US Economic Data Reporting Now Officially A Farce: Every Economic Data Point Prints 4+ Std Devs Above Consensus
by Zero Hedge - November 30th, 2011 10:15 am
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
It appears that central bank intervention was not the only thing in full force today: The US version of the Chinese Ministry of Truth in economic reporting has now officially joined the fray. Anyone wondering just how much of a joke the US high frequency economic data updates have become should look no further than these three charts showing Wall Street forecasts (consensus and distribution) and actual prints for the ADP Payroll, the Chicago PMI and Pending Home Sales. Not one indicator has come below 4 standard deviations above the average forecast, and every single one has printed above the highest forecast. It is now safe to say without any doubt that US data is equal if not more equal in credibility terms with that of China.
Below are the charts showing sellside forecast distribution for ADP, Chicago PMI and Pending Home Sales. Nuf said.
ADP: 4+ Std Devs above consensus
Chicago PMI: 4 Std Devs above consensus
and Pending Home Sales: 5 Std Devs above consensus
Charts: Bloomberg
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DiggSilver Lake Wants a Piece of Yahoo!, Willing to Pay $16.60 a Share
by Insider Scoop - November 30th, 2011 10:07 am
Courtesy of Benzinga.
Wait, you mean someone actually sees value in the dying media company?
According to Bloomberg, the answer is yes.
Citing “people with knowledge of the matter,” Bloomberg said that a group of investors – led by private-equity firm Silver Lake – offered to buy a minority stake in Yahoo! (NASDAQ: YHOO) for “about” $16.60 a share. Silver Lake is apparently working with Microsoft (NASDAQ: MSFT), as well as Andreessen Horowitz, to complete the share acquisition. Microsoft is reportedly aiming to use a minority holding to protect the 10-year web search agreement it signed with Yahoo.
But one of Bloomberg’s sources claims that the offer is lower than the one made by TPG Capital, another private-equity form interested in acquiring a piece of the media company. Blackstone Group (NYSE: BX) and KKR (NYSE: KKR) are among the private-equity firms considering a bid for Yahoo.
Bloomberg added that another source claims that Alibaba Group Holding is monitoring the situation and may enter the bidding in an effort to buy back the stake in itself that is owned by Yahoo.
Hamilton Faber, an analyst with Atlantic Equities LLP, told Bloomberg that the offer is “disappointing. “Investors who’ve been buying Yahoo recently were hoping for a significant premium and a takeout of the full company, and this falls short on both counts,” he said.
Some of these offers could be made public at a board meeting that is scheduled to take place later today, one of Bloomberg’s sources claimed.
Follow me @LouisBedigian
For more Benzinga, visit Benzinga Professional Service, Value Investor, and Stocks Under $5.
Here Is What Happened After The Last Global Coordinated Central Bank Intervention
by Zero Hedge - November 30th, 2011 9:52 am
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
Presented with little comment but following the mid-September Global Save, things didn’t end so well.
Chart: Bloomberg
November Chicago PMI 62.6 Better Than Expectations Of 58.5
by Zero Hedge - November 30th, 2011 9:46 am
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
The barrage of better than expected “everything” is relentless.November PMI comes at 62.6, higher than 58.4 before, and a beat of Consensus 58.5. Highest since April. This also means that the ISM will almost certainly be an upside “surprise” imminently. And with the miraculous outlier print from the ADP it was only logical that the employment index in the PMI would print… lower, from 62.3 to 56.9. No data makes sense anymore, so just buy: after all there is no risk. Fed will bail everyone out.
The largest driver of this outlier print is the New Orders sub-index which jumped impressively from 61.3 to 70.2. Most of the other sub-indices were flat to down even (including a big drop in employment!). New Orders jumped to their highest since March, but it seems very obvious when we look at the seasonality (pre-2008) of the sub-index that August to November tends to see a consistent and positive bias over time as we suspect this is simply pre-holidays ordering.The charts below show the average move by month and then this year’s move comparatively.
The last month or two has seen a very volatile time series and it seems very clear that orders were left until the last minute due to economic uncertainty and the bounce in stocks perhaps provided the confidence to get that inventory in. The move in this month’s New Orders sub-index looks like a catch-up to the drop of last month in what is a seasonal period and furthermore will seasonally drop away after this into year-end (especially as we have commented on the demand issues that we are seeing post Black Friday in LCD screens etc.).
More shortly.
Are Apple and Samsung’s Patent Wars Going Too Far?
by Insider Scoop - November 30th, 2011 9:39 am
Courtesy of Benzinga.
Samsung may be a winner today, but in the end, everybody loses.
When this began, Apple (NASDAQ: AAPL) thought that it could reduce competition, eliminate copycats, and dominate the smartphone and tablet markets by claiming that its competitors (such as Samsung and HTC) infringed on its patents.
Let’s suppose for a moment that Apple was completely justified in its actions. Let’s assume that Samsung and HTC are guilty of cloning Apple’s products, since, well…have you looked at them? If they don’t legally infringe on Apple’s patents, they certainly infringe on Apple’s creativity and originality.
Unfortunately for Apple, Sony (NYSE: SNE) and any other company that wants to pick a fight, patent law disregards creativity and originality. In these battles, the only thing the law cares about is which company holds the oldest patent.
Thus, Apple could develop the most revolutionary product the world has ever seen. It could do so independently without ever spying on or communicating with another company. But if it turns out that Samsung had a similar concept 10 years prior – and holds a patent to back up its claim – Apple will lose. It doesn’t matter if Samsung’s patent was filed independently of Apple. It doesn’t matter if Samsung’s intentions were different from Apple’s, nor does it matter if Samsung never actually intended to produce the product described in its patent. In the end, the only thing that matters is whether or not the court believes that Apple’s product appears to match Samsung’s patent. If the court rules in Samsung’s favor, Samsung could then use that patent to extract money from Apple or to halt the sale of Apple products.
That’s not to say that Apple is always innocent in these battles. But from where I’m standing, Apple isn’t guilty as much as it is foolish. Up until the Mac maker launched its first round of attacks, patent infringement cases were rather scarce in the tech world. Sure, you’d hear about them from time to time. But the majority of the cases were kept quiet, and typically involved millions (not billions) of dollars. Now that Apple has made it clear that it will take no prisoners in the patent…
Moving Averages: Month-End Preview
by Chart School - November 30th, 2011 9:35 am
Courtesy of Doug Short.
Here is a preview of the monthly moving averages I track before the market opens on the last business day of the month. All three S&P 500 and four of the five Ivy Portfolio ETF monthly moving averages are giving a "sell" signal. The one Ivy change from last month is that VNQ, the REIT index, has flipped to "sell" after a one-month "buy" signal (the dreaded "whipsaw").
Note: My inclusion of the S&P 500 index updates is intended to illustrate a popular moving moving-average timing strategy. The index signals also give a general sense of how US equities are behaving. However, for followers of a moving average strategy, the general practice is to make buy/sell decisions on the signals for each specific investment, not based on a broad index. Even if you’re investing in a fund that tracks the S&P 500 (e.g., Vanguard’s VFINX or the SPY ETF) the moving average signals for the funds will occasionally differ from the underlying index because of dividend reinvestment, which is not factored into the index closes.
The Ivy Portfolio
The second of the three adjacent tables previews the 10-month SMA timing signals for the five asset classes highlighted in The Ivy Portfolio.
I’ve also included (third table) the 12-month SMA timing signals for the Ivy ETFs in response to the many requests I’ve received to include this slightly longer timeframe.
After the end-of-month market close, I’ll update the monthly moving average feature with charts to illustrate.
The bottom line, as we’ve pointed out earlier, is that these moving-average signals have a good track record for long-term gains while avoiding major losses. They’re not fool-proof, but they essentially dodged the 2007-2009 bear and captured significant gains since the initial buy signals after the March 2009 low.
Note: See the Timing Updates for interim updates throughout the month.
Nevada Gold Announces Sale of Colorado Grande Casino for $3.2M
by Insider Scoop - November 30th, 2011 9:27 am
Courtesy of Benzinga.
Nevada Gold & Casinos, Inc. (NYSE: UWN) today announced the sale of the Colorado Grande Casino in Cripple Creek, Colorado to G Investments, LLC. Under the terms of the agreement, the Buyer has agreed to pay the Company $3.2 million of which $800,000 will be paid in cash and $2.4 million will be paid in the form of a promissory note. The proceeds will be used to pay down the Company’s debt.
“We believe the sale of the Colorado Grande Casino makes good sense from a strategic perspective. Owning a single, small property in the Cripple Creek market is no longer attractive for us as we are focused on properties with greater earnings potential going forward,” said Robert Sturges, CEO of Nevada Gold. “Additionally, we were able to sell the property at an attractive EBITDA multiple due to the fact that the principal purchaser owns a property in close proximity to the Colorado Grande Casino. This will enable the Buyer to create synergies and efficiencies not available to Nevada Gold.”
For more Benzinga, visit Benzinga Professional Service, Value Investor, and Stocks Under $5.
EU Finance Ministers Drop the Ball and Pass the Buck
by Insider Scoop - November 30th, 2011 9:24 am
Courtesy of Benzinga.
Eurozone finance ministers came out of a meeting that was meant to save the euro without a plan to stop a eurozone financial collapse.
The financial markets were hoping that the 17 eurozone finance ministers would emerge from their meeting with a bold new plan to avert financial disaster but they had little to show for their efforts. Instead, the pressure will be on their bosses to come up with a rescue plan when the heads of state meet on December 9. Until then, financial markets will be left wondering if there is enough political will among the eurozone leaders to come up with a comprehensive plan that addresses all of the issues that are causing the eurozone’s sovereign debt crisis.
Greece was given the latest installment of its rescue package, an 8 billion euro ($10.7 billion) payment that will allow the embattled country to pay its bills. However, Greece was expected to receive the bailout funds and traders were hoping to see something more robust from the finance ministers.
As a deal to save the euro continues to elude European leaders, Spain and Italy have watched their borrowing costs rise as the eurozone finance ministers dithered over what actions they could take in order to restore investor confidence in the eurozone. If their borrowing costs continue to climb, Italy and Spain could be the next two eurozone countries to seek bailouts. While the European Union has been able to rescue Greece, Ireland and Portugal from default, it’s unlikely that it would be able to do the same for Spain or Italy under present conditions.
One of the ways to restore investor confidence would be to give veto power over individual state budgets to a central European Union authority. Then troubled countries like Greece and Italy would be less likely to roll back unpopular austerity measures aimed at reducing their fiscal deficits. However, this would be a major step and could face opposition by many citizens of the European Union.
Another way to quickly reduce borrowing costs would be to create eurobonds issued by all eurozone members or to allow the European Central Bank to buy unlimited amounts of European sovereign debt in order to drive bond yields lower. However, both of…
Foreign Currency Liquidity Swaps (aka Global Bail Out Plan B) FAQs
by Zero Hedge - November 30th, 2011 9:14 am
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
Those wondering about the global Fed bailout (this is not the first time, recall How The Federal Reserve Bailed Out The World) can read the FAQ from none other than the source of the global liquidity tsunami itself.
Frequently Asked Questions: Foreign Currency Liquidity Swaps
What is the purpose of the foreign currency liquidity swap lines?
The foreign currency liquidity swap lines are designed to provide the Federal Reserve with the capacity to offer liquidity in foreign currencies to U.S. financial institutions should the Federal Reserve judge that such actions are appropriate.
Which central banks are participating in these arrangements?
The Federal Open Market Committee has authorized arrangements between the Federal Reserve and the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank. In addition, these foreign central banks are also establishing bilateral swap arrangements with one another.
Why are these swap lines being implemented?
These swap lines are being implemented as a contingency measure, so that central banks can offer liquidity in foreign currencies if market conditions warrant such actions. These lines provide the Federal Reserve with the same ability to provide foreign currency, should the need arise, as foreign central banks currently have through the existing dollar swap lines with the Federal Reserve to provide dollar liquidity in their jurisdictions.
Why is the Federal Reserve establishing lines for these five currencies and with these five central banks?
These five currencies are used globally and account for the bulk of the foreign currency funding of U.S. financial institutions.
In what manner would foreign currency liquidity be provided?
There has not been a decision to activate the foreign currency liquidity facilities. If the Federal Reserve were to decide to offer liquidity in foreign currencies to U.S. financial institutions, the details of the operations would be determined at that time in light of the prevailing circumstances.
Will activity under the liquidity swap arrangements be disclosed to the public?
Yes, the aggregate swap activity in each currency with foreign central banks will be published weekly. They will be found on the Federal Reserve Bank of New York’s Foreign Exchange Swap Agreement webpage Leaving the Board. In addition, any liquidity-supplying operations in foreign currencies would be subject to the same disclosure…
Did The Fed Just Buy Europe A Week?
by Zero Hedge - November 30th, 2011 9:07 am
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
One of our most watched indications of the pressure on European funding markets is the EUR-USD cross-currency basis swap. This simple trade is a way for European entities to take the excessive EUR funding they can get from the ECB and ‘swap’ it into USD to meet their significantly problematic USD funding needs. It has smashed higher (well lower in the charts) as the cost of the transaction moves with demand for the swap – indicating that demand for USD is huge and we are in as much of a liquidity crisis as we were in the middle of the 2008 critical period. What is fascinating to us is today’s reaction – a 22bps jump – while being large, merely moves us back to the same levels of stress we were at one week ago. So even if this is seen as some huge form of liquidity surge, it seems not to have even solved the liquidity problems of banks, let alone solvency problems.
Short-term we are back to stress levels in the USD swap funding market from only a week ago. But on a longer-term basis, this is still extreme by any standards.
Charts: Bloomberg
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