John Thain, former chairman and CEO of Merrill Lynch and COO at Goldman Sachs, told Bloomberg Television’s Erik Schatzker and Sara Eisen on “Market Makers” today that a crisis like the one in 2008 could “absolutely” happen again.” Thain said, “If anything, too big to fail is a bigger problem because the biggest financial institutions are more concentrated today than they were. Dodd Frank did not solve too big to [...]
Hedge Funds Haven’t Owned This Much Of The Stock Market Since Right Before The Crash In 2008
All bulled up.
Two interesting stats on hedge fund exposure to the market via BofA Merrill Lynch analysts Stephen Suttmeier, Jue Xiong, and MacNeil Curry:
In the first quarter of 2013, net exposure (the difference between long and short positions in stocks) rose to match the previous peak (made in the second quarter of 2007).
The percentage of the stock [...]
3 Things Investors Are Telling Themselves To Explain The Divergence Between Stocks And The Economy
“Four months into the year, we are confronted by two indisputable facts,” says BofA Merrill Lynch rates guru David Woo. “One, U.S. data is weak. Two, markets are no longer troubled by weak U.S. data.”
The question Woo poses in his latest note to clients is simple: “Does anyone still care about weak data?”
Woo says no, citing three things clients [...]
Earnings Season Is Off To An Ugly Start
With 33% of the S&P 500 market cap having reported, earnings season has had mixed results thus far. Earnings are pacing 4.1% ahead of expectations – 2.8% excluding financials; company guidance was generally negative leading into earnings season, and thus companies are beating lowered estimates and “clearing low hurdles.” Early revenue results have been weaker than bottom-line numbers with revenues missing already lowered expectations by [...]
Today’s AM fix was USD 1,416.00, EUR 1,083.31 and GBP 924.52 per ounce.
Friday’s AM fix was USD 1,548.00, EUR 1,186.30 and GBP 1,008.60 per ounce.
Cross Currency Table – (Bloomberg)
Gold fell $72.90 or 4.67% on Friday to $1,488.10/oz and silver slid to $26.04 and finished -5.29%.
Gold in USD, Daily – (Bloomberg)
Gold and silver were both down for the week – 5.76% and 4.14% respectively.
There is blood running in the gold [...]
Global Financial Stress Is Starting To Grow, And That’s Bad News For Stocks
Global financial stress, a coincident indicator for global stock prices, is flaring up again in the wake of the crisis in Cyprus.
The blue line on the chart below shows BofA Merrill Lynch‘s Global Financial Stress Index turned upside down to illustrate how it correlates with global equities, proxied by the MSCI All Country World Index (the red line).
While global equities have [...]
London Gold Market Report
from Ben Traynor, BullionVault
Tuesday 26 March 2013, 08:30 EST
Stronger Economy “Means Investors Lack Reason to Add to Gold Holdings”, Cyprus Means Markets “Will Now Be Wary of European Depositor Flight”
U.S. DOLLAR prices to buy gold dipped back below $1600 per ounce Tuesday morning in London, though it remained above yesterday’s low hit following news of the Cyprus bailout, while stocks and commodities were broadly flat and US Treasury bonds dipped.
US Economy Now Like Royalist System of Europe?
Recovery in U.S. Is Lifting Profits, but Not Adding Jobs … A Growing Divide: As federal budget cuts begin, high productivity and low interest rates help corporations but not job seekers. … “So far in this recovery, corporations have captured an unusually high share of the income gains,” said Ethan Harris, co-head of global economics at Bank of America Merrill Lynch. “The U.S. corporate sector [...]
Roubini Says Global Equity Rally Masks Risk From Europe to U.S.
The rally in global equity markets isn’t reflecting risks to economic growth from the European debt crisis and U.S. spending cuts, said Nouriel Roubini, the New York University professor famous for predicting the 2008 crisis.
Global stocks have gained more than $2 trillion since the start of 2013 as central banks move to stimulate economic growth. Risks including a deeper recession in Europe triggered by [...]
by Phoenix Capital Research
In 2008, as the financial crisis picked up steam, one by one the big bank Wall Street CEOs came forward to assure everyone that “everything is fine” and that their banks were “well capitalized.”
Anyone who did a bit of actual research knew this was not the case. But a large component of corporate (and political) leadership is to maintain confidence and calm no matter how bad things [...]
It Sure Feels Like A Recession
While stocks suggest all is well, and anecdotal macro data (seasonally slandered by fiscal cliff drag-forwards and ‘weather’) might offer hope that green shoots are back; one glance at the following chart of US, Europe, and Asia (ex-Japan) EBITDA tells a very different story. With cashflow clearly barely budging, is it any wonder that companies are creating conservative balance sheets? It sure feels like a recessionary environment…
“This is not a fluke: almost all of the underlying determinants of inflation point to weakness,” writes BofA Merrill Lynch economist Ethan Harris in a note to clients today.
For all of the talk of rising government bond yields and predictions for when the Federal Reserve will taper back its bond buying, Harris says, deflation is still a bigger risk than higher inflation – and disinflation could cause the Fed to actually ramp up [...]
Investor Jim Rogers joined Bill Gross, who runs the world’s biggest bond fund, in warning that a rout that sent Treasurys to their biggest loss last month in almost a year probably isn’t over.
The list of bond bears is growing after Goldman Sachs Group Inc. and Wells Capital Management Inc. also voiced concern. While unemployment rose in January, Labor Department revisions showed job gains at the end of last [...]
EL-ERIAN: This ‘Great Rotation’ Is Actually Money Falling Off Of The ‘Trillion Dollar Deposit Cliff’
Citi strategists pointed out, though, that January is always a strong month for inflows, which means what we are seeing likely owes to seasonality.
Even still, flows into equity funds this January are much bigger than usual.
In an interview with Bloomberg TV this morning, Mohamed El-Erian, the CEO of PIMCO – which is the world’s biggest bond fund [...]
From All Star Charts:
The stock market might be making fresh nominal highs, but Wall Street strategists aren’t yet buying into the hype. Historically, this is great for stocks, because sell-side consensus is usually wrong. We look at their stuff as contrarians and shoot to position ourselves in the opposite direction, as long as our risk management procedures allow for it of course.
So when strategists have been extremely bullish in the [...]
State and local governments are in desperate need of cash for all manner of road, building and bridge repair, and are increasingly turning to private money for funding.
But the involvement of private investors is raising concerns over how much control the public may lose over its roadways.
Companies putting up the money include construction and engineering firms like Bechtel and Samsung, and big banks like Goldman Sachs (GS, Fortune 500) and Merrill Lynch that aim [...]
It’s a central bankers’ world, and we’re all just living in it.
Entities such as the Federal Reserve and the European Central Bank in 2012 took control of global economies like never before. Based on current market and economic behavior it’s likely to be years before anything changes.
After all, how can central banks take their foot off the stimulus pedal when there’s so much at stake?
In all, 13 other central banks [...]
December 12th, 2012
Amid growing concern that the global economy is teetering on the edge of a total collapse, governments in Europe, China and the United States continue to manipulate statistics in an effort to paint a picture of recovery and a return to normalcy.
But despite their best efforts to fabricate positive employment numbers, GDP growth, currency stability and stock market health, the stark reality is that the global economy [...]
London Gold Market Report
from Ben Traynor
Wednesday 12 December 2012, 07:30 EST
“Scope for Gold at $2400″ as US Monetary Policy “Designed to Weaken the Dollar”
THE SPOT gold price climbed back above $1715 an ounce Wednesday morning, around ten Dollars up from last week’s close, as stocks, commodities and the Euro also edged higher and US Treasuries dipped, ahead of today’s Federal Reserve policy announcement.
Silver meantime edged above $33.20 an ounce this morning, a [...]
Less than a quarter-century ago, Japan was the economic envy of the world. In 1989, Tokyo-listed shares represented nearly half the planet’s equity value, while the land beneath the city’s royal palace was worth more than all of California. American nightly news anchors practically misted up when they had to report that Rockefeller Center was turning Japanese.
Two lost decades and massive property- and stock-bubble explosions later, Japan is a one-word cautionary [...]
Greece turning to desperate measures as citizens face starvation due to economic collapse
The European nation of Greece appears to be sliding ever so progressively into the abyss of total collapse, as illustrated by a recent government measure aimed at feeding the growing hordes of hungry, unemployed Greeks across the nation. A report translated into English from Voz Populi explains that, under the new law, Greek merchants will now be permitted to sell [...]
Stock Market Is Going To Crash Tomorrow? Breaking: Apple Earnings Miss, But iPhone Crushes, Cut Q4 Forecast To $11.75 From $15.45, And iPad Is Weak
Here is what Apple reported versus expectations here. (Expectations via Gene Munster at Piper Jaffray.):
Revenue: $36 billion versus $36 billion expected.
EPS: $8.67 versus $8.81 expected.
iPhone: 26.9 million versus 25.3 million expected.
iPad: 14 million versus 15 million expected (See below for explanation on this estimate).
Mac: 4.9 million versus 5 million expected.
iPod: 5.3 million versus 5.5 million expected.
Gross Margin: 40% [...]
Every Investor And CEO Needs To See This Chart Before The Fiscal Cliff Is Hit
Drawing on a similar idea, back in April, John Hussman posted this chart, which compares corporate profitability to the inverse of government and household savings (with a lag). In other words, when government and household savings decline, the red line goes up. A few months later, the blue line (corporate profits) follow nicely.
Bottom line: The deficit is a major [...]
Rasmussen: 62% of Consumers See US in Recession
More and more Americans feel the U.S. economy is mired in a recession, a new Rasmussen Reports survey finds.
The poll found that 62 percent of consumers believe the U.S. economy is currently in a recession, while 22 percent disagree.
Among investors, 61 percent say the economy is in a recession, while 24 percent say it’s not.
The Rasmussen Consumer Index, which measures consumer confidence on [...]
From The Big Picture:
Merrill Lynch’s Equity & Quant Strategist, Savita Subramanian, notes that Wall Street is still excessively bearish, and that this remains a reliable contrarian indicator:
The Sell Side Indicator is based on the average recommended equity allocation of Wall Street strategists as of the last business day of each month. We have found that Wall Street’s consensus equity allocation has historically been a reliable contrary indicator.
In other words, it [...]
Sept. 26 — Former FDIC Chairman Sheila Bair talks with Bloomberg’s Betty Liu about her frustration with U.S. Treasury Secretary Timothy Geithner.
“Citigroup and Merrill Lynch were both clearly insolvent.”
Here’s what we’ve learned so far from Bair’s book:
Bair wanted Volcker for Treasury Secretary.
Geithner loves Citigroup.
Blankfein wasn’t playing team ball until Bair called Buffet to complain.
Bank of America will pay Merrill Lynch a settlement of $2.4 billion, AP reports.
Read more: http://www.businessinsider.com/bank-of-america-to-pay-merrill-lynch-a-settlement-of-243-billion-2012-9#ixzz27lgTdAtf
Following the planned reduction in the Bank’s workforce, the multinational US company would no longer hold its current title as the American banking industry’s largest employer, the Wall Street Journal reported Wednesday.
The cuts will take the banking giant’s total employment to 260,000, the Journal said, the lowest level since 2008, when the bank acquired failing mortgage lender Countrywide Financial and the Merrill Lynch investment bank.
Most of the cuts are expected [...]