It’s Getting Plain Silly: MF Global Hikes Silver Margin To 175% Of CME, Or Over 10% Of Contract
by Zero Hedge - April 29th, 2011 4:55 pm
Courtesy of Tyler Durden
Now it’s just getting plain silly. Following two margin hikes by the CME, one for 9% and one for 10% this week, now MF Global, run by former Goldman CEO Jon Corzine has joined the fray, and has hiked its silver margin to $25,397. As a reminder, the latest CME margin is $14,513, or about 6% of the contract value of $241,750 assuming a silver price of $48.35. So MF Global’s is 175% of the CME! It is obvious that everyone is now hell bent on destroying the parabolic move higher in gold and silver, which is happening for a very good reason: deranged money printing. Although, as yesterday, we very much doubt MF Global, or anyone else for that matter will hike ES margins any time soon. After all, doing anything to stop the Weimar rallyTM in its tracks is treason of the highest degree under Bernanke’s dictatorship and is punishable appropriately. In the meantime, can the exchange just make margin trading in commodities illegal and move to all cash? At least that way all the weak momo hands can be relegated to chasing Netflix and other bubbles, making their eventual pop all the more memorable.
h/t @gptrading
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DiggU.S. Stem-Cell Research Can Continue, Appeals Court Says
by ilene - April 29th, 2011 4:38 pm
This was the right decision regardless of any “linguistic jujitsu,” which really began with George W. Bush’s executive order limiting research to about 20 existing cell lines. That make no logical sense. – Ilene
U.S. funding of human embryonic stem-cell studies can continue while a lower court decides whether the government-backed research violates the law, a federal appeals court said.
The U.S. Court of Appeals in Washington today reversed a preliminary order that would have blocked the U.S. Health and Human Services Department and the National Institutes of Health from spending government money on researching embryonic stem- cells, known as ESC, until the district court judge rules. The court had put a hold on the order in September.
“The hardship a preliminary injunction would impose on ESC researchers” would be “certain and substantial,” the court said. “Their investment in project planning would be a loss, their expenditures for equipment a waste, and their staffs out of a job.”
[...]
The appeals court found that the plaintiffs were unlikely to succeed on the merits of their case so the “extraordinary remedy” of a preliminary injunction could not be justified.
Continue here: U.S. Stem-Cell Research Can Continue, Appeals Court Says – Bloomberg.
RANsquawk Market Wrap Up – Stocks, Bonds, FX etc. – 29/04/11
by Zero Hedge - April 29th, 2011 4:26 pm
Courtesy of RANSquawk Video
First Federal Bancshares Of Arkansas: Holders OK 1-For-5 Reverse Stock Split -DJ (FFBH)
by Insider Scoop - April 29th, 2011 4:10 pm
Courtesy of Benzinga
First Federal Bancshares Of Arkansas (NASDAQ: FFBH) Holders OK 1-For-5 Reverse Stock Split, Reported By Dow Jones
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GMO Quarterly Review: “U.S. Small Cap Stocks Are Now As Expensive As We Have Ever Seen Them”
by Zero Hedge - April 29th, 2011 4:10 pm
Courtesy of Tyler Durden
From GMO’s latest quarterly review:
From a strategic perspective, the current overpriced environment makes asset allocation decisions neither simple nor comfortable. Having established that we are once again in a world of narrow risk premiums, it is not hard to look back at history and pinpoint times where current valuations led to steep falls in prices. The problem, of course, is that we can also find previous episodes where markets continued to rally, albeit still delivering poor longer-term returns. This stark choice is made even more bleak by the dearth of safe assets offering reasonable returns to hold while sitting out the ongoing stock market levitation. As a result, we are forced to hold more equities than we would prefer at these absolute valuations for the simple reason that we could be in for a long sideways grind where growth eventually closes the valuation gap. In that scenario, real equity returns will likely be meager, but at least positive. One group that we refuse to hold, however, is global small cap stocks and, in particular, U.S. small caps. On our data, U.S. small cap stocks are now as expensive as we have ever seen them. Perhaps more surprising still is the deafening silence about this distinctly frothy group. Although the S&P 500 price index is still some way below its all-time high, U.S. small caps are within spitting distance of theirs: a high that was last reached with a booming global economy, strong employment, and a debt-driven consumption binge in full swing.
All this and much more in the full thing:
Netgear Options Pop as Shares Fly to All-Time High
by Option Review - April 29th, 2011 4:09 pm
Today’s tickers: NTGR, GT, DOW & S
NTGR - Netgear, Inc. – The maker of networking products for at-home and small business use reported better-than-expected first-quarter earnings on Thursday after the closing bell, and projected second-quarter sales of $270 million, which beat the consensus estimate of $240.3 million. Shares in the San Jose, CA-based company subsequently jumped 28.4% today to secure an intraday- and new all-time high of $43.67. Investors expecting the price of the underlying to trend higher through the next couple of months traded more than 2,800 calls at the June $45 strike on just 10 lots of previously existing open interest. The majority of the call options were purchased for an average premium of $1.35 each. Call buyers make money if shares in Netgear rally another 6.1% over today’s high of $43.67 to surpass the average breakeven price of $46.35 by expiration day in June. Meanwhile, pre-earnings report buyers of May contract call options have seen the value of their positions sky-rocket today. One trader appears to be taking profits, selling 50 now deep in-the-money calls at the May $31 strike for an average premium of $10.38 each, which he appears to have initially purchased for just $3.60 apiece on Thursday. Open interest levels at the two highest-available strike prices in the front month indicate call buyers paid as much as $0.35 per contract to buy fewer than 100 calls at each of the May $37 and $38 strikes earlier in the week. Today, these same calls tout asking prices of $4.60 and $3.80, respectively. Approximately 4,200 call and put options have changed hands on Netgear just before 1:00pm on overall previously existing open interest of 5,678 contracts on the stock.
GT - Goodyear Tire & Rubber Co. – Shares in the largest U.S. tire manufacturer shot up…
Fabulous Friday – Royal Weddings and a Record Russell
by Zero Hedge - April 29th, 2011 4:05 pm
Courtesy of ilene
Fabulous Friday – Royal Weddings and a Record Russell
Are 55% of the people in this country idiots?
According to the MSM punditocracy, they must be because a whopping 29% of the people in the United States of America feel we are in an Economic Depression while 26% of the people classify the economy as being in a Recession and 16% of the remaining 45% say the economy is slowing down leaving 27% of the people polled by Gallup (only 2% admitted they were not qualified to make a determination) who believe the economy is growing.
We already know how well the top 10% are doing so if we remove them from the “growing” side of the survey we see that, among the rest of the people, a full 83% aren’t buying into this “growth” BS. Living paycheck to paycheck does tend to put you a bit more in touch with the real economy than the average media pundit, Congressperson or Fed Chairman, I suppose. Now hear is the most interesting thing about the survey: The groups that sees the economy growing the least (14%) and who are most likely to feel we are in a Recession or Depression (68%) are Tea Partiers and Republicans. Democrats actually gave the economy the best scores, with 42% seeing growth in the economy and “just” 43% seeing the economy in a Recession or Depression with only 18% seeing Depression, 1/2 the number of Reps, Independents or Tea Party People.
[click on chart to enlarge]
Although economists announced that the recession ended in mid-2009, more than half of Americans still don’t agree. These ratings are consistent with Gallup’s mid-April findings that 47% of Americans rate the economy “poor“ and 19.2% report being underemployed. According to Gallup:
It also seems likely that most Americans would not agree with the FOMC’s assessment of the current economic recovery. Nor does it seem likely that — given surging gas and food prices — most would agree with the Committee that “longer-term inflation expectations have remained stable and measures of underlying inflation are subdued.”
Although the FOMC seems to perceive current economic conditions differently than most Americans, it does say it
…
Markit Responds To Allegations Of CDS Pricing Collusion
by Zero Hedge - April 29th, 2011 3:41 pm
Courtesy of Tyler Durden
Earlier we observed the long-overdue (noted first here in March of 2009) allegations that Markit among any others may be involved in a massive CDS pricing collusion scheme. Now it is Markit’s turn to provide its side of the story.
Markit Statement on European Commission CDS Inquiry
Markit is aware of the European Commission’s statement that it will open investigations relating to the Credit Default Swaps information and clearing markets. Markit has no exclusive arrangements with any data provider and makes its data and related products widely available to global market participants. Markit has created new and innovative products and services in a competitive marketplace since its inception, bringing greater transparency and information to the CDS market. Markit is unaware of any collusion by other market participants as described by the Commission. Markit does not believe it has engaged in any inappropriate conduct and looks forward to demonstrating that to the Commission.
Of course, this does sound much more diplomatically correct than this hypothetical example: “Markit is indeed owned by many of the 16 banks referenced in the charges, and confirms that it has in fact colluded with its owners to provide them with unfair pricing benefits and advantages.” The latter version would surely be ludicrous.
“Equities Have Achieved a ‘Holy Grail’” — Sign of a Top?
by ilene - April 29th, 2011 3:35 pm
Courtesy of John Rubino
During the early stages of the housing bubble Morgan Stanley’s Stephen Roach was one of the few sane voices on Wall Street. His warnings about the global economy were clear and obviously true, and his willingness to bite the hand that fed him was admirable. The guy had guts. In early 2006 I had the following article all ready to post:
The Bravest Man on Wall Street
People tend to lump the big-name critics of the U.S. economy together, and assume that they’re all coming from the same place and somehow benefiting, one way or another, from their points of view. But that’s not true. It’s relatively easy for a Bob Prechter or Doug Noland or Marc Faber to hold to their positions for years while their truth gradually dawns on the rest of us, because they more-or-less run their own shows. The might lose a few investors, but they don’t face institutional resistance from above and below.
That’s why Morgan Stanley’s Stephen Roach deserves our admiration. He doesn’t work for a short seller and he’s not the author of best selling gloom-and-doom books. He works for a big, mainstream investment bank, where optimism is golden and pessimism scares clients, lowers trading volumes and eventually gets you fired. To grasp the truth of this you have to understand the internal structure of an investment bank. It’s made up of bankers who do deals, traders who trade, and salespeople who convince money managers and other traders to buy the firm’s securities. None of these guys likes the idea of a global economic meltdown. In fact they hate sell recommendations in general.
For a salesman, getting a client to buy a given stock or bond builds a relationship and creates an ongoing income stream. At the very least, knowing a customer likes a given security allows the salesman to sharpen the pitch for the next call. On the other hand, if a customer sells everything and goes to cash, that’s it. They don’t need updates and you have no way of knowing what to offer them by looking at their holdings. Your income goes down, maybe you get fired, and you blame the senior strategist who terrified the money manger into doing this.
It’s the same with investment bankers. If investors are selling rather than buying and the overall market is falling, there’s no demand for
…
“Equities Have Achieved a ‘Holy Grail’” — Sign of a Top?
by ilene - April 29th, 2011 3:35 pm
Courtesy of John Rubino
During the early stages of the housing bubble Morgan Stanley’s Stephen Roach was one of the few sane voices on Wall Street. His warnings about the global economy were clear and obviously true, and his willingness to bite the hand that fed him was admirable. The guy had guts. In early 2006 I had the following article all ready to post:
The Bravest Man on Wall Street
People tend to lump the big-name critics of the U.S. economy together, and assume that they’re all coming from the same place and somehow benefiting, one way or another, from their points of view. But that’s not true. It’s relatively easy for a Bob Prechter or Doug Noland or Marc Faber to hold to their positions for years while their truth gradually dawns on the rest of us, because they more-or-less run their own shows. The might lose a few investors, but they don’t face institutional resistance from above and below.
That’s why Morgan Stanley’s Stephen Roach deserves our admiration. He doesn’t work for a short seller and he’s not the author of best selling gloom-and-doom books. He works for a big, mainstream investment bank, where optimism is golden and pessimism scares clients, lowers trading volumes and eventually gets you fired. To grasp the truth of this you have to understand the internal structure of an investment bank. It’s made up of bankers who do deals, traders who trade, and salespeople who convince money managers and other traders to buy the firm’s securities. None of these guys likes the idea of a global economic meltdown. In fact they hate sell recommendations in general.
For a salesman, getting a client to buy a given stock or bond builds a relationship and creates an ongoing income stream. At the very least, knowing a customer likes a given security allows the salesman to sharpen the pitch for the next call. On the other hand, if a customer sells everything and goes to cash, that’s it. They don’t need updates and you have no way of knowing what to offer them by looking at their holdings. Your income goes down, maybe you get fired, and you blame the senior strategist who terrified the money manger into doing this.
It’s the same with investment bankers. If investors are selling rather than buying and the overall market is falling, there’s no demand for
…
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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...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
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