A Stock Market Rebound Closely Linked with Economic Data Surprises

[jtabeb]

Re: A Stock Market Rebound Closely Linked with Economic Data Surprises

LOL. In a continent overendowed with Baby Boomers, the illusion remains their reality...only because even contemplating the implications of the alternate is so horrifying for so many.

After all we are the generation that so refuses to accept reality, or personal responsibility, we had to invent botox and Cialis, and artificial joints to replace the ones we were born with after pounding them out with our growing obesity.

Bank earnings out this week. Already this am I've heard an S&P analyst recommending the "big money center banks"...Wells and JPM being his favourites, apparently. And another dismissing the results of a recent business outlook survey because...well..."that survey was taken before the turnaround started". Situation normal...

Sir, could I kindly trouble you for a set of plans?:eek:

[GRG55]

Re: A Stock Market Rebound Closely Linked with Economic Data Surprises

Sir, could I kindly trouble you for a set of plans?:eek:

For a knee replacement? ;)

[Supercilious]

Re: A Stock Market Rebound Closely Linked with Economic Data Surprises

And guess what ???!!!


http://www.forbes.com/2009/04/13/bri...-earnings.html

Goldman Issues Surprise Earnings Report

Steve Schaefer, 04.13.09, 04:30 PM EDT The bank crushed Q1 estimates a day early, following in Wells Fargo's footsteps.

[...]
Goldman Sachs ( GS - news - people ) surprised investors by issuing its first-quarter earnings report just after the close, ahead of Tuesday's scheduled release. The bank reported profits of $3.39 a share, well ahead of the $1.64 consensus estimate, and said it is planning a $5.0 billion public offering of common stock. Proceeds from the sale will go toward repaying Goldman's Troubled Asset Relief Program loans. The offering would cover half of its debt to the government. Goldman made a knee-jerk move higher in after-hours trading, adding more than 2.0% following a 4.7% advance during the day.
During the day, Wall Street was bracing for first-quarter results from Goldman, JPMorgan Chase ( JPM - news - people ) and Citigroup ( C - news - people ), but in light of Wells Fargo ( WFC - news - people )'s stunning early announcement April 9 of $3.0 billion in first-quarter earnings, traders were reconsidering their gloomy projections for the financial sector.

Gee, what a surprise .... :eek: So Goldman is following in Wells Fargo's steps....
http://www.bloomberg.com/apps/news?p...HA0&refer=home

Wells Fargo & Co., the second- biggest U.S. home lender, may need $50 billion to pay back the federal government and cover loan losses as the economic slump deepens, according to KBW Inc.’s Frederick Cannon. KBW expects $120 billion of “stress” losses at Wells Fargo, assuming the recession continues through the first quarter of 2010 and unemployment reaches 12 percent, Cannon wrote today in a report. The San Francisco-based bank may need to raise $25 billion on top of the $25 billion it owes the U.S. Treasury for the industry bailout plan, he wrote.

Yeah, I can see how Goldman is following in Fargo's steps. They will definitely need to get more money form the taxpayer


Am I the only one stunned by the surrealism of the whole situation, or am I insane?

[GRG55]

Re: A Stock Market Rebound Closely Linked with Economic Data Surprises

And guess what ???!!!


http://www.forbes.com/2009/04/13/bri...-earnings.html


Gee, what a surprise .... :eek: So Goldman is following in Wells Fargo's steps....
http://www.bloomberg.com/apps/news?p...HA0&refer=home

Yeah, I can see how Goldman is following in Fargo's steps. They will definitely need to get more money form the taxpayer


Am I the only one stunned by the surrealism of the whole situation, or am I insane?

Maybe we're both insane. I burst out laughing after I got home and switched on the news to hear about Goldman. My wife thinks I'm crazy [and I can't think of any good reason to persuade her otherwise ]

[allenjs]

Re: A Stock Market Rebound Closely Linked with Economic Data Surprises

After all we are the generation that so refuses to accept reality, or personal responsibility, we had to invent botox and Cialis, and artificial joints to replace the ones we were born with after pounding them out with our growing obesity.

Haha! This is the most insightful thing I've read all day!

It's remarkable to me that one of the most widely watched shows each year is the Oscars, which celebrates the industry that sells us fantasy. We pay the actors and actresses to pretend to be other people. If they do a really good job, they can earn a little plastic statue. And after having many plastic surgeries, most of them are increasingly made of plastic themselves.

And between his Cialis-enabled bouts with breast-implanted hookers, the boomer grandfather dreams that his grandson might one day win an Oscar. That little statue could pay for a lot of plastic surgery, knee replacements, and Cialis for the young fella!

[ax]

Re: A Stock Market Rebound Closely Linked with Economic Data Surprises

I'm with GRG. Now both WF and GS have beaten estimates by more than 2x, the fix is certainly in. This will be followed with the report of how strong these banks are, passing the stress tests with flying colors. Why did these banks need money again?

[ThePythonicCow]

Re: A Stock Market Rebound Closely Linked with Economic Data Surprises

I'm with GRG. Now both WF and GS have beaten estimates by more than 2x, the fix is certainly in. This will be followed with the report of how strong these banks are, passing the stress tests with flying colors. Why did these banks need money again?

I suspect this is just one more visible aspect of a short covering rally, this time in financial stocks.

Huge swap positions are being unwound behind the scenes. These swaps were hedged by shorting the underlying financial institution that issued the debt paper referenced by the swap.

I suspect that we're seeing an actual temporary shortage of stock in money center banks.

One not need fret over having missed this rally, however. Anyone holding Dollars, Treasuries, dollar-denominated assets, or with expectations of future Social Security, Medicare or other dollar denominated retirement payouts ... we're already invested in this nice little short covering rally, thanks to the wise foresight of Bernanke, Paulson and Geitner.

So life is good :rolleyes:.

[jtabeb]

Re: A Stock Market Rebound Closely Linked with Economic Data Surprises

I'm with GRG. Now both WF and GS have beaten estimates by more than 2x, the fix is certainly in. This will be followed with the report of how strong these banks are, passing the stress tests with flying colors. Why did these banks need money again?

Don't kid yourself, they are broke and suspending mark-to-market allowed them to "magically" improve their profitability. (They would have been stone-cold-dead if they were actually required to post their assets on a mark-to-market basis).

Am I the only one who feels like I'm living in 1984 here?

[Supercilious]

Re: A Stock Market Rebound Closely Linked with Economic Data Surprises

Am I the only one who feels like I'm living in 1984 here?

Nope you are not the only one. We are at least two thinking that way.

But can we please return to the tone of absurd and surreal comedy of this forum. I've just had a GRG laughing moment reading this:
http://online.wsj.com/article/SB1239...googlenews_wsj

WASHINGTON -- President Barack Obama is expected to tap Fannie Mae Chief Executive Herb Allison to head the government's $700 billion financial-rescue program, people familiar with the matter say.
In choosing Mr. Allison to head the Troubled Asset Relief Program, the administration is turning to an experienced manager at a time when it is having trouble filling key finance posts. Mr. Allison, 65 years old, is the former chairman of investment company TIAA-CREF and was a Merrill Lynch & Co. executive for years. In September, he agreed to run Fannie Mae after the U.S. took over the mortgage giant and its sister firm, Freddie Mac.
Mr. Obama could announce his intention to nominate Mr. Allison as assistant secretary for the Office of Financial Stability as early as this week. Mr. Allison would replace Neel Kashkari, a holdover from the Bush administration, who was asked by Treasury Secretary Timothy Geithner to stay on until a replacement was found.

I can't stop laughing since I've red that. I guess they do need to entrust TARP to a person with good experience in driving the bus over the cliff...

[GRG55]

Re: A Stock Market Rebound Closely Linked with Economic Data Surprises

Nope you are not the only one. We are at least two thinking that way.

But can we please return to the tone of absurd and surreal comedy of this forum. I've just had a GRG laughing moment reading this:
http://online.wsj.com/article/SB1239...googlenews_wsj




I can't stop laughing since I've red that. I guess they do need to entrust TARP to a person with good experience in driving the bus over the cliff...

Well the surreal continues. A 32% pop in the stock price on a pre-release.

Now comes the bad news part...:eek:

Wells Fargo May Need $50 Billion in Capital, KBW Says

April 13 (Bloomberg) -- Wells Fargo & Co., the second- biggest U.S. home lender, may need $50 billion to pay back the federal government and cover loan losses as the economic slump deepens, according to KBW Inc.’s Frederick Cannon.

KBW expects $120 billion of “stress” losses at Wells Fargo, assuming the recession continues through the first quarter of 2010 and unemployment reaches 12 percent, Cannon wrote today in a report. The San Francisco-based bank may need to raise $25 billion on top of the $25 billion it owes the U.S. Treasury for the industry bailout plan, he wrote...

...“Details were scarce and we believe that much of the positive news in the preliminary results had to do with merger accounting, revised accounting standards and mortgage default moratoriums, rather than underlying trends,” wrote Cannon, who downgraded the shares to “underperform” from “market perform.” “We expect earnings and capital to be under pressure due to continued economic weakness.”...

[Supercilious]

Re: A Stock Market Rebound Closely Linked with Economic Data Surprises




And another great piece from Zero Hedge on one of my favourite subjects:

http://zerohedge.blogspot.com/2009/0...provision.html

Dark Pools' Role In Liquidity Provision

Posted by Tyler Durden at 12:15 PM
The same "liquidity providers" that have been discussed previously in Zero Hedge, are also in dark pools to make sure trading costs are shifted from observable to less observable or not directly observable. Observable trading costs are the difference from VWAP, open price or arrival price + commission and spread costs. Less observable are bid/ask drift before a dark pool print.

[...]

Obviously, mutual and pension fund traders have high alpha, they need access to expensive liquidity provided by GS principal bids desk, crossing networks and other means where trading costs are allocated via the "back door" and do not affect buy side traders' bonus scheme payouts. And obviously, teachers, firefighters and the police along with 401(k) investors are on the receiving end. What's new?

In essence, dark pools do not facilitate liquidity provisions over and above what the high-vol players provide, and one can argue, do not lower transaction costs at all - these are merely contraptions that are designed to fool naive traders that immediate vol spikes can be avoided on large block trades, however the cost in the long run is prohibitive enough to where the entire model start cannibalizing itself. Potentially the only benefit from the pools is as an opaque conduit for "not so legitimate" transactions.

It's really funny to watch the Wall Street boys eating each others (of course Government Sachs boys will be the last pythons left and they will have their belly full). There are too many leeches and to few fish left for all the parasites ;)

[doom&gloom]

Re: A Stock Market Rebound Closely Linked with Economic Data Surprises

LOL. In a continent overendowed with Baby Boomers, the illusion remains their reality...only because even contemplating the implications of the alternate is so horrifying for so many.

After all we are the generation that so refuses to accept reality, or personal responsibility, we had to invent botox and Cialis, and artificial joints to replace the ones we were born with after pounding them out with our growing obesity.

Bank earnings out this week. Already this am I've heard an S&P analyst recommending the "big money center banks"...Wells and JPM being his favourites, apparently. And another dismissing the results of a recent business outlook survey because...well..."that survey was taken before the turnaround started". Situation normal...

Well, as one going in for hip replacement in about 12 hours, I am VERY
happy we invented that stuff. Only mine comes from an issue when I
was 15 years old, though I sure could stand to lose a few lbs. At 48
I am tired of walking like I am 84. Technology is a good thing!

[ax]

Re: A Stock Market Rebound Closely Linked with Economic Data Surprises

Don't kid yourself, they are broke and suspending mark-to-market allowed them to "magically" improve their profitability. (They would have been stone-cold-dead if they were actually required to post their assets on a mark-to-market basis).

Am I the only one who feels like I'm living in 1984 here?

We're on the same page here, JT, simply a magic trick to delay the inevitable, similar to the no-shorting financial fiasco of last summer. I'm under no delusions that these banks are actually solvent. I guess my outrage didn't come through in my previous post.

[GRG55]

Re: A Stock Market Rebound Closely Linked with Economic Data Surprises

We're on the same page here, JT, simply a magic trick to delay the inevitable, similar to the no-shorting financial fiasco of last summer. I'm under no delusions that these banks are actually solvent. I guess my outrage didn't come through in my previous post.

What would constitute a "solvent" bank in your opinion?

[jtabeb]

Re: A Stock Market Rebound Closely Linked with Economic Data Surprises

What would constitute a "solvent" bank in your opinion?

One covered in battery acid?