Diary of a Financier

Top Newsstuffs (July 9-15)

In Bookshelf on Sun 15 Jul 2012 at 06:07

I got my bounce off trendline support this week.  I had been accumulating equity exposure these past couple weeks in preparation, as documented herein.  In addition to adding to some preexisting singlename equity holdings, I closed my longs in Utilities (XLU) & Consumer Staples (XLP).  I took my Russell 3000 All Market ETF (VTI) exposure down from 15% to 10%, building a 10% stake in Large Cap Growth (IWF) to more than displace it–as 2011 dictates outperformance for IWF in the coming weeks.

Very much going on in my personal life this weekend though.  It overshadows everything else.  Not a weekend (Friday) I’ll ever forget.  Love.

Here’s the Newsstuffs from this past week…


Interview: Maria Bartiromo v. Eliot Spitzer | CNBC
Maria spars with the former NY Attorney General about his indictment of Hank Greenberg (AIG).  She cites 6 of 8 charges having been dismissed, while he rebuts with a federal court opinion that calls Mr. Greenberg’s behavior at AIG “fraudulent.”

RealtyTrac, CoreLogic Confirm Housing Bear Thesis | naked capitalism
85-90% of REO is being withheld from the market, which means the “tight” inventories that’re driving prices higher are bogus.

Rail Traffic Weekly: Intermodal Surging, Carloads Still Ambiguous | Association of American Railroads (AAR)
Carloads -2.8% and Intermodal +3.4 (y/y cumulative ytd volume); -1% and +5.6 respectively (vs. this week last year).
7 of 20 carload groups posted gains: Petroleum products +54.8%, Motor vehicles/parts +52.7 & Food +11.1; Steel scrap -29.6%, Forest products -24.1, Farm products -23.6.

The Most Important Charts in the World from Wall Street’s Greatest Minds | Business Insider

Clarifying the Entirely Unremarkable Shift in ECB Deposits | Merrill Lynch
MSM cited €484b drop in ECB’s excess deposits as bullish sign that banks were lending after recent ZIRP move. The deposits actually just moved to ECB’s current account, which doesn’t term nightly.

Interview: Jim Chanos | Market Folly
Discusses his background, philosophy, process (short-selling), and his continued bearish-China thesis.

Blackstone Is Selling Its Commercial Real Estate | Wall Street Journal
BX likely to sell all of its $22b US CRE portfolio, which contributed $1b to its $1.6b total EBIT in 2011.

Defending Attacks Against Austrian Economics | Ludwig von Mises Institute
“Anything the government does to prevent the painful but necessary readjustment from occurring puts the brakes on the recovery. This is why Austrians are against all government interference in the marketplace to prevent a much needed correction following a bust caused predominantly by the government’s own inflationist agenda.”

Charts: Long-Term Employment Data | The Big Picture

Complete Guide to the European Stability Mechanism (ESM) | Deutsche Bank
Since ESM was accelerated, it’ll run alongside EFSF for about a year starting end of August 2012, assuming Estonia/Italy/Germany ratify ASAP.  It’ll be capitalized with €80b with a 15% margin maintenance providing €500b in buying power–assuming ESM can place debt in the marketplace.
It can call €700b total capital, which is also the liability ceiling for EFSF & ESM combined. Given outstanding EFSF loans, ESM can only lend €100b through October 2012 (all has been committed to Spain).

Consumer Credit Surges in May | Pragmatic Capitalism
Consumer credit +8% (annualized) in May; Revolving credit increased +11.25%; Nonrevolving credit +6.5%.

European Leaders Agree on Spanish Bailout | Associated Press
Final approval on 7/20 after German, Dutch & Finnish parliaments. €30b will be released by month-end for Spain’s banks, with a total of €100b soon to be available. Extends Spain’s deadline to reduce deficit under 3% until 2014, yet amidst “ruthless” financial-sector reforms.

Mayor of Scranton PA Lowers City Employees’ Salaries to Minimum Wage | ZeroHedge
All 400 city workers are now paid state minimum wage ($7.25/hour) to lower $16.8b budget deficit. Scranton ended last week with only $5k in cash.

2q12 SPX Earnings Trends: Expectations Trimmed | Zacks
2q12 Earnings expected to increase +0.6% y/y (-5.0% ex-financials), down from +2.3% at end of May, +5.0% at 1q end.
EPS FY2012/2013 down to $102.57/$113.50.
Net Income FY2012/2013 +8.9%/+10.7% (down from +9.4%/+12.7% at 1q end).
Revenue FY2012/2013 +3.2%/+4.5%.

Interview: Nigel Farage (UK Independence Party Leader), ‘Euro Titanic’ Hits the Iceberg | Rick Santelli (CNBC)
PIIGS need to leave Euro, which would leave the ECB insolvent. Remember, Italy has to borrow at 7% to provide Spain its 3% bailout loan.

Global Central Bank Balance Sheet Updates | J.P. Morgan
Balance sheet expansion has become a conventional monetary policy tool. The latest round has focused on Europe (SNB/ECB/BOE), leaving room for Fed & BOJ, helping USD & JPY.

Ten Reasons I Like Stocks for the Second Half (2h12) | The Reformed Broker*

How to Bring Back America | Steve Forbes
New wealth creation is what happens naturally with stable money based on the gold standard, lower taxes on individuals, a simplified tax code, reduced bureaucracy and free markets.




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