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nobby73

nobby73
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  • Weighing The Week Ahead: Will The Fed Disappoint Markets? [View article]
    TARP - that's funny. Have you spoken to anyone who works in any of these banks recently? I have and I don't hear any roaring...
    Sep 9 05:04 PM | 1 Like Like |Link to Comment
  • Weighing The Week Ahead: Will The Fed Disappoint Markets? [View article]
    Daro - you have made a very accurate point. The purpose of the court is to prevent the politicians exceeding their power or breaking the Grundgesetz (it translates as basic law, as Germany has no constitution). This purpose can be explained in one word - Hitler.

    Now, the secondary complication in this process is that the Grundgesetz was only intended as a temporary arrangement until the German Republic would vote on a new constitution, but the politicians have delayed in doing this for 60 years, even during reunification. As a consequence, there are certain limits to the application and grey areas that the Court may decide can only be answered via a referendum. This is something Merkel, Schauble et al are aware of, indeed so is Weidmann. Therefore, it is quite likely that the court sets very strict boundaries around the government and makes it very clear that to push Eurozone integration further requires a referendum.
    Sep 9 05:02 PM | Likes Like |Link to Comment
  • Fundamentals Do Not Support The Stock Market Rally [View article]
    I think it is for this reason that we won't get any intervention for a long time, unless something big happens. Bernanke himself has questioned the usefulness of further monetization, and frankly, if they thought it would work, they would have done it.

    However, by using the likes of Hilsenrath and Hatzius, they can push the market by promising, without any downside.

    As for the ECB, the problem is the far more narrowly defined mandate and the opposition to this sort of thing which holds them back.

    It's been said by other people, but the markets are very strange at the moment, but it may simply be there are too many put buyers to allow a decent correction...
    Aug 9 10:35 AM | 5 Likes Like |Link to Comment
  • If you think Jamie Dimon (JPM) can't end up like Barclays' Bob Diamond, think again, says Jonathan Weil. The fact that JPMorgan only decided on Thursday to restate Q1 results shows that Dimon still hadn't grasped how internal controls are failing him and the company.  [View news story]
    I agree with you to a certain degree, but it's possible the reason for the delay to restating Q1 was to make sure the methodology was consistent with what they would use to show the p&l for Q2.
    There are essentially three aspects to how you price the trade. Firstly, there is the midmarket on the CDS (which is an observable), second there is the correlation between the longs and the shorts and thirdly, there is the spread reserve needed for a positions of this size. The biggest unknown, and one which is always more of an educated guess is the spread for size. It would not be surprising if they waited until they decided what was an acceptable number for Q2 and then backsolved for the Q1 number.

    Given it is almost impossible for them to unwind the trade unless they pay silly money, or do it very very slowly, the spread is an arbitrary number, but they clearly wanted to send out a positive message.
    Jul 14 05:47 PM | 1 Like Like |Link to Comment
  • Greece's Default Gets Messier [View article]
    In fact, subordination does not apply to sovereign credits, so it's not likely ISDA will rule on that. If it did, every country that has received IMF aid would automatically trigger default under CDS.

    As for the ECB profit, there is some funny accounting going on. What they mean is they will return the interest as it comes in. The ECB may still take a loss if there is a messy default.

    I suspect the ISDA ruling will state that the "voluntary" PSI will not trigger, but exercising a CAC clause will.
    Feb 29 06:44 PM | 1 Like Like |Link to Comment
  • Could 2012 Be A Bright Year For John Paulson? [View article]
    today wasn't so bright...
    Feb 29 06:31 PM | Likes Like |Link to Comment
  • Don't Be Fooled By The 'Breakout' In Stocks [View article]
    Here's a hint - massive liquidity injections around the world (BoJ, ECB, BoE, PBC they have all been at it) have managed to boost risk assets, but look at the oil price and ask if we can have a recovery in Europe, with Brent at $120?

    Fact is, the economic data has been ok, but not terrific, earnings were actually poor, once you strip out Apple, but because the world has not ended, markets have been on a tear and it seems like everyone is bullish. It troubles me...
    Feb 19 06:20 PM | 11 Likes Like |Link to Comment
  • The Right Decision Is For Greece To Finally Default [View article]
    Except all of those who work for the state, who will probably lose their jobs, those who get their trash picked up, those whose pensions will be wiped out, those who go to school, or hospital etc etc,

    In fact, those rejoicing will be the rich who have put their money in Swiss banks and will salivate at being able to buy up assets cheaply post default.

    The important point to understand is the private sector in Greece is very wealthy (or the top few percent are) - they have gained hugely from the years of excess and have moved their wealth out of the country. Greece will essentially revert to a feudal state..
    Feb 2 04:04 AM | Likes Like |Link to Comment
  • The Right Decision Is For Greece To Finally Default [View article]
    Given how rotten and corrupt their own officials are, the idea of bring in outsiders might be beneficial to the majority. What's interesting is that it's the political class who are most staunchly opposed.
    Feb 1 06:24 PM | 1 Like Like |Link to Comment
  • The IMF is losing confidence the current program for Greece can succeed, reports Der Spiegel, citing an internal agency memo which concludes the country needs either speedier fiscal reform, or a bigger haircut on its debt, or another bailout. One key date: March 20, when the country needs to pay off €14.5B in maturing bonds.  [View news story]
    The problem is that the outside world still thinks Greece is part modern Europe, part the spirit of ancient Athens. This is an excellent explanation of the reality. How much money has been wasted because the European political class didn't want to admit they got it wrong?

    http://bit.ly/zmuJi0
    Jan 8 05:09 PM | 2 Likes Like |Link to Comment
  • As Bank of America soared Thursday on chatter of a mass-refinancing plan, mortgage REITs slid on worries of prepayments slashing returns on their holdings of MBS. The trend was reversed Friday after an administration official denied the rumors, but mREIT investors remain wary as NY Fed chief Dudley suggests intervention to reduce obstacles to refinancing. For now, many continue to offer double-digit dividends.  [View news story]
    on the other hand, given how many are angry with the banks, it would be political suicide to bend the law too far....
    Jan 7 05:52 PM | Likes Like |Link to Comment
  • Next Thursday's ISM numbers may provide a glimmer of hope for the employment picture, according to Credit Suisse. December's seasonal adjustment for employment should be the biggest positive adjustment for any December, and could help push the index back over 50. Last month's disappointing results were driven mainly by a weaker employment number, its second sub-50 reading in three months.  [View news story]
    So we are to take the seasonal adjustment fudge as a sign all is well?
    Dec 30 05:44 PM | Likes Like |Link to Comment
  • The widening gap between the S&P 500 price and earnings estimates suggests either the market is being way too pessimistic or analysts are still too optimistic. FactSet's John Butters: "Although the bottoms-up EPS estimate for the S&P 500 decreased 6% during the quarter, the price of the index actually increased 12%." The last quarter that saw a similar combination was Q2 2009.  [View news story]
    The first problem is the analysts focus on operating earnings, whereas reported earnings are what really matter... the second problem is it's hard to buy into the decoupling meme...
    Dec 30 05:42 PM | Likes Like |Link to Comment
  • The WSJ's Vince Cignarella sees French President Sarkozy getting booted from office in Spring 2012, rupturing the Franco-German alliance holding Europe together. and forcing Germany's exit from the union. As ugly as that sounds, the resulting plunge in the euro will make the PIIGS competitive again, allowing them to grow their way out of debt.  [View news story]
    If a pundit makes a prediction but there's no one around to hear it, does it make a sound?
    Dec 29 04:36 PM | 1 Like Like |Link to Comment
  • A nice late-year run by stocks combined with the fall in gold prices has allowed the DJIA (with dividends included) to pull ahead of the yellow metal's performance for 2011 - a massive turnaround from late summer, when gold was in the lead by 26%. Goldbugs retain a big advantage over the last decade though, +465% vs. a 54% total return for the Dow.  [View news story]
    This is probably Bernanke's greatest achievement of 2011...
    Dec 29 12:51 PM | 2 Likes Like |Link to Comment
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