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The Mole

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  • Preview from Europe: Mid-Day Sell-Off [View article]
    Sorry if the times are confusing. Unfortunately, first and foremost, I write the Market Watch for readers in the UK and Ireland so I tend to leave the economic data times in their time zone. I'm absolutely delighted that I get US readers too though.
    Aug 25 09:08 AM | 4 Likes Like |Link to Comment
  • Preview from Europe: A Jobless Recovery? [View article]
    Just to give you a big fat example of the lack of green shoots in an area I've been very worried about for some time - Tourism, which will have a horrible year this year and force a lot of price cutting and redundancy. So we weren't surprised to see the following…

    Arcandor AG (one of Germany’s largest tourist operator and retail outlets) today filed for Insolvency. They employ over 80,000 people - go tell the initial 43,000 that will be tinned about the "Green" shoots and surely they will disagree. It’s going to get worse from an unemployment front. For what it’s worth, 60% of their business was tourism and 40% from retail. Just for the record they don’t have a word for Green Shoots in Germany, which is OK because they wont need it for some time??
    Jun 9 08:37 AM | 3 Likes Like |Link to Comment
  • Preview from Europe: Another Yo-Yo Day [View article]
    Financials are the worst performing sector this morning - there is selling pressure across the space. The market is concerned about the possible writedowns at Belgina bank KBC (their shares are suspended) with press (The Tijd) now reporting they may write down as much as €4bn on their CDO portfolio. This has also brought the monoline exposure of European Financials into focus. On a conference call yesterday MBIA indicated that between 66-80% of losses on 2nd mortgage bonds and CDOs was tied to collateral that was ‘ineligible’ to be included in the deals. This has brought into question if Banks and Insurers may have to take further writedowns and how much of their monoline exposure will actually be insured. It is not a good sign that defensive sectors are outperforming. Expect further volatility.

    I see the Central Bank of Ireland are recruiting. I hadn’t realised that things had become QUITE so bad over there:
    So the revolution is coming eh?
    May 13 06:34 AM | 2 Likes Like |Link to Comment
  • Report From Europe: Markets on Fedwatch [View article]
    In to what to the untrained eye might appear a purely technical move, for the train spotters, the more hawkish of the two big US rating giants Standard & Poor’s have adjusted the credit rating from negative WATCH to negative OUTLOOK. Okay what that means in English is the immediate threat of a further credit ratings downgrade has been removed & they have been given a few months breathing space to get their house in order. Given this came out 4 minutes before the Greek markets closed (they are 2 hours ahead) the reaction has been muted but EXPECT a big day tomorrow for Greece i.e. their spread will tighten and its good news for Ireland, Portugal to a lesser extent Spain (whom the hot money may turn on next).
    Mar 16 12:12 PM | 1 Like Like |Link to Comment
  • Report from Europe: Greece, China and Bank Reform Worries [View article]
    In fairness, I meant "ruthless" in a more positive way than it probably sounded. The bigger point I was trying to make in that paragraph was that it may actually be better for Germany's long term benefit to suppress their short term wishes to leave Greece to the financial market wolves.
    Feb 1 01:16 PM | 1 Like Like |Link to Comment
  • Report from Europe: Obama, China and Greece Spook Stocks [View article]
    Interesting piece from the equity guys at UBS. This signal from our equities electronic trading desk has been an incredibly good indicator since its development in 2008. Definitely worth paying attention to given the track record.

    Originally discovered during the post-Lehman bear market of September 2008 to March 2009 as a way to determine temporary oversold markets, the PIN Buy Signal has worked equally well since last March as a way of identifying entry points during the subsequent bull market. As of the close last Friday, the PIN Buy Signal, or if you prefer the Retail Purge Indicator flashed for just the fourth time since the market bottomed on March 9, 2009.

    Although the signals that were sent in July, September, and October of last year all ‘felt’ wrong and led to an increasing amount of pushback — well reasoned to be sure, but pushback nonetheless — from customers, I don’t think the market faced the technical peril it does now during any of those three situations. As such, the pre-trade stop loss I attached to this morning signal is tighter than it’s been before. Officially the trade is to increase exposure to the market at the open but close it out if the S&P 500 closes below 1,084, the intraday level that served as support after the breakout of November 9, 2009. That’s 71 basis points of potential drawdown vs. Friday’s close.

    Should the trade advance to the point that the S&P 500 closes above its 10-day moving average, at that point the stop loss should be moved from 1,084 to the 10-day moving average.

    The PIN Buy Indicator was developed when it was noticed that retail investor behaviour periodically veered sharply to the sell side. Owing to the general optimism of retail investors, in general retail flow is ‘better to buy.’ Therefore net selling itself is enough to qualify as mildly different behaviour. Looking at those selling days, when the combination of outsized volume (defined as >25% of the prior 10-day average) a big notional skew to the sell side, plus an outlying amount of net cash raised via selling occurred it seemed to mark tradable entry points with uncanny accuracy.
    Jan 25 11:00 AM | 1 Like Like |Link to Comment
  • Report from Europe: Stocks Treading Water Ahead of Non Farms [View article]
    Thanks - Good to be back!
    Jan 7 02:23 PM | 1 Like Like |Link to Comment
  • Report from Europe: 10,000 Beckons for the Dow [View article]
    A lot more than that has been traded on Xstrata today. That 5,490 that you saw was probably the amount traded on Xstrata's listing in the US. I noted on Yahoo! Finance that the volume was under 10k on the 14th.

    But Xstrata's main listing is in London. On the 14th, nearly 19 million shares were traded there.
    Oct 14 05:53 PM | 1 Like Like |Link to Comment
  • Preview from Europe: Stocks Snooze [View article]
    The U.S. Dollar is weaker today and Treasury Bond yields higher on a report that Russia may be switching some more of its reserves into IMF bonds. Sabre rattling?
    Jun 10 07:57 AM | 1 Like Like |Link to Comment
  • Preview from Europe: Earnings to Test Market Strength [View article]
    The story re the dodgy stress tests has been PULLED by Bloomberg so please disregard. Don't shoot the messanger.
    Apr 20 08:39 AM | 1 Like Like |Link to Comment
  • Preview from Europe: Profit Taking Pushes Market Down [View article]
    If you ever wanted a demo of what a complete and utter muppet Tim Geithner is well take a look at this EUR/USD chart. He states boldly that he is quite open to China's suggestion of moving toward an SDR linked currency which caused a big two figure rally and then says a few minutes later that he still believes in the Dollar remaining as the world's reserve currency. Cretin.


    Mar 25 10:26 AM | 1 Like Like |Link to Comment
  • Report From Europe: Underwhelming Jobs Numbers See Stocks Trim Gains [View article]
    Carnage in Eur / Chf cross!!! Swissie is on the rampage on market rumours of a large French bank in a spot of bother, allegedly Soc Gen?
    Jun 4 07:09 AM | Likes Like |Link to Comment
  • Report From Europe: Of Oil Slicks, Greece and Goldmans [View article]
    This is getting VERY sloppy. When someone writes you a cheque for €110bn you don't really expect the market to react by cheapening up your 2 year debt by 4% on the day! And worse than that contagion, the domino effect is kicking in with Portugal and Spain getting a serious kicking today. The sages of the ECB in their ivory towers really need to get the finger out and do something quickly instead of their usual sloth like procrastination. We need substantial QE via direct buying of euro peripheral (PIIGS) bonds by the ECB and maybe even a rate cut NOW.
    May 4 10:31 AM | Likes Like |Link to Comment
  • Report From Europe: Of Oil Slicks, Greece and Goldmans [View article]
    Peripheral panic this Tuesday afternoon!!!

    Talk in the market of a ECB rate cut and more chatter regarding the ECB buying bonds directly.

    Something has to give soon as it’s a massacre today in the bond markets with Greek 2 year borrowing cost at 15.3%!

    Only big surprise is that the euro is not a lot lower.
    May 4 09:45 AM | Likes Like |Link to Comment
  • Report From Europe: Stocks Drift Lower Ahead of Bernanke Speech [View article]
    Greek 5yr CDS now trades flat to Iraq. Such has been the widening this week that Greece is up around 420 with Iraq at 425. Contagion is spreading; Spain is 15bp wider at 137, Portugal +7bp at 162, Ireland +8bp at 161 and Italy +6bp at 127. Should this continue, and traders see scope for it too, then the March 15th all-time wide of 110 for the SovX and 430 from Greece will be surpassed.

    Sticking with quirky facts that the market likes, BNP Paribas noted at the back-end of last week, "Its (Greece) CDSs at c350bp are the 5th widest amongst all sovereigns (only behind Venezuela, Argentina, Ukraine and Dubai) and are much wider than Mexico s (107), Poland s (96) and Hungary (182bps)." For note Venezuela is 865, Argentina 851, Ukraine 629 and Dubai 438.
    Apr 7 11:01 AM | Likes Like |Link to Comment