Saturday, January 1, 2011

OT: "Random Act of Culture" - Opera at the Shoe Department of Macy's

The best music video I've watched.

Random Act of Culture at Miami's Dadeland Mall from Knight Foundation on Vimeo.

Friday, December 31, 2010

One Defining Moment of 2010 - May 6, 2010

It was the day of the Flash Crash. I was sitting in front of the computer, trading. Dow was down something like 400, slowly grinding downward all day. And all of a sudden the floor dropped. I thought a nuclear war must have broken out somewhere. Thank you algo bots for the scare much bigger than when Lehman Brothers went down. Back then, we knew what had happened (Lehman went bankrupt). But in May 6, there was absolutely no news that could have triggered the drop. I didn't feel any sense of someone, something, buying to support the market. None.

That particular date and time, the Senate was debating Bernie Sanders' bill on auditing the Federal Reserve. The Flash Crash clearly scared the s--t out of the Senators including Mr. Sanders, who opted for a much weakened version of the bill. That was convenient for the banksters, wasn't it? In addition, it was particularly good for the High Frequency traders who had gone short the week before and were doubling down on shorts that week.

Then, just as fast a Flash Dash happened, taking the indices back up very rapidly. No rhyme nor reason, both ways, that the carbon-based life-forms could comprehend. Many small retail investors couldn't access their accounts. I couldn't, though I wanted to buy. That's when I finally thought enough was enough, screw this. This ain't no market any more, where information is exchanged to assess the value of a company and allocate capital accordingly. The market is totally controlled by the algo bots, and they are used to bring about the desired outcome for the powers that be.

The Flash Crash of May 6, 2010 showed all who cared to see what a sham the whole edifice of capital markets had become.

For the record, this is a recording of the S&P500 pits that day, that moment. It was linked at Zero Hedge.

Happy 2011 Everyone!

Less than an hour and a half till 2010 ends here in California. I hope the year 2010 was a good one for you and your family. Not for the country most likely but we go micro here, to what we can still control. Thank you for reading my posts this year. Best of luck to you in 2011. Keep an eye on the macro issues so that you can protect your micros.

Here's some fun end of the year arts from Williambanzai7 at Zero Hedge. More at the link.

GDP Grows 14.7% in 2010 ..... in Singapore

I was looking for a cheerful bit of news outside CNBC and Goldman Sachs (who recently switched to cheerleading with their bright outlook on the US economy), and I found one. It's just not about the US economy, but cheerful nonetheless...

Singapore's 2010 GDP jumped 14.7%.

AFP via Breitbart:

Singapore's economy expanded at a record 14.7 percent in 2010, Prime Minister Lee Hsien Loong said Friday, in a sharp recovery from last year's recession for the city-state.

It was the best performance ever for Singapore's trade-led economy, surpassing the previous record 13.8 percent growth achieved in 1970.

The annual 14.7 percent surge announced by Lee is also at the top end of the government's growth forecast of 13-15 percent.

For next year, growth will moderate to 4.0-6.0 percent, Lee said.

"The Singapore economy recovered strongly in 2010," the prime minister said in his annual New Year speech.

"This is a dramatic rebound from the negative growth last year.

"We should rejoice in this exceptional performance, but please remember that it is also the result of special circumstances, and so is unlikely to be repeated soon."

Singapore's gross domestic product (GDP) shrank 1.3 percent last year because of the global downturn when demand from the US and other developed economies collapsed.

Its GDP, valued at 247.33 billion Singapore dollars (191 billion US) in 2009, is highly dependent on external trade and any slip-up in the global economy will affect the city-state's economy.

A sharp recovery after a sharp decline. It seems to me that the city state's economy is much freer than what we have here in the US.

Thursday, December 30, 2010

Is "Dumb Money" Coming Back to the US Stock Market?

Is this a sign that the top is indeed in?

Zero Hedge reports that after 33 consecutive weeks of outflows, the money is flowing back to the US equity funds:

The inflection point has arrived. After pulling money for 33 consecutive weeks, and withdrawing over $98 billion in capital from domestic equity mutual funds, in the week ended December 21, the Fed has finally succeeded in getting the rotation out of bonds and into stocks as per ICI. After a total of $4.4 billion was redeemed from bond funds in the same week, mostly from municipals but also $837 million from taxable bonds (still a major decline from the almost $9 billion in bond outflows the prior week), domestic equity funds saw a token inflow of $335 million, compared to last week's $2.4 billion outflow. Just enough to halt the seemingly endless outflow. Still, since the bulk of the move seems predicated upon a move out of muni bonds, with $9.5 billion in outflows in December alone, should the muni crisis accelerate, and validate the investor concern, stocks as an asset class will certainly be impaired once the muni insolvency thesis start being played out... unless of course it is met with further action from Ben Bernanke in the form of QE3, as most Zero Hedge readers believe will inevitably happen. At that point, and as always when the Fed intervenes, all bets are off, suffice to say that gold will be well over $2,000 by then.

Go Ben! Before Congress takes away your power to print money so that Timmy can print on demand... (If you're interested, take a look at the bill (HR 6550) proposed by Dennis Kucinich, who seemingly has become a mouthpiece for the "Greenbackers" like Ellen Brown.)

At this point, I don't care how much Ben's gonna print, or Timmy's gonna print. Bring it on, so the whole system can crash and we get to start fresh.

Winter Wonderland in NYC Courtesy of Sanitation Workers and Mayor Bloomberg

As New York City is snowed under, it turns out the City's sanitation workers may have been contributing to this natural wonder. New York Post reports:

Selfish Sanitation Department bosses from the snow-slammed outer boroughs ordered their drivers to snarl the blizzard cleanup to protest budget cuts -- a disastrous move that turned streets into a minefield for emergency-services vehicles, The Post has learned.

Miles of roads stretching from as north as Whitestone, Queens, to the south shore of Staten Island still remained treacherously unplowed last night because of the shameless job action, several sources and a city lawmaker said, which was over a raft of demotions, attrition and budget cuts.

... The snitches "didn't want to be identified because they were afraid of retaliation," Halloran said. "They were told [by supervisors] to take off routes [and] not do the plowing of some of the major arteries in a timely manner. They were told to make the mayor pay for the layoffs, the reductions in rank for the supervisors, shrinking the rolls of the rank-and-file."

New York's Strongest used a variety of tactics to drag out the plowing process -- and pad overtime checks -- which included keeping plows slightly higher than the roadways and skipping over streets along their routes, the sources said.

The snow-removal snitches said they were told to keep their plows off most streets and to wait for orders before attacking the accumulating piles of snow.

and to collect fat overtime checks. They are ostensibly doing this to stick it to Mayor Bloomberg.

Emergency vehicles are stuck on the streets of New York thanks to them. Instead of sticking it to the billionaire mayor, they are likely killing people. One new-born baby in Brooklyn was dead probably because of them.

And what does Mayor Bloomberg do? Blame the public.

That's the public union and the elected official for you. And remember, taxpayers in New York City, you are paying for their destructive non-service and for their fat benefits and pensions while some among you are paying for it with their lives.

Tuesday, December 28, 2010

How AAA-Rated Foreign Banks Made Out on Ben's Term Auction Facility

Financial Times reports [emphasis is mine]:

The Taf was set up in December 2007 to provide one-month loans to creditworthy banks as markets dried up for lending longer than overnight. In August 2008, it began offering three-month loans as well.

Rabobank of the Netherlands and Toronto-Dominion of Canada, two of the only banks in the world with triple A credit ratings, used more than $20bn in cumulative Taf loans.

Ed Clark, TD chief executive, said that using Taf was logical even though his bank never had a liquidity problem. “That wasn’t how we made a lot of money. But you make a dollar here, you make a dollar there. What’s the spread you make on a billion dollars?” he said.

In the summer of 2008, TD was borrowing $1bn from TAF at rates of between 2 and 2.5 per cent. For that borrowing it used the lowest quality – and hence highest yielding – collateral acceptable to the Fed.

More than 80 per cent of its collateral had a triple B credit rating at a time when such bonds yielded about 7 per cent. TD could therefore have made a notional gross spread of about $4m a month during 2008.

A BBB rating is the lowest a bond can be rated and still considered to be an investment-grade. In other words, one notch above junk bonds, which are rated BB and lower.

And we are supposed to think everything is OK and justified because the money was fully repaid with interest. Hurray for the banks who took advantage of risk-free free money from the Fed and made out like the true bandits that they were and continue to be.

Chris Matthews and His Two Guests Sneer at 43% of Americans

who either do not believe Barack Obama was born in the US or do not know.

At least Matthews kept asking whether his guests were calling almost half the US as stupid "birthers". Smug-faced Clarance Page of the Chicago Tribune and David Corn of Mother Jones kept defending the non-action (or obstruction) from the White House until the end when they had to concur with Matthews that yes, just produce the long form and get it over with.

Well, what do you say, Mr. Obama?

I had to laugh when I heard Mr. Page defending Obama by saying he has more important things to do. (Yeah right. Like vacationing in Hawaii and watching ESPN and playing golf? Or burdening the country with ever more intrusive bureaucracy while the country is struggling to recover from the worst recession since World War II?)

The whole eligibility issue may be a trivial matter, as these three gentlemen say, but it is the matter which should have been cleared up at the very beginning of his candidacy when Obama was being vetted. (Who vetted him anyway?)

Here's the vid of the segment in MSNBC "Hard Ball":

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Monday, December 27, 2010

Randall Wray: Time to Audit REMICs!

Yes, those REMICs (Real Estate Mortgage Investment Conduits) that didn't have any mortgage to back their MBS, which therefore was "mortgage-unbacked securities".

Randall Wray, who's been writing extensively about mortgage origination - securitization - foreclosure fraud which he calls "the worst in human history", says it is time we audited the REMICs:

We now know that the “mortgage backed” securities were not backed by mortgages. In reality they are unsecured debt. The “pooling and servicing agreements” (PSAs) that govern securitization require that the mortgage documents (including the wet ink notes as well as a clean chain of title) are transferred in a timely manner to the trustees. This was rarely and perhaps never done, because it was counter to the recommendation made by MERS (Mortgage Electronic Registry System). Instead, notes were either destroyed or held by the servicers to speed the foreclosures that were always envisioned as the end result of the mortgage origination process. Not only does this practice render the securities fraudulent but it also violates the federal tax laws that govern the REMICs—meaning back taxes are due.

But worse than all that, by breaking the chain of title and by destruction of documents, MERS and the servicers have jeopardized the entire system of property rights. Most, perhaps all, foreclosures have been fraudulent, which means that resales of the homes are also frauds. It goes without saying that the original mortgages were frauds from the very beginning—to complete the transformation to the ownership society it was necessary to ensure that by construction, default was inevitable. Either the homeowner would be unable to pay, or the servicer would “lose” the payments. By obscuring the chain of title, it would be impossible for the debtors or the courts to sort things out. Separating home owners from their property was necessary to ensure that we can create Bush's ownership society. It is the modern form of the feudal foreclosures and seizures of peasant lands that concentrated ownership in the hands of agricultural capitalists—creating the first ownership society.

...It is time to push the reset button. All foreclosures should be stopped immediately. The REMIC trustees should be audited to see if they have properly followed the requirements of the PSAs and laws applying to REMICs. If they do not have the notes, the securities should be put back to the banks. If the banks cannot absorb the losses, they must be closed and resolved.

On a very thin trading today, banks who are servicers and/or trustees of a REMIC - Bank of America, J.P.Morgan Chase, Wells Fargo, Citi, Bank of New York, etc - are all up.

OT: How to Lose That Holiday Fat in the Middle...

A diet plan devised by two doctors that uses whey protein, cream, oil and meat.

I tried this earlier this year, and while I was at it IT WORKED, for me, without doing hardly any exercise.

From UK's Daily Mail (4/9/2010):

... The authors, Dr Mary Dan Eades and Dr Michael Eades, have drawn on two decades of experience running obesity clinics in the U.S. Not only will you lose this dangerous fat, but you'll do so drinking shakes made with cream; and after the first two weeks, you are actively encouraged to include oils and fats in your diet.

The plan has been devised to force your body to use this harmful abdominal fat as fuel, while at the same time re-training it to store fat in a more healthy and slim-waisted way.

Beating your middle-aged middle is all about tricking your body into reversing some of the harmful processes that lead to it.

Spread is caused by a combination of factors, including poor diet, changing hormones and certain medications.

The problem with poor diet is that it can lead to 'fatty liver' - a condition that affects one-third of people in Western populations.

While the exact cause is not clear, excessive consumption of sugar and omega-6 fats ( polyunsaturated fatty acids found in vegetable oils) in modern diets is thought to be to blame.

'Fatty liver' affects the organ's ability to perform one of its primary jobs, detoxification - the breaking down of harmful toxic substances such as drugs, environmental pollutants and hormones.

Meanwhile, the body is also coming under pressure from too much sugar in the diet; and this, combined with stress, causes high blood sugar levels. The body produces more insulin to mop it all up, but a fatty liver can't break it down as it should and it ends up as more fat in the middle of the body.

Hormones add to this. The female hormone oestrogen instructs the body to store fat on the hips and thighs; but as levels decline with age, the target for storage shifts to the abdomen.

Likewise, men experience a drop in testosterone levels. And if they have high insulin levels or a fatty liver, this can lead to more fat on their breasts and bellies.

The problem is not just one of aesthetics, either. The fat that gathers in and around the vital organs in the abdomen is called 'visceral fat', and it behaves very differently to ordinary 'subcutaneous fat', which settles all over the body under the skin.

In fact, when there's enough of it, visceral fat can behave like an active organ that responds to brain chemicals and hormones and sends out its own chemical messages.

One of the things it triggers is inflammation in the blood vessels - damaging them and making it more likely for your blood to form clots, which is bad news for the coronary arteries. Some scientists believe that this, not cholesterol in the blood, triggers cardio-vascular disease.

The two Dr Eades argue that middle-age spread doesn't respond readily to the old adage of 'eat less and exercise more'. But with the right nutritional tools, it can be quickly reduced.