Monday, October 31, 2011

Goldman Man destroys Man

Corzine © fintag

News comments:
EDF MF Man Global or whatever its called these days always lived by the seat of its pants.

Actually that is not true. It has been around for 200 years and survived financial disasters and wars. In the last 10 years, the brokerage arm was always thought of as a bit wide and despite a few hiccups and fines was able to spin out of the other MAN entity without huge DD alarm bells ringing. I have known brokers who worked there and some of the stories are hilarious.

So along came one of god's men, a Goldman Sacher. Boy did he mess it up. From what we can tell he thought it was a hedge fund he was running and not a brokerage business as positions were left open overnight and employees didn't know what the business they were in actually was.

Shame an historic London brokerage should be destroyed by someone from Goldman Sachs.

Nothing new there then ...

Today's shorts:
Broker takes assets from broker (marketwatch)

Italy ready to demand 100% haircuts (bloomberg)

Today's longs:
Barcap hides toxic assets (bloomberg)

Obama creates new jobs by dumping snow on NYC.

Thursday, October 27, 2011

Greece: 50% off

50% off Greece © fintag

News comments:
So the banks have voluntarily agreed to take a 50% haircut. This means no credit default event and no payoffs. Oh dear.

But what does this mean?

Now the dust is settling and the EU deal is nothing but more of the same, Greece has got away with wiping off 50% of its debt. Again the Greeks have got something for nothing and the likes of Ireland who have been bailed out and are being good and cutting their costs are looking at those bad boys in Greece and wondering what they did wrong?

The EU is keen there was no Greek default. It would be bad for the Euro. So it has told debt owners you can only get 50% back. While we all try and work out what this actually means, here is a quote:

"[Europe is] a monument to the vanity of intellectuals, a programme whose inevitable destiny is failure: only the scale of the final damage is in doubt" Margaret Thatcher

So if the ECB is not the lender of last resort, is it, through the back door, being given that role in contravention of the Maastricht Treaty? Now Greece has written off half its debt, it doesn't need to bother with its austerity cuts and can continue like in the old days? Something doesn't smell right.

The upshot is the rich Greeks are buying up London real estate (so my contact at John D Wood tells me). They are stripping Greece of its wealth and are waiting for Greece to be kicked out of the Euro so they can go back and buy up the place. This 50% off deal is a bit of a bummer but give them a couple of months and Greece will be kicked out of the Euro. Looks like the rest of Europe will be asking for 50% haircuts - shame the UK / USA is not a member to enjoy this sale of the century.

Today's shorts:
CDS (seekingalpha)

Today's longs:
Help is hand to stop the hackers (reuters)

Sarkozy to be made an honorary Greek.

Euro sticking plaster. So what is new then?

Flag © archbishop-cranmer.

News comments:
Hurrah! The EU has a solution.

Well not really. So they are to increase the Euro-TARP fund, force banks and the ECB to take haircuts on Greek debt and increase Tier 1 capital requirements.

Sounds like a plan (similar to last weeks in fact). What is happening in front of our eyes is the "Save France at all costs" plan. With BNP and SocGen heavily exposed to Greece (oops and Italy but that is for next weeks Euro meeting), they will be forced down the rights issue route (unless they can dump their toxic crap onto the ECB) and we don't want that do we?

I have to hand it to Sarkozy - a great job indeed. He wins and the Euro tax payer looses heavily. This "bank A lends to the ECB which buys sovereign debt to keep France's AAA and ensure Bank A's Tier 1 capital is AAA" model is bizarre indeed.

It is a house of cards. Anyway, good news for a few days. The Greeks got to keep 50% of the bail out fund for free and the rest of us pay.

Today's shorts:
French Banks (bloomberg)

French corruption (dailymail)

Today's longs:
Long live the Euro (marketwatch)

Italy to default on its austerity package.

Tuesday, October 25, 2011

Blame the Politicians not the Bankers

Inflation © fintag

News comments:
As a child I collected stamps. Thought they maybe worth something in the future but no. Worthless. I blame Stanley Gibbons for pumping up my expectations.

You see I believed them. They were the "authority". Of course as a cynical adult it is clear stamp collecting was pumped to keep them in business.

My stamps were like CDOs or call options on the S&P 500. When I realised my stamps were worthless I looked for someone to blame. So I blamed Stanley Gibbons. They were my Bank.

Nobody regulates stamps but if they did I would blame them too. But I would be barking up the wrong tree. Stanley Gibbons is an organisation. One of many in the UK. And who looks after all these companies? Politicians.

During the boom, governments force fed the banks their debt. Banks liked the yield, liked it being tier 1 capital and could sell it easily. The politicians liked being able to say "more pensions", "more child care", "more silicon implants" and so on.

Banks were not the cause. They were just doing their jobs.

So it is with sadness that a bunch of elected morons in Europe cannot face up to their imbecilic behaviour over the past few years and just continue to bash the finance sector whenever they want deflect criticism away from them.

But that is dull.

Just read Michael Lewis's book, Boomerang. Looks like he read fintag during 2008. Anyway, he never mentions the Russians who funded Iceland. And Cyprus. And Ireland. Why would this be? He talks about the Icelandic banks rising from fishing boats. If it was that easy why doesn't Europe just create a fictitious bank?

Oops, they have already done that and not a Russian bean in sight (much better to buy out London where capital gains is zero and money laundering is a Camden pub band).

Today's shorts:
King brainstorms with himself (telegraph)

Italy austerity programme stolen from Greece (reuters)

Today's longs:
BP pushed up the FTSE (reuters)

Europe to demerge and Goldman Sachs to help it do so.

Saturday, October 22, 2011

PIGS to be relegated to Euro B

Coins © fintag

News comments:
The Euro has failed because the participating countries ignored the fiscal rules.

So we are hearing, as fintag predicted, the Euro is to be split into a Euro A and a Euro B.

Euro A countries will be restricted in their abilities to tax and spend and if targets are breached they will be relegated to Euro B status.

Euro B countries will be given 3 years to "get their acts together". If they do, they become Euro A again. If they fail, they will have to leave the Euro.

Seems reasonable. Seems inevitable.

Today's shorts:
Tesco tells Euro to fcuk off (telegraph)

Today's longs:
Google to pay mercenaries to take out Yahoo (bloomberg)

Fintag to win the £250,000 prize for sorting out the Euro problem.

Tuesday, October 18, 2011

Turn those printing presses off please!!!

Pop-up tents © fintag

News comments:
UK Inflation. 5.2%

So the excuses we are hearing about are related to energy costs. Well these are high because Sterling has been hammered as its a low grade currency. Peanuts = higher import costs = high energy prices. And lots of other high prices.

But the real reason is the printing presses are distorting the money supply. Same thing in the USA too.

If these morons want to get out of this mess, put rates up, lower sales taxes and put duties on stuff made in China.

Basic economics. To reduce inflation you put up interest rates. You don't feed the fire with petrol.

Today's shorts:
UK (bloomberg)

Cyprus is symptomatic of the European Nightmare

Cyprus © Russia

News comments:
Tiny Cyprus is the most exposed and indebted Euro country outside of Greece. Here is a cut and paste from a Cypriot website:

Cyprus Finance Minister Kikis Kazamias explained that if the House does not approve the bill for an increase in VAT from 15% to 17%, this does not necessarily mean that Cyprus will have to join the European Financial Stability Facility (EFSF), however “the country will draw closer to it”.

Cyprus is being propped up by the Russians who have used Cyprus as a gateway into Europe. This is well known. So when Cyprus explicitly says it is looking forward to joining the Euro-TARP, it is looking at providing collateral to its Russian paymasters.

The ESFS is being treated like a sweet shop and I still cannot understand why anyone can still believe Germany will want to fund this thing and give away its wealth on the promise these indebted countries will pay it back.

Politicians go on about growth being their saviour. Of course it is but we are talking rampant growth and that isn't coming for many years.

The game is over. The Euro will collapse by the 31 December 2011 and I will collect my winnings.

Today's shorts:
Germany seeks to see France lose its AAA (bloomberg)

Cyprus (cyprusexpat)

Leveraging up the Euro TARP (telegraph)

Today's longs:
CRA ready to pull the trigger on France (cityam)

French car industry to bail out France.

Monday, October 17, 2011

Occupying the wrong targets

Bankers © fintag

News comments:
Occupy are targeting the wrong people.

It is good to see some people action. The Bankers have managed to keep their lifestyle going through these rough times by ensuring they cannot fail. But as many commentators are starting to realize, the people are attacking the wrong people.

For a number of years now, we have been attacking the printing presses of Bernanke and King and the distortions to the capitalistic system. With flat growth, banks kept alive and inflation, we are all suffering.

The protests should be targeted at the Fed, ECB and Bank of England for crimes against capitalism.

Today's shorts:
Goldman Sachs workers struggle to get to work (guardian)

Today's longs:
Ludwig von Mises (order-order)

Pop up festival tents and laptops to be issued to bankers.

Friday, October 14, 2011

RBS Rights Issue

RBS © fintag

News comments:
RBS reminds me of Dexia.

Both were unheard of 10 years ago. Feeling unloved, they both turned into badly run banks who dabbled in stuff they knew little about.

It is well known RBS is prepping up for a rights issue for it is a bank run on spreadsheets and fear. It is two banks who hate each other - plc and nv - who don't share anything except blame.

Despite RBS being owned by the UK taxpayer the markets are concerned they will not support it anymore Gordon Brown style.

So with CS saying it is the worst bank in Europe, it is no wonder us Brits feel uncomfortable. But not to worry. Goldman et all will soon have some fees to pay bonuses when the mother of all rights issues takes place later this year.

Today's shorts:
RBS is fcked (telegraph)

Today's longs:
Raj gets prison tips from Madoff (bloomberg)

RBS to merge with Dexia to create a Bad Bank.

Thursday, October 13, 2011

#Occupy and have your photo taken outside Goldman Sachs

#occupy LSE © fintag

News comments:
The 1% club. It is has having a hard time.

Having been unwittingly on a number of demonstrations (G20 and Student Riots) it is pretty clear they are a waste of time. Even in Greece where the starving people (and tax inspectors) routinely smash a few things and complain vociferously, nothing is being done to respect the wishes of the people.

Wall Street is also a party place at the moment and Paternoster Square, the home of the LSE and Goldman Sachs is to be London's location for a bash the bankers demo. And it is being held on a Saturday when the "bankers" will be lording it up in their multi-million pound pads in the country.

Why bother? The regulators appear to be doing a better job at breaking the banks than a few protesters.

Today's shorts:
WSJ takes a leaf out the bail out funds (guardian)

Shoppers to boost numbers in the City (bloomberg)

The sick woman of Europe (dailymail)

Today's longs:
Raj dumpster gets a long time (npr)

Bankers to #occupy the FSA and SEC.

Wednesday, October 12, 2011

Blackberry: Encryption and what else?

Piece of shti © fintag

News comments:
Three days. No Blackberry. Emails I deleted come back. No web access. Emails not coming through or going out. So its now just a phone.

I like Blackberry because the mails are encrypted and I like the keyboard. I can type much faster than on a finger tiring glass screen. But that is it. The apps are non existent. Its slow. The screen is tiny. Its going the way of DOS.

Please, will someone take over RIM and sort the company out? Get the handsets made in Asia for starters. Mine is made in Hungary. Well it was. The device is currently having a swim in my toilet.

Today's shorts:

Today's longs:
Anything but RIM

Blackberry to rebrand as Apple Blossom.

Welcome to the madhouse

5 Star © fintag

News comments:
BBC Radio 5 had an alarming phone in yesterday where people described how they were surviving on 4 meals a week and stealing electricity from neighbours. And then we hear the bailed-out bankers are ready for a billion plus share out.

Occupy Wall Street is all so very tame. Why should this be? Governments are destroying the wealth of their people to reward Investment Bankers for having a good year trading balance sheets funded by the tax payer, assets held artificially high by regulators who refuse to allow tier 1 sovereign debt to be marked to market and liabilities taken off their hands by bail out funds.

Welcome to the madhouse. And there is more ...

Today's shorts:
Happy Christmas Bankers (dailymail)

20 years later and Japan is still printing money (telegraph)

RIM. What is it good for? (telegraph)

BNY spy exposed (wsj)

Today's longs:
Tiny country to help bring down the Euro (telegraph)

Heavy Metal town has better credit rating than USA (telegraph)

USA to start taxing the rich but give credits to Investment Bankers because they are so important.

Tuesday, October 11, 2011

Buying time. For what?

Drugs by the backdoor © fintag

News comments:
If you needed some drugs to keep you alive for another 6 months you would probably try and raise the finance. You only live once.

If you are a Government (read large fund with many investors called tax payers run by incompetent people) and need some funds to keep you alive for another 6 months you would probably try and raise the finance. Countries are people with different life expectancies.

Take Greece. It looks like it has been given some more time. The IMF et al are allowing it some more drugs to keep it going a bit longer. Will Greece perform a miracle and repay all its debts 100%? Meez thinks this is very unlikely. Meez thinks it will be asking for some more a bit later on this year.

The Greeks should become Investment Bankers. They just know how to rape foreign taxpayers better than Wall Street.

Today's shorts:
Couple go into hiding (dailymail)

Hedge Funds are useless (hedgeweek)

Today's longs:
King to print more money (reuters)

Greece to be given Nobel Prize in Economics.

Monday, October 10, 2011

Hot air. Heads down mindless boogie

Hot Air © fintag

News comments:
Some of the hot air being spouted at present beggars belief.

Belgium government bails out Dexia
...Belgium is nearing Greek levels of debt so will be downgraded
...Dexia is so toxic that nationalisation was the only way to keep it off the streets (just like RBS)
...Dexia can now offload its crap without the rest of us knowing where it has gone
...Tax payers are securing ANOTHER bank bonus pool

Merkel and Sarkozy agree to have talks about talks about talks and a roadmap on 23rd October
...Will be too late
...Greece will have defaulted by then
...Greek government will be forced to Nationalize its banks and so screw the French who own most of them
...Soc Gen and BNP will be merged together and Nationalised
...DB will be seen as the next toxic bank

US avoids recession
...But still has trillions in debt that it cannot pay in our life times
...Obama will still be kicked out
...Bernanke gets a pat on the back and prints even more money
...Inflation will erode the average Americans income and savings further
...US debt to be worth even less
...(although if it can grow fast it will rule once more)
...TARP 2.0 will be resurrected to keep Goldman Sachs alive

UK Austerity Cuts help it keep its AAA
...And yet its debt goes up every month to highest levels ever
...Unemployment and Inflation just keep on rising
...Turns into the next Japan as King cannot turn the printing press off

Today's shorts:
Greece and the Anarchists (telegraph)

Today's longs:
Hedge Funds. Too little, too late (bloomberg)

Being a banker to be made a criminal offence.

Friday, October 7, 2011

Living one day at a time

Depressed Mervin © fintag

News comments:
"If you live each day as if it was your last, someday you'll most certainly be right." Steve Jobs.

We seem to be living in a CYA world where everything has to be grim and black and dark. The banks are shot to pieces, bankers are satanic worshippers and the BBC is a national treasure that must be saved at all costs or we shall all die a painful death.

Take Dexia. Bigger than the banking systems of Greece and Ireland. A mirky bank full of old toxic crap (mostly real estate) that is being propped up by the French until they coerce the Germans into seeding the euro-TARP and then will swap it out. 30,000 jobs to save, it makes RBS look like a dull wealth manager.

National interests coming first and the sleeping tax payer indirectly pumps more money into the banking sector ("more capitalization" read "money for bonuses please").

Bankers really are the scum of the earth but boy are they the smartest scum ever.

The regulators and ignorant policy makers (Volker) are making it worse for the banks. Lower their ratings and guess what they will need more bail out. More bail out means more bonuses.

Let them die. Dexia is a disgrace. It has died once and saved and it is dying again.

Today's shorts:
Toxia (bloomberg)

Today's longs:
Richard Harris' Fear Index (guardian)

Bankers to stay calm and carry on.

Thursday, October 6, 2011

Did they have iPods in the 1930's?

1930s © fintag

News comments:
So Mervyn King has decided we are all living in a 1930's depression.

Sky interview

My history is a bit rusty but I recall 25% unemployment in the USA and deflation. That is not what we are seeing at the moment. Thanks to his and Bernanke's printing press, inflation is looking healthy and unemployment around 10%.

During the 30's, Keynes was in vogue and public spending and deficits and low taxes were the norm.

Today, in the west austerity and high taxes are the norm.

So what is he going on about?

Answers on a postcard please.

Today's shorts:
Toxia (bbc)

Crack (bbc)

Keep calm and starve (telegraph)

Today's longs:
BBC to close down (telegraph)

Bank of England to be turned into a workhouse.

QE. Next it will be nationalization

Les Paul 1969 © fintag

News comments:
QE is printing money by any other name.

The US and UK have lost the plot. They want (and we are talking about King and Bernanke who were once lovers, sorry lived next door to each other) to reduce long term yields. As the Fed model shows, the correlation of 10 year bond yields and the S&P500 means lower growth when you hammer long term rates.

King goes on a GBP75bn shopping spree (bbc)

Bernaking had one tool. Base rates. Once these were down to nil it was time to swap long term debt with short term debt. Then it was swapping new notes for toxic crap.
The upshot is inflation and a depreciated exchange rate. Savers lose out and have to eat road kill and join the protest on Wall St against the banks. People like myself have to start flogging assets to pay for my lunches.

QE to the average punter means re-capitalizing banks so they can pay their bonuses. Banks win again. You lose again.

So what happens next? Well before long they will start stock picking and buying debt in their favourite companies and countries. And that is nationalization.

Yep, it's the 1970's all over again which is when Bernaking were starting out their careers.

Today's shorts:
The BBC (bbc)

Today's longs:
Vintage Les Pauls (just been offered $12k for this old beauty)

Apple to send me the new prototype iPhone 5 to test

Steve Jobs: Some perspective please

Ears © fintag

News comments:
It is sad when a great entrepreneur dies.

Steve Jobs was an inspiration to generations and helped create a huge money machine in Apple. His leadership... [Editor: Stop]

Let's get real here folks. Apple was a design company. Nearly all of its technology was licensed or ripped off of other companies. They never invented the mouse (1963 - Stanford Research) or the GUI (1963 - Stanford Research) or Windows or Icons (1963 - Stanford Research). They didn't invent the MP3 player (HP invented the device and in 1999 the JukeBox was launched) or touchscreen technology (invented by a Brit for the Royal Radar Establishment). The iPad was based on something called the SketchPad invented by... yes you guessed it, Stanford Research.

Jobs was a magpie and a design merchant. He presided over a monopoly company. Apple is a closed shop and tries to own the complete supply chain. Its technology is less open than Microsoft. Jobs was so useless Apple nearly went bust until a Brit, Jony Ive was hired to rebrand their products. He is the master behind Apple for he "invented" the Macbook, iMac, iPod, iPhone and iPad. Jobs got lucky.

Apple is also a big polluter as new model after new is launched and old and redundant rare earth metal rich white consumables are tossed out and land filled. The increase in incurable tinnitus is shocking and so is RSI but nobody is interested in the health of its customers.

A great man but he wasn't god. He was a marketing king.

His death is the end of Apple. Its products are going nowhere and the once cool brand is now considered uncool. Ask anyone under 25.

Today's shorts:
Apple (albwabaa)

Today's longs:
RIM (bloomberg)

Apple to rot and turn into cider.

Wednesday, October 5, 2011

Yahoo Yaboo

Old cartoon © fintag

News comments:
If you are a newbie day trader, here is a guide to help you on your way.

If the News headlines are as follows, then buy because the markets will rise:

Angela Merkel mutters something about leadership and she loves the Euro.

French spokesperson says French Banks have so much capital they will contribute to the new euro-TARP fund.

Italian politician says it will see some good growth next year.

Dexia spokesperson says its over valued real estate book is a myth.

Bloomberg reports "Hope that debt is an illusion pushes up the Dow".

BBC hack says new bail out fund will raise 14 trillion.

If the News headlines are as follows, then sell because the markets will fall:

No-one in Europe has anything to say.

Bernanke launches Operation Rock 'n' Roll.

Obama says something.

Greek man says they have debt under control.

Sarah Palin says something that makes sense.

Euro to be renamed Peanuts.

Microsoft to bid for yahoo (oops)

Greece's military power and oral sex

© fintag

News comments:
So the most read news story today on Bloomberg is about oral sex.

In times like these when uncertainty prevails, attention to detail on diversionary and left field issues become more important. We learn from Bloomberg of all sources that stimulating your better half with your mouth has risks associated that are greater than smoking 20 a day.

Of course life is too short to worry about the joys of pleasure.

I once had a Greek girlfriend and she was, putting it politely, very active in her sexual pursuits. Volatile, experimental, soft and mad all in one go. The relationship was short and I became celibate and a heavy smoker for a while after. Being out of control with a Greek is a recipe for disaster as the Germans and French are now realising to the cost of the world's economy.

But that is for another blog.

Did you know Greece has a serious military might?

According to this blog, Greece has been buying up more military kit than nearly every other nation on earth.

"Greece now has more than 1,200 battle tanks, 1,700 armoured personnel carriers, 300 fighter jets (including 156 F-16s), eight submarines and more than 40 frigates, gunboats and miscellaneous missile carriers. The bloated Greek military now has an air force similar in size to Germany's -- a front line member of NATO with an economy 10 times larger than Greece and eight times as many people."

So the euro-TARP is a military fund. What an odd world we live in.

Today's shorts:
BJs and the like (bloomberg)

Today's longs:
Answers on a postcard please.

Greece ready to nuke Germany. France ready to nuke Greece. Turkey to nuke itself.

Monday, October 3, 2011

Picture: Euro banks that are the next Lehman

Next up © Flickr

News comments:
Found this on Flickr posted by Madame Butcher.

So there you go. French Banks needing short term debt to survive. Dexia and Barclays too. Lehmans all over again ...

Greece. A huge pimple ready to burst

VIX © fintag

News comments:
Greece. It's like a huge pimple.

The European politicians are pumping anti-biotics and covering it with super strength Acne cream every day. Meanwhile, the hedge funds and prop traders are pushing at its sides trying to squeeze it out.

The poor Greek citizens who reside inside the spot realise their free for all has been found out. Peter. Wolf. Our debt is under control. Our debt was worse than we thought. The Germans will look after us. No they won't. Yes they will.

CDS owners are watching as the pimple grows and grows and more creams are applied. They rub their hands, watching the politicians find money from nowhere ready to fund even more meds.

And then pop!

I reckon another 4 weeks and it will burst like a dormant volcano.

Today's shorts:
UK is too frightened to get RBS to start lending again (telegraph)

Acne Cream (acnecream)

Firefox. Please fix the bollox.

Today's longs:
More cream please (bloomberg)

Puss to kill thousands of fleeing European bankers.

Saturday, October 1, 2011

UK Statistics: Finger in the air

PIGS © fintag

News comments:
Statistics. Lies. Damned. Whatever.

Given the world markets treat statistics like Hello magazine, it is always alarming when you see inconsistencies and errors in the numbers.

An eagle eyed hack has embarrassed the ONS for its construction data after a row in an Excel spreadsheet was copied incorrectly. Yep, an Excel spreadsheet.

Not that the ONS is the only agency run by monkeys. Eurostat, Europe's big statistic collector also uses spreadsheets. Our systems used to hoover up their "spreadsheets" but time and time again they would appear in foreign languages, suddenly the values were rebased to 100 and calculation methodologies would change.

Here is an an example. It's a Eurostat spreadsheet of the GDP / Debt of the European countries.

Click on this link and open it. Then do it a few more times and see the data changing (best to do during a business day and not the weekend).  

Greek debt to be wiped out during an IT migration project.