How fast things change in just an afternoon. Earlier today when ES Futures traded at 1230, it all felt so good. Just mentioning we would trade below 1200 today, some proclaimed we had lost it, but here we are again. The shorts closed out, the new positive longs, Biggs, freshly long, and the market at levels nobody thought remotely possible this morning. To make it more interesting, Moody’s is delivering some harsh words on France. Remember what we wrote of last Friday, What’s going on in France? Goodbye EFSF. Below from Moodys:
However, Moody’s notes that the government’s financial strength has weakened, as it has for other euro area sovereigns, because the global financial and economic crisis has led to a deterioration in French government debt metrics — which are now among the weakest of France’s Aaa peers.
When markets were 15% lower he was dreaming of being ultrashort. Now, Mr Biggs is disclosing his bullish stance again by proclaiming he has gone from 20% net long to 65% net long. He also explains he is not a speculator and that the market will go slowly higher. That was when the DOW was down small digits earlier today. Well, our readers remember what we wrote late this Friday, “Wish I Was Short”. Watch below Bloomberg video for the final Sell signal. Biggs, bullish as ever. As we said, all pundits are confused.
You can’t make this up. “It should be about good research, where somebody wants to pay you for the work you do.” Well, time to face the truth. Internet is here, blogs are here, and information is open. Just because you do your research in a pink shirt with a Tie, it is not more accurate.
Zero Hedge (and other blogs) have done tremendous work, and deserve attention, irrespective if the research is done with the Tie on or not. More reading here. Must see video below, fast forward to 4 minutes into the clip.
Reflecting the Progressive Era’s reform agenda Simon Patten (1852–1922) argued that freeing markets from one source of economic rent (by taxing land rent) would merely leave the surplus to be taken by other monopolists and rent extractors (railroads, Wall Street trusts, and basic privatized utilities). To prevent unearned income (economic rent) from adding to the economy’s cost of living and doing business, potentially rent-yielding infrastructure should be kept in the public domain as a “fourth factor of production.” Instead of rentiers making a profit by charging access fees and user fees, the return to public investment should take the form of reducing the economy’s overall price structure.
Full article here.
‘Commercial Banking Should Be Split From Investment Banking’-democracy or the rule of the financial markets.
In an interview with SPIEGEL, Sigmar Gabriel, the leader of the opposition center-left Social Democrats, outlines his plans to tame financial capitalism, warns that the supposed supremacy of banks and markets is eroding faith in politics and says the SPD would do a better job containing the crisis.
SPIEGEL: Criticising capitalism seems to be all the rage – even Frank Schirrmacher, Editor in Chief of the conservative daily Frankfurter Allegmeine Zeitung, has joined capitalism’s critics. Why is the SPD remaining true to the existing system?
Gabriel: We have long criticized financial capitalism for trying to evade almost any form of democratic influence. We, the Social Democrats, are convinced that capitalism needs to be tamed a second time. The first time we achieved that in Germany for many decades with the social market economy. That is no longer enough. Now we need to do it in Europe and even globally.
After the brutal price falls we saw in August, markets managed to put on some nice gains during the past weeks. Many Indices have reached rather extended moves, while hitting some resistance levels. Many markets have actually just been trading in a range, if you look back two months. We see both DAX and the Stoxx 50 hitting resistance levels. With the action this morning, taking out new shorts, markets reversed, and the DAX is once again underperforming the other markets. As many shorts have covered, and too many are scared of shorting this, we could see some good dynamics to the downside. Below DAX and Stoxx 50 charts, and yes, Athens is down 3.6%, and counting….
Market in full retard Mean Reversion mood. With absolutely no real volumes traded out there, markets are flip flopping. From squeeze to mini flash crashes. DAX moves 1% while you go for a coffee. These no trend, no volume, only HFT driven moves, are not good for markets. We still see the biggest factor for cautiosness, being the market microstructure. There should not be too many serious fund managers wanting to put capital at work in this illiquid HFT driven market. Wonder what would happen if SPX traded below 1200 today?
Quick morning recap. Everything trading higher as HFT melt up 2.0 continues. Equities, oil, metals, everything is trading higher in a squeezed session. The lack of volume, is exaggerating all moves. As the ES futures broke above the 1220, many shorts are closing out, as this was the stop loss level for many. Let’s see if 1230 holds, but this market is very angry with bears, and risks taking out many “smart” shorts in this leg up. Below some of today’s early charts. Note how easily DAX jumps 0.6% in a matter of seconds. Bullish or bearish, we recommend reading the UBS Technical Research we posted last week.
Asian shares rose on Monday and the euro held near a one-month high amid hopes that a crucial week for the eurozone crisis will see policymakers finally come up with a plan to resolve the region’s debt woes and recapitalise its banks,http://ftalphaville.ft.com/thecut/2011/10/17/703106/rising-markets-adds-to-pressure-for-eurozone-deal/
Regulators ordered MF Global Holdings, the brokerage firm led by former New Jersey governor Jon Corzine, to boost its net capital in August after they grew concerned about its exposure to European debt,http://ftalphaville.ft.com/thecut/2011/10/17/703126/mf-globals-eurozone-exposure-led-to-capital-boost/
Barack Obama, US president, offered more support for protesters against the global financial system after a weekend of demonstrations in cities around the world, but called on them not to “demonise” those who worked on Wall Street.http://ftalphaville.ft.com/thecut/2011/10/17/703101/obama-indicates-support-for-ows/
Singapore’s exports unexpectedly fell in September as weakening expansion in the world’s biggest economies eroded demand for electronics and petrochemicals, says Bloomberg. Non-oil domestic exports fell 4.5 per cent from a year earlier, http://ftalphaville.ft.com/thecut/2011/10/17/703056/singapore-exports-unexpectedly-decline/