To Cut or Not to Cut, The Irish Threaten To Play Rough With Those Clippers: Threats of Haircuts Rattle the ECB!
by Zero Hedge - March 31st, 2011 1:04 pm
Courtesy of Reggie Middleton
Yesterday, I made it clear that “It Looks Like Ireland Is About To Get Those Leprechaun Clippers Ready – Haircuts, Here We Come!” Today, in the news we see that…
Anglo Irish Bank Posts Record Loss
Anglo Irish Bank said its net loss widened to a record €17.65 billion last year, reflecting the heavy discounts on the transfer of its bad property loans to the government’s asset-management agency.
Ireland May Merge Two Banks as Stress Tests to Trigger More Aid
The government is considering folding EBS Building Society, the fifth-largest, into Allied Irish Banks Plc (ALBK), the second- largest, according to two people with knowledge of the situation. An announcement may come today after the central bank publishes the results of bank stress tests at 4:30 p.m. in Dublin, said the people, who declined to be identified because the matter isn’t yet public….
Ireland’s banks were reliant on the European Central Bank for 88.7 billion euros of funding at the end of last month, the Irish central bank said today. They may have borrowed as much as an additional 70.1 billion euros in exceptional liquidity from the Irish central bank, according to figures on March 11.
The government may have to inject 27.5 billion euros extra into the banks in total, according to a survey of 10 analysts and economists by Bloomberg News.
This would exhaust about 80 percent of the bank fund set up last year as part of Ireland’s bailout by the European Union and International Monetary Fund. The fund includes 17.5 billion euros from Ireland’s own resources….
Armed with the stress tests results, Ireland’s month-old Fine Gael-led government will seek to reopen the terms of the country’s 85 billion-euro bailout inked in November. Noonan will bring the results to a meeting of European finance ministers in Budapest starting on April 8 as he pushes for a reduction in the 5.8 percent interest rate on the loans.
The government also said it wants the ECB to provide longer-term financing for the banking system, and is seeking permission to share losses with senior bank…
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DiggRANsquawk US Afternoon Briefing – Stocks, Bonds, FX etc. – 31/03/11
by Zero Hedge - March 31st, 2011 12:56 pm
Courtesy of RANSquawk Video
Market Response To Irish Stress Test
by Zero Hedge - March 31st, 2011 12:40 pm
Courtesy of Tyler Durden
The market took one look at the stress test results… sniffed around the latest bail out plans (after taking 15 minutes to download the stress test pdf from a server capable of handling at most 5 simultaneous requests)… and slammed the 2 Year to the lows of the day. Good news though, it is not at 10% yet. Give it 12 hours.
Sokol Denies Wrongdoing in Lubrizol Stock Purchases – Bloomberg
by ilene - March 31st, 2011 12:40 pm
Right, just an honest mistake. I do wonder whether many people in these top wall street positions can see "the appearance of unethical behavior" at all, from the eyes of non-wall streeters. Perhaps some people lie to themselves so often that they’re blinded to another perspective. Then again, they may know perfectly well what they’re doing. – Ilene
David Sokol, who resigned yesterday as a top manager at Berkshire Hathaway Inc. (BRK/A), said he did nothing unethical when he bought stock in a company that he later proposed as a takeover target to Chairman Warren Buffett.
“I don’t believe that I did anything wrong,” Sokol told CNBC today in a televised interview. “I can understand the appearance issue and that’s why we made it public.”
Sokol, 54, bought about 96,000 Lubrizol Corp. (LZ) shares in January, less than two weeks before recommending the company as a target, Buffett said yesterday in a statement. Sokol had started confidential talks with Lubrizol the month before, according to a regulatory filing last week. Lawyers at the U.S. Securities and Exchange Commission were reviewing Buffett’s statement and discussing the matter, according to one person with knowledge of the talks.
via Sokol Denies Wrongdoing in Lubrizol Stock Purchases – Bloomberg.
Wal-Mart US CEO To America: “Prepare For Serious Inflation”
by Zero Hedge - March 31st, 2011 12:32 pm
Courtesy of Tyler Durden
To those who think that buying food in the corner deli is becoming a luxury, we have five words: you ain’t seen nuthin’ yet. U.S. consumers face "serious" inflation in the months ahead for clothing, food and other products, the head of Wal-Mart’s U.S. operations warned Wednesday talking to USA Today. And if Wal-Mart which is at the very bottom of commoditized consumer retail, and at the very peak of avoiding reexporting of US inflation by way of China is concerned, it may be time to panic, or at least cancel those plane tickets to Zimbabwe, which is soon coming to us.
The world’s largest retailer is working with suppliers to minimize the effect of cost increases and believes its low-cost business model will position it better than its competitors.
Still, inflation is "going to be serious," Wal-Mart U.S. CEO Bill Simon said during a meeting with USA TODAY’s editorial board. "We’re seeing cost increases starting to come through at a pretty rapid rate."
Along with steep increases in raw material costs, John Long, a retail strategist at Kurt Salmon, says labor costs in China and fuel costs for transportation are weighing heavily on retailers. He predicts prices will start increasing at all retailers in June.
"Every single retailer has and is paying more for the items they sell, and retailers will be passing some of these costs along," Long says. "Except for fuel costs, U.S. consumers haven’t seen much in the way of inflation for almost a decade, so a broad-based increase in prices will be unprecedented in recent memory."
Consumer prices — or the consumer price index — rose 0.5% in February, the most since mid-2009, largely because of surging food and gasoline prices. Core inflation, which excludes volatile food and energy costs, rose a more modest 0.2%, though that still exceeded estimates.
Add to this the shock that was today’s grains report, and the summer is about to seem like straight out of Harare.
Farmers will struggle to replenish rapidly shrinking U.S. grain stocks this year, despite plans to sow the most land to corn since World War Two and near-record acreage to soybeans, two U.S. government reports showed on Thursday.
Chicago corn prices surged their daily limit, while soybeans and wheat jumped more than 3 percent as traders looked past higher-than-expected figures in the
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Food-Price Spiral Will Swamp Consumers With More Inflation, Superfund Says – Bloomberg
by ilene - March 31st, 2011 12:30 pm
Coffee, sugar and cocoa prices will rise five- to 10-fold by 2014 because of shortages that will mean consumers getting “swamped” by food-price inflation, according to Superfund Financial.
A lack of farmland and rising costs means growers will fail to keep up with demand, said Aaron Smith, managing director of Superfund Financial (Hong Kong) Ltd. and Superfund USA Inc. Commodities account for about 40 percent of Superfund’s $1.25 billion assets under management. Smith correctly predicted record copper prices in November and a month later rightly anticipated that silver would outperform gold.
A United Nations index of world food prices jumped to a record last month, contributing to riots across northern Africa and the Middle East that already toppled leaders in Egypt and Tunisia. Global food security is threatened by “excessive price volatility and speculation,” farm ministers from 48 countries said in a joint statement after meeting in Berlin in January.
More here: Food-Price Spiral Will Swamp Consumers With More Inflation, Superfund Says – Bloomberg.
Gross Echoes Buffett Saying Treasuries Have ‘Little Value’ on Debt, Dollar – Bloomberg
by ilene - March 31st, 2011 12:29 pm
Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said Treasuries “have little value” because of the growing U.S. debt burden.
The U.S. has unrecorded debt of $75 trillion, or close to 500 percent of gross domestic product, counting what it owes on its bonds plus obligations for Social Security, Medicare and Medicaid, Gross wrote in his monthly investment outlook. The U.S. will experience inflation, currency devaluation and low-to- negative interest rates after accounting for consumer-price gains if it doesn’t reform its entitlement programs, he said.
Pimco “has been selling Treasuries because they have little value within the context of a $75 trillion total debt burden,” Gross wrote in the report published on Newport Beach, California-based company’s website. Congress “must make ‘debt’ a four-letter word.”
Read more here: Gross Echoes Buffett Saying Treasuries Have ‘Little Value’ on Debt, Dollar – Bloomberg.
Watch El-Erian’s Reuters Interview Live
by ilene - March 31st, 2011 12:13 pm
Courtesy of Tyler Durden
Pimco’s El-Erian is doing his latest daily media tour, this time holding a live chat with Reuters’ Chrystia Freeland. The live interview can be watched live here.
EXTEND & PRETEND IS WALL STREET’S FRIEND
by ilene - March 31st, 2011 11:53 am
Courtesy of Jim Quinn, The Burning Platform
“We now have an economy in which five banks control over 50 percent of the entire banking industry, four or five corporations own most of the mainstream media, and the top one percent of families hold a greater share of the nation’s wealth than any time since 1930. This sort of concentration of wealth and power is a classic setup for the failure of a democratic republic and the stifling of organic economic growth.” - Jesse –http://jessescrossroadscafe.blogspot.com/
Source: Barry Ritholtz
“All of the old-timers knew that subprime mortgages were what we called neutron loans — they killed the people and left the houses.” - Louis S. Barnes, 58, a partner at Boulder West, a mortgage banking firm in Lafayette, Colo
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5 Reasons To Consider Locking In Some Gains
by Chart School - March 31st, 2011 11:32 am
Courtesy of David Grandey
Here are your “Into The End Of The Quarter” Trend Channel charts.
Let’s move on to the 60-minute charts.
Interesting to note that the OTC is backtesting a broken trendline (PINK).
Now let’s move on to the daily charts
So there you have it.
1. We have technical indicators such as the RSI and Full Stoh’s BOTH in overbought territory in the 60 min. time frequency and now the daily time frequency charts.
2. We have off the March lows 5 waves up showing in the nano charts and the 60 min. charts
3. We have the S&P 500 tagging a resistance level and at trend channel resistance
4. We have the OTC with a little work to do yet to the upside to match the SPX, don’t worry a gap up in AAPL would do it.
5. And ohhhh let’s not forget we’ve got the “In The Face Of Fear ” showing for those who are looking at the short side here. Which is just the opposite of the face of fear on the long side.
Be on your toes here, this is also about the time traditional Wall St. upgrades something that makes up a big weighting in one of the indexes (Who’s it gonna be this time? The financial sector? AAPL? MSFT? INTC? CAT? CVX?). Remember those guys? Remember how they have a habit of downgrading stocks at the lows AFTER they already fell and of course upgrading AFTER they already took off? What a joke, But WE’RE all smarter now right?
All of which makes these levels very dangerous to be chasing stocks on the long side with regards to putting new money to work.
Start to brush up on your “Change In Trend” patterns here folks, as in topping patterns like double tops for one. Here’s an example of what we want to be on the lookout for over the next few weeks.
To learn more, sign up for our free newsletter and receive our free report — “How To Outperform 90% Of Wall Street With Just $500 A Week.”
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
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