State Of Emergency Issued For New York
by Zero Hedge - August 25th, 2011 5:03 pm
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
Hopefully, this is as bad as it will get. Per Reuters, New York Governor Andrew Cuomo on Thursday declared a state of emergency to prepare for the potential impact of Hurricane Irene, which could hit the state this weekend. The formal declaration allows the state to aid counties, cities and towns “more effectively and quickly,” get help from the national Emergency Management Assistance Compact and get federal help earlier, the Democratic governor said in a statement. “We are communicating with our federal and local partners to track the storm and to plan a coordinated response, and we will deploy resources as needed to the areas expected to be hit the hardest,” Cuomo said.
All that said, we would be delighted to see the following scene on 200 West Street:
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DiggCharting The Deterioration Of Bank Self-Assessed Counterparty Risk Through 3 Month USD Libor
by Zero Hedge - August 25th, 2011 4:57 pm
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
When it comes to counterparty risk, one can look at CDS, for an indication of how the market view a given bank’s counterparty risk, or, one can observe how the banks themselves evaluate each other, courtesy of daily Libor fixings by bank. When it comes to Europe it is well known that dollar funding pressures are the most representative of overall liquidity stress. As such, we look at the 3 Month USD libor for various BBA-reporting banks. The picture, over the past month, is not pretty, especially if one is Barclays or RBS. The chart says it all.
On the BAC deal
by Zero Hedge - August 25th, 2011 4:41 pm
Courtesy of ZeroHedge. View original post here.
Submitted by Bruce Krasting.
A few random thoughts on the BofA – Buffett deal.
This deal is $5b. A fair bit of change. But it is also small beer for a bank with $2.2 Trillion of assets. The stories that went around re BAC were related to the following issues:
Business Insider summed up the various concerns. The number came to as high as $200b.
it looks as though we could easily come up with, say, $100-$200 billion in write-offs and exposures to “clean up” Bank of America’s balance sheet.
I don’t know what BAC has on its books, so I won’t hazard a guess on these numbers. I can’t believe there is no smoke with all this fire. Buffet’s 5 bill will cover 3-5% of the nut. Not much of a margin if there is, in fact, some big ticket issues.
BAC could have done a public deal for common and pref under much better terms than Buffet is charging. To me, the only conclusion is that BoA bought Buffett’s name. Admittedly, Warren does have a lot of clout. I have no doubt but that many small investors are thinking, “If Warrens in, it’s gotta be good!” I’m thinking that Buffett is just an expensive show pony.
Just a question, How many times have we heard that there was no need to raise equity? I guess that was just a bluff.
This is perpetual cumulative Pref. I find that interesting. There is no intention to pay a cash dividend. The 6% will be paid in more pref script. What does this structure mean to common shareholder and the hopes they might see some dividend action out of BAC? I think it means they will see very little (if anything) for a long time to come. It will be interesting to see (if we ever do) what covenant restrictions the Buffet Pref has regarding dividend restrictions on…
RANsquawk Market Wrap Up – Stocks, Bonds, FX etc. – 25/08/11
by Zero Hedge - August 25th, 2011 4:27 pm
Courtesy of ZeroHedge. View original post here.
Submitted by RANSquawk Video.
The European Dollar Funding Crunch Is Back: Fed Does Another $500 Million In USD Swaps This Time With The ECB
by Zero Hedge - August 25th, 2011 4:25 pm
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
And now for some disturbing news out of the ECB, just in time for tomorrow’s sub-1% GDP announcement and Jackson Hole disappointment. Unlike last week, when the Fed conducted a $200 million FX swap with the Swiss National Bank, this week the bank in dire needs of dollar funding is the ECB itself… and for two and a half times than last week. Furthermore, unlike last week, when we knew in advance that at least one European bank was experiencing a dollar liquidity event, this time the update from the ECB indicated no USD-based liquidity constraints: the $500 million in 7 day USD punitive loans quietly expired and everyone once again assumed that Eurozone liquidity is back to normal. It isn’t. The question once again now becomes, who finds themselves in a dollar funding crunch?
HFT Quote Stuffing Market Manipulation Caught In The Act
by Zero Hedge - August 25th, 2011 3:38 pm
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
Now that we can directly monitor the amount of quote stuffing in the NYSE courtesy of Nanex (an ability that the SEC apparently never will have), we know that every time there is a massive spike in hollow trade (as in without intentions to cross bids or asks, something everyone but the SEC and the HFT lobby believes should be a felony offense), the market is programmed to either rip of plunge. Sure enough, at just after 3:19 pm we saw an epic spike in empty packets on the NYSE, which set off red flags and immediately prompted us to observe the move in ES, which naturally confirmed that an HFT driven coordinated buy order (no block) was going through and pushing the ES well on its way to VWAP. Market manipulation no longer needs anything more than a coordinated packet stuffing dump, as what happened on May 19. Keep in mind: these work on both the upside and the downside- the reason why suddenly everyone hates HFT after loving it for over 2 years, is that while it provides volumeless levitation, it just as easily can serve as quicksand in a downmarket. That, however, does not make it right, and just as two years ago, when we first brought attention to the matter, so today, we claim that HFT should be abolished immediately by the imposition of a minimum active quote latency. That would eliminate all quote stuffing and HFT market manipulation in a millisecond.
HFT quote stuffing spike:
and ES response:
ViSuaL CoMBaT DaiLY (8.26.11)
by Zero Hedge - August 25th, 2011 3:34 pm
Courtesy of ZeroHedge. View original post here.
Submitted by williambanzai7.
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Here Are Wall Street’s Expectations For Tomorrow, As Goldman Makes The Case For $1 Trillion In QE3
by Zero Hedge - August 25th, 2011 2:55 pm
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
After 3 months ago everyone was convinced there was no QE3 imminent ever, all it took for the lemming majority to scramble to the other side of the boat was a 20% drop in stocks. Since then, following a brief stabiliziation in stocks, based precisely on beliefs that Bernanke would once again pull something from this bag of goodies, the lemmingrati once again shifted back, and the majority now pretends it does not expect anything out of Jackson Hole tomorrow, even though it obviously does, as otherwise the market would resume its plunge. UBS earlier conducted a survey among money managers, finding that 50% of the 82 respondents expect Bernanke to limit Jackson Hole remarks only to reviewing the rationale for the Fed to pledge ZIRP until mid 2013. Then there are those who actually told the truth, such as Goldman which, in a note yesterday, says that $1 trillion in QE3 is an absolute minimum if the Fed wants to get GDP higher by at least 0.5%. To wit: “Taken together, our analysis suggests that QE3 is unlikely to be a panacea for growth. Nonetheless, our estimates suggests that $1trn of asset purchases–or an equivalent increase in the duration of the Fed’s balance sheet–might increase GDP growth by up to 0.5 percentage point in the first year after any announcement of QE3.” And since we are talking the truth here, why not stop pretending you care about GDP – just think of the marginal impact on Wall Street bonuses…
First, the UBS responses:
- 18% expect Fed will extend average maturity of Treasury holdings, similar to “Operation Twist”
- 3% expect either “QE3 Max” (purchases include risky assets or a 10-yr yeld target) or a QE3 along the lines of QE2
- “We suspect that a reasonable chunk of the nearly 4% gain in the S&P 500 this week is built on the hope that the speech is friendly to risk assets. Hence they could suffer at least a bit if the Chairman does not pave the way for QE3”
One firm that is not shy about its “QE3 or bust” policy, er, recommendation is Goldman. Here is the firm’s Sven Jari Stehn defending the firm’s outlook why a $1 trillion boost in LSAP (or duration equivalent extension, because see, LSAP is the same as…
Germany Won’t Go “All In” on the Euro
by Zero Hedge - August 25th, 2011 2:09 pm
Courtesy of ZeroHedge. View original post here.
Submitted by Phoenix Capital Research.
Let’s consider the belief that Germany and the ECB might solve Europe’s debt problems.
For starters, this argument is absurd simply on a common-sense basis. Greece first asked for a bailout in June 2010. It’s since asked for an extension on this bailout AND a second bailout… all within a 14-month period. The fact this has occurred in such a brief period of time should make it clear how impotent the ECB (and ultimately Germany) is at fixing the situation.
Indeed, Europe’s debt contagion has now spread from Greece and Portugal to Spain and Italy: countries far too large for the ECB to bail out (by the way, the second Greek bailout hasn’t even been finalized yet so that potential crisis is still on the table).
As I’ve noted in previous issues, any and all EU bailouts and interventions hinge on Germany, the largest, most solvent economy in the EU. No German support means no bailout, and no EU (in its current form).
As I’ve noted in previous issues, Germany has had enough of the bailout nonsense. The following stories confirm this:
Investor confidence sags in Germany as ZEW index falls to minus 37.6
German investor confidence fell sharply in August on fears about sagging growth in Europe’s biggest economy, the region’s government debt crisis and the possibility of another recession in the United States.
The ZEW institute said Tuesday that its index of investor confidence dropped to minus 37.6, down 22.5 points from the month before.
The institute said the drop was due to fears about a double-dip recession in the United States and uncertainty about the global economy, coupled with Germany’s disappointing second-quarter growth of 0.1 percent reported…
Caution: Another Gold Margin Hike Imminent
by Zero Hedge - August 25th, 2011 2:06 pm
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
Just like Interactive Brokers predicted the last CME margin hike with 100% precision, here it comes again. It is now all too clear that the CME risk managers have decided to do to gold what they did to silver: namely shake out the weak hands with as many as 5 or more margin hikes in a row. Since everyone else is all cash, the CME’s attempt to manipulate the market is coming to an end.
To HKMEX,NYMEX,NYSELIFFE traders:
Thu Aug 25 13:54:57 2011 EST
As a result of the continued volatile trading environment, please be advised that exchange margins and/or house margins are likely to increase overnight and over the next couple of days, particularly in the metals. For exchange specific increases, please visit the respective websites. IB will also be increasing the gold derivatives margin. Please monitor any affected holdings closely and manage your risk accordingly.
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