Archive for September, 2011

Margin Stanley, China, And High Yield: Mix It All In, And Let Simmer (With An Aussie Accent?)

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

This week’s trifecta of key financial developments, that go far deeper than superficial headlines, namely China, Morgan Stanley (and European bank exposure in general) and the equity-credit disconnect, just got another major push. CNBC just interviewed Tim Backshall (of Capital Context) to discuss the dramatic moves in MS credit risk (which we mentioned earlier) and in an undeniably convincing accent (British, Aussie, South African?), he managed to bring many of our broader concerns into focus including global financial contagion, bank funding, Chinese growth, and high yield credit. We also learned that ZeroHedge is a blog.





Mid-Day Update

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

 

On one hand one can clearly see we are locked in an overall downtrend when viewing the indexes.
 
 
 
 
 
 
 
 
 
On the other hand take a look at what the stocks below are starting to build out. 
 
 
LEADING STOCKS OF INTEREST
 
 
 
 
AMZN
 
 
 
 
 
 
 
 
AAPL
 
 
 
 
 
 
ULTA
 
 
AVGO 
 
 
 
PANL
 
 
ATHN
 
 
 
 
NUS
 
  
When I operate from a mechanical trade what I see perspective with no clue as to what is going on in the world I see some Pullback Off Highs (POH) structure I can start to get interested in. in simplest terms all I’m really saying is that the names above are starting to sport some positive longside patterns setting up.
 
We aren’t out of the woods just yet all things macro and still could easily get slammed but I’m starting to think any slam may very well be short lived so should that occur then we’ll want to use that to our advantage and clean up our short sells and look to get long, that’s the mind set with any slam by the way. The big question is?  WHEN.
 
On a side note there are a lot of rumblings out there about the IMF doing a huge bailout across the Atlantic. Yes I know there is nothing good about that BUT it could in a weird sort of way be the equivalent of a QE move.  Sure over time it probably (in the event there is any truth to it) will come back to bite but right now the market is looking for some sort of resolution , anything it can hang its hat on.   So if we see it and the market sells off on fear or shall I say a REACTION? its what we want to see to lock our gains on short side and again who are we going to buy on the


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Agenus Announces 1-for-6 Reverse Stock Split

Courtesy of Benzinga.

Agenus Inc. (Nasdaq: AGEN) today announced that its board of directors has approved a 1-for-6 share consolidation, or reverse stock split, that will become effective on October 3, 2011.

The primary objectives for implementing the reverse stock split are to enable the company to comply with NASDAQ’s minimum bid price requirement of $1.00 per share, to reduce the number of shares outstanding to be more commensurate with the company’s size and market capitalization and to reduce transaction costs for investors.

The company’s common shares will begin trading on a split-adjusted basis on The NASDAQ Capital Market at the opening of trading on Monday, October 3, 2011.





Radiohead To Play At #OccupyWallStreet Event At 4 pm

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The scrappy #OccupyWallStreet movement, which is now into its second week, will get some high caliber reinforcements today at 4 pm, when as the official web site indicates, will see Radiohead play a surprise (or not so surprise anymore) for the event. Assuming this actually does transpire, will Radiohead become a harbinger of the interest that other musical bands (and other media organization) will express in the activist venue as a promotion for their own interests, and thus bring much more popular focus to the events in lower Manhattan?





Navistar Announces Redemption Notice of Senior Notes

Courtesy of Benzinga.

On September 28, 2011, Navistar International Corporation (NYSE: NAV) issued a redemption notice to holders of its 8.25% Senior Notes due November 1, 2021.

Navistar intends to redeem $50 million of its Senior Notes on November 1, 2011 at a price of 103 and to redeem an additional $50 million of the same Senior Notes at a price of 103 on November 2, 2011. The company intends to borrow under its Asset Based Revolving Line of Credit to finance the redemption of the Senior Notes.





Morgan Stanley CDS – Is China Part Of The Problem?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Via Peter Tchir of TF Market Advisors

The move in Morgan Stanley CDS has been grabbing some attention.  It has moved wider than any of the other banks.  Its exposure to French banks in particular has been part of the reason.  Potential hedging of counterparty exposure has also been listed as a reason. (Once again I can’t help but wonder why derivatives in general, and CDS in particular, didn’t get forced into clearing or exchanges after Lehman).

Those are both valid reasons, but I wonder if there is concern about its exposure to Asia and Asian property markets are playing a role as well.  Here is a graph showing the CDS spreads of MS, GS, BAC and Citi.  BAC underperforms whenever mortgage lawsuits are in the headlines.  All the banks have moved wider as the problems in Europe have continued to escalate, but the underperformance of Morgan Stanley is fairly recent.  It is only in the past 2 weeks that it has blown through BAC.

Since the European problems have been around for awhile, I’m not sure it makes complete sense to blame the underperformance on their exposure to French banks.  Just below the radar screen of what is trading out there, are problems with Emerging Market corporate bonds in general, but specifically for Asian Property bonds.  These bonds have been dropping in price over the past two weeks and have been part of why China CDS is blowing out.   The price drop for assets tied to Asian properties is big enough to have an impact.

This graph has MS CDS along with SocGen, France, and China CDS.  SocGen CDS has actually improved a lot in the past 2 weeks.  If MS was just going wider on the back of French banks, it should have seen more relief.  Even French CDS has been relatively stable, so it doesn’t explain the move particularly well either.  On the other hand China started widening right around the same time as Morgan Stanley started underperforming.  MS CDS is currently at 470 at China is above 200.

I tried looking through the annual report.  I could see exposure there for French banks  but I remain confused about how much net exposure there really is as the reported numbers are based on Federal Financial Institutions Examination Council’s rules –…
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Margan Stanley CDS – Is China Part Of The Problem?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Via Peter Tchir of TF Market Advisors

The move in Morgan Stanley CDS has been grabbing some attention.  It has moved wider than any of the other banks.  Its exposure to French banks in particular has been part of the reason.  Potential hedging of counterparty exposure has also been listed as a reason. (Once again I can’t help but wonder why derivatives in general, and CDS in particular, didn’t get forced into clearing or exchanges after Lehman).

Those are both valid reasons, but I wonder if there is concern about its exposure to Asia and Asian property markets are playing a role as well.  Here is a graph showing the CDS spreads of MS, GS, BAC and Citi.  BAC underperforms whenever mortgage lawsuits are in the headlines.  All the banks have moved wider as the problems in Europe have continued to escalate, but the underperformance of Morgan Stanley is fairly recent.  It is only in the past 2 weeks that it has blown through BAC.

Since the European problems have been around for awhile, I’m not sure it makes complete sense to blame the underperformance on their exposure to French banks.  Just below the radar screen of what is trading out there, are problems with Emerging Market corporate bonds in general, but specifically for Asian Property bonds.  These bonds have been dropping in price over the past two weeks and have been part of why China CDS is blowing out.   The price drop for assets tied to Asian properties is big enough to have an impact.

This graph has MS CDS along with SocGen, France, and China CDS.  SocGen CDS has actually improved a lot in the past 2 weeks.  If MS was just going wider on the back of French banks, it should have seen more relief.  Even French CDS has been relatively stable, so it doesn’t explain the move particularly well either.  On the other hand China started widening right around the same time as Morgan Stanley started underperforming.  MS CDS is currently at 470 at China is above 200.

I tried looking through the annual report.  I could see exposure there for French banks  but I remain confused about how much net exposure there really is as the reported numbers are based on Federal Financial Institutions Examination Council’s rules –…
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A Free Lunch for America

Courtesy of Brad Delong, Grasping Reality with Both Hands 

We are live at Project Syndicate:

BERKELEY – Former US Treasury Secretary Lawrence Summers had a good line at the International Monetary Fund meetings this year: governments, he said, are trying to treat a broken ankle when the patient is facing organ failure. Summers was criticizing Europe’s focus on the second-order issue of Greece while far graver imbalances – between the EU’s north and south, and between reckless banks’ creditors and governments that failed to regulate properly – worsen with each passing day.

But, on the other side of the Atlantic, Americans have no reason to feel smug. Summers could have used the same metaphor to criticize the United States, where the continued focus on the long-run funding dilemmas of social insurance is sucking all of the oxygen out of efforts to deal with America’s macroeconomic and unemployment crisis.

The US government can currently borrow for 30 years at a real (inflation-adjusted) interest rate of 1% per year. Suppose that the US government were to borrow an extra $500 billion over the next two years and spend it on infrastructure – even unproductively, on projects for which the social rate of return is a measly 25% per year. Suppose that – as seems to be the case – the simple Keynesian government-expenditure multiplier on this spending is only two.

In that case, the $500 billion of extra federal infrastructure spending over the next two years would produce $1 trillion of extra output of goods and services, generate approximately seven million person-years of extra employment, and push down the unemployment rate by two percentage points in each of those years. And, with tighter labor-force attachment on the part of those who have jobs, the unemployment rate thereafter would likely be about 0.1 percentage points lower in the indefinite future.

The impressive gains don’t stop there. Better infrastructure would mean an extra $20 billion a year of income and social welfare. A lower unemployment rate into the future would mean another $20 billion a year in higher production. And half of the extra $1 trillion of goods and services would show up as consumption goods and services for American households.

In sum, on the benefits side of the equation: more jobs now, $500 billion of additional consumption of goods and services over the next two years, and then a $40 billion a…
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David Stockman: Blame The Fed!

Courtesy of ZeroHedge. View original post here.

Submitted Chris Martenson

David Stockman, former US Representative and Director of the Office of Management and Budget under Reagan, does not mince words. He sees the monetary systems of the world coming apart.

How did we get here? He identifies the root cause as the intentional over-leveraging of world economies by central planners in a misguided effort to enjoy growth without consequence.

I blame it on the Fed. I blame it on the 1971 decision by Nixon to close the gold window and let the dollar float. Because out of that has evolved — or morphed — a central banking policy in the world that absorbs unlimited amounts of government debt. And so we went on what I call the "T-bill standard" or the "federal debt standard." And the other central banks of the emerging mercantilist Asian economies — Japan, Korea, and now, especially, the People’s Printing Press of China — have absorbed this massive emission of debt that otherwise would’ve created powerful negative consequences that would’ve forced politicians to act long ago. In other words, higher interest rates, pressure for inflationary monetary policy, and the actual appearance of price inflation. But because all the bonds on the margin were being absorbed by the central banks, we got away for twenty or twenty five years with “deficits without tears.”

And he’s just getting started. The only thing more impressive than Stockman’s CV of insider roles in public economics and private finance is his talent for colorful metaphor. 

On The Fed

As far as I’m concerned, Bernanke is the monetary Darth Vader. He has destroyed the bond market. Because fundamentally, in a healthy capitalist system, the interest rate in the money market and in the longer-term capital market is the price of money and the price of capital. And if the pricing system isn’t working, if it’s been totally crushed, disabled, manipulated, rigged, medicated, everything that the Fed has done with QE1, QE2, zero interest rates, Operation Twist – all the rest of this insanity – then we’ve destroyed the ability of the capital market to function and we’re giving false signals in every direction.    

On The Economy

We effectively had, over the last thirty years, a national LBO – a leveraged buyout of the whole economy. And this is important because if you look


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Banks Raise Fees on Same People Who Bailed Out Their Asses

Introduce New ‘Thank You’ Fee on Debit Cards 

NEW YORK (The Borowitz Report) – The largest banks in the US made history today by hiking fees on the same people who bailed out their asses three years ago.

“We would not exist today without the generosity of the American taxpayers,” said CEO Brian Moynihan of Bank of America, which received billions of dollars of Federal bailout money.  “And we want to thank them by assessing a special monthly ‘thank you’ fee on all of our debit cards.”

Becoming emotional, Mr. Moynihan added, “We think of the taxpayers every time we vacation on our yachts or visit our third homes, and we want them to think of us every time they try to spend $20 on groceries.”

Keep reading: Banks Raise Fees on Same People Who Bailed Out Their Asses « Borowitz Report.

 





 
 
 

Zero Hedge

US Fertility Rate Hit Record Low In 2018

Courtesy of ZeroHedge View original post here.

The US fertility rate dropped for the fourth straight year in 2018, and has fallen approximately 15% since 2007, according to the National Center for Health Statistics - which reports that there were 59.1 births for every 1,000 women of childbearing age.

In total, 3,791,712 births were recorded across the country last year - extending a steep decline that began during the 2008 Recession, according to the New York Times. ...



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Phil's Favorites

Chart Shows the Fed Ramping Up Not QE - Funding Almost All Treasury Issuance

 

Chart Shows the Fed Ramping Up Not QE – Funding Almost All Treasury Issuance

Courtesy of Lee Adler, Wall Street Examiner 

The Fed is ramping up “Not QE” .

The Fed bought $2.2 billion in notes today in its POMO, “not QE,” operations. Actually $2.15 billion because they sold back a whole $50 million. Must have been a little glitch in the force.

This brings the Fed’s total outright purchases of Treasuries to $170 billion since it started Not QE, on September 17.

It also did $107 billion in gross new repo loans to Primary Dealers to buy Tre...



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Lee's Free Thinking

Chart Shows the Fed Ramping Up Not QE - Funding Almost All Treasury Issuance

 

Chart Shows the Fed Ramping Up Not QE – Funding Almost All Treasury Issuance

Courtesy of Lee Adler, Wall Street Examiner 

The Fed is ramping up “Not QE” .

The Fed bought $2.2 billion in notes today in its POMO, “not QE,” operations. Actually $2.15 billion because they sold back a whole $50 million. Must have been a little glitch in the force.

This brings the Fed’s total outright purchases of Treasuries to $170 billion since it started Not QE, on September 17.

It also did $107 billion in gross new repo loans to Primary Dealers to buy Tre...



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Chart School

Silver stock taking the sector higher

Courtesy of Read the Ticker

As the US economy begins to show late cycle characteristics like: GDP slowing, higher inflation, higher wage costs, CEO confidence slump. 

Previous Post: Gold Stocks Review

The big players in the market are looking for the next swing off good value lows. This means more money is finding it way into the gold and silver sector, and it is said gold and silver stocks actually lead the metal prices.

The cycle below shows prices are ready to move in the months ahead (older chart re posted).


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



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Kimble Charting Solutions

Health Care & Merck Working A Bullish Breakouts!

Courtesy of Chris Kimble

Health Care (XLV) ETF has lagged the S&P for the past few years. Is the lagging trend about to end? It sure could and we should find out very soon!

This chart looks at the Health Care/S&P Ratio (XLV/SPY), which reflects that it has created a series of lower highs and lower lows inside of falling channel (1). Over the past 6-months the ratio has created a series of higher lows, reflecting out performance of XLV to the broad markets.

The ratio is testing a support/resistance line at (2). If the ratio breaks out at (2), it would suggest that health care stocks wi...



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Insider Scoop

CMA CGM Bolsters Its LNG Fuel Supply With Total Deal

Courtesy of Benzinga

CMA CGM said it signed a deal with France's largest energy firm to supply liquefied natural gas (LNG) to power container ships.

The fourth-largest global carrier by capacity, CMA CGM said the deal with Total's marine fuels division will cover LNG supply at the Marseille-Fos fueling hub in the Mediterranean. Terms were not disclosed.

Total will supply approximately 270,000 metric tons of LNG per year over the next 10 years. CMA CGM said it will be the volume needed for its 15,000 twenty-foot equivalen...



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Digital Currencies

Chinese Crypto Exchange IDAX Locks Cold Wallet As CEO "Goes Missing"

Courtesy of ZeroHedge

By William Suberg via CoinTelegraph.com

Chinese cryptocurrency exchange IDAX has suspended deposits and withdrawals after its CEO allegedly disappeared.

In a blog post on Nov. 29, IDAX, which earlier this week warned it was seeing a run on withdrawals, said the whereabouts of Lei Guorong were currently unkno...



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Members' Corner

Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook

 

Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook

By Matt Wilstein

Excerpt:

Sacha Baron Cohen accepted the International Leadership Award at the Anti-Defamation League’s Never is Now summit on anti-Semitism and hate Thursday. And the comedian and actor used his keynote speech to single out the one Jewish-American who he believes is doing the most to facilitate “hate and violence” in America: Facebook founder and CEO Mark Zuckerberg.

He began with a joke at the Trump administration’s expense. “Thank you, ADL, for this recognition and your work in fighting racism, hate and bigotry,” Baron Cohen said, according to his prepared...



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The Technical Traders

VIX Warns Of Imminent Market Correction

Courtesy of Technical Traders

The VIX is warning that a market peak may be setting up in the global markets and that investors should be cautious of the extremely low price in the VIX. These extremely low prices in the VIX are typically followed by some type of increased volatility in the markets.

The US Federal Reserve continues to push an easy money policy and has recently begun acquiring more dept allowing a deeper move towards a Quantitative Easing stance. This move, along with investor confidence in the US markets, has prompted early warning signs that the market has reached near extreme levels/peaks. 

Vix Value Drops Before Monthly Expiration

When the VIX falls to levels below 12~13, this typically v...



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Biotech

Why telling people with diabetes to use Walmart insulin can be dangerous advice

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

 

Why telling people with diabetes to use Walmart insulin can be dangerous advice

A vial of insulin. Prices for the drug, crucial for those with diabetes, have soared in recent years. Oleksandr Nagaiets/Shutterstock.com

Courtesy of Jeffrey Bennett, Vanderbilt University

About 7.4 million people ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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