Diary of a Financier

Top Newsstuffs (May 21-27)

In Bookshelf on Sun 27 May 2012 at 06:22

Welcome back to Groundhog Day.  I’m trying to keep these newspaper clippings fresh, but even then, I feel like we’ve done this Eurocrisis stuff before.  No?  One note: there are no more bears & bulls left on the Street as of this week.  Everyone’s turned into an appraisor, just trying to figure out how bad the damage will be.  Very interesting. Enjoy my newsstand from this past week…


US Decides to Backstop Derivatives Exchanges with Fed Dollars | Jesse’s Café Américain
Chris Dodd led Congress to pass a bill in May 2010 that granted clearinghouses deemed “systemically important” (read: Too Big To Fail) access to the Fed’s discount window without bank charters. On 5/22/12, the Financial Stability Oversight Council began selecting such TBTFs, with derivatives clearinghouses CME Group, ICE, and London’s LCH.Clearnet already approved.

Relative expansion of global central banks’ balance sheets (2007-12) | Federal Reserve Bank of Atlanta
Surprising bookends: Bank of England (BOE) #1, Federal Reserve (Fed) #2, European Central Bank (ECB) #3, Bank of Canada (BOC) #4, Bank of Japan (BOJ) #5.

Best Ad Campaigns of All Time | The Big Picture

There is a difference between a good trade & good trading | Peter Brandt
Once you have a tried process, adhere to it and believe in it. Losses are still bad trades, but good trading (according to your process) will prevail over a career.

Rail Traffic Weekly: Growth Deceleration Continues, Buoyed by Mitigation of Energy Supply Distribution Issues | Association of American Railroads (AAR)
Carloads -5% and Intermodal +3.1%. 12 of 20 segments posted gains y/y. Cumulative volume -3.2% y/y: Petroleum products +49.4%, Motor Vehicles/Parts +23.3, Lumber/Wood +17.9; Nonmetallic Minerals -16.3, Coal -16.1, Coke -8.6.

Stocks Priced In Gold (1886-2012) | Tobias Levkovich (Citigroup)
SPX v Gold Ratio.

EU Summit: Europe Solves Nothing and the Spat Rages on between Merkel & Hollande | Business Insider
Merkel & Draghi oppose Eurobonds, but EIB already issued €230mm “project bonds” as a pilot. No discussion of ESM bank charter to bailout troubled banks. Leaders discussed deposit insurance.

Interview: Jack Schwager, Hedge Fund Market Wizards | Michael Covel
Regarding his new book.

Social Security is not going broke | David Cay Johnston
SSTF ended 2011 with $2.7T surplus (+$95B y/y),which Reagan started building in 1983 by raising SS taxes to end PAYGO. We can raise FICA eligible wages from 83% to Reagan’s 90% to help LT solvency.

China Sovereign Wealth Fund (CIC) Says Renminbi Will Become Reserve Currency | ZeroHedge

CBO Warns of Fiscal Cliff | Seeking Alpha
Estimate 1h13 GDP -1.3% or +4.4% (if spending cuts and tax increases averted).

Subordination 101: A Walk Thru For Sovereign Bond Markets In A Post-Greek Default World | ZeroHedge
Includes Portugal, Ireland, Italy, Greece & Spain (PIIGS) debt notionals categorized by Local and English/foreign-Law.

FX: 4 Reasons Why The Euro (EUR) Isn’t Trading Lower | UBS
1. Global Currency Wars- Developed nations’ QE vs. EU’s lack thereof.
2. Current Account Surplus- Eurozone (barely) operating in the black.
3. Sovereign Wealth Funds- High energy/oil prices giving Middle East sovereign wealth funds excess petrodollars to diversify in Europe.
4. Repatriation- European corporations selling foreign assets for liquidity.

European Crisis: Fiscal Consolidation Proposals from Schäuble & Trichet | ZeroHedge
German FinMin Schäuble and former ECB president Trichet float proposals, including an elected EU president, political union, “federation by exception.”

China Is the First Sovereign Given Access to Bypass Wall Street and Bid US Treasury Auctions Directly | ZeroHedge

Operation Twist: Not Enough Inventory for a Sequel | ZeroHedge
Fed has managed to push its SOMA duration from 75 months to 100 using Operation Twist, but at this rate, they’ll only have 2 months’ worth of inventory (1-3 year bills) to for an OT2 after June 30.

The Mortgage Crisis Hits France: Are French Bank Nationalizations Imminent? | Fitch & Moodys
Covered bonds issued by Credit Immobilier de France Development, a pseudo-GSE, full-service mortgage financial, are plummeting after Moodys warned it might lose access to wholesale financing, leaving it with only 6 months of liquidity and in need of full nationalization.

America Hit Bottom This Week: An All-Time Low & Beginning of Recovery | The Reformed Broker
Tyler Durden: “We view this as a sign of hope… the events of the past few days show that the truth is getting out – the truth that capital markets simply can not exist under the authoritarian rule of central planners, the truth that the stock market is a casino in which the best one can hope for a quick flip, and finally the truth that our entire socio-economic regime, whose existence has been predicated by borrowing from the uncreated wealth of the future, and where accumulated debt could be wiped out at the flip of a switch if things go wrong in the process obliterating the welfare of billions, is one big lie.”


  1. […] included that research in my Top Newsstuffs a few weeks ago, and I even drafted up a post about it, because I disagreed with Mr. […]

  2. […] energy prices have collapsed, and the increased distribution of petroleum products has helped buoy railroads’ activity […]


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