Two major news events largely determined the tenor of trade on US markets Friday.
The Greek restructuring plan went as the global banking cartel liked, with non-governmental lenders taking a 53.5% haircut on bad Greek bonds, while the troika's funding facilities remained intact.
Triggering the collective action clauses and a credit "event" according to the ISDA (International Swaps and Derivatives Association) in which affected parties will settle up on March 19. With just a little over $3 billion in Credit Default Swaps affected in the deal, the effect is little more than a rounding error in the international scheme of things, or roughly the amount Bank of America writes off in a typical quarter.
Prior to the open, the BLS offered another positive reading on unemployment, with the official rate staying unchanged at 8.3%, as the US economy created 233K jobs during February, strongly aided by a raft of temporary hires and the usual fudging by the Labor Department.
Like it or not, the impression is that the US continues to emerge from the depths of the Great Recession, as the calendar turned three years old on the current bull market in equities.
For the week, the major indices were little changed, and, despite all the hoopla, trading volume continued to be incredibly weak, especially on Friday, one of the lowest-volume days of the year, which has seen nothing but poor volume.
Market participants appear to be smug over the developments in Greece and Europe, which continues to avert crises on a regular basis, even though Greece is now in a depression, their latest quarter GDP showing a 7.5% decline.
But, hey, it's the weekend and college basketball is heading into its wild March Madness phase, so relax and enjoy seems to be the operative mindset, though commodity prices, especially in oil, gold and silver, tell a different story.
Dow 12,922.02, +14.08 (0.11%)
NASDAQ 2,988.34, +17.92 (0.60%)
S&P 500 1,370.87, +4.96 (0.36%)
NYSE Composite 8,102.13, +19.75 (0.24%)
NASDAQ Volume 1,553,531,125
NYSE Volume 3,527,470,750
Combined NYSE & NASDAQ Advance - Decline: 3837-1653
Combined NYSE & NASDAQ New highs - New lows: 278-26
WTI crude oil: 107.38, +0.80
Gold: 1,711.50, +12.80
Silver: 34.21, +0.38
Showing posts with label CDS. Show all posts
Showing posts with label CDS. Show all posts
Friday, March 9, 2012
Friday, February 17, 2012
Freaky Friday: $6 Trillion In Fake Bonds, Euro-Greek Bond Swap; March 23rd Looking Grim
For a Friday, the news flow certainly was heavy.
The morning began with a report out of Italy, that $6 trillion worth of allegedly "fake" US Treasury bonds were seized by Italian police and the US Secret Service along with eight men involved in the counterfeiting and money laundering scam. Authorities said that the individuals arrested were planning to purchase plutonium from Nigeria, a story that has a familiar ring, last used as part of the pretense for going to war with Iraq after 9/11.
This story has all the markings of either a false flag event or wild conspiracy. Details are sketchy, though the assembled mainstream news media has already accepted the idea that the bonds are fakes. Don't expect to hear or see much more about this after today, except from bloggers and investigators outside the mainstream.
The European Central Bank (ECB) swapped its Greek bonds for new ones to ensure it isn’t forced to take losses in a debt restructuring. This story also greeted the morning in New York, without much fanfare, except for the press mimicking the officials at the ECB that Greece is moving closer to a resolution of its debt issues before the fateful date of March 20 arrives.
ZeroHedge has a pretty good take on the implications and possible illegalities of the move, which will apparently trigger the collective action clauses (CAC) and also Credit Default Swaps, as it would be a default event. Ooopsie. Could be a cascade coming.
Related, but unconfirmed, is a report that some banks already have documents detailing a March 23 default by Greece in which Greek banks will be closed, accounts frozen and Euro-denominated currency will become worthless in the land of Plato and Aristotle.
March 23 happens to be a Friday, which makes sense, since the report says the major credit agencies will declare Greece in default, and late Friday afternoons, after US markets have closed, seems to be the preferred time for any nasty news from the credit raters.
Late in the day, our normally-inept congress managed to PURPOSELY UNDERFUND THE SOCIAL SECURITY TRUST FUND by passing a bill to extend the roughly-30% cut to employees for the rest of the year and keep unemployment benefits flowing to the millions of Americans who just can't seem to find a good job.
Amid all of this, the stock market looked like a side show, with stocks limping along to yet another positive close - except for the NASDAQ, mostly because Apple finished down 0.09 - on horrifyingly-low volume.
It's tough to make this stuff up, but somebody must be, because financial markets are acting as if they're from another dimension or distant galaxy. The only reasonable correlation that can be assumed these days is that if the Euro is up, so will be US stocks. Oh, and any mention of Iran or the Strait of Hormuz is good for at least another 40-cent move higher in the price of crude, which has retail gasoline now priced at US record levels for February.
Hey, it's a three-day weekend. We can worry about Greece on Tuesday. But, don't drive too much. Could just wreck your budget.
Dow 12,950.10, +46.02 (0.36%)
NASDAQ 2,951.78, -8.07 (0.27%)
S&P 500 1,361.23, +3.19 (0.23%)
NYSE Composite 8,114.51, +22.32 (0.28%)
NASDAQ Volume 1,972,077,750
NYSE Volume 3,675,412,000
Combined NYSE & NASDAQ Advance - Decline: 3082-2535
Combined NYSE & NASDAQ New highs - New lows: 303-12 (0 new lows on NYSE. WOW!)
WTI crude oil: 103.24, +0.93
Gold: 1,725.90, -2.50
Silver: 33.22, -0.15
The morning began with a report out of Italy, that $6 trillion worth of allegedly "fake" US Treasury bonds were seized by Italian police and the US Secret Service along with eight men involved in the counterfeiting and money laundering scam. Authorities said that the individuals arrested were planning to purchase plutonium from Nigeria, a story that has a familiar ring, last used as part of the pretense for going to war with Iraq after 9/11.
This story has all the markings of either a false flag event or wild conspiracy. Details are sketchy, though the assembled mainstream news media has already accepted the idea that the bonds are fakes. Don't expect to hear or see much more about this after today, except from bloggers and investigators outside the mainstream.
The European Central Bank (ECB) swapped its Greek bonds for new ones to ensure it isn’t forced to take losses in a debt restructuring. This story also greeted the morning in New York, without much fanfare, except for the press mimicking the officials at the ECB that Greece is moving closer to a resolution of its debt issues before the fateful date of March 20 arrives.
ZeroHedge has a pretty good take on the implications and possible illegalities of the move, which will apparently trigger the collective action clauses (CAC) and also Credit Default Swaps, as it would be a default event. Ooopsie. Could be a cascade coming.
Related, but unconfirmed, is a report that some banks already have documents detailing a March 23 default by Greece in which Greek banks will be closed, accounts frozen and Euro-denominated currency will become worthless in the land of Plato and Aristotle.
March 23 happens to be a Friday, which makes sense, since the report says the major credit agencies will declare Greece in default, and late Friday afternoons, after US markets have closed, seems to be the preferred time for any nasty news from the credit raters.
Late in the day, our normally-inept congress managed to PURPOSELY UNDERFUND THE SOCIAL SECURITY TRUST FUND by passing a bill to extend the roughly-30% cut to employees for the rest of the year and keep unemployment benefits flowing to the millions of Americans who just can't seem to find a good job.
Amid all of this, the stock market looked like a side show, with stocks limping along to yet another positive close - except for the NASDAQ, mostly because Apple finished down 0.09 - on horrifyingly-low volume.
It's tough to make this stuff up, but somebody must be, because financial markets are acting as if they're from another dimension or distant galaxy. The only reasonable correlation that can be assumed these days is that if the Euro is up, so will be US stocks. Oh, and any mention of Iran or the Strait of Hormuz is good for at least another 40-cent move higher in the price of crude, which has retail gasoline now priced at US record levels for February.
Hey, it's a three-day weekend. We can worry about Greece on Tuesday. But, don't drive too much. Could just wreck your budget.
Dow 12,950.10, +46.02 (0.36%)
NASDAQ 2,951.78, -8.07 (0.27%)
S&P 500 1,361.23, +3.19 (0.23%)
NYSE Composite 8,114.51, +22.32 (0.28%)
NASDAQ Volume 1,972,077,750
NYSE Volume 3,675,412,000
Combined NYSE & NASDAQ Advance - Decline: 3082-2535
Combined NYSE & NASDAQ New highs - New lows: 303-12 (0 new lows on NYSE. WOW!)
WTI crude oil: 103.24, +0.93
Gold: 1,725.90, -2.50
Silver: 33.22, -0.15
Thursday, February 25, 2010
Suckers Galore in Classic Pump and Dump
One has to wonder just how much bad news it will take to send stocks down for the count. Just this week, the Conference Board's measure of consumer confidence trundled down ten full points to 46, a level not seen since 1983. New home sales for January fell to 309,000, a figure more reminiscent of 1962 than 2010, and, just this morning, new filings for unemployment insurance claims reached 496,000, the third consecutive weekly rise in that number, signaling that instead of declining, unemployment may actually be on the rise again.
Adding to the difficult situation is word that Goldman Sachs - tops on everyone's most-hated company list - will soon be under investigation by the Federal Reserve (what a laugh!) for trading in Credit Default Swaps (CDS) related to the nation of Greece. The Fed would like to know if Goldman traders have been betting on a default of Greece's debt, and, anybody who knows the language of Wall Street would have to conclude that the Goldman traders are all over it.
Not that profiting from another country's missteps or outright demise is in any way illegal or unethical - though some may argue that the practice would be immoral - Goldman Sachs may be just the next victim lined up for the dog-and-pony show currently underway in congress. Once the congressional clowns are done with smearing Toyota, they might want to take aim at one of their country's own. Goldman Sachs makes a perfect whipping boy for the incompetent congress. Since they can't pass meaningful legislation, they have resorted to mealy-mouthed denunciations of the business community. The act takes some of the spotlight off their inept attempts at legislating and/or governing.
However, Wall Street being the biggest and most-corrupt casino on the planet, more bad news may only produce sideways trading. Perhaps half of California slipping into the Pacific might garner some support from the bulls, though such an event would likely be viewed with insidious sarcasm on Wall Street, something along the lines of, "well, there one more problem we'll not have to concern ourselves with any more."
On the day that the Dow was down 187 points by midday - a normal reaction - the index ends the session down just over 50 points - an abnormal trade. The question of whether US stocks are manipulated has already been answered over and over again, so since there's little point in beating a horse that's already dead, we can safely assume that the US economy is about to implode once again, and the insiders in DC and on Wall Street already know it. They're just waiting for the optimal moment - when they have as many suckers as possible fully invested in stocks - to sell everything and run for the hills, sending the markets into another spasmodic paroxysm of panic-induced crashing.
While my interpretation of market movements and political foreplay may sound to some like the last days of Cicero, it's about the best I a able to muster considering the abysmal trappings to which we are currently bound. The banking and credit system is broken and more prone to penalize borrowers than help them, real estate is a bad bet for anything other than arable land and the political process has largely ground to a complete halt. Nothing short of a major war is going to solve the debt problems of the developed world, especially Europe, Japan and the United States, a prospect which I do not wish to see, nor do I espouse. Wars only solve nations' problems - and not very well - at the expense of the lives of the general public.
However, as much as I'd like to wax positive on the current condition, I see only gloom and doom ahead for those who are not adequately prepared. Personally, I've divested all of my holdings in anything speculative and am completely in cash and productive investments: tools and seeds, for today; machines and vegetables, tomorrow.
Dow 10,321.03, -53.13 (0.51%)
NASDAQ 2,234.22, -1.68 (0.08%)
S&P 500 1,102.93, -2.31 (0.21%)
NYSE Composite 7,013.45, -17.22 (0.24%)
Not unexpectedly, declining issues beat advancers, though not by nearly the 3-1 margin seen earlier in the day, 3458-2969. New highs stood at 225. There were 45 new lows. Volume was at its best level of the week, owing, in part, to the incredibly heavy lifting done by those who eviscerated nearly 140 points from the downside.
NYSE Volume 5,247,205,000
NASDAQ Volume 2,268,341,000
Commodities were mixed again, though today was oil's day for decline. Crude was off $1.70, to $78.30. Gold gained $11.20, to $1,108.40, on rumors that the government of China was planning to buy up the remaining reserves of the IMF. Silver dipped 2 cents, to $15.94.
Tomorrow, being the final day of trading for the week and the month, ought to offer even more ammo for interested parties. The government issues the second estimate of 4th quarter '09 GDP, existing home sales for January are offered and the Chicago PMI and U of Michigan final February consumer sentiment gauge are all on tap.
10,400 is the magic number on the Dow. Closing above that would be the third straight weekly positive finish. For the year, the Dow's record for weekly closes stands at 2 up and 4 down.
Adding to the difficult situation is word that Goldman Sachs - tops on everyone's most-hated company list - will soon be under investigation by the Federal Reserve (what a laugh!) for trading in Credit Default Swaps (CDS) related to the nation of Greece. The Fed would like to know if Goldman traders have been betting on a default of Greece's debt, and, anybody who knows the language of Wall Street would have to conclude that the Goldman traders are all over it.
Obviously, using these instruments in a way that intentionally destabilizes a company or a country is counterproductive. - Fed Chairman Ben Bernanke
Not that profiting from another country's missteps or outright demise is in any way illegal or unethical - though some may argue that the practice would be immoral - Goldman Sachs may be just the next victim lined up for the dog-and-pony show currently underway in congress. Once the congressional clowns are done with smearing Toyota, they might want to take aim at one of their country's own. Goldman Sachs makes a perfect whipping boy for the incompetent congress. Since they can't pass meaningful legislation, they have resorted to mealy-mouthed denunciations of the business community. The act takes some of the spotlight off their inept attempts at legislating and/or governing.
However, Wall Street being the biggest and most-corrupt casino on the planet, more bad news may only produce sideways trading. Perhaps half of California slipping into the Pacific might garner some support from the bulls, though such an event would likely be viewed with insidious sarcasm on Wall Street, something along the lines of, "well, there one more problem we'll not have to concern ourselves with any more."
On the day that the Dow was down 187 points by midday - a normal reaction - the index ends the session down just over 50 points - an abnormal trade. The question of whether US stocks are manipulated has already been answered over and over again, so since there's little point in beating a horse that's already dead, we can safely assume that the US economy is about to implode once again, and the insiders in DC and on Wall Street already know it. They're just waiting for the optimal moment - when they have as many suckers as possible fully invested in stocks - to sell everything and run for the hills, sending the markets into another spasmodic paroxysm of panic-induced crashing.
While my interpretation of market movements and political foreplay may sound to some like the last days of Cicero, it's about the best I a able to muster considering the abysmal trappings to which we are currently bound. The banking and credit system is broken and more prone to penalize borrowers than help them, real estate is a bad bet for anything other than arable land and the political process has largely ground to a complete halt. Nothing short of a major war is going to solve the debt problems of the developed world, especially Europe, Japan and the United States, a prospect which I do not wish to see, nor do I espouse. Wars only solve nations' problems - and not very well - at the expense of the lives of the general public.
However, as much as I'd like to wax positive on the current condition, I see only gloom and doom ahead for those who are not adequately prepared. Personally, I've divested all of my holdings in anything speculative and am completely in cash and productive investments: tools and seeds, for today; machines and vegetables, tomorrow.
Dow 10,321.03, -53.13 (0.51%)
NASDAQ 2,234.22, -1.68 (0.08%)
S&P 500 1,102.93, -2.31 (0.21%)
NYSE Composite 7,013.45, -17.22 (0.24%)
Not unexpectedly, declining issues beat advancers, though not by nearly the 3-1 margin seen earlier in the day, 3458-2969. New highs stood at 225. There were 45 new lows. Volume was at its best level of the week, owing, in part, to the incredibly heavy lifting done by those who eviscerated nearly 140 points from the downside.
NYSE Volume 5,247,205,000
NASDAQ Volume 2,268,341,000
Commodities were mixed again, though today was oil's day for decline. Crude was off $1.70, to $78.30. Gold gained $11.20, to $1,108.40, on rumors that the government of China was planning to buy up the remaining reserves of the IMF. Silver dipped 2 cents, to $15.94.
Tomorrow, being the final day of trading for the week and the month, ought to offer even more ammo for interested parties. The government issues the second estimate of 4th quarter '09 GDP, existing home sales for January are offered and the Chicago PMI and U of Michigan final February consumer sentiment gauge are all on tap.
10,400 is the magic number on the Dow. Closing above that would be the third straight weekly positive finish. For the year, the Dow's record for weekly closes stands at 2 up and 4 down.
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