Tuesday, April 14, 2009

Overallotment: April 14

The DTCC data will have to wait until tomorrow as apparently the good folks who keep track of $24 trillion in CDS notional needed a good Easter rest.

Another administration 180 degree turn: stress test results to be announced shortly (WSJ)
Goldman's next $28 billion public handout (NYT)
Citi prolongs "squeeze" and NYSE isn't helping (WSJ)
China foreign direct investment declines for sixth month (Bloomberg)
Bernanke's PR push rewrites Fed script (WSJ)
TARP lives: more spending power for Geithner (Forbes)
The literal Lehman Bros bomb: Lehman sits on bomb of Uranium cake as prices slump (Bloomberg)
Mort Zuckerman: New stimulus plan needed (USNews)

With gratitude to Bryan, James and Stacey for their generous donations.

Daily market summary from Robert Savage:

The economic news was just weak enough today to slow the raw energy of the 5 week rally and turn many back towards questions of sustainability. Retail Sales dropped enough to make many fear 2Q starts with a soft patch rather than a solid base for the consumer. Producer Prices fell the most since 1950 bringing back deflation doubts. So the questions began to crawl back into the minds of investors: Will the FED expansion of the balance sheet – the printing of money – be sufficient or sustainable for the economy to navigate the narrow path of deflation and inflation? Will the race of earnings ahead match the expectations already priced? Will the old indicators of risk like EUR/JPY return to hobble markets? What is the right level of volatility in markets given the recent stability in data? Will the emerging markets truly decouple from the G7 and lead markets back to a sustainable recovery? Those questions dominated another rather quiet New York session where equities shed 2% led by financials; where oil dropped 1.5%; where bonds rallied with a 4 bps flattening and where EUR/JPY dropped 2% driving JPY towards the 200-day moving average near 98.80 and the EUR back to 1.3250. The world did trade on one big story – the Polish request to tap the IMF for $20.5 bn of the new credit line – driving EUR/PLN 1.5%. The GS Research team recommends long PLN short CZK for a tactical trade now – and the mood for carry remained robust even as the investor returns in most places sagged today. The answers to today’s questions won’t be forthcoming overnight leading many to think we are in for a bit more trouble in risk positions. The move in JPY seems related today to the disappointment over the MAS action and the SGD reaction. The ability in a world starved for good news to hang onto carry trades amidst high volatility proves unsustainable to all but the bravest. But many confuse heroism with stupidity waiting for the outcome to prove the difference. Sphere: Related Content
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Anonymous said...

Is anyone going to short the Indian Telecom Quants?

"Indian mobile telecoms are doing very well in attracting new subscribers from around the country, but not so well in attracting investors to buy their stock."


Anonymous said...

re: lehman and uranium cake

I hope they got that stuff wrapped up in special CIA napkins! (ffw to 1:55)

Anonymous said...

I'm going back to do more work on the my Integral paradigm but before I do I would like to pose a philosophical question.

Was the correct answer chosen

Anonymous said...

ZH: "next" means something that is pending, not something that already happened.

Brett in Manhattan said...

I'm constantly amazed how even the most market savy people buy into the Exchange propaganda regarding what causes the market to go up or down.

What is direct evidence, other than Post Hoc Reasoning, that these particular economic indicators caused the market to go down?

Had no economic data been released, how do we know that the market wouldn't have done the exact same thing?