are that fiscal and monetary policies are no longer affective and we're lacking the "quality dialogues" needed to deal with these issues, which ends up creating social tensions (ex. Occupy Wall Street). Watch the full interview at CharlieRose. I embedded a clip after the jump as well. Below are important quotes from the transcript (hat tip Zero Hedge). In an FT article recently, Dalio said: “Our character and our political and social systems are now being tested in ways that have typically been tested in past deleveragings.” It's getting serious people.

"I think it`s important to understand that we`re going through a deleveraging. So we have to understand the big picture is -- there`s a deleveraging. Three big themes: first there`s a deleveraging; secondly we have a problem with monetary and fiscal policies are running out of ammunition; and thirdly we have an issue in terms of people most importantly who are at each other`s throats politically and globally in terms of having a problem resolving those."

"I think it`s very important to understand that the government debt is the terrible challenging issue that we should talk about maybe but also more important is the private sector debt. So that resolving the public sector debt does not resolve the problem."

"We can`t solve the problem easily because we still have too much debt. But we can move forward in being able to make the best of it. We can spread it out, we can keep orderly we have a situation now in which we have a very severe situation, not only because we have a deleveraging going on, but we have a situation in which monetary policy cannot work the way it worked in the past, that fiscal policy will not be stimulative."

Fed's November Economic Projections, FOMC Statement and Bernanke's Press Conference (11/2/2011)

Nothing much has changed... The Fed is keeping rates at 0% and plans to "continue its program to extend the average maturity of its holdings of securities". Watch Bernanke's press conference after the jump (here is the transcript). If they announce QE3, which could be in the form of "large scale MBS purchases" (that was Fed Governor Daniel Tarullo's idea), then that could change the game. Here's a snapshot of the Fed's economic projections vs. June. They lowered their real GDP projections and raised unemployment rate projections.


Full PDF: http://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20111102.pdf