In his piece today, Rosenberg analyzes the increasing lumpiness of volatility in the secular market, observing an increasing performance variation as the duration of major market moves is reduced, while the delta from the flatline keeps growing. Ironically this is happening even as implied correlation drifts lower over time. And even as all eagerly await to see just what the financial regulation overhaul will look like, Rosie observes that the market is now experiencing "intense volatility that has been and continues to be nurtured by government policy." As we shift to a market which is backstopped by taxpayers holdings of assets on which even the FASB encouraged informational opacity, one wonders just what is the real value of information that prices now convey
Charlie Gasparino over at Fox Business News reports a rumor that the government may be looking to dispose of its 27% Citi stake at some point over the next 3 months. Logistics aside, presumably somehow this means that even more bankrupt companies like AIG, FNM and FRE are probably next in line for offloading the taxpayer stake into the hands of hapless hedge/sovereigns funds. We hope it is not the same hedge funds that have recently received subpoenas and C&D orders from ever shorting the euro (i.e., going long the dollar).As a reference point the gov't owns 27.01% of Citi which has a hilarious market cap of $108 billion, and owns 80.66% of AIG with its $23.5 billion capitalization (and $107 billion in debt)
It’s been a while since I have updated the NewsFlashr Business Blog Editor’s Picks , so let’s get right back in the swing of things and highlight a few of the top posts for the week from the sites on the NewsFlashr Business Blog section. Link order is always ranked by Alexa Ranking: 1. Dr
Two months ago we first presented a very gloomy outlook on Japan by Dylan Grice , one of the more erudite skeptics currently out there. Dylan's thesis was simple, and was subsequently taken up by a variety of other pundits to express comparable concerns about developed countries with burgeoning debt levels, namely that an aging population, now actively engaged in asset sales, will have less of an ability to participate in its traditional role of purchasing JGBs
Today's letter by John Hussman is as insightful as ever, yet what caught our eye is one of the most lyrical and gorgeous Crucifixions ever performed of Wall Street's favorite mouthpiece, CNBC, and specifically,its most vocal anchor: one James Cramer. From the full letter ( must read ) Can we rely on investor myopia? Over the past decade, it has been an uncomfortable lesson to accept that investors can be relied on to behave in ways that are ultimately unsustainable and destructive to their wealth, as long as market internals are temporarily supportive
In a letter to the CFTC's Chairman, Gary Gensler , GATA Chairman William Murphy shares the following bombshell: " GATA has evidence that there are enormous physical short positions in the gold and silver markets that cannot be covered. " Even as the CFTC is meeting later this month to establish position limits in the gold, silver, and other precious metals' markets, it could be none other than the CFTC's core banks, and Mr.
Administration Releases Legislative Language to Restrict Size and Risky Activities of Financial Firms In January, the President announced a proposal to limit the size of financial firms and the risky activities of banks. Today, the Treasury has delivered proposed legislative text to implement these reforms to Capitol Hill. These proposals are part of a comprehensive package of reforms to create a safer, more resilient financial system
An early glimpse at the detailed "Volcker Rule", which is expected to be released this afternoon, indicates that not just bank holding companies are going to be targeted by the prop trading ban. The WSJ reports that "the White House's push to limit, or in some cases ban, certain risky trading activities at financial companies also would affect companies that don't own bank subsidiaries, according to a summary of proposed legislative language prepared by the administration." This probably means that life for those pesky hedge fund scapegoatees is about to get even more unpleasant. And as for trading sovereign CDS, we suggest you novate all positions promptly
Via the ever insightful Contrary Investor Art For Art's Sake, Money For God's Sake... No, this is not an homage to the financial archangel Lloyd Blankfein and his flock of chaste and devoted followers on Goldman's prop desk.
Wednesday, March 10, 2010
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