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867046

867046
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  • Swiss bond yields are now negative all the way out to 5 years on the curve, the country's 5-year paper falling to -0.01% this morning. The 2-year is at -0.34%, the 10-year still above water at 0.56%. Deflationary poster child Japan: 2-year at 0.10%, 5-year at 0.23%, 10-year at 0.86%. (h/t Larry McDonald)  [View news story]
    This probably signals a confirnation of a bottom for real estate.
    Jun 13 08:17 AM | Likes Like |Link to Comment
  • Facing a $16B budget deficit, California Governor Jerry Brown is proposing to overhaul the the state's CalWORKs welfare-to-work program in an effort to save $880M. It would represent a major shift in philosophy for California, which, with a third of the U.S.'s welfare recipients, is the national leader. (see S&P)  [View news story]
    Some perspective here:

    1) California has the 9th largest economy in the world with a GDP @ around $2 trillion. Somewhere between Italy and India.

    2) If one were to scale California's GDP to the size of the US GDP, the $16 billion would be equivalent to a national government budget shortfall of around $120 billion.

    3) On top of this California paid $313 billion dollars in federal taxes in 2010.
    Jun 11 02:14 PM | 1 Like Like |Link to Comment
  • More Ominous Signs From China [View article]
    From a June FP article:

    "...in May, Beijing ruled that the local affiliates of the "Big Four" international auditing firms must be managed by Chinese nationals by 2017 if they want to continue auditing Chinese company accounts."
    Jun 11 01:14 PM | 2 Likes Like |Link to Comment
  • The conventional wisdom says risk markets rally Monday in Pavlovian response to the latest bailout, but the news may be baked in: Spain (EWP) was 10% higher last week, the S&P 500 +4%. Is the rescue even good news? "Spain is the Rubicon that should have never been crossed," says Nicholas Spiro. "A limited bailout for Spain (will) fail to restore confidence in the markets, (and) could fuel fears that more aid will be needed at a later stage (with Italy waiting in the wings)."  [View news story]
    In other words, allowing bank runs is anticapitalist.
    Jun 10 02:21 AM | 3 Likes Like |Link to Comment
  • A weakening global economy on top of a highly fragile credit system "is an explosive cocktail," says Felix Zulauf, sounding apocalyptic in the Barron's mid-year roundtable. Markets are oversold (and Treasurys overbought) for now, especially with authorities about to apply a band-aid, but continued euro disintegration and China weakness "should lead the world into financial and economic chaos."  [View news story]
    So if I listen to the Zulauf bulls, track record is all. Therefore I will now worship ISRG bulls who made about 21X on their money in the same time period.

    Again for the perma bears, we are in the midst of a one time buildout/growth of the world middle class. APPL is an example of one of the surfers of this wave. This is the true macro econ phenomena.

    Finally, a speculation on the advantages of "inside" information for billionaires. One advantage of Buffet owning a railroad is the (truncated) window on macro economic info. For instance, just by looking at the numbers behind customer shipments of stuff you can probably get intel which is not available to retail and go long or short accordingly.
    Jun 10 01:57 AM | Likes Like |Link to Comment
  • A weakening global economy on top of a highly fragile credit system "is an explosive cocktail," says Felix Zulauf, sounding apocalyptic in the Barron's mid-year roundtable. Markets are oversold (and Treasurys overbought) for now, especially with authorities about to apply a band-aid, but continued euro disintegration and China weakness "should lead the world into financial and economic chaos."  [View news story]
    Seeking Alpha needs to seriously rethink their reader's demographics if they think their readers are diving into Barron's for trading ideas.
    Jun 9 01:00 PM | 1 Like Like |Link to Comment
  • A weakening global economy on top of a highly fragile credit system "is an explosive cocktail," says Felix Zulauf, sounding apocalyptic in the Barron's mid-year roundtable. Markets are oversold (and Treasurys overbought) for now, especially with authorities about to apply a band-aid, but continued euro disintegration and China weakness "should lead the world into financial and economic chaos."  [View news story]
    The ultimate proof of the reigning negativism is that when the US government spends money it's bad, when it undergoes belt tightening it's bad.

    World GDP will be around 3% in 2012 and we are looking at a once in a lifetime expansion of the global middle class.
    Jun 9 12:52 PM | 1 Like Like |Link to Comment
  • ASCO Data Suggest Dendreon's Provenge Should Go First [View article]
    The theoretical short problem(s) is that nobody not insane has claimed that provenge doesn't work. All blabbering is only about degree of goodness. Shorts have this binary result mindset similar to a pass/fail ph3 whereas a more sophisticated appreciation understands that there is a continuum of only good provenge outcomes. The only issue then, are there enough good outcomes to make a business? Even then, the financial pressure can be moderated by partnership or being bought out because of synergies with some BP.
    Jun 9 04:38 AM | Likes Like |Link to Comment
  • UBS' (UBS -1%) loss on Facebook trading could be as much as $350M, reports CNBC, and the company is said to be preparing legal action against Nasdaq (NDAQ -0.5%).  [View news story]
    Wow, The ivy league golden boys spending the night in chump town.

    The above report is too diplomatic in not stating the particular level of stupidity:

    "These people said UBS (UBS - News) wanted 1 million shares, but when it did not receive confirmations, it repeated the order multiple times and was left with much more than it intended. "

    How many stock trading platforms and internet commerce sites etc etc tell you explicitly to just press the order button once?

    It would seem like it's almost an inborn survival skill even for web age Mongos not to insanely repeat a hung up software step in which each iteration could potentially debit some hard earned cash account.
    Jun 9 03:52 AM | Likes Like |Link to Comment
  • While the European debt crisis garners most of the attention, the political mess in Washington and looming "fiscal cliff" at year-end may actually pose a bigger danger to the markets. Trillions of dollars in automatic tax increases and spending cuts are on the horizon, but it's barely registering with investors. "It is unlikely that the cliff is fully priced into the markets," says BofA Merrill Lynch economist Ethan Harris. We're only beginning to grasp the size and timing of the coming shock to the economy.  [View news story]
    The author's comment points out the buried illogic in the conservative Obama narrative.

    Obama continually gets hammered as a liberal spending us into oblivion. Now that under his watch potentially spending is coming down and revenues are going up, thus at least constraining the deficit, he doesn't get any credit but instead it's portrayed as another disaster on the horizon.

    I disagree on the political suicide angle. Obama will play of the republicans as problematic financial stewards starting with the following:

    "...But Republicans who helped create it as a bludgeon to force a bipartisan budget accord are now desperate to undo it. Indeed, some of the loudest advocates for blocking the cuts — like Representative Howard P. McKeon of California, chairman of the House Armed Services Committee, and Senator John McCain of Arizona, the ranking Republican on the Senate Armed Services Committee — voted to create them; 28 Senate Republicans and 174 House Republicans voted for the Budget Control Act, overwhelming the opposition. "

    What further demonstrates the obtuseness of the BoA comment is the total lack of any discussion involving going short or long defense stocks and the defense supply chain.
    Jun 9 03:28 AM | Likes Like |Link to Comment
  • U.S. stock futures swing lower ahead of a busy weekend for data on China. S&P -0.3%, Dow -0.2%[View news story]
    Speaking of data from China. From FP:

    "...in May, Beijing ruled that the local affiliates of the "Big Four" international auditing firms must be managed by Chinese nationals by 2017 if they want to continue auditing Chinese company accounts."
    Jun 8 06:44 AM | 1 Like Like |Link to Comment
  • German trade fell sharply in April, with exports -1.7% vs. expectations of -1% on weaker-than-expected European demand; exports to the EU fell 1.1%, while non-European exports gained 10.3%. Imports fell 4.8% vs. expectations for imports to remain flat.  [View news story]
    Why the negative headline?

    "...German exports increased by 3.4% and imports decreased by 1.0% in April 2012 on April 2011...."

    "....waren damit die deutschen Ausfuhren im April 2012 um 3,4 % höher und die Einfuhren um 1,0 % niedriger als im April 2011..."

    Google translation:
    "...
    so were the German exports in April 2012, higher by 3.4% and imports by 1.0% lower than in April 2011..."


    The Y/Y data is the most meaningful.
    Jun 8 06:05 AM | 1 Like Like |Link to Comment
  • Small businesses are waiting longer for their big customers to pay, as many large corporations are trying to hold onto their cash as long as possible to bolster their own working capital. The trend is squeezing small companies that often have fewer resources to rely on during the wait and less access to credit.  [View news story]
    Large corporations have been net 45 like forever.

    One option not mentioned is that there are places to report on the lateness of payments in such a way that it affects the credit worthiness of companies involved.
    Jun 7 06:52 AM | Likes Like |Link to Comment
  • ASCO Data Suggest Dendreon's Provenge Should Go First [View article]
    A little bit of a logical disconnect:

    "(6/6/12)3:00 PM Intuitive Surgical (ISRG +2.2%) should be bought , albeit selectively, says William Blair. The firm recommends using the recent weakness to pick it up. Its channel checks indicate the outlook for robotic surgery has never been stronger, however Zytiga drug approval is likely years away. The firm maintains an Outperform rating."

    While not completely unbiased, note the the comment that Zytiga is years away and no mention of MDV3100.

    I find it ironic that the DNDN stock price drops based on any rumor,
    but that ISRG's price appears to hold up against any potential super drug competition.

    Somewhere, the market is being inefficient.

    As a purely practical point, if Zytiga and MDV3100 were the potential near term wonder drugs people say they are, why aren't the trading superstars shorting ISRG which now only has a short interest of 2.5%?

    In defense of DNDN, right now the issues are operational and the current ISRG stock price indirectly indicates that the market is mispricing various PC treatments.
    Jun 6 10:41 PM | Likes Like |Link to Comment
  • As the S&P 500 plows back above its 200-day moving average, technical bulls once again are coming out of the woodwork. But, will this rally turn into something real or just peter out? Skeptics argue Europe is still a problem and the gains aren't sustainable. Dennis Gartman agrees, saying the recent bounce is going to be short lived. "Usually bottoms are not formed in a pattern of a 'V'... Usually you get a bounce, then the market goes back and tests its lows again and again. I'd have very little exposure to equities."  [View news story]
    The expected world 2012 GDP growth is still around 3% and

    "Caterpillar's first-quarter profit (1Q2012) jumped 29 percent and it boosted its outlook for the year Wednesday with U.S. construction firms replacing old gear and global demand booming for mining equipment."

    Certainly CAT would have seen something negative in March.
    Jun 6 10:17 PM | Likes Like |Link to Comment
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