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Posts Tagged ‘Blackrock’

THE MARKET IS FACING HEADWINDS

THE MARKET IS FACING HEADWINDS

Two businessmen kneeling on pavement, grabbing paper blowing in wind

Courtesy of Comstock Partners

(H/t Pragcap) 

The current market rally is not based on a self-sustained typical economic recovery, but on blind faith that the Fed can pull out a magic wand and cure everything with another round of quantitative easing (QE2).  As we pointed out last week, this a desperate attempt by the Fed to try non-conventional means to get the economy going again after a massive dose of conventional measures resulted in failure.  The members of the FOMC know this, but with further fiscal measures off the table, they are aware that they are the only game in town.  The Fed’s acknowledgement that the economy is in trouble is again highlighted by the latest Beige Book released yesterday.  The following are some excerpts from the report:

“National economic activity continued to rise, albeit at a modest pace..consumer spending was steady to up slightly, but consumers remained price-sensitive, and purchases were mostly limited to necessities and non-discretionary items..Housing markets remained weak..Most reports suggested overall home sales were sluggish or declining..Home inventories were elevated or rising..Conditions in the commercial real estate market were subdued, and construction was expected to remain weak.Reports suggested that rental rates continued to decline for most commercial property types..industry contacts appeared to believe that the commercial real estate and construction sectors would remain weak for some time..Hiring remained limited, with many firms reluctant to add to permanent payrolls, given economic softness..Future capital spending plans appeared to be limited”

So there you have an outline of the anemic economic picture in the Fed’s own words.  To be sure, they indicated some strong points as well.   But the weakness in consumer spending, housing, capital expenditures, commercial real estate and employment pretty much accounts for some 85% of the overall economy.

In addition some of the major problems that worried the market earlier have not really gone away.  The sovereign debt problems of the weaker EU nations have been papered over without being solved and are still lingering just beneath the surface.  The looming currency wars that were shoved down the road by the recent G-20 meeting are also a major threat to the global economy.

Furthermore the Chinese housing bubble previously highlighted by bearish investor Jim Chanos and others has now appeared on the front page of the New York Times.  A new district of the city of Ordos,…
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PIMCO, Blackrock, NY Fed Seek to Force BofA to Repurchase $47 Billion in Soured Mortgages; Viral Nonsense on “Show Me the Note” and “ForeclosureGate”

Excellent article by Mish who separates fact and fiction in the Foreclosuregate drama. - Ilene 

PIMCO, Blackrock, NY Fed Seek to Force BofA to Repurchase $47 Billion in Soured Mortgages; Viral Nonsense on "Show Me the Note" and "ForeclosureGate"

foreclosureCourtesy of Mish

At long last, the real issue regarding soured mortgages has stepped up to the plate. The misguided focus on "ForclosureGate" is but a sideshow compared to Pimco, NY Fed Said to Seek BofA Mortgage Repurchases

Pacific Investment Management Co., BlackRock Inc. and the Federal Reserve Bank of New York are seeking to force Bank of America Corp. to repurchase soured mortgages packaged into $47 billion of bonds by its Countrywide Financial Corp. unit, people familiar with the matter said.

A group of bondholders wrote a letter to Bank of America and Bank of New York Mellon Corp., the debt’s trustee, citing alleged failures by Countrywide to service loans properly, their lawyer said yesterday in a statement that didn’t name the firms. The New York Fed acquired mortgage debt through its 2008 rescues of Bear Stearns Cos. and American International Group Inc.

Investors are stepping up efforts to recoup losses on mortgage bonds, which plummeted in value amid the worst slump in home prices since the 1930s. Last month, BNY Mellon declined to investigate mortgage files in response to a demand from the bondholder group, which has since expanded. Countrywide’s servicing failures, including insufficient record keeping, may open the door for investors to seek repurchases by bypassing the trustee, said Kathy Patrick, their lawyer at Gibbs & Bruns LLP.

Patrick represents investors who own at least 25 percent of so-called voting rights in the deals and stand to recover “many billions of dollars,” Patrick said.

Countrywide hasn’t met its contractual obligations as a servicer also because it hasn’t asked for loan repurchases and is taking too long with foreclosures, Patrick said. The delays stem from missing documents, process mistakes and insufficient staffing to evaluate borrowers for loan modifications, she said.

If Countrywide doesn’t correct the servicing problems within a few months, her clients could have the right to pursue legal action against Bank of America, Bank of New York or both, she said. “None of the bondholders are opposed to modifications for deserving borrowers, but you’ve got to get it done” in a timely fashion, she added.

Mortgage-bond contracts are explicit in requiring repurchases of loans when their


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Beware the Black Turkey

Beware the Black Turkey: ETF Outlook for Wednesday October 20, 2010

Courtesy of John Nyaradi of Wall Street Sector Selector

a turkey perched on a rock

Get a Special Free Report from Wall Street Sector Selector 

Instratrader Indicators: 

Red Flag: We Expect Lower Prices Ahead 

Daily Technical Sentiment Indicators: Neutral

Short Term Market Condition:  Oversold (short term bullish)

Short Term Trend: Neutral

Just about everyone has heard about or read “The Black Swan: The Impact of the Highly Improbable” by Nassim Nicholas Taleb in which he describes how unexpected, highly improbable events can have massive impact. 

I think that recent developments in U.S. financial markets could be a “black turkey,” larger, more destructive and uglier than any black swan ever could be.

In recent days, a “black swan” event, or even worse, a potential “black turkey” event has surfaced that is just beginning to impact financial markets and could have far reaching effects going forward. 

I’m talking about “Foreclosuregate” or the “robo signing” scandal that has been rocking financial markets over the past several days and that this action could be just the beginning of a major unforeseen, black swan event. 

Of course the details are still murky but the Attorneys General in all 50 states have launched an investigation to see if false documents and forged signatures were used in their foreclosure procedures. 

All the big names could be involved, including Ally Financial, Bank of America and JP Morgan, among others, and the ramifications could be huge as this situation could throw the whole foreclosure process into question and uncertainty. 

Today’s selloff appeared to be what could be the first salvo in a bloody war as PIMCO, Blackrock and the New York Federal Reserve went to Bank of America with a demand for $47 billion of mortgage repurchases. These entities are all huge players with similar interests and to have them square off against each other is certainly an unexpected event. 

Bank of America will fight this, of course, but the “black turkey” here is that nobody knows how large the liability or how far reaching the claims might go if “robo signing” spreads. 

JP Morgan estimates liabilities of as high as $120 Billion but if the $47 Billion at Bank of America is accurate, total industry liabilities could be much higher.

And here’s where the “black turkey” really could really get ugly. As we know, the market hates uncertainty…
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NY Fed, BlackRock and PIMCO Pressure Bank of America to Buy Back $47 Billion in Bad Mortgages

NY Fed, BlackRock and PIMCO Pressure Bank of America to Buy Back $47 Billion in Bad Mortgages

banksCourtesy of JESSE’S CAFÉ AMÉRICAIN

The news had a significant impact on the market because of the parties involved in suing Bank of America. The loans were originated by CountryWide, which had been acquired by BofA. It is ironic that Countrywide CEO Angelo Mozilo just settled with the SEC admitting no wrongdoing and merely paid a fine which was a small percentage of his financial gains.

It is nothing new for bondholders and the common people to sue some of the big Wall Street Banks for fraud. 

But when the plaintiffs include some of the most important financial institutions in the country the market has to sit up and take notice.

It’s nice to see some outrage being expressed, even if it is among the privileged few. Watching Bloomberg television was particularly difficult today as the apologetics and cheerleading for the financial sector among its guests and newspeople is almost shameless. 

And the band played on…

Bloomberg
Pimco, NY Fed Said to Seek BofA Repurchase of Mortgages
By Jody Shenn
Oct 19, 2010 2:53 PM ET 

Pacific Investment Management Co., BlackRock Inc. and the Federal Reserve Bank of New York are seeking to force Bank of America Corp. to repurchase soured mortgages packaged into $47 billion of bonds by its Countrywide Financial Corp. unit, people familiar with the matter said. 

A group of bondholders wrote a letter to Bank of America and Bank of New York Mellon Corp., the debt’s trustee, citing alleged failures by Countrywide to service loans properly, their lawyer said yesterday in a statement that didn’t name the firms. The New York Fed acquired mortgage debt through its 2008 rescues of Bear Stearns Cos. and American International Group Inc. 

Investors are stepping up efforts to recoup losses on mortgage bonds, which plummeted in value amid the worst slump in home prices since the 1930s. Last month, BNY Mellon declined to investigate mortgage files in response to a demand from the bondholder group, which has since expanded. Countrywide’s servicing failures, including insufficient record keeping, may open the door for investors to seek repurchases by bypassing the trustee, said Kathy Patrick, their lawyer at Gibbs & Bruns LLP. 

“We now are in a position where we have


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The Economic Elite Vs. The People of the United States of America (I – III)

Full Report: The Economic Elite Vs. The People of the United States of America (Parts I-III)

Courtesy of David DeGraw, AmpedStatus Report

This report was originally released as a six-part series. The first part was published on February 15, 2010. The last part was published on February 27, 2010.  

Support this work by ordering the full report in book format.
>  Download full report with graphics and links.
>  Download printer-friendly version.
 

“The American oligarchy spares no pains in promoting the belief that it does not exist,
but the success of its disappearing act depends on equally strenuous efforts
on the part of an American public anxious to believe in egalitarian fictions
and unwilling to see what is hidden in plain sight.”
– Michael Lind, To Have and to Have Not

 

The Economic Elite Vs. The People of the United States of America

 

It’s time for 99% of Americans to mobilize and aggressively move on common sense political reforms.

Yes, of course, we all have very strong differences of opinion on many issues. However, like our Founding Fathers before us, we must put aside our differences and unite to fight a common enemy.

It has now become evident to a…
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Is Blackrock Buying the US Equity Market?

I asked Tyler at Zero Hedge about this and he explained that Blackrock is probably aggregating its ETF exposure by buying iShares which it now owns.  In other words, it’s netting out existing (short) ETF exposure and hedging by going long the stocks.  Blackrock’s net exposure is likely negligible.  - Ilene  

Is Blackrock Buying the US Equity Market?

Courtesy of Jesse’s Café Américain

One might conjecture from this enormous number of 13G filings noted below that Blackrock has taken what appears to be new 5+% stakes in over 1,800 US equities.

"We counted over 1,800 13Gs that Blackrock dumped on Friday…For those less familiar with the 13G…it’s a requirement when ownership exceeds 5% of the outstanding shares…these filings represented new positions for Blackrock since we only counted 11 amended 13Gs, which in itself seems very surprising, given the long list of stocks."

Holy guacamole!

Perhaps this is an error, or a misreading of the data. Someone ‘fat-fingered’ the Edgar filing button.

We are incredulous that a private investment firm, no matter how well connected, could have taken 5+% positions in most of the NY listed equity market so quickly. Driven madly bullish, with enormously deep pockets, and an abiding faith in their ability to defy the odds? Facilitating the hostile takeover of the rest of US real economy by a cabal of bonus taking Bonapartes? Starting a new Blackrock 1800 index fund from the bottom up, build it and they will come? LOL

Certainly the SEC will inquire as to their intentions, which is the purpose of such filings, and an explanation to the investment public will be forthcoming.

We suggested the other day that Blackrock and the NY Fed might turn out to be Obama’s Halliburton and KBR – private contractors fulfilling administration policy. NY Fed Conspired to Hide Details of AIG There are repeated rumours of an invisible hand in several markets, as an arm of Washington. But this is a bit much.

The Robert Rubin Rule of Financial Crisis Management was stated in the mid 1990′s. It held that buying SP futures to prop the stock market was cheaper than trying to clean up the mess after a stock market panic. But this was not about actually buying the market; it was about using price to manage perception, in the manner recommended by Edward Bernays. 

"The


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Buy Pick: Blackrock Inc. (BLK)

Courtesy of David at Oxen Group

Buy Pick: Blackrock Inc. (BLK)

The Oxen Group, for Monday, sees a rather bearish market going into Monday. There is little to no economic news coming out tomorrow of much importance. Without much fundamental bullishness, it may mean that the market will ultimately see a sell off because the market will need something to drive it with its overbought technicals. Further, the futures are down for the market for Monday for the Dow and S&P. What we see as fundamentally bullish, however, is the BlackRock Inc. hopeful acquistion of iShares from Barclays Global, which will make BlackRock the largest fund manager in the world. This offer to buy iShares is huge for BlackRock, and it should drive its stock extremely higher on Monday. The market will be looking for data that they can bank on, and the BlackRock deal is definitely one that will scare up some significant buying. Technically, however, BlackRock is somewhat overbought and overvalued on RSI. That will mean that after BlackRock sees a runup in the early morning there should be profit taking. This will be a chance to buy in on the pullback as the possible merger should continue to move the stock up. There has been some selling for BLK in the past few days, creating some room to the upper bollinger bands, and the fast stochasics have moved downwards with some room for possible growth as well. Be sure to buy in on a pullback, however, because this news is great for BLK.

Entry: Recommend buying within first 15-30 minutes after slight pullback.
Exit: We recommend exiting after a 2-4% increase.
Upper Resistance: 175.00

 


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Sunday Readings

Interesting interview with Justice Antonin Scalia (below).  Click here for a free subscription to PSW Report, it’s really easy and you’ll have immediate access to all the articles. – Ilene

Tyler Durden’s Sunday Readings

  • Gordon Brown repeats vow not to go away (Telegraph)
  • Airline execs say industry outlook still grim (Reuters)
  • Extreme dumb money bullish sentiment (Technical Take)
  • Blackrock set to become largest quant fund in the world (Telegraph)
  • Monetizing debt: The grandest of larcenies (Daily Reckoning)
  • Evans-Pritchard: Merkel’s inflationary fretting may wake the bears from hibernation (Telegraph)
  • Bankruptcy filings rise to 6,000 a day (USA Today)
  • Daniel Gross: The bond war – Krugman vs Ferguson (Slate)
  • Roundup of (un)employment charts (Big Picture)
  • Justice Antonin Scalia: "The US Constitution is dead" (Fora)
  • Eli Broad’s remedy for the auto industry (Fora)

Chartology

Big thanks to Gayle and Sherrie for their donations and support.

 


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Zero Hedge

"What's Going On" - Traders Stumped As HFTs Frontrun Last Night's Australia "Surprise" Rate Decision

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Yesterday at 10:30pm eastern, or alternatively today at 2:30pm local time, Australia's central bank unexpectedly did not cut its key interest rate, keeping it at 2.25% even as the majority of economists had predicted a rate cut. However, not everyone was surprised. Just a minute before the official announcement at bottom of the hour sharp, the AUD surged by 0.6%, rising from 0.7774 to 0.7822, suggesting that at least one algo and likely more, had advance knowledge of the unchanged decision, as shown in the  chart below...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker.

Please review a collection of WWW browsing results.Date Found: Saturday, 31 January 2015, 07:04:10 PM

Click for popup. Clear your browser cache if image is not showing. Comment: Recessions are illegal! Banned by the central bankers. Wait whats this???

Date Found: Sunday, 01 February 2015, 12:47:52 PM

Click for popup. Clear your browser cache if image is not showing. Comment: Feliz Zulauf talks deflation and non producing debt, a great concern. kingworldnews.com...

Date Found: Sunday, 01 February 2015, 12:49:32 PM

Click for popup. Clear your browser cache if image is not s...



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Phil's Favorites

Bill Gross: Too Much Debt, Too Many Zombie Corporations, Low Interest Rates Destroy Pension System

Courtesy of Mish.

In an Bloomberg Television interview Bill Gross of Janus Capital spoke with Bloomberg Television's Trish Regan about the outlook for Federal Reserve policy, the U.S. economy and his objectives at Janus Capital.

Key Quotes

  • "Not even thin gruel is being offered to our modern-day Oliver Twist investors. You have to pay to come to the dinner table and then sit there staring at an empty plate."
  • "The interest rate can't be raised substantially even over the next two to three years."
  • "The US has escaped the liquidity trap that euroland and Japan are in. But, not necessarily for all time."
  • "[Low interest rates] keeps zombie corporations alive because they can borrow at 3 and 4 percent, as opposed to the 8 or 9 percent. It destroys business models. It's destroying the pension industry and in the insurance ind...



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Sabrient

Sector Detector: Stocks break out again but may be running on fumes

Courtesy of Sabrient Systems and Gradient Analytics

Despite low trading volume, a strong dollar, mixed economic and earnings reports, paralyzing weather conditions throughout much of the U.S., and ominous global news events, stocks continue to march ever higher. The world remains on edge about potential Black Swan events from the likes of Russia, Greece, or ISIS (or lone wolf extremists). Moreover, the economic recovery of the U.S. may be feeling the pull of the proverbial ball-and-chain from the rest of the world’s economies. Nevertheless, awash in investable cash, global investors see few choices better than U.S. equities.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then ...



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All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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OpTrader

Swing trading portfolio - week of March 2nd, 2015

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Market Shadows

Kimble Charts: Coal

Kimble Charts: Coal

By Ilene 

Chris Kimble's chart for KOL shows a recently beaten down ETF struggling to pull itself up from the ashes. As the chart shows, KOL has recently drifted down to levels not seen since the financial crisis of 2008-9.

Bouncing or recovering with energy in general, coal prices appear to have stabilized in the short-term. Reflecting coal prices, KOL has traded between $13.45 and $19.75 during the past year. Bouncing from lows, KOL traded around 2% higher yesterday from $14.26 to $14.48 on high volume. It traded another 3.6% higher in after hours to $15, possibly related to ...



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Digital Currencies

MyCoin Exchange Disappears with Up To $387 Million, Reports Claim

Follow up from yesterday's Just the latest Bitcoin scam.

Hong Kong's MyCoin Disappears With Up To $387 Million, Reports Claim By  

Reports are emerging from Hong Kong that local bitcoin exchange MyCoin has shut its doors, taking with it possibly as much as HK$3bn ($386.9m) in investor funds.

If true, the supposed losses are a staggering amount, although this estimate is based on the company's own earlier claims that it served 3,000 clients who had invested HK$1m ($129,000) each.

...



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Pharmboy

2015 - Biotech Fever

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

PSW Members - well, what a year for biotechs!   The Biotech Index (IBB) is up a whopping 40%, beating the S&P hands down!  The healthcare sector has had a number of high flying IPOs, and beat the Tech Sector in total nubmer of IPOs in the past 12 months.  What could go wrong?

Phil has given his Secret Santa Inflation Hedges for 2015, and since I have been trying to keep my head above water between work, PSW, and baseball with my boys...it is time that something is put together for PSW on biotechs in 2015.

Cancer and fibrosis remain two of the hottest areas for VC backed biotechs to invest their monies.  A number of companies have gone IPO which have drugs/technologies that fight cancer, includin...



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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's this week's Stock World Weekly.

Click here and sign in with your user name and password. 

 

...

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Option Review

SPX Call Spread Eyes Fresh Record Highs By Year End

Stocks got off to a rocky start on the first trading day in December, with the S&P 500 Index slipping just below 2050 on Monday. Based on one large bullish SPX options trade executed on Wednesday, however, such price action is not likely to break the trend of strong gains observed in the benchmark index since mid-October. It looks like one options market participant purchased 25,000 of the 31Dec’14 2105/2115 call spreads at a net premium of $2.70 each. The trade cost $6.75mm to put on, and represents the maximum potential loss on the position should the 2105 calls expire worthless at the end of December. The call spread could reap profits of as much as $7.30 per spread, or $18.25mm, in the event that the SPX ends the year above 2115. The index would need to rally 2.0% over the current level...



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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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