immobilienblasen

Kass: The Quant Bubble

2009-11-18T08:59:00.000-08:00

A must read...... Pflichtlektüre......

"When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you've got to get up and dance. We're still dancing."

Chuck Prince, former chairman and CEO of Citigroup (told to the Financial Times on July 10, 2007).

Kass: The Quant Bubble TSC ( H/T Anti Lemming )

A portion of the sharp rise in several asset classes over the past few months could be the dominance of quant funds that worship at the altar of price momentum (and the self-fulfilling prophecy of the fund flows that follow the price momentum induced by the quants!).

By some estimates, this price-momentum-based quant trading now has doubled in significance since early in the year, to more than two-thirds of the average day's trading.

> I doubt that this figure is correct, but it is verry telling that combined with High Frenquency Trading the "Quants" are the main market force dominating trading...... Doesn´t give me much comfort that the recent gains are "sustainable" ...... Especially after one of the biggest Bear Market Rallies ever on almost non existent Volume ( ! ) ..... Thank god the retail investor this time is smarter than the so called "smart money" ( 13th Straight Week Of Domestic Equity Fund Outflows As Market Rips 11% Over Same Period ) BRAVO ;-)

> Ich bezweifle das die von Kass gennante Zahl in der Tat so hoch ist.... Das aber die Quants zusammen mit dem sonstigen computergetützten Handel ( HFT) der wesentliche "Spieler" ( Investor traue ich mich in diesem Zusammenhang nicht in den Mund zu nehmen.... ) an den momentanen Märkten sind fördert nicht gerade mein Vertrauen in die Nachhaltigkeit in einen nicht "unwesentlicher" Teil der bisher verbuchten Kursgewinne . Nicht verbessert wird das Gesamtbild das der Anstieg praktisch unter minimalen ( ! ) Handelsvolumen stattgefunden hat.. Wenn man jetzt noch bedenkt das wir gerade einer der größten Bear Market Rallies aller Zeiten hinter uns haben sind immer neue Kursziele die man so jeden Tag zu hören bekommt zumindest "mutig"...Glücklicherweise scheint es diesemal so das der "Kleinanleger" sich nicht erneut für das über Jahre erprobte "PUMP & DUMB" begeistern läßt ( 13th Straight Week Of Domestic Equity Fund Outflows As Market Rips 11% Over Same Period ). BRAVO ;-)

Trades initiated by these funds are insensitive to an underemployment rate approaching 18%, signs of an unsteady recovery in housing, the prospects for higher marginal tax rates and how we are going to finance our budget deficit, which hurdles ever higher.

If you don't believe me about the growing quant fund influence, speak to any prominent institutional trader or salesman: They will tell you that their business with plain vanilla institutions is weak and that the quant funds are the ever growing whales of trading.

The pattern is all-too familiar as a new marginal buyer of an asset class dominates the market until they don't.

Here is an anecdote that underscores the changing landscape and is reminiscent of other sectors hiring at tops. (To refresh your memory, this occurred several years ago in private equity and was followed by a sharp cyclical decline in private-equity deals.) At any rate, a subscriber wrote me a telling note recently about his son's friend who attends Wharton and is "a genius in math and game theory." He was just hired by a high-frequency trading firm after being interviewed by 15 similarly talented employees at the firm. He is 20 years old and has been offered approximately $100,000 a year, with a bonus that can add up to an additional $100,000 a quarter! That's far better than even the estimable Goldman Sachs pays!

Keep dancing if you will, but I continue to sit out the melt-up in stocks and the bubble in other asset classes. When investors/traders are arguably overinfluenced by prices (not fundamentals) that dominate the markets, and are all on a similar side, it has the potential to lead to a treacherous and slippery slope, as it did in 2007-08.

Remember, it is some of the same momentum-based quant funds that sold in March 2009 that have been buying over the past few months

AMEN.....

Mark Faber : "Gold Won't Go Below $1,000" & "Gold A Better Buy Than At $300/oz. "

2009-11-17T19:12:00.000-08:00

Hearing quotes like this i sometimes have the feeling that i´m one of the more bearish GOLD-BUGS out there.... ;-)

Muß allerdings gestehen das ich bei solchen Zitaten so langsam als einer der pessimitischeren GOLD-BUGS durchgehe... ;-)

H/T Expected Returns for the videos & Tim from The Mess That Greenspan Made for digging out the following quote and analyzing it perfectly....

Dank an Expected Returns für die Videos und Tim von The Mess That Greenspan Made der nachfolgendes Zitat hervorgehoben hat und dies dann mehr als treffend analysiert hat.....

Faber : Maybe, gold at this level is a better buy than it was at $300 per ounce in 2001.
Tim: At first glance, the idea that gold priced at over $1,100 an ounce is "a better buy" than when the metal traded at about a quarter of that price seems reposterous. But, when you think about it just a little bit (i.e., what constitutes a "better buy" and how the fundamental factors have now swung so decidedly in gold's favor), maybe it isn't a crazy idea at all.

I wouldn't be surprised if, in another eight years - in 2017 - the yellow metal fetches $5,000 an ounce or more which, by my math, would make it a better buy. Gold may not rise as much against other currencies, but, after almost a decade of trillion dollar deficits, that almost seems like a slam dunk when the measuring stick is the U.S. dollar.

Compare yesterdays quotes from Yellen, Kohn & Bernanke with what Faber said.....In the context of these remarlks i just couldn´t resist to post the following video "highlighting" Bernanke´s past track record in seeing the obvious.... Gold is a not the way to get rich but is a wonderful way to PROTECT your "puchasing power" with a very long track record ( 750 Years Of Real Gold Prices )

Vergleicht die Zitate von Yellen, Kohn & natürlich Bernanke vom Vortag mit dem was Faber gesagt hat..... Konnte in diesem Zusammenhang nicht verkneifen das nachfolgende Video mit einigen von Bernankes vergangenen "Glanzleistungen" zu bringen wenn es darum geht einen gewissen "Überschwang" zu "sichten"......... Gold ist sicher nicht geeignet um zu spekulieren aber die Historie ( 750 Years Of Real Gold Prices ) zeigt das es sich bei Gold zumindest um eine der weinigen Möglichkeiten handelt die nachweisbar zumindest die KAUFKRAFT ERHALTEN......

Geithner Blames Collapse On Previous Admin Even As Tim Was President Of FRBNY Under Bush; Resignation Time H/T Zero Hedge

Dylan Grice / Societe Generale ZH

Of course, any gold bull, gold "bug" or otherwise, faces some serious competition, in the face of none other than Goldman Sachs' most recent partner in philanthropic, TARP subsidized ( disturbing table / diese Übersicht "entzaubert" Buffet zumindest als den "guten" Amerikaner, er bleibt ein guter Investor... mehr aber auch nicht....! ) deeds, Warren Buffett.

“Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It as no utility. Anyone watching from Mars would be scratching their head.”

Warren Buffett

At least the quote is funny but after taking a look at the following link "Our Governments Are Insolvent" it is easy to see why Buffet is wrong. Wouldn´t be the first time.....At least one quote where he is not talking his book .... ;-) This Chart is clearly telling what is going on.......I´m still thinking that the Dow/Goldratio reached in 1980 is not "unrealistic" over time......

Immerhin ein witziges Zitat von Buffet das aber gerade wenn man die Grafik in "Our Governments Are Insolvent" ansieht wohl zu den weniger ruhmreichen Einschätzungen von Buffet gehören wird.....Dieser Chart spricht zumindest momentan eine eindeutige Sprache.....Bin mehr denn je der Meinung das ein Dow/Goldratio vergleichbar mit dem Jahr 1980 in den nächsten Jahren nicht "unrealistisch" ist....

UPDATE:

Gold: Short-Term and Long-Term Outlook Expected Returns

The Fed is sending gold higher Rolfe Winkler

Wells Fargo Needs TARP Money More Than It Admits: Jonathan Weil "Buffet Watch....."

Meridth Whithney "I Havn´t Been This Bearish In A Year"

2009-11-16T21:14:00.000-08:00

So do i...... But at least from this point of view the market looks "rationale";-)

Genau wie ich ... Immerhin stimmt die Martbewertung wenn man diesen Maßstab ansetzt..;-)

Unlike Bernanke ( H/T Maxgreen) she at least managed to influence the $ longer than 30 minutes......No Surprise ;-) UPDATE : Bernanke vs. Meredith Whitney Mish

Im Gegensatzu zu Bernanke ( H/T Maxgreen ) hat Sie es zumindest geschafft des Verlauf des $ länger als 30 Minuten zu beeinflussen.... Keine Überraschung ;-) UPDATE :Bernanke vs. Meredith Whitney Mish

Central Planning & Ghost Towns In China.....

2009-11-14T00:48:00.000-08:00

Fits perfectly to an earlier post ( see China’s Loan Growth Isn’t Boosting My Confidence In China’s “Green Shoots” Michael Pettis ).

Paßt hervorragend zu einem früheren Posting ( siehe China’s Loan Growth Isn’t Boosting My Confidence In China’s “Green Shoots” Michael Pettis .

China Digital Times

China’s economy is continuing to grow despite the global recession, helped by a massive government stimulus package of $585bn.

But doubts remain whether such strong growth can be sustained by public spending alone.

Al Jazeera’s Melissa Chan reports from Inner Mongolia, where a whole town built with government money is standing empty

> Here one interesting anecdotal evidence from a fund manager via M.Pettis.

> Hier eine recht interessante Einschätzung eines Fondsmanagers via M.Pettis

Notes on a real estate trip in China

I don’t know how much you travel around China. T and I do a fair bit, and most recently we were in Guiyang. I thought I’d seen insane excess in the past – 200 thousand square meter malls completely empty next to apartment complexes with 40 thousand units and 30% occupancy rates, etc. etc.

But what we saw over there is rather hard to fathom. It seems the Guiyang city mayor had the same idea as the Shenzhen mayor – to move the old downtown to a piece of undeveloped land.

Of course Guiyang has a quarter the population and probably a quarter the per capita income of Shenzhen. They built sprawling new government buildings about a 20-minute drive north of town. And then the residential high rise projects started going up. From driving around the area, we figured well over 100 20+ storey buildings.

What was most distressing was that the development has been totally uncoordinated – a project with 15 buildings here, in another field two miles away a project with one building, another mile in another direction three buildings, sprawled over what was easily over 30 square kms. of farmland well north of town. Every building we got close enough to see was either incomplete/under construction, or empty. Our tone gradually went from “Haha, another one!” to “Oh my God, another one.” We conservatively guesstimated that we saw US$10bn of NPLs in one afternoon.

The only buildings that were occupied were six-storey towers built to accommodate the peasants who had been displaced by the construction.

Back in the city proper, every neighborhood we saw was a convulsing mess of buildings being torn down, new ones being built, and unfinished high rises starting to crumble

> Another comment from a friend of M.Pettis

> Hier eine weiterere "amüsante" Beobachtung....

"By the way almost no one I know trusts the official vacancy rates.

A friend of mine who works in the financial service industry in Shanghai took advantage of the recent total solar eclipse to do his own vacancy rate analysis.

His message to me: “Today’s eclipse provided a perfect opportunity for keen-eyed observers on the ground to see how many floors of the nternational Financial Center (aka The Bottle Opener) are actually lit and ready for use: 25% at most.
Hope that’s of use the next time you comment on speculative office building.”

World's Largest Shopping Mall Sits Vacant Mish

The World's Largest Shopping MallThe world's largest shopping mall, in Guangzhou, China, is almost entirely empty

> I´ve written earlier about the CRE in Beijing ( see Beijing's Olympic Building Boom Becomes A Bust )....

> Hier ein paar Fakten zum Zustand des gewerblichen Immobiliensektors in Peking ( siehe Beijing's Olympic Building Boom Becomes A Bust )

By Rodman's calculations, 500 million square feet of commercial real estate has been developed in Beijing since 2006, more than all the office space in Manhattan. And that doesn't include huge projects developed by the government.
He says 100 million square feet of office space is vacant -- a 14-year supply if it filled up at the same rate as in the best years, 2004 through '06, when about 7 million square feet a year was leased.

Big property bubble forming in China, warns leading developer FT

"In Manhattan, they have vacancy rates of 10-15 per cent and they feel like the sky is falling, but in Pudong [the central business district in Shanghai] vacancy rates are as high as 50 per cent and they are still building new skyscrapers," she said.

> It seems clear that the "magic´" race to achive the 8-10% GDP growth target is going hand in hand with massive mailinvetments.....Looking at the 2009 credit "explosion" i have some doubts that this has changed.....I have to repeat myself.....I wrote in February ( see Number Of The Day "Credit Explosion In China" ) "This almost surreal number is signalling a real panic among the leaders..." & "I wonder what percentage of the loans will default"....There is nothing to add ( except the percentage will be sky high ) UPDATE: Is China Frontin’ On Us All?

> Es scheint ziemlich klar das die 8-10% zentige Pflichterfüllung des BSP Wachstums über Jahre zu massivsten Fehinvestitionen geführt hat.... Den Kreditzahlen dieses Jahr zu urteilen dürfte sich das nocheinmal beschleunigt haben......Mein letzter Kommentar hat leider noch immer Bestand.....Ich schrieb im Februar ( siehe Number Of The Day "Credit Explosion In China" ) "Diese unheimliche Zahl signalisiert ne echte Panik der chinesischen Führung...." & "Möchte nicht wissen welcher Prozentsatz dieser Ausleihungen in 24 Monaten als notleidend deklariert werden muß......" Nach aktueller Datenlage ist dem wenig hinzuzufügen.... Höchstens die Gewissheit das die Panik noch zugenommen hat und das eine gigantische Zahl dieser Kredite implodieren wird".... UPDATE: Is China Frontin’ On Us All?

I´m Not An Art Expert, But This Price Looks "Frothy"......

2009-11-13T01:16:00.000-08:00

Stories like this might explain why some still call the debt & equity "markets" a buy .....;-) Probably ( not) a coincidence that my May 2007 post Speaking Of Bubbles......What About Art? was highlighting another Warhol work sold for the "distressed" price of just $US71.7 million almost matched the peak for other asset classes as well.....

Solche Geschichten erklären wohl auch warum immer noch fast alle die Aktien und Anleihemärkte als klaren Kauf einstufen.... ;-) Sicher (k)ein Zufall das mein letztes Posting zu diesem Thema vom Mai 2007 Speaking Of Bubbles......What About Art? wo ein weiteres Warholwerk für den Schnäppchenpreis von lediglich 71.7 million $ den Besitzer gewechselt hat zeitlich mit dem Top in anderen Märkten einherging.....

Warhol’s ‘200 One Dollar Bills’ Fetches $43.8 Million in N.Y.

Andy Warhol’s 1962 “200 One Dollar Bills” fetched $43.8 million tonight at Sotheby’s contemporary- art auction in New York.
The seller was London-based collector Pauline Karpidas, according to two people familiar with the situation. Karpidas couldn’t immediately be reached for comment.

The work, estimated to sell for $8 million to $12 million, is among the artist’s earliest silkscreen paintings, a process that became his signature technique

> I don´t argue with the art ( see picture ) but when the price estimate is $8 to $12 million and it the final price is almost 400 percent higher something is indeed very "frothy"...... UPDATE: See final comment in the post.....

> Mir macht weniger der Preis für das Bild ( siehe oben ) zu schaffen als vielmehr das die ursprüngliche Preisspanne von 8-12 Mio $ mal eben um fast 400% übetroffen worden ist.....Solch Verhalten geht unabhängig von der Anlageklasse fast immer mit einerm Top bzw einer Blase einher..... UPDATE: Verweise auf meinen aktualisierten Abschlußkommentar am Ende des Postings....

Alex Rotter , head of the contemporary art department

"Andy Warhol's 200 One Dollar Bills is a hugely important work for American art history. Not only was it one of the starting points of pop art, but this picture had the perfect ownership history - directly from Warhol's dealer to the legendary collector Robert C Scull, and then from his estate sale at Sotheby's to the current owner who acquired it in 1986 for USD 385,000,"

This spinmaster could easily work on Wall Street.....

Man muß diese Kunstkritiker einfach lieben......

UPDATE:

The Great Contemporary Art Bubble Trailer Documentary by Ben Lewis

I hope you have the chance to see this "brilliant" documentary! After watching the entire doc i´m now 100 percent sure that the lates Warhol auction represents a bubble or is a scam.....Not sure what is better..... Guess who shortet the hell out of Sothebys.... Famous Hedge Fund manger Jim Chanos...This guy rocks!

Hoffentlich ergibt sich für Euch die Möglichkeit sich die wirklich bombastische Doku in voller Länge anzusehen....Bin mir nun zu 100% sicher das es sich bei der o.g. Auktion um eine neue Blase handelt bzw die Auktion getürkt gewesen ist...Weiß nicht was ich besser finden soll....Verglichen mit dem Kunstmarkt scheint selbst Wall Street etisch ganz weit vorne zu sein..... Übrigens schön zu sehen das einer der besten Hedge Fond Manager Jim Chanos auch hier das richtige Näßchen gehabt hat und Sothebys in Grund und Boden geshortet hat.... Der Typ rockt!

"Main Street vs Wall Street" Monty Python Edition & Update Blogroll

2009-11-07T02:17:00.000-08:00

Posting will probably be a little less frequent than in the past.....

Werde in nächster Zeit "blogtechnisch" etwas weniger aktiv sein.....

Agnes Crane & Caroline Baum & Dilbert & John Kemp & Jonathan Weil & Marc Gilbert & News Stories In Photographs & The Baseline Scenario & The Colbert Report & The Daily Show & The Pragmatic Capitalist & The Reformed Broker & Washington´s Blog

WOW!

H/T Rolfe Winkler

"The New Bubble Is In Stimulants....." Rosenberg

2009-11-05T08:28:00.000-08:00

I want to add that the bubble is also in outright & hidden bailouts.....Nothing really new but hours/days away from the next mega bailout ( FHA ) a sober summary how wasteful the resources are "squandered"......

Finde zudem das man der Überschrift von Rosenberg noch hinzufügen sollte das es eine Blase in Sachen unverblümten und verschleierten Bailouts gibt..... Nichts wirklich neues, aber im Angesicht des nächsten unmittelbar anstehenden Megabailouts ( FHA ) eine wirklich deprimierende Zusammenfassung wie sinnlos unvorstellbare Summen verschleudert werden.....

H/T Gary Varvel

Rosenberg

So the U.S. economy is growing again. But how can it not be growing with all the dramatic stimulus? The question should be “why only 3.5%”?

> If you can stand more details you can read "A Sham GDP For A Sham Economy"......

> Für einen teiferen Einblick was die USA veranstalten müssen um überhaupt ein positives GDP Ergebnis auf die Beine zu stellen kann das in "A Sham GDP For A Sham Economy"...... nachlesen....

Now the U.S. government is going to not just extend but indeed expand the tax credits for homeownership. This is happening at a time when the fiscal deficit is 10% of GDP. Simply amazing. The sector already receives more in the way of government support than any other area, and it adds zero to the capital stock or productivity growth. Oh, but it makes us better citizens. Renting must be for losers.

And then we see that the Fed’s TALF (Term Asset-Backed Securities Loan Facility) program that began in March just broke the $90 billion mark. This has basically supported 75% of the growth in the asset-backed market, almost evenly split between auto credit and credit cards because at over a 130% household liability-to-disposable income ratio, the government seems to believe we don't have enough debt on our balance sheets. Honestly — you can't make this stuff up.

But here is the real kicker. The Federal Housing Authority (FHA). If you’re wondering how it is that the U.S. housing market has managed to rise from the ashes, well, consider that the government-insured FHA program moved into high gear this year and has basically filled the gap vacated by the private sector.
The efforts to allow practically anyone to secure a mortgage not just for a new purchase but for refinancing purposes (where default rates are really becoming a problem) should not go unnoticed (and they weren’t by the staff at the WSJ that uncovered the growing problems in yesterday's edition — FHA Digging Out After Loans Sour on page A2).

The efforts to stimulate were so profound that the damn-the-torpedoes-full-steam-ahead policy has resulted in an expected 24% default rate on loans originated in 2007, and 20% for 2008. So, what has happened is that the taxpayer has taken over the bad lending decisions that were Wall Street’s domain three, four and five years ago.

>The following chart is from the must read Quote Of The Day..... "The Defaults Are Worth It " Guess who said this......

>Der nachfolgende Chart stammt vom unbedingt zu lesenden Quote Of The Day..... "The Defaults Are Worth It " . Gut zu wissen das der Typ der dieses Zitat gebracht dem Bankenausschuß vorsteht......

Indeed, the FHA began its aggressive moves to support the housing market in 2007 and has since spread its tentacles

According to the WSJ, the FHA is going to publish a report acknowledging that it may need to tap into general tax revenues for the first time in its 75 year history. Oh, but don’t worry, FHA officials say the agency has enough capital to withstand any expected losses.

> I think David missed the "surprising" news that the FHA Delays Fiscal Report . The only question is now how "shocking" & "surprising" the multibillion $ bailout will be...... Cannot wait to hear Barney Frank´s "outrage" ( "The Defaults Are Worth It " ) .........

> Ich denke Davis hat diese "überraschende" Meldung von heute übersehen das die FHA den Fiscal Report "verschiebt". Fragt sich nur wie "schockierend" & "überraschend" der sicher zweistellige Mrd $ Bailout sein wird...... Am lautesten wird sich sicher Barney Frank aufregen ( "The Defaults Are Worth It " ) ......

The FHA began its aggressive moves to support the housing market in 2007 and has since spread its tentacles. The FHA actions, foreclosure moratorium and tax credit have all given a false impression that we have seen a bottom in residential real estate.

But all that’s happened here is the risks have been transferred to the public sector balance sheet. The share of FHA-insured borrowers with a sub-600 FICO score has rapidly approached the 40% mark. So, we have stimulated a recovery by inducing more bad debt accumulation, which got us into trouble to begin with. But it’s not Wall Street taking on the risks now, its Capitol Hill.
This is an effective way to fight a credit collapse? No wonder global central banks are diversifying into gold. The U.S. is hardly going to pay for this by raising taxes (the newly emboldened GOP will see to that) nor by cutting spending (the union lobby groups won't stand for that). Moreover, we'll have to assume that global central banks are not stupid and can see the future supply of dollars that will be printed to fund all these initiatives.

All this must be part of the famous "strong $ policy"........ ;-) Good to be a GOLD-BUG......

Denke all dies ist Ausdrück der berühmt berüchtigten "strong $ policy" der USA..... ;-) Da weiß man doch gleich wieder warum ein bekennender GOLD-BUG ist......

UPDATE:

Fannie Mae: $18.9 Billion Loss, Requests Another $15 Billion CR

Total nonperforming loans in our guaranty book of business were $198.3 billion
In the past year, the government has invested more than $110 billion in Fannie and Freddie, and it has pledged to invest as much as $200 billion in each company to keep them afloat.

$45 Billion Boondoggle of Which $33 Billion Goes To Homebuilders Mish

It would loosen tax rules for homebuilders and other money-losing companies to let them claim an estimated $33 billion in tax refunds this year, according to Joint Committee on Taxation estimates.
The most galling thing about it is $33 billion of the $45 billion is not going to do anything but pad the pockets of those who helped create this mess. A mere $2.4 billion was given to extend unemployment benefits.
If Goldman Sachs is correct (and I believe they are), then most of the $10 billion in tax credits is a waste as well. Moreover, we have a huge inventory of homes already and we are creating incentives to build more.
The whole thing reeks and the Senate knows it. Note that Senator Christopher Bond called it a waste of money but there was not a single "No Vote". The bill passed 98-0 undoubtedly because the homebuilders padded the pockets of those voting for it with campaign contributions. This is the way Congress "works".

You cannot make this up...... This explain why i have the "Banana Republic Watch" label tagged to this post.... ;-)

Erklärt warum ich diesem Post das Prädikat "Banana Republic Watch" zugeteilt habe......;-)

IMF Sells Gold To India's Reserve Bank & Remembering The "Brown Bottom"

2009-11-02T22:10:00.000-08:00

Good to be a GOLD-BUG .......Take a look at this excellent Graph to put today´s news when it comes to gold & central banks into perspective..... So much for the overhang of the "massive" IMF gold sale threatening the price of gold...... As discussed earlier it looks like the headwind has transformed into a tailwind.....The price is flirting with new highs today....And it´s not only a "weak US$ story" ( H/T The Privateer via Mish ).... The chances are very high that Gold will continue to outperform for some time to come ( not so sure obout the short term ).......

Schon schön wenn.. man ein GOLD-BUG ist..... Diese Grafik gibt einen erstklassigen Überblick wenn es um Gold und Zentralbanken geht..... Da Gold heute nahe neuer Hochs (und das nicht nur in US$ , H/TThe Privateer via Mish )notiert ist von dem vielbeschworenen Überhang der den Goldpreis angeblich extrem belasten wird wenn das Gold letztendlich verkauft wird nicht viel zu spüren....Wie bereits früher erwähnt sieht es ganz so aus als wenn aus dem jahrelangen Gegenwind von Verkäufen durch die Institutionen zunehmend ein Rückenwind geworden ist..... ;-) Die Chancen stehen mehr als gut das Gold auch weiterhin outperformen wird ( kurzfristig bin ich mir weniger sicher ) .....

IMF sells gold to India's Reserve Bank

The International Monetary Fund said Monday it's selling 200 metric tons of gold to the Reserve Bank of India, to help shore up the fund's finances. The sale is part of a total of 403.3 metric tons of gold approved for sale in September, the IMF said.

via Jesse

RBI’s decision to shore up its gold reserves needs to be seen in the context of other central banks across the globe increasing their gold reserves. Among them are the central banks of China, Russia and a few countries in the European Union.

In the last one year, China has increased its gold holdings, by weight, by 75.69%, Russia by 18.78%, the Philippines by 18.50% and Mexico by 108.91%.

Compared with this, India’s central bank did not add anything to its gold reserves in the last one year, according to Bloomberg data.

In fact, the share of gold in India’s total reserves has dwindled over the decade.

In March 1994, the share of gold in the total reserves of the country was 20.86%; by the end of June 2009, gold constituted only 3.7% of the total reserves.

“Gold is the ultimate currency. In fact, only gold came to our rescue during (the) 1991 crisis, so it makes sense that RBI should try to increase its gold holdings,” Patil said.

At the current market value of $1,054 an ounce, or per 28.5g, RBI would need to spend about $7.4 billion to buy 200 tonnes of gold. With this, its gold reserve will rise to $17.716 billion, or roughly 6.20% of the total reserves.

A committee set up by a group of central banks overseeing the gold sales by the IMF has allowed the fund to sell 400 tonnes of its gold annually and 2,000 tonnes in total during the five years starting 27 September.

According to a report by the Associated Press dated 20 September, India, along with China and Russia, had evinced interest in buying IMF-held gold.

IMF’s total holding at historical price is valued at about $9.2 billion on its balance sheet. At market prices, as of 28 August, the fund’s total gold holdings were worth $98.8 billion.

I just coudn´t resist......

Konnte mir den nachfolgenden Chart einfach nicht verkneifen......

Gold: Does Gordon Brown's regret selling half of Britains' gold reserves 10 years ago?

Adjusting to todays & future prices combined with the "rock solid" outlook for the pound the "Brown Bottom" will provide even more reasons for SCHADENFREUDE for years to come.....

Auf aktuelle und zukünftige Preise gemünzt und den mehr als soliden Ausblick für das "britische Pfund" dürfe der "Brown Bottom" noch jahrelang für gehörig SCHADENFREUDE sorgen......

The Mess That Greenspan Made

Make sure you read The significance of the IMF-RBI gold sales also from Tim

Verweise zudem auf The significance of the IMF-RBI gold sales ebenfalls von Tim. Sehr gute Zusammenfassung

UPDATE:

Couldn´resist...... Nice call...... ;-)

Wohl ein Trade an dem Goldman kein Geld verdient...... ;-)

Goldman on Gold Prices: Central Bank Buying Something to Watch MB WSJ

“In addition to this potential shift of central banks from being net sellers to net buyers of gold, the continued weakness in real interest rates continues to provide strong support to gold prices over the medium term,” Goldman analysts write.

Low interest rates could make for “upside risk” to Goldman’s price forecast of $960 a troy ounce.
But we can’t help but notice that they haven’t raised their forecast even though we’re already around $1,100. The obvious question is when does Goldman see a pullback coming?

The following chart via Rolfe Winkler sums it up...

Denke der nachfolgende Chart von Rolfe Winkler spricht Bände....

You Know Something Is Wrong When.......

2009-10-30T07:44:00.000-07:00

A veteran like Art Cashin is scared that the markets cannot handle ( QUOTE: "Meltdown" , "800 Point Plunge" ) a 2 percent intraday "spike" in the $......Needless to say that after Cashin finished the interview the market scored the biggest gain fueled from the "blockbuster" Government Domestic Product report since July hand in hand with a weaker $...... Shocking to see that this "bulletprove" strategy cannot work indefinitely.....

Wenn ein Veteran wie Art Cashin Angst vor einem Crash ( ZITAT: "Meltdown, "800 Point Plunge") hat nur weil der $ nach einer langen Talfahrt keine 2% intraday Erholung vertragen kann sollte man zumindest mal kurz innehalten..... Brauche wohl nicht zu erwähnen das nur Minuten nachdem Cashin die Bombe hat platzen lassen die Märkte getragen von dem "überzeugenden" Government Domestic Product den größten Tagesgewinn seit Juli haben folgen lassen.... Hand in Hand mit einem stark schwächelnden $...... Schon schade das diese "idiotensichere" Strategie nicht in alle Ewigkeit fortgeführt werden kann.....

Combine this with one of the biggest stock market rallies of all time ( chart ) & the Highest Risk Appetite Since April 2006 among the so called "smart money" and things can get "interesting"....... God forbid when the $ moves lower and the markets refuse to follow the inverse course.....Would probably qualify at least for a "Grey Swan".....

Wenn man nun noch bedenkt das wir gerade eine der gewaltigsten Aktienmarktrallies aller Zeiten ( Chart ) hinter uns haben und die Risikobereitschaft der "Professionellen" den höchsten Stand seit April 2006 erreicht hat kann es schnell "ungemütlich" werden..... Nicht auszudenken was passiert wenn der $ gen Süden geht und die Märkte daraufhin weigern zu steigen..... Denke dann dürften einige Marktteilnehmer zumindest einen "Grey Swan" am Horizont erkennen....;-)

"A Sham GDP For A Sham Economy"......

2009-10-29T11:02:00.000-07:00

The high quality of the GDP aka "Government Domestic Product" growth is indeed "impressive".... As a GOLDBUG you gotta love this kind of "sustainable" growth.....

Solch "solides" und vor allem "nachhaltig" erkauftes GDP bzw "Government Domestic Product" Wachstum verdeutlichen eindrucksvoll warum ich starker Befürworter von GOLD bin..... ;-)

Mean Street: A Sham GDP for a Sham Economy Even Newmark

Americans rejoice! GDP grew by 3.5% in the third quarter and the recession is over.

It’s time to drink champagne, dance in the streets, and have a group hug with Nancy Pelosi and Ben Bernanke. But whatever you do, don’t ask yourself why the recession has ended. The answer might ruin the party.

The recession is over only because Washington decided it should be. With billions in fresh government spending, it was only a matter of time before GDP posted some growth.

It’s too bad all that government spending is borrowed money. Someday, we’ll actually have to pay off this year’s $1.4 trillion deficit.

Of course, all of the president’s Keynesian men will argue that everything is working to plan — the stimulus is stimulating. But it’s hard not to see today’s GDP bounce as a bit of a sham.

Just check out where the economy grew. Almost half — or 1.7% of the pickup in GDP growth came from “motor vehicle output.” That’s the summer’s $3 billion cash-for-clunkers program doing its thing.

H/T Clusterstock

But at what cost?

Edmunds.com just released some compelling analysis on cash-for-clunkers. Apparently, it cost the U.S. taxpayer about $24,000 per vehicle sold. Edmunds gets that number by dividing the $3 billion by the 125,000 additional car sales generated by the program. The methodology makes sense to me, but click here and decide for yourself.

The White House would probably contend that it’s impossible to determine incremental sales — meaning each sale that only happened because of the government $3,500 to $4,500 subsidy. And that the sale of each and every car spurs economic activity well beyond the program’s $3 billion.

But isn’t it possible that the Edmunds.com analysis is actually understating the true costs to the taxpayer? What about the interest costs on the borrowed $3 billion?

What about the cost of propping up GMAC so that it could underwrite cash-for-clunker loans?

That’s the catch with all this government intervention — lots of unforeseen consequences. And we never learn. The trillion dollar disasters with Fannie Mae and Freddie Mac haven’t stopped the government from tinkering with the housing market.

Consider another one of Washington’s smashing successes: the $8,000 credit for first-time home buyers.
For the third quarter, “real residential fixed investment” — also known as “homebuilding” — jumped 23.4%. That boosted GDP by another 0.5%. Do you feel like hugging Harry Reid now?

H/T Mark Hanson

> More Homes.......Just what the Doctor ordered...... Thank god there are only 18.8 Million Vacant Homes In Q3 ......

> Mehr Häuser.....Macht bei Ansicht der o.g. Grafik die das Verhältnis von neuen Hausverkäufen und neuen Zwangsvollstreckungen extrem viel Sinn..... Besonders wenn man bedenkt das in den USA lediglich 18.8 Million leerstehende Häuser existieren ...... Brauche nicht zu erwähnen das diese mehr als sinnvolle Förderung gerade ausgedehnt und verlängert worden ist......

But we’re not seeing the real cost of the homebuyer tax credit. This is very expensive stuff. The Calculated Risk blog figures the home-buyer credit costs the taxpayer $43,000 per incremental home sale. Goldman Sachs ran its own numbers, reckoning that each incremental home sale cost the taxpayer an astounding $80,000. Again, the methodology seems right to me, but decide for yourself.

And again, this analysis understates the program’s true costs. We don’t include the cost of all the fraud — even though we know thousands of false and improper claims are being filed.

We don’t consider the cost of propping up the FHA , which is now underwriting all of the mortgages

And we can never calculate the true economic cost of messing with home prices – though the crisis over the last three years certainly gives us a hint.

So, let’s party as we welcome GDP growth. But never forget how the party ends – a group hug with lots of tears.

UPDATE

Monument Securities' Stephen Lewis via FT Alphaville

Government purchases were surprisingly strong. Instead of falling back from what had looked an erratic 14.0% annualised rise in Q2, defence spending increased further, at an 8.4% rate.

Cheering Over Ugly Report MISH Personal income decreased $15.5 billion (0.5 percent), while real disposable personal income decreased 3.4 percent, in contrast to an increase of 3.8 percent last quarter. Those are horrible numbers
The savings rate is down, which no doubt has misguided economists cheering, but people spending more than they make is one of the things that got us into trouble.
The government sloshed trillions around and yet disposable income is down, jobs are horrendously weak, and the only reason GDP rose is wasteful government spending, cash-for-clunkers and extremely unaffordable housing tax credits whose effect is soon going to start diminishing even though the program was just extended.
I see plenty of chances for negative territory or at least extremely anemic growth starting in the second quarter of 2010, if indeed not the first quarter.Let's see what Christmas brings.
I am expecting far weaker numbers than most. In the meantime, let's party even if only for a day or two. Reality is likely to return soon.
Mark Zandi H/ Claculated Risk
This suggests that all the growth in Q3 was due to the stimulus package, and the impact will now wane - only 2% in Q4, and 1.5% in Q1 2010 - and then the package will be a drag on the economy in the 2nd half of 2010.
It's Alive, It's ALIVE, It's ALLLIIIIVVVE! Paul Kedrosky
Turns out coursing a few gigavolts of financial stimulus current through even an economy the size of the U.S. will still get Frankenstein off the slab, however briefly.
Inside GDP : The Figures Behind The Number ( nice chart )
Full GDP observations from Goldman Sachs ZH
David Rosenberg: GDP Head-Fake H/T Expected Returns

> Why i´m not surprised that the bubblehead from CNBC brouht up all the "Cash On The Sidelines"...... UPDATE: What a difference a day makes.... The same guys laughing at Rosenberg & spinning the cash on the sidelines, strong gdp, markets moving higher etc have reversed course and are suffering severe AMNESIA.....Click here for BUBBLEVISION at its best.....
> Passend zur euphoriuschen GDP Stimmung verwundert es nicht das der Typ von CNBC das Totschlagargument "Cash On The Sidelines" ins Spiel gebracht hat...... UPDATE: Was für ein Unterschied doch 24 Stunden machen können.... Dieselben "Gestalten" die noch gestern Rosenberg "belächelt" haben und was von Cash on the sidelines, starkes GDP, etc gefaselt haben leiden unter akutem Gedächnisverlust und haben Ihre Meinung um 180% gedreht....Hier klicken um zu erfahren warum CNBC als Bubblevision geadelt worden ist....
From the latest Rosenberg report
U.S. Q3 REAL GDP — ABSOLUTELY NOTHING TO GET EXCITED ABOUT
Never before did a gap between a 3.2% consensus GDP forecast and an actual print of 3.5% manage to elicit so much excitement in the equity market. It just goes to show how speculative the stock market has become. The question is why it is that the economy couldn’t do even better?
Historically, the auto sector adds 0.1 percentage point or 0.2 percentage point to any given GDP report. In the third quarter, courtesy of cash-for-clunkers, the sector added 1.7 percentage points to the headline figure, which is less a than 1-in-10 event in terms of probabilities.
Because of the housing and auto subsidies, the personal savings rate plunged to 3.3% in Q3 from 4.9% in Q2 — in the past quarter-century, there have been only four other times that the savings rate went down so much in one quarter.
If not for that plunge in savings, real GDP actually would have contracted fractionally last quarter. The entire GDP growth was funded by a rundown in the savings rate that occurs less than 5% of the time.
Moreover, what is normal in that first positive post-recession GDP release is a 5% annual rate of growth. That puts 3.5% in Q3 into a certain perspective, especially when you consider the massive amount of stimulus that underpinned the latest batch of data.
While it seems very flashy, 3.5% growth is far from a trend-setter. Let’s go back to Japan. Since 1990, it has enjoyed no fewer than 19 of these 3.5%-or-better GDP growth quarters.
That is almost 25% of the time, by the way.
And we know with hindsight that this was noise around the fundamental downtrend because the Japanese economy has experienced four recessions and the equity market is down more than 70% from the peak
Without "Cash for Kindles, I-Phones, trucks etc" 2010 will be very "interesting".... Thank god the "experts" still argue the stock market is discounting the obviously bright outlook for the coming years....How else would you justify one of the biggest stock market rallies of all time ( chart ) ...... Would be shocking to see the "Herd" get it wrong ......... ;-)

Ohne "Cash for I Phones, LKW´s usw. " dürfte das Jahr 2010 mehr als interessant werden.... Zum Glück schauen die Märkte ja wie uns regelmäßig erzählt wird voraus und haben die "exzellenten" Aussichten für die nächsten Jahre sicher eingepreist.... Wie anders ist einer der gewaltigsten Aktienmarktrallies aller Zeiten ( Chart ) auch sonst zu erklären.....Wäre ja auch das erste Mal das die "Herde" komplett daneben liegen würde, oder ? ;-)

Fuzzy Numbers Chris Martenson

"Enron-esque characteristics".......

Yes, We Can´t..... GMAC Scores Bailout Hattrick.....

2009-10-27T22:33:00.000-07:00

This kind of taypayer generosity / backstop is one of the main reasons ( add to this ZIRP & QE ) the "smart money" has increased the risk appetite to the highest point since April 2006 ( just in time after one of the biggest rallies ever .....without any meaningfull pullback) , so far they have almost perfectly manage to go "ALL IN"close to the recent market top, with cash levels at the lowest point since Jan 2004! not an overstatement, taking the latest market action into account the post is looking better on a daily basis..... )..... Stories like this are one of many reasons why i´m bullish on GOLD......

Denke das genau diese Art der "Problemlösung" zu Lasten der Steuerzahler einer der entscheidenden Gründe ( neben Nullzinspolitik und "Quatitive Easing" ) ist das weltweit die professionellen Investoren Ihren Risikoappetit auf den höchsten Stand seit April 2006 hochgefahren haben ( gerade noch rechtzeitig nachdem die Märkte einen der größten Kursanstiege der Geschichte ( ohne eine nennenswerte Korrektur ) hingelegt haben, aktuell sieht es so aus als wenn Die "Profis" es fast punktgenau geschafft haben zum Markettop "All In" zu gehen, oder wie sonst soll man es bezeichnen wenn man bedenkt das die Cashlevels auf dem niedrigsten Stand seit Januar 2004! sind, mir persönlich bereitet besonders dieser Link tagtäglich mehr "Freude") ..... Erinnere im Angesicht solch "dollen" Meldungen noch einmal an mein gestriges Posting zum Thema Gold.....

GMAC Asks for Fresh Lifeline WSJ

The U.S. government is likely to inject $2.8 billion to $5.6 billion of capital into the Detroit company, on top of the $12.5 billion that GMAC has received since December 2008, these people said.

The latest infusion would come in the form of preferred stock. The government's 35.4% stake in the company could increase if existing shares eventually are converted into common equity.

Federal officials also are moving to shore up GMAC's ability to fund its daily operations, with the Federal Deposit Insurance Corp. telling the company Tuesday the agency will guarantee an additional $2.9 billion in debt, according to people familiar with the discussions. The FDIC guarantee will make it easier for the company to sell debt to investors. The FDIC backed $4.5 billion in GMAC-issued debt earlier this year.

The FDIC approval came just four days before the expiration of the regulator's program that guarantees debt issued by certain banks. It ended months of tense negotiations between GMAC and regulators.

At GMAC, the likelihood of a third infusion increased when the government's stress-test results were released in May. The tests were conducted to determine whether banks would need more capital to continue lending if the economy deteriorated in 2009 and 2010. The test concluded GMAC needed $11.5 billion in common equity to continue lending in a stressed economy.

GMAC raised some of the money directly from the government, but a significant hole remains. The company hasn't been able to attract much capital from private investors because it isn't listed as a public company, forcing GMAC to begin negotiating with the government to find the remaining funds. GMAC and Treasury officials are now negotiating about exactly how much capital the company needs.

People close to GMAC said they don't expect the government to call for changes in management as a result of the likely infusion. The company posted a second-quarter loss of $3.9 billion amid rising loan delinquencies and the continued U.S. auto slump. It expects to release third-quarter earnings next week.

Mr. de Molina's search for capital brought him to the government's door.

The Fed awarded GMAC status as a bank-holding company and Treasury injected $5 billion in December 2008. It came back with an additional $7.5 billion on May 21. The Fed also waived rules to allow the bank to pass assets down into its bank division, and the FDIC reluctantly agreed to issue "up to" $7.4 billion in government-backed debt. The FDIC approval issued Tuesday brings GMAC to the full amount authorized in May.

In May, GMAC also launched a new brand for its online bank, called Ally Bank. Its pursuit of deposits at high rates became a key leg of its strategy, since deposits provide a cheap form of funding, but the taxpayer-assisted approach rankled competitors and the FDIC.

The dispute nearly cost GMAC its chance at the final $2.9 billion in FDIC debt guarantees. The two sides were able to hammer out an agreement that requires GMAC to keep its rates at certain amounts in exchange for the support, according to people familiar with the situation.

Rolfe Winkler

Taxpayers are lending themselves money to buy cars (via GMAC). To buy houses (via Fannie, Freddie and very soon FHA). To buy anything and everything that has to be financed.

Chris Whalen : Zombie Love: Barack Obama, GMAC and Ally Bank

If Citigroup (NYSE:C) is the Queen of the Zombie Dance Party and AIG (NYSE:AIG) the King, then GMAC is certainly one of the children. In relative terms, GMAC has received far more subsidies than any other zombie and seemingly has no access to the private markets in terms of raising new equity.....
Looking at the latest 10-Q from GMAC filed with the SEC, the only question we have is why isn't GMAC already in bankruptcy?
While GMAC's total consoldiated assets are down, Ally Bank's assets have grown by nearly 25% in the past quarter, fueled by copious television advertising and federal subsidies. The term "moral hazard" comes to mind. By propping up GMAC and Ally Bank with taxpayer dollars, the Treasury is hurting sound, well-managed banks.....
Note too that as of Q2 2009, Ally Bank was funding more than 17% of its now $42 billion in assets via the Federal Home Loan Banks -- yet another subsidy and another striking indcator of growing moral harzard......
Federal bank regulations generally identify 15% as the threshold for unsafe and unsound practices with respect to the use of FHLB advances for funding, but it seems that GMAC is exempt from these rules as well.....

Mean Street: GMAC = Insanity Deal Journal

Well, we didn’t really need it, but now we have it. Today’s WSJ piece on the bailout of auto-lender GMAC is yet further proof that there is no end to the insanity of the “Great Detroit Bailout.”

We’re not just saving failed carmakers. We’re saving GMAC, the failed financier of failed mortgages and failed carmakers…for the third time.

Last winter, we had to “help” Detroit with some temporary loans. By spring, we had to “save” Detroit with tens of billions in fresh equity. By summer, we had to “kick-start” Detroit with the Cash for Clunkers. And here we are in autumn, still at it. By winter, we’ll be in a strait-jacket we can’t get out of.

And for what? To save GMAC?

This is a business that for years lent money to lots of Americans to buy homes and cars they couldn’t afford. Remember the unsustainable housing boom? GMAC.
The unsustainable Hummer and Escalade boom? GMAC. Our unsustainable economy? GMAC.

And after the boom, comes the bust — which is exactly what GMAC is.

BANANA REPUBLIC ....... ;-)

Scarcity. That Is The Answer To The Question “Why Gold?” End Of Story !

2009-10-27T00:12:00.000-07:00

The headline is from the latest David Rosenberg piece ( as always much needed ANTI SPIN ) and sums up the some of the reasons (here is another good overview, thank god that at least the banks are "well capitalized"...... ) why Gold should outperform for some time to come ( not so sure obout the short term )....... Especially when one of the biggest headwinds during the past decades is becoming a tailwind ( see Central Banks Net Buyers Of Gold....... )

Die Überschrift stammt aus dem letzten Report von David Rosenberg ( dringend benötigter ANTI SPIN ) und faßt einige der Gründe ( hier noch ne nette Übersicht., da kann man ja von Glück sprechen das zumindest die Banken ""well capitalized" sind...) dafür zusammen das Gold auch weiterhin outperformen wird ( kurzfristig bin ich mir da weit weniger sicher ) ..... Das gilt umso mehr als sich der stärkste Gegenwind der letzten Jahrzehnte zunemhemnd in einen angenehmen Rückenwind zu wandeln scheint ( siehe Central Banks Net Buyers Of Gold....... )

WHAT IT IS ABOUT GOLD?

After all, you can’t calculate a P/E. There is no dividend discount model. There is no interest rate or income stream. No — gold is a store of value and one that has been durable and reliable for thousands of years. No fiat currency system has outlived gold. The question is what is so sacred about fiat paper money? A backing of the government printing press, is that the alluring factor? The Fed has been pumping money into the system at an unprecedented fashion and even if it is sitting idle on commercial bank balance sheets as excess reserves, that money is still in the system.

So what about gold? How much of that is in the system? How about the fact that global gold production, after doubling from 1980 to 1999, has completely stagnated over the past decade? Has fiat currency done that? And, how long does it normally take for a gold mine to yield production? Answer -- five years or so? Do you think it takes Bernanke et al that long to print greenbacks? At least we know with some degree of confidence about the supply of gold; there are reserves equivalent to about 40% of the total amount of gold above the ground (and half of that is in South Africa).

As we said, it takes time, usually five years, and plenty of financial resources to bring gold mines into production. In this sense the supply side of the gold equation is relatively constant — in economic parlance. Fiat government-issued currency is not — especially in the context of a U.S. monetary and fiscal authority that will stop at nothing to revive a cycle of overspending and overborrowing.

In the current sense, the pullback in consumer spending is being replaced either by government spending or incentives to prevent households from modifying their spending behaviour away from frugality; and the pullback in credit demand by the consumer sector is being offset by the Fed’s involvement in the mortgage market to ensure that borrowing costs remain very low, and by the FHA to ensure that down-payment requirements are as close to zero as possible. The supply of gold is reasonably easy to figure out — the supply of fiat currency is less easy to figure out. The behaviour of not just the U.S. government but governments everywhere seems to be that reflationary policies will ultimately be the key towards redressing the ongoing private sector deleveraging cycle.

Back to the gold market. There is an estimated 120,000-140,000 tons of gold above ground. That would equate to roughly $4 trillion. The total amount of U.S. dollars in circulation globally is estimated at $8 trillion, and the total size of the global money supply would thereby be closer to $30 trillion. The size of the world stock market is around $40 trillion. At last count, the total size of the global bond market was north of $80 trillion. The total world derivatives market has been estimated at about $800 trillion, face or nominal value. Hopefully all this places the total value of gold above ground into a certain perspective.

So, here is what makes gold so attractive, beyond the fact that it is a hedge against irresponsible fiscal, monetary policies and reckless trade policies, is that relative to fiat currency, bonds and equities, it is scarce.

We can also get into geopolitical uncertainties and reckless trade policies, but they are just the proverbial cherry on the ice cream.

Scarcity. That is the answer to the question “why gold?” End of story.

Just to back the amount of currency that is out there right now, gold has the potential to triple from here, never mind merely double. Sounds outlandish, to be sure, but when gold was carving out its bottom at $255/oz in September 1999 (when the S&P 500 was flirting near 1,300 — sorry to have to add that one in), was anyone calling for it to rise four-fold in the next decade? Secular bull markets usually last 16 to 18 years and this one is just in year 10, so let’s say that we are barely past the halfway point in both duration and magnitude in this gold cycle

Paul Tudor Jones ♥ gold FT Alphaville

By our estimation, G7 central banks have upwards of 35% of total reserve
assets in gold. However, the remaining countries that make up the G20 only have 3.5% of their reserve assets in gold. These countries have seen a $2.2 trillion increase in reserve assets over the last five years, making up well over 50% of the increase in global reserves. However, despite a 150% increase in the price of gold, 97% of the increase in reserve assets has been in the form of paper currency or interest-bearing notes backed by paper currency.

> I also urge everybody still not convinced that at least a small part of their portfolio should include GOLD to read the following report........ The cartoon from the brilliant Gary Varvel gives a hint what is in the cards for years /decades to come ( when you´re not living in countries like Norway ) .....

> Der nachfolgende Report verdeutlicht mehr als eindrucksvoll warum meiner Meinung nach in jedes Depot GOLD zumindest einen gewissen Prozentsatz enthalten sollte..... Der nachfolgende Cartoon vom brillianten Gary Varvel gibt einen Überblick was uns wohl die nächsten Jahrzehnte begleiten wird ( wenn man nicht das Glück hat in Staaten wie z.B. Norwegen usw zu leben ) .....

Sprott Oct 2009 Comment

H/T ZH

BofA Merrill Lynch Fund Manager Survey Finds Risk Appetite at Highest Point Since April 2006

2009-10-21T03:51:00.000-07:00

With almost all asset classes ( Dow 10.100, S&P 500 1100, N100 1780, Dax 5860, FTSE 5250, Oil $ 80 etc ) at new highs it looks like the herd mentality is once more rampant ( fueled in large part from the $ Carry Trade - €/$ 1,50 - & "Quantitive Easing" see also Speaking Of A Money Illusion........ ). Nice to see that after one of the biggest rallies in decades finally the "smart money" ( unlike the retail investor ) is getting more bullish..... As a contrarian it seems lots of folks are "all in"...... Another UPDATE: It remains to be seen if last hour drop from Wednesday was only a minor glitch in the Matrix..... Very telling that this (!!) "bulletproof" strategy seems the only relevant parameter that is important.... until it stops working ....;-) UPDATE: Taking todays ( Oct. 26th ) action into account i think this was more than a minor glitch in the MATRIX... There is now a reasonable chance that this guy will get the upper hand for some time to come..... At least all the "Cash On The Sidelines" ( sarcasm ) has now the opportunity to step in. Add to this that "Wall Street Finest" have only a sell rating on 5 percent of all stocks and the potential for some extra SCHADENFREUDE is not getting smaller.... ;-)

Da gerade heute praktisch alle Vermögenswerte nahe Ihren Jahreshochs ( Dow 10.100, S&P 500 1100, DAX 5860, MDAX 7450, TECDAX 775, FTSE 5250, Öl $ 80 ) notieren ( dank des$ Carry Trades invers zum $ - €/$ 1,50 - versteht sich, sowie dank des sog. "Quantitive Easing" , passend zum Thema Speaking Of A Money Illusion........ ) sieht es in der Tat einmal mehr so aus als wenn der Herdentrieb praktisch alle Marktteilnehmer infiziert hat... Da paßt es gut ins Bild das auch gerade jetzt die Big Boys ( ganz im Gegensatz zu dem Kleinanleger ) nach einer der größten Kursexplosion der letzten Jahrzehnte endlich Ihre Vorsicht über Bord geworfen haben und zum Teil massiv Ihr Risiprofil erhöht haben... Man könnte auch sagen das sie "all in" sind... Erneutes Update: Es bleibt abzuwarten ob der starke Abverkauf in der letzten Handelsstunde vom Dienstag nur ein kleiner Fehler in der Matrix gewesen ist... Wenn man sich aber die anscheinend momentan gängige "Strategie" (!!) ansieht wie die Märkte "funktionieren" sagt das einiges über Robustheit der Rally aus......;-) UPDATE: Nach dem heutigen ( 26. Oktober ) erneuten Abverkauf handelt es sich wohl um mehr als nur einen kleinen Fehler in der Matrix..... Es ist nun nicht unrealistisch das dieser Typ bis auf weiteres die Oberhand gewonnen hat ...... Immerhin ermöglicht dieser noch kleine Rückschlag ja den angeblichem "Cash On The Sidelines" ;- ) sich endlich massivst in den Aktienmarkt einzukaufen.....Wenn man jetzt noch bedenkt das die "Analysten" lediglich 5% der Aktien mit einer Verkaufsempfehlung versehen haben dürfte das die mögliche Schadenfreude nicht gerade mindern..... ;-)

H/T RobotTrader

BofA Merrill Lynch Fund Manager Survey Finds Risk Appetite at Highest Point Since April 2006 as Double-Dip Recession Fears Fade Marketwatch

--Investors See Brighter Corporate Profits on Horizon - Shift from Cash to Equities

Investors' risk appetite has reached its highest point in more than three years amid continued optimism about the prospects for a global economic recovery and rising corporate profits, according to the BofA Merrill Lynch Survey of Fund Managers for October

Investors are increasingly confident that the threat of a double-dip recession is waning. A net 65 percent of respondents believe a global recession is unlikely in the next 12 months, up from 47 percent a month earlier.

A net 72 percent of respondents believe the outlook for corporate profits will improve in the next year, up from 68 percent a month earlier.

The survey also shows asset allocators shifting out of cash and into equities as risk appetite grows. Their cash positions are at their lowest level since January 2004. A net 7 percent of respondents are underweight cash in October, compared to a net 10 percent overweight a month earlier.

A net 38 percent of panelists are overweight equities, up from 27 percent in September. Technology, Energy, Materials and Industrials are the favored sectors for asset allocators in October with investors still shying away from financial
stocks.

Investors seeing value in Europe hits eight-year high

Asset allocators are showing a growing conviction that global corporate profits will post double digit earnings growth, the survey shows. A net 39 percent of panelists think profits will rise by at least 10 percent in the next 12 months, up from just 25 percent in September.

Optimism about Europe is pronounced in the October survey. A net 30 percent of global portfolio managers see eurozone equities as undervalued relative to other regions, the highest reading since April 2001

. A net 9 percent of panelists want to overweight the region in the next 12 months, up from 7 percent last month. This contrasts with Japan, which a net 20 percent of investors regard as the least attractive region a year ahead.

The change in sentiment coincides with a shift in investors' appetite for European financials. Investors are overweight European banks for the first time since June 2007, courtesy of greater confidence in bank balance sheets and profitability trends.

"Europe is emerging phoenix-like from the ashes as confidence in its banks boosts overall confidence in European equities," said Gary Baker, head of European equity strategy at BofA Merrill Lynch Global Research.

> Read this twice...... ;-)

> Das sollte man zur Sicherheit zweimal lesen....... ;-)

Chinese confidence rebounds: U.S. dollar confidence sinks

Confidence in the prospects for the Chinese economy and emerging markets in general remains robust. A net 49 percent of respondents think China's economy will strengthen in the next 12 months, up from 35 percent in September. A net 36 percent of respondents also said they would most like to overweight emerging markets in the next year.

Continuing weakness in the U.S. dollar has resulted in a growing number of respondents who believe the dollar is undervalued. A net 20 percent of panelists regard the currency as undervalued, compared to one percent a month earlier. Japan's economic outlook is marked by a growing number of asset allocators who view the yen as overvalued. A net 34 percent of respondents believe it is overvalued, compared to just 21 percent last month.

"Confidence in Chinese growth has rebounded but worries over a U.S. dollar crisis are on the rise. The dollar is seen as undervalued and the yen as very overvalued, suggesting that central bank intervention in currency markets in coming months could soon prove successful," said Michael Hartnett.

A total of 229 fund managers, managing a total of US$616 billion, participated in the global survey from 2 October to 8 October. A total of 195 managers, managing US$384 billion, participated in the regional surveys.

> It feels like my blog headline "Bubbles Are Normal And Non-Bubble Times Are Depressions...." is the new mantra among central banksters...... ;-)

> Ich fürchte immer mehr das meine Blogüberschrift "Bubbles Are Normal And Non-Bubble Times Are Depressions...." weltweit alle Zentralbankster erfaßt hat....... ;-)

UPDATE:

90% Of Fund Managers Think The Market Will Go Up Clusterstock

Maybe the street has become a bit too bullish afterall.
90% of institutional investors believe that the S&P500 will rise to 1,200 by the end 2011 according to a survey by The Markets. 75% then expect it to hit 1,500 by the end of 2013, and 75% believe that the market already bottomed earlier this year. The survey covered 103 invesors in 20 countries.
We don't necessarily disagree with these views, but naturally find it disturbing to find such a strong consensus on market direction. It sets off our contrarian alarm loud and clear.

From Paul Tudor Jones, who reports in his third-quarter letter to investors

While many of our surveys of aggregate hedge fund positioning would say net long exposure has rebounded to late 2007 percentages (though on a smaller base), and mutual fund cash/asset ratios have come in significantly, markets continue to trade as if most are not satisfied with their current commitment to equities.

Fall 2009 Big Money Poll Results Out: Only 13% Are Bearish, 70% Are Beating S&P, As Taxpayers Get Hosed ZH

On economic matters, 72% of respondents believe the recession has ended, and an amusing 52% believe there is no chance of a double dip recession. It is scary that over half of the "sophisticiated community" thinks that Fed can succeed where so many central planning administration have failed before.

Uh-Oh: Economists Say Recovery, Market Gains Solid BR

Nearly four of five economists surveyed by USA TODAY say the stock market rally since March is heralding a sustainable recovery.

> Needless to say that i agree almost 100 percent with this guy & Geremy Grantham....

> Kann nicht oft genug wiederholen das ich zu fast 100% mit diesem Typen & Geremy Grantham übereinstimme.....

JGLetter_ALL_3Q09 -

Speaking Of A Money Illusion........

2009-10-14T19:57:00.000-07:00

As assumed last Friday the Dow finally hit 10 K. After looking at the chart you probably know why i prefer gold....... I think a few years from now this ratio will be even more favourable.....Wouldn´t surprise me if we see similar ratios like in 1980 . The same is true when you price the S&P 500 in Gold .....

Wie bereits letzten Freitag hat der Dow die 10 K geknackt. Habe das mal zum Anlaß genommen das Dow/Gold upzudaten. Unschwer zu erkennen warum ich seit langer Zeit Gold bevorzuge.... Meiner Meinung nach wird sich dieses Verhältnis zukünftig noch weiter zugunsten von Gold beschleunigen.... Ich würde selbst ein Verhältnis ähnlich dem Jahr 1980 für nicht "unwahrscheinlich" halten. Ähnlich verhält es sich wenn man den S&P 500 in Gold kalkuliert .....

WSJ

And you thought you had broken even. If investors had bought gold when the Dow first closed above 10000 in March 1999, they'd be up almost 280%.
Put another way, Dow 10000 a decade ago "cost" 36 ounces of gold, treating each Dow point as $1.
When the Dow revisited that level Wednesday, it was worth only 9.276 ounces of gold.
In oil terms, the Dow has gone from 609 barrels to 133.

Chart via Zero Hedge

bigger / größer

Dow 10,000: A Celebration Jesse

Team coverage today on Bloomberg by the Money Honeys as the Dow Jones Industrial Average crossed 10,000 intra-day, led by J.P. Morgan, in a move that surely epitomizes the illusions of wealth granted by modern accounting practices.

Can you believe the NYSE had the nerve to prepare new Dow 10,000 hats and distribute them for today? The first time the Dow Industrials crossed 10,000 was in 1999. The last time it closed over 10,000 was in October of 2008, just
before the most recent plunge of the collapsing credit bubble.

That does not speak well of equities for the "buy and hold" crowd, which has surely had a wild ride if they have indeed managed to hold on for the last ten years, and ex-dividends and fees and commissions and inflation and a plunging US dollar and soaring commodities are... even.

AMEN :-)

UPDATE:

The following videos are too good to be buried in the comment section..... Judging from this interview Bloomberg has morphed into another version of CNBC.......

Denke die folgenden Clips sind zu gut um in den Kommentaren versteckt zu werden..... Muß gestehen das ich nach dem folgenden Interview den Eindruck habe das sich Blommberg und CNBC nicht mehr wesentlich voneinander unterscheiden......

The Colbert Report

Mon - Thurs 11:30pm / 10:30c

The Money Shot

http://www.colbertnation.com/

Colbert Report Full Episodes

Political Humor

Michael Moore

The Daily Show With Jon Stewart

Mon - Thurs 11p / 10c

Dow Jones Rebounds to 1999

http://www.thedailyshow.com/

Daily Show
Full Episodes

Political Humor

Ron Paul Interview

Wall Street Vs Main Street..........

2009-10-13T21:22:00.000-07:00

Thanks Ben, Timmy etc....... Yes we can´t........ I think the guy from Main Street ( see Chart of the day, underemployment edition & Still on the Job, but Making Only Half as Much ) will be pleased when he reads this kind of news....... Make sure you watch the Bird & Fortune, FT video: Banking, bonuses, boom and bust :-) & Bank-Favoring Censorship by Congress :-( !

Besten Dank an Ben, Timmy usw........ Yes We Can´t........ Solche "dollen" Nachrichten dürften bei dem Durchschnittsbürger ( siehe Chart of the day, underemployment edition & Still on the Job, but Making Only Half as Much ) besonders gut ankommen..... Die satirische Betrachtung von Bird & Fortune, FT video: Banking, bonuses, boom and bust ist sehenswert und leider recht nahe an der Realität :-)! Wer immer noch Zweifel hat das sich nichts ändern wird sollte dringend Bank-Favoring Censorship by Congress lesen..... DEPRIMIEREND!

Wall Street On Track To Award Record Pay WSJ

Major U.S. banks and securities firms are on pace to pay their employees about $140 billion this year -- a record high that shows compensation is rebounding despite regulatory scrutiny of Wall Street's pay culture.

Workers at 23 top investment banks, hedge funds, asset managers and stock and commodities exchanges can expect to earn even more than they did the peak year of 2007, according to an analysis of securities filings for the first half of 2009 and revenue estimates through year-end by The Wall Street Journal.

Total compensation and benefits at the publicly traded firms analyzed by the Journal are on track to increase 20% from last year's $117 billion -- and to top 2007's $130 billion payout. This year, employees at the companies will earn an estimated $143,400 on average, up almost almost $2,000 from 2007 levels.

H/T Rolfe Winkler

Here is a link to the raw data, below a list of the top 10.

NOTE: This includes only public companies

Blackstone: $4.04 million per employee
Och-Ziff: $878k
Goldman Sachs: $743k
Jeffries: $514k
Lazard: $473k
BlackRock: $318k
Legg Mason: $291k
Eaton Vance: $280k
IntercontinentalExchange: $279k
Morgan Stanley: $263k

Felix Salmon on Goldman

But just because we need these banks to exist does not mean that we want these banks to make enormous profits.....
So the answer to the question Sorkin poses in the question is, essentially, “yes”: we don’t want Goldman to fail, and neither do we want Goldman to reward success in the way it has of late. What we do want is less excess and less systemic risk.
Allowing a super-sized Goldman to pay out untold billions in bonuses every year — even if they’re cleverly structured in the form of slowly-vesting stock — achieves neither of those aims.

Havn´t heard the word "moral hazard" for a long long time.....Unfortunately i think the following excellent cartoon from Gary Varvel is spot on.....

Was ist eigentlich aus dem Wort "Moral Hazard" geworden....... Leider ist der Wahrheitsgehalt des folgenden Cartoons von Gary Varvel erschreckend hoch......

Geithner Aides Reaped Millions Working for Banks, Hedge Funds

Speaking to financial executives last month, Obama said: “We will not go back to the days of reckless behavior and unchecked excess that was at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses.”

At the same time, the president has promised to change Washington by keeping lobbyists for special interests at a distance and by making decisions in the open.

I´ll finish with a good "advice" from Jesse Gold: Until the Banks Are Restrained and Balance Is Restored ... ;-) & a nice rant from Black ( see The financial sector harms the real economy. )

Denke der folgenden Ratschlag Gold: Until the Banks Are Restrained and Balance Is Restored von Jesse & der Standpunkt von Black ( The financial sector harms the real economy. )sind ideal um dieses Posting zu beenden..... ;-)

Update:

JPM Sets Aside $471,779 Run-Rated Compensation For 2009 ZH

Lobbyists Mass to Try to Shape Financial Reform NYT

The financial services industry has poured more than $220 million into lobbying in 2009, much of it in anticipation of this Congressional effort now beginning

Bank Lobbyists Are Not Only Trying to Kill NEW Legislation, They Are Trying to Weaken EXISTING Regulations Washington´s Blog

WALL STREET IS WINNING! Elizabeth Warren "Speechless" About Record Bonuses Blodget

Thank God There Is No Conflict Of Interest....... ;-)

2009-10-09T09:10:00.000-07:00

Nothing really new but with the Dow probably hitting 10.000 on Monday i think it´s not a bad time to update the topic "Wall Street Finest" ....... Watch the red line......

Da der Dow wahrscheinlich am Montag die 10.000 knacken wird und auch ansonsten alle Märkte weltweit nahe Ihren Hochs stehen kann es nicht schaden erneut einen Blick die selbstverständlich "höchst wertvolle" Rolle der sog. Experten , oder wie von mir liebevoll als"Wall Street Finest" tituliert, zu werfen..... Man beachte die rote Linie....

‘Sell’ for Research Renegades Becomes Business Off Wall Street Bloomberg

In October 2008, as the global financial system teetered on the brink of collapse, “sell” calls in U.S. markets constituted 6 percent of the total recommendations by analysts, with “buys” comprising 36 percent and “holds,” 58 percent, according to Bloomberg data.

Almost a year later, amid a stock market rally, the percentage of “buy” calls dropped: They made up 32 percent, with “holds” comprising 63 percent and “sells,” 5 percent, as of Oct. 8.

"Business as usual" ( across all segments ).....Now compare this kind of "wisdom" with the next report on valuations......

"Business As Usual" ( und das über alle Sektoren) ..... Vergleicht bitte die o.g. "Weisheit" mit dem folgenden Report zum Thema Bewertungen......

Special Report Valuation 100909

Mish

Even if one uses "operating earnings" a euphemism for "blatant lie" in which all "one-time losses" that recur like clockwork are ignored (along with everything else the companies want to ignore), the PE based clocks in at 29.64 as of the end of the third quarter according to S&P Earnings Data.

Forward Earnings Imply a Return To Near-Record Profit Margins Hester/Hussman

At these levels it seems that a full-blown V-shaped recovery is being priced in. There's no better example of a V-shaped forecast than for what is expected for the recovery in earnings over the next couple of years. The graph below shows the operating profit series, which includes actual results from the second quarter of 2007 – when earnings peaked – through this year's second quarter, and then continues with estimates through the end of 2011.
For operating earnings to get back to their peak levels, analysts have penciled in earnings growth of more than 40 percent over the next year, and then another 22 percent between 2010 and 2011
What is worth highlighting is that analysts expect that the typical company will soon achieve the same level of profit margin that they were able to deliver in the years leading up to 2007 – a period where leverage was preferred over balance sheet strength, a preference by company managements to focus on equity shareholders, during a political climate where labor lacked bargaining power, where consumer spending was fueled by mortgage equity withdrawals, and leverage ratios increased broadly because business and consumer credit was easy to come by.
To assume a return to peak profit margins is a bet that the economic and political landscape that emerges over the next year or two will match the pre-panic landscape perfectly.

But it is also important to keep this from Barry Ritholtz & Hester in mind......

In jedem Fall sollte man aber diesen Kernsatz von Barry Ritholtz & Hester im Hinterkopf haben.....

Barry: As noted previously, at times, things like “valuation” or the economy or earnings don’t matter — until they suddenly do.
Hester : While S&P earnings may not be able to rise to the lofty expectations of analysts over the next couple of years, this isn't a strongly bearish argument in itself. The link between near-term earnings and stock direction is tenuous. Outside of very large changes in earnings, there is essentially no correlation between year-over-year changes in earnings and changes in stock prices.
But if you're investor that is sensitive to valuation and your preference is to use forward earnings, then an understanding of the building blocks that create those earnings estimates is important.

Regardless of this rule the risk/reward ratio isn´t quite "favourable" ( i´m being polite ) right now...... But as long as the technicals are not breaking down it is still too dangerous to entry a short position...... Even if it is very tempting.... ;-) At least the first not insignificant signs are popping up that the party might be over rather sooner than later......At some point this kind of "wealth transfer" has to stop...... I´m pretty sure this guy will have lots of fun in 2010...... ;-)

Denke es bleibt in jedem Fall festzuhalten das das momentan vorhandene Chance/Risikoverhältnis nicht gerade vorteilhaft ( höflich vormuliert ) ist...... Solange die Markttechnik aber noch intakt ist sollte man auf jeden Fall der Versuchung widerstehen short zu gehen. Auch wenn das tagtäglich schwerer fällt...... ;-) Immerhin sind doch erste ernsthafte Anzeichen zu erkennen die andeuten das der Party bald der Treibstoff ausgeht.......Spätestens wenn diese Art von "Umverteilung notgedrungen Ihr Ende findet......Ich bin mir ziemlich sicher das dieser Typ spätestens im Jahr 2010 eine Menge Spaß haben wird...... ;-)

Quote Of The Day..... "The Defaults Are Worth It "

2009-10-09T01:23:00.000-07:00

Looks like i was spot on ....."the Phony Mae & Fraudie Mac pain wasn´t enough......."

Sieht ganz so aus als wenn ich nicht ganz verkehrt gelegen habe......."der Phony Mae & Fraudie Mac Schaden doch noch nicht hoch genug war....... "

U.S. Mortgage Backer May Need Bailout, Experts Say NYT

Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee, said in an interview that the defaults were, in essence, worth it.

“I don’t think it’s a bad thing that the bad loans occurred,” he said. “It was an effort to keep prices from falling too fast. That’s a policy.”

With an insured mortgage exposure already running well over $ 600 billion & spiking higher on a daily basis one has to admit that this clown has CHUZPAH! I suggest to read the entire NYT link.... Lots of stuff that makes a GOLDBUG happy......

Wenn man sich jetzt vor Augen führt das sich die o.g. Institution bereits jetzt für über 600 Mrd $ an wackeligen Hypotheken geradesteht und tagtäglich massivst neue Garantien schreibt muß man diesem Clown zumindest zugestehen das er CHUZPAH hat.....Ich empfehle sich den folgenden Link der NYT komplett durchzulesen.....Läßt das Herz eines GOLDBUGS höher hupfen......

The HYPOCRITE himself in 2005.......

Rolfe Winkler has nailed it a few weeks ago!

Rolfe Winkler hat es bereits vor einigen Wochen treffend formuliert...

"It’s equally likely the agency will continue to be a conduit through which the Obama administration funnels cash to the housing market"

Over $600 billion of loans backed by the end of this year — many very risky due to very low downpayments — but no chief risk officer….

Especially worrysome when the Fed is the only buyer of agency debt right now......

Das ganze wird noch amüsanter wenn man bedenkt das die Fed momentan der einzige Käufer in diesem Marktsegment ist.....

More on this topic

House Hearing on FHA Capital Reserves Home Economics
Bailout watch, US Federal Housing Administration edition FT Alphaville
FHA Bailout Seen Calculated Risk
FHA: Next Bailout? NC
The Sound Of One Hand Clapping Chris Martenson

"Cash On The Sidelines" Anti Spin

2009-10-06T20:28:00.001-07:00

This quote from James Bianco sums it up ( when it comes to stocks )..... More "Anti Spin" on this topic from Barry Ritholtz, Hussman & Tim Bond

Der nachfolgende Satz von James Bianco trifft es hervorragend ( zumindest wenn es im Hinblick auf Aktien gemacht wird ) .......Mehr "Anti Spin" zu diesem Thema von Barry Ritholtz, Hussman & Tim Bond

“Any time you hear a money manager say there’s $3.5 trillion dollars in cash on the sidelines, take your money away from them. Because he doesn’t know what he’s saying.”

bigger / vergrößerte Version H/T Barry Ritholtz

Will “Cash-on-the-Sidelines” Really Drive Stocks? MarketBeat WSJ
The “cash-on-the-sidelines” argument many market-watchers make to explain why stocks should move still higher shows no signs of losing traction.

MarketBeat: Jim, thanks for taking a few minutes to talk. You recently wrote a research piece saying the assets in money-market mutual funds won’t be moving into stocks anytime soon. How come?

Bianco: If you look at the mutual-fund flows there is a record amount going into bond funds. Forty-two billion dollars went into bond funds in August, which is an all-time monthly record. In fact, the all-time monthly record, I believe, for stock funds was $55 billion back in February of 2000. So it’s pretty close to the stock-fund record. But when you break it down, what you’ll find is that short-term muni funds, and short-term corporate funds, those are the funds that are getting huge, huge inflows.

The short-term corporate funds are up 12% this year. And as we talk right now, the S&P 500 is up around 16% this year and the Dow is up about 11% this year. That’s including dividends. So my conclusion was, “Yes, there’s a lot of money that’s built up in the cash on the sidelines. Yes, it is going to come out of that zero interest rate funds. And its going into short-term bond funds, which by the way are performing pretty much in line with the stock market. So don’t hold your breath. You’re going to be waiting a long time before you see that money ever matriculate into the stock market.”

MarketBeat: What about the cash-on-the-sidelines argument more broadly. Do you have problems with the fundamental logic of it?

Bianco: Now a couple things about that. The first one is I hate when they say, “There’s $3.5 trillion on the sidelines and that’s a whole lot of money.” It implies that all of that money should be put in investments like the stock market. That’s not true. The vast, vast majority is in transactional balances.

MarketBeat: What does that mean exactly?

Bianco: It’s money that is going to be needed in a very short period of time, like, within a year. It’s going to be spent on something. They’re almost like checking accounts, if you want to think of it that way. It’s like somebody saying, “You’ve got $10,000 dollars in your checking account, why don’t you $10,000 worth of stocks?” And the answer is, “Well because I’ve got to pay my credit card bill and my rent.”

Maybe $1,500, $2,000 or $1,000 of it, I might be able to peel out and put into an investment. But I can’t put the whole $10,000 into it.

MarketBeat: So who owns all this money in money-market funds?

Bianco: The way people say “$3.5 trillion in money-market funds,” they make it sound like $3.5 trillion of widows and orphans are out there irrationally taking a zero-percent return and not recognizing that they should be plowing their money into the stock market.

Well, first of all 65-70% of the money isn’t widows and orphans. It’s institutional money, and the majority of it is transactional balances. So once you stripped all of that out, how much retail money is hiding away from the stock market? The answer is, it’s not very much. It’s probably in the range of a couple of hundred billion dollars.

So there’s a few hundred billion dollars — not $3.5 trillion — that could potentially move back into a longer term investment. My argument is that most of it is already moving. It is moving into short-term bond funds. And those short term bond funds have performed in line with the stock market.

So, what you would need is a massive divergence of those short-term bond funds underperforming — with the stock market not going down — in order to start pushing people out the risk curve even more and into stocks.

So when people say, “Look at all this money. it’s an all-time high in money market funds. And these people are stupid for being in money funds.” Well, money funds have outperformed the stock market for the last 12 years. So shouldn’t money funds have a lot of assets relative to stocks right now? Because we all know that everybody chases performance. So the fact of the matter is there should be a lot of money there because stocks have not performed well. The high-falutin’ technical term for that is “stocks have sucked.”

“Well, they’ve been outperforming cash since March,” would be the argument. Yes, but not over the last two years. People do remember what the stock market did to them last year.

MarketBeat: So, in short you don’t buy the cash-on-the-sidelines argument.

Bianco: No. You know I started in this business in 1986 and there was a ton of cash on the sidelines. And every single day since 1986 everybody has told me that there’s large amounts of cash on the sidelines.

MarketBeat: What do you mean?

Bianco: That’s been a constant argument that’s never gone away. There’s never been a point where anybody has argued that there’s been too little cash on the sidelines. That’s just background noise is all that argument is. Especially when somebody says there’s $3.5 trillion on the sidelines. I was kidding around with some guys in the office here and said, “Any time you hear a money manager say there’s $3.5 trillion dollars in cash on the sidelines, take your money away from them. Because he doesn’t know what he’s saying.”

Equity managers want you to believe that in reality there should be no such thing as a money-market fund. And they should all be closed down and all that money should be put into the stock market.

UPDATE: Quote Rosenberg

"Another way to look at the situation is that when you hear and read about "liquidity" driving the market, it is usually a catch-all phrase for "we have no clue" but it sounds good. "

News from 1930 Daily summary based upon my reading of the Wall Street Journal from the corresponding day in 1930

There's a large amount of money on sidelines waiting for investment opportunities; this should be felt in market when “cheerful sentiment is more firmly intrenched.”

Sounds familar.....? ;-)

Kommt Euch das irgendwie bekannt vor...... ? ;-)

Soured Loans To Other Banks

2009-10-06T19:37:00.000-07:00

Just one more example how banks have marked numerous assets on their balance sheets..... ;-)

Ein weiterer Beleg wie marktgerecht die einzelnen Positionen der Bankenbilanzen bewertet sind..... ;-)

WSJ
After slogging through quarters of losses from disastrous bets on the Arizona and Florida housing markets, Milwaukee-based Marshall & IlsleyCorp. is facing a new source of pain: bad loans to other banks.

The bank said Tuesday it expects to post a larger third-quarter loss than analysts had expected, in part because it will set aside $185 million for loans to other banks that have abruptly gone bad.

In fact, the bank said 75% of the now-troubled loans to other lenders were current just seven days ago on Sept. 30.

Here comes another example.......... This time it´s CRE......

Hier ein weiterer Beleg für die "überragende" Bilanzqualität wenn es um die Risikovorsorge bei gewerblichen Immobilien geht.....

Fed Frets About Commercial Real Estate WSJ

In another sign that many U.S. financial institutions are inadequately protected against potential losses on commercial real-estate loans, banks with heavy exposure to such loans set aside just 38 cents in reserves during the second quarter for every $1 in bad loans, according to an analysis of regulatory filings by The Wall Street Journal. That is a sharp decline from $1.58 in reserves for every $1 in bad loans from the beginning of 2007.

Make sure you visit the comment section for another stunning CRE story leading to the highest per-square-foot price paid for a Birmingham office property since 2001, easily topping the 2008 mark........

Empfehle zudem einen Besuch in den Comments für ein weiteres Bespiel aus der "Wunderwelt" der gewerblichen Immobilien die erzählt mit welcher Finanzierung es auch jetzt noch möglich die Quadratmeterpreise aus dem Jahr 2008 locker zu toppen .....

Kyle Bass & David Rosenberg

2009-10-06T12:05:00.000-07:00

Probably no coincidence that two of the brightest like GOLD ( both with different views if & when inflation will become a problem )........... Excellent read!

Sicher kein Zufall das zwei der Besten Gold nicht abgeneigt entgegen stehen. Und das obwohl die Zwei weit ( Untertreibung ) auseinander liegen ob & wann Inflation problematisch werden könnte..... Extrem empfehlenswert! Klickt bitte jeweils den Toggle Button oben rechts und nutzt dann die Zoomfunktion für das perfekte Format.

H/T Zero Hedge

"The man who made billions shorting subprime shares his latest observations."

Hay Man

H/T Expected Returns

" One of the few economists living in the real world."

Lunch With Dave 100209

Here are his thoughts on today´s rally. For a daily dose of excellent "ANTI SPIN" i highly recommend to subsribe to the free daily update from David Rosenberg.

Hier seine Gedanken zum heutigen Kursfeuerwerk. Wer die momentan wohl beste tagtägliche Analyse frei aus geliefert haben möchte der sollte sich hier registrieren lassen.

The Government Won´t Make Any Money On This Deal.......

2009-09-29T23:39:00.000-07:00

Looks like a "Deja Vu".....Compare this with the news from July ...... They have kicked the can three month down the road ( DESPERATION when you look at the maturity schedule )....... BRAVO! Needless to say that when they received the TARP money CIT were classified as "well capitalised".......If the WSJ & Reuters are correct it is very good news that we finally see the Debt To Equity Swap in a not so small ( see CIT Analyst Presentation ) financial company ....Too bad for CIT that they are not TBTF like Citi ( see yesterdays news Citi is still using FDIC TLGP ) ......

Fühlt sich wie ein Deja Vu an......Vergleicht die heutige Meldung bitte mal mit der vom Juli...... CIT hat es immerhin geschafft sich ganze 3 Monate Luft zu verschaffen ( pure Verzweiflung wenn man einen Blick auf die Fälligkeiten wirft )......BRAVO! Ganz nebenbei bemerkt war CIT zum Zeitpunkt der als die TARP Mrd flossen "well capitalized".....Sollten das WSJ & Reuters richtig liegen bleibt festzuhalten das wir endlich den ersten Debt To Equity Swap in einem nicht ganz kleinen Finanzinstitut ( ein Blick in die CIT Analysten Presentation gibt eine gute Übersicht ) zu sehen bekommen. Dumm für CIT hat sie nicht wie Citi ( siehe gestrige Meldung Citi Still Using FDIC TLGP ) in die Kategorie "Too Big Too Fail" fallen.....

CIT Readies Plan to Hand Control to Bondholders WSJ

Lender Readies Plan to Hand Control to Bondholders; Bankruptcy Filing Is an Option

The fate of CIT Group Inc. was hanging in the balance Tuesday as the large commercial lender readied a plan that would likely hand control of the company to its bondholders.

CIT is preparing a sweeping exchange offer that would eliminate 30% to 40% of its more than $30 billion in debt outstanding, said people familiar with the matter.

The plan would offer bondholders new debt secured by CIT assets, as well as nearly all of the equity in a restructured firm. The new debt would mature later than current debt, the impending maturity of which has posed a problem for CIT.

The plan sets up a potential showdown between bondholders with debt coming due soon and those whose debt does not come due for years. If the company doesn't receive enough bondholder support, it plans to execute the restructuring in bankruptcy court, the people familiar with the situation said.

While the plan is being developed by a steering committee of bondholders in consultation with CIT management, many of those involved said they didn't expect that the company could avoid seeking Chapter 11 bankruptcy protection, given competing bondholder interests.

If CIT does file, it would be the fifth-largest bankruptcy filing, by assets, in U.S. history, trailing only Lehman Brothers Holdings Inc., Washington Mutual Inc., WorldCom Inc. and General Motors Corp. CIT would continue operating under creditor protection, although other financial businesses have struggled to remain viable in bankruptcy.

CIT declined to comment. The people familiar with the matter cautioned that talks remained fluid and many details remained to be determined, including the amount of debt CIT needed to extinguish to avoid a bankruptcy filing.

Having run out of funding options this summer, given its "junk" credit rating, CIT faced the looming need to roll over debt that was maturing. The firm teetered on the verge of a bankruptcy filing before it got a rescue package in late July.

CIT had sought relief from federal regulators and last December did receive $2.3 billion under the Treasury's Troubled Asset Relief Program.

In 2009, however, federal regulators declined further aid, having determined that a failure by CIT wouldn't severely harm the economy. That left the lender scrambling to right a balance sheet burdened by bad real-estate and commercial loans.

CIT avoided a bankruptcy filing in late July when a group of large bondholders such as Pimco, Oaktree Capital and Silver Point Capital infused $3 billion in last-minute financing. The money acted like a "bridge" for CIT to prepare a debt-exchange offer.

UPDATE via Zero Hedge ( couldn´t resist )

Citi and CIT Are Primed for Upside, by Jim Cramer 9/29/2009, 1:54 PM EDT

....I put both of these up there as examples of companies that won't die, and because they won't die, they live. I know that seems a little circular in reasoning, but because Citigroup never suffered a run like Wachovia and Washington Mutual did, it made it and as our flagship site mentioned, it is safe. If it is safe, it can go higher. Because no one forced CIT into bankruptcy, it can live to play again, and when I read in the New York Post that Paulson owns CIT debt, I realized that he's powerful enough to save this company, particularly because he is one of the investors in IndyMac and knows his way around the bottom of the debt barrel.
These two stocks represent lottery tickets that are no longer rip-ups because they have made it out of the "critical care" stage and are recovering. I would buy them both.

> Nice timing Jim..... Add this expertise to his "Ten Trillion $ Worth Of Good Calls"..... ;-) But after watching the other ZOMBIE stocks ( AIG, FRE, FNM ) spiking higher & considering the market rationale these days it would not surprise me to see the stock move higher..... Stock closed down 45 percent.....

> Autsch......Gelungenes Timing..... Denke dieser Expertenrat reiht sich nathlos an die Reihe der "Ten Trillion $ Worth Of Good Calls" ein..... ;-) Nachdem was ansonsten mit anderen ZOMBIEAKTIEN ( AIG, FRE, FNM, Arcandor, Hypo Real Estate usw ) geschehen ist bzw man die aktuelle Risikobereitschaft berücksichtigt ist nicht ausgeschlossen das selbst diese Meldung noch zu Kurssprüngen führt... Aktie reagiert überraschenderweise mit einem "Abschlag" von 45% vollkommen rational....

CORRECTION: Business Week Cover "Why The Market Will Keep Going Up" / "Why The Market Is Going Nowhere"

2009-09-28T09:47:00.000-07:00

Shame on me..... See the correction at the end of the post.....(Original Post) Just in time .....You don´t have to read Why The Market Will Keep Going Up ( i didn´t )to know that this kind of cover comes usually closer to the top...... ;-)

Da habe ich wohl gepennt...... Bitte die alternative Lesart des Covers bei einer 180% Drehung am Ende des Postings beachten...... ( Ursprüngliches Posting) Gerade noch rechtzeitig .......Man muß kein Prophet sein und den Artikel Why The Market Will Keep Going Up gelesen haben ( habe es mir verkniffen ) um zu wissen das diese Art von Cover im Regelfall eher nahe einem Top zu finden ist..... ;-)

H/T Clusterstock

Dow 9.750, S&P 1.060, N100 1.725, DAX 5675, Eurostoxx 2875, Nikkei 10.130

Needless to say that i ´m "less optimistisc" ( see here , here & here)

Brauche wohl nicht zu erwähnen das ich weniger optimistsisch bin ( siehe hier , hier & hier) Sollte nun auch noch der Focus einen ähnlichen Titel machen ist es höchste Zeit short zu gehen...... :-)

CORRECTION : H/T Barry Ritholtz

We're Speaking Japanese Without Knowing It - John Hussman

2009-09-27T22:02:00.000-07:00

Good reminder from Hussman that we still havn´t make any meaningful progress with the main issue of all the toxic debt & the impaired bank balance sheets ( click here & here for just a few example )..... He is spot on that it is a scandal that so far the bondholders have been "protected"at the expense of the taxpayer ( rip off still expanding on a daily basis / see The Talf that keeps on taking (CMBS) ,Let’s say RIP to PPIP , Spain to approve EUR 64bln of guarantees for bank debt sales & "Today I Think Of Myself As A Government Contractor......" etc.) ...... The Great "Cover-Up" is still in full force without significant consequences for the "participants"........" Where is the debt to equity swap ?"

Schön zu sehen das es zumindest noch einzelne Rufer in der Wüste wie Hussman gibt die sich erlauben darauf hinzuweisen das der wichtigste Punkt der Krise, die sich unter Wasser befindlichen Bankenbilanzen, noch immer nicht mal ansatzweise gelöst worden ist ( Hier & hier nur einige Beispiele ). Unglücklicherweise ist die Lage in Deutschland ebenfalls nach wie vor "instabil" siehe Oppenheim verpfändet Aktien & Neues Milliardenloch bei LBBW ) ........ Es ist gelinde gesagt ein Skandal das praktisch weltweit die Politik in Verbindung mit den Notenbanken entschieden hat die Anleiheinvestoren zu schützen und stattdessen den Steuerzahler in Risiko gehen zu lassen ( verweise stellvertretend auf The Talf that keeps on taking (CMBS) , Let’s say RIP to PPIP, Spain to approve EUR 64bln of guarantees for bank debt sales & "Today I Think Of Myself As A Government Contractor......" usw.)..... Es sieht ganz so aus als wenn bis auf weiteres The Great "Cover-Up" ohne größere Konsequenzen für die "Beteiligten" auszugehen scheint..... Habe zu diesem Thema unter dem Label "Where Is The Debt To Equity Swap" bereits öfter meinem "Unverständnis" Luft gemacht.....

H/T Option ARMageddon / R. Winkler

We're Speaking Japanese Without Knowing It Hussman

If one seeks analysis about the recent financial crisis, and what most probably lies ahead, it would be wise to place particular weight on the views of economists who saw it coming (and ideally those who provided careful analysis rather than hyperbole

.....At a speech at the Princeton Club last week, economist Carmen Reinhart eiterated that by propping up unhealthy banks, the U.S. is unwittingly committing the same mistakes as the Japanese did in their decade-long stagnation, saying, “These are not zombie loans. They're just non-performing. We're speaking Japanese without knowing it.”

Historically and across countries, according to the IMF, 86% of systemic banking crises have ultimately required government restructuring plans that included closing, nationalizing and merging banks.

Yet the policy response of the U.S. has been akin to putting a band-aid on an untreated infection. Worse, not only has the underlying infection been overlooked, but thanks to the easing of FASB mark-to-market rules early this year, we have at least temporarily stopped reporting on the status of that infection.

After the bubble burst in Japan in 1990, Japanese banks were not compelled to properly disclose their losses either. The predictable result is that the problems resurfaced later, but worse, because they had not been addressed.

This sort of “regulatory forbearance” – setting aside requirements for large loan loss reserves and timely loss disclosure - was helpful during the Latin American debt crisis of the 1980's, but largely because it allowed time for negotiations with countries to restructure debt, first by rescheduling payments, and then ultimately through debt-equity swaps, exit bonds, and other major debt restructuring under the Brady Plan.

Forbearance only works, however, if you're buying time to do something to restructure debt. Instead, we've celebrated bailouts and the easing of reporting requirements as if they are a substitute for restructuring. In my view, this is a mistake that will haunt us.

Our response to the recent crisis has thus far repeated the mistakes made during the Japanese and S&L debacles.

The continued urgency of debt restructuring

With the financial markets cheerily celebrating the end of the recession, credit spreads back to 2007 levels, and analysts referring to the mortgage crisis as largely a thing of the past, it is natural to ask why I would start pounding the tables again about debt restructuring. Old news. Problem solved. Why even bring it up?

The simple answer is that we have not solved the mortgage mess. We have temporarily buried it under a pile of public money, bailing out bank bondholders at public expense. As I've noted before, the best time to panic, in the financial markets, is before everyone else does

Similarly, the best time to consider responses to credit strains is before they surface.

My sincere hope is that if, and I believe when, financial trouble resurfaces, we will be wise enough as a nation to prevent policy makers like Geithner and Bernanke from making the same bailout mistakes twice, protecting irresponsible lenders, and further burdening the nation with debt in the process.

With regard to the banking system, we still have no mechanism by which large undercapitalized banks would be able to absorb large losses with their own balance sheets, in lieu of going into receivership or default. The problem is that there is too much on the balance sheets in the form of debt, and not enough in terms of equity. Citigroup, with about $2 trillion in assets, continues to fund about $600 billion of that through debt to its own bondholders. Customers would never be at risk of loss in the event that Citigroup was to “fail.” The bondholders would.

But we have chosen to defend the bondholders. A cushion on the balance sheet that can't be touched is no cushion at all.
The proper solution is not to bail out the banks, but to create a regulatory structure that allows losses to be absorbed from the capital of bondholders.
UPDATE:

Andy Xie: Why One Bubble Burst Deserves Another Caijing

The lesson from the Lehman collapse seems to be, "Take whatever you can and, when it crashes, you get to keep it." How governments and central banks have dealt with this bubble will encourage more people to join bubble making in the future.

Chris Whalen: The Global Carry Trade And The Crimes Of Patriots via ZH

Since the October 1987 financial crisis, the Federal Reserve System has not denied the Street either liquidity or collateral. The objective goal of policy, it seems, has been to keep the ability of Congress to issue debt intact all the while keeping the casino part of the banking system operating at full steam regardless of the impact on inflation and, more important, investor behavior.....
The EU also has killed any entrepreneurial activity in private banking as well. There is virtually no private capital inflows into the EU banking sector and, in many markets, private and public sector EU banks mostly are insolvent. The EU member states now are the last redoubt for entire nations when it comes to credit.

One wonders how the EU will participate in the stated intention of the G-20 to raise bank capital for riskier activities when many EU banks cannot meet current capital requirements and are facing losses that are equally as large as those unrealized losses facing US banks.

Janet Tavakoli : Wall Street's Fraud Solutions For Systemic Peril ZH

Massive fraud damaged the U.S. economy. (Housing prices didn’t just fall; they plummeted as the fraud unraveled.) U.S. taxpayers became unwilling unsophisticated investors funding Wall Street’s bailout. The Fed uses tax dollars to keep some of our largest banks—weakened by reverse‐Glass‐Steagall mergers with troubled entities—from collapsing under heavy loan losses.
Wall Street’s huge bonus payments were based on suspect accounting. Failure should not result in fortune. Yet, Wall Street once again proposes to pay out exorbitant bonuses.
Many banks’ current illusion of profitability is only made possible by taxpayers’ enormous subsidies including low cost borrowing, higher interest payments on bank capital deposits, a credit line for the FDIC (to be repaid with banks’ subsidized profits), and continued government debt guarantees on bank debt. A large share of certain banks’ tax‐subsidized profits is due as reparation to unsophisticated investors, the U.S. taxpayers.
Troubled financial entities should be put into receivership and restructured. Old shareholders will be wiped out. Debt‐holders will take a haircut (discount) along with a debt for new equity swap to recapitalize the entity.
But the job won’t be complete until we separate high risk activities from traditional banking in a return to a Glass‐Steagall like structure with regulators that indict fraudsters, snuff out systemic fraud, and allow honest bankers to prosper.

Volcker to Banks: Stop Trading with Taxpayer Money WSJ

....the fact that commercial banks that have taken billions in government assistance and whose deposits are now insured by the federal government, continue to take trading risks that Volcker finds unacceptable.

Commercial banks “lend money to businesses, and that’s still a very important function….And that’s why we protect them. I don’t want to see those banks, however, taking a lot of unnecessary risk. It’s risky enough lending money. They don’t have to do a lot of trading on speculative reasons,’’ Volcker says in an interview on “Charlie Rose,”

In other words, Volcker said banks should not be allowed to act like hedge funds trading everything from commodities to debt instruments

The problem is that proprietary trading is a major revenue generator for many commercial banks today. On some levels this could be good for taxpayers because the banks can use their trading profits to help pay back government bail out funds.

Not surprisingly, Volcker admitted during the interview with journalist Charlie Rose, which will be rebroadcast by Bloomberg TV, that he hasn’t found any takers in the Obama administration for his call to separate commercial banking from trading.

In Harsh Reports on S.E.C.’s Fraud Failures, a Watchdog Urges Sweeping Changes

Many on Wall Street and in Washington were surprised that some of Mr. Kotz’s proposals, like recording interviews with witnesses and creating a database for tips and complaints, were not already part of the S.E.C.’s standard practice.

Too Big To Jail :-)

Mark Faber Is Still Making A Lot Of Sense..... Enjoy!

2009-09-22T23:43:00.000-07:00

One of my "favourites"...... After listening to the interview or visiting my
earlier post on Faber you know why.... ;-)

Einer meiner absoluten "Favoriten"...... Spätestens nachdem Ihr das Interview bzw meine früheren Posts zu Faber gesehen habt wisst Ihr warum..... ;-)

Update:

Faber: Gloom, Boom or Doom? Credit Writedowns

Brit Bashes Bozos ZH ( No Faber but another person making sense!)

A New Bubble Of the Fed's Creation WaPo

Reflections on "The Last Bear Standing" Mish

Disclosure:

While i agree with several of Faber´s viewpoints i´m "less optimistic" on the markets than Faber ( see here & here ) and will finish with a quote from yesterdays post....

Obwohl ich mit fast allen was Faber zum Besten gibt übereinstimme bin ich im Vergleich doch "weniger optimistisch" im Hinblick auf die Märkte ( siehe here & here ) und kann mir nicht verkneifen ein gestriges Zitat erneut zu wiederholen

Bob, ‘The Bear’, Janjuah via FT Alphaville

I think balance sheets and sustainability - govt, central bank AND private sector, MATTER
If they no longer matter, I will be WRONG, and I will have to accept that the policy of ‘Print/Borrow/Spend on Rubbish we don’t Need’ is a limitless phenomena, without consequences, which means there should never be a bear market ever again….
I hope this sounds as ridiculous to you reading as it did to me when writing…..

Looks Like S&P Equity Anlaysts Are As Competent As Their Debt Analysts.....

2009-09-21T23:47:00.000-07:00

This kind of expertise from Wall Street Finest based only on hope of a better bailout deal ( proposed from a major sharholder.... ) sums the market action up..... At least S&P isn´t able to play the Pump & Dump like Goldman & others.... Keep in mind that AIG is one of the Zombie Stocks making up to 20 percent of daily NYSE volume.....

Diese "Expertenmeinung" die einzig und allein auf einem noch besseren Bailoutdeal ( passenderweise vorgeschlagen von einem der Hauptaktionäre ) basiert spiegelt recht schön wider was momentan an den Märkten abgeht.....Immerhin kann man S&P nicht wie z.B. Goldman vorwerfen das altbekannte Pump & Dump zu praktizieren.... Man sollte sich zusärtlich noch ins Gedächnis rufen das AIG eine der Zombie Aktien ist die momentan für knapp 20% des täglichen Handelsvolumens stehen.....

AIG Shares Shoot up on Proposal to Ease Government Loan Terms MarketBeat

AIG jumped roughly 11% today after the powerful House Oversight and Government Reform Committee confirmed receiving a proposal from former CEO Maurice “Hank” Greenberg to restructure the government’s bailout of the insurance giant.
The reports prompted S&P Equity Research to boost AIG to “hold” from “sell.”
“We see this news buoying the shares near term,” S&P’s Catherine Seifert wrote in quick squib earlier today. But before you sink the kid’s college fund into AIG shares, keep this in mind:
It’s far from clear that there’s actually any actual equity value in this company.
“We note June 30 tangible common equity was minus $261.66 per share,” Seifert states

Needless to say that according to Yahoo Finance there is no sell rating ( 10 hold ) on AIG.....;-)

Überflüssig zu erwähnen das lt. Yahoo Finance keine einzige Verkaufsempfehlung ( 10 mal Halten ) existiert.....;-)

UPDATE: Traders Seek Fortune in AIG, a Stock Once Left for Dead WSJ