Morning Updates

U.S. Futures Gain as Investors Say Drop Overdone; Dollar Falls

By David Merritt


Jan. 25 (Bloomberg) -- U.S. stock-index futures rose and
European equities pared losses as investors said last week’s
global decline was overdone. The dollar and Treasuries fell.
Futures on the Standard & Poor’s 500 Index rallied 0.8
percent at 12:20 p.m. in London. Europe’s Dow Jones Stoxx 600
Index was little changed. The Hang Seng Index, which was closed
when U.S. markets slipped the most in three months on Jan. 22,
slid 0.6 percent into a correction as its losses since the
November high touched 10 percent. The dollar fell against 15 of
its 16 most-traded counterparts. Two-year notes led declines in
Treasuries, driving their yield up 2 basis points.
“We believe recent market weakness is a buying
opportunity,” Credit Suisse Group AG analysts led by Andrew
Garthwaite in London wrote in a note. “Both earnings revisions
and economic surprises remain positive.”
Ben. S Bernanke will be reappointed Federal Reserve
Chairman, according to Mitch McConnell, the senior Senate
Republican. Concern that some Democrats might block him helped
drive the benchmark stock index to its biggest three-day decline
since March. Royal Philips Electronics NV posted profit that
beat analysts’ estimates. Of the 62 S&P 500 companies that
reported earnings last week, 46 topped the average forecast.
U.S. Rebound
The gain in U.S. futures indicates the S&P 500 may rebound
from its biggest three-day decline since March, when the rally
began. The index plunged 2.2 percent on Friday when investors
were rattled by concern that senators would block Bernanke’s
confirmation and by President Barack Obama’s proposal to limit
the size of banks.
The S&P 500 still is up more than 60 percent from a 12-year
low in March, with a valuation of about 14.2 times the combined
operating earnings forecast for its companies this year. More
than 130 companies in the benchmark gauge for U.S. equities are
scheduled to release results this week. A record nine-quarter
earnings slump is projected to have ended in the fourth quarter
with a 73 percent increase in S&P 500 profits.
Halliburton Co., the world’s second-largest oilfield-
services provider, said fourth-quarter profit fell 48 percent to
28 cents a share after clients cut spending because of lower
demand. Analysts had predicted earnings per share of 27 cents.
Apple Inc. reports results after the close of trading today.
The U.S. economy grew in the third quarter for the first
time in more than a year, and may have expanded at a 4.6 percent
rate in the fourth quarter, the fastest pace in four years,
according to the median estimate of economists surveyed by
Bloomberg.
Philips, Ericsson
In the Dow Jones 600, more than three stocks rose for every
two that fell. Philips, Europe’s biggest consumer-electronics
maker, climbed 5.4 percent in Amsterdam after posting a third
straight quarterly profit. Gains were limited as Ericsson, the
world’s biggest maker of wireless networks, sank 1.5 percent in
Stockholm after reporting a 92 percent plunge in profit.
Greek stocks gained the most in nearly three weeks as
demand for the country’s first bond sale of the year eased
funding concerns. The benchmark ASE Index rose 2.6 percent, on
course for a second day of gains. National Bank of Greece SA,
the country’s largest, led the advance, adding 4 percent in
Athens. Greek five-year bonds fell, sending the yield up 4 basis
points to 5.95 percent. Ten-year notes rose, with the yield
dropping 8 basis points to 6.17 percent.
The MSCI Asia Pacific Index lost 0.7 percent as Bank of
China Ltd. fell 2.1 percent in Hong Kong and Honda Motor Co.,
which gets 42 percent of its sales from North America, declined
1.7 percent in Tokyo.
Emerging Markets
Declines in Asian shares drove the MSCI Emerging Markets
Index down 0.2 percent, headed for the lowest close in a month.
Dubai’s DFM General Index rebounded 2.8 percent after a 5
percent drop yesterday.
The ruble fell to its weakest level against the dollar this
year and dropped the most in almost a month versus the euro. The
dollar fell most against the Mexican Peso, falling 0.8 percent,
as investors sought higher-yielding currencies. The yen declined
compared with all of its 16 most-traded counterparts, after
people familiar with the matter said Bank of Japan policy makers
are prepared to consider expanding an emergency-loan program for
banks and increasing purchases of government debt.
The yield on the benchmark two-year U.S. note climbed 2
basis points to 0.81 percent. The Treasury will auction $44
billion of the notes tomorrow, part of a record-tying $118
billion of debt being sold this week.
Copper for delivery in three months rose 0.6 percent to
$7,435 a metric ton on the London Metal Exchange. Crude oil
added 0.3 percent to $74.75 a barrel in New York trading. Gold
for immediate delivery added 0.7 percent to $1,100.70 an ounce.

No Humility?

===============================================================



Geithner says US credit rating safe despite debt


Treasury secretary says US credit rating remains safe despite deficits, growing national debt

On Sunday February 7, 2010, 3:55 pm EST
WASHINGTON (AP) -- Treasury Secretary Timothy Geithner (GYT'-nur) says the U.S. government "will never" lose its sterling credit rating despite big budget deficits and a newly increased debt limit that now tops $14 trillion.

Geithner says in an interview broadcast Sunday that in times of economic crisis, international investors will continue to buy U.S. Treasury bonds because the bonds are a safe investment.Moody's Investors Service recently issued a warning that the government's credit rating could eventually be in jeopardy if nation's finances don't improve. The cost of borrowing would increase significantly if the ratings service lowered the credit rating, also known as a bond rating, for U.S. Treasuries.Geithner tells ABC's "This Week" that will never happen.

-

NEW YORK (AP) -- The stock market edged higher as news of stronger
regional manufacturing offset concerns about unemployment and weak
sales at Wal-Mart.

Stocks rose Thursday for a third straight day. The Dow Jones industrial average has gained more than 200 points this week. Treasury prices fell as improvements in some economic reports eased demand for safe havens.The Philadelphia Federal Reserve said manufacturing in its region is
improving. The Philly Fed's manufacturing index rose to 17.6 in
February from 15.2 in January. That follows reports the past two days
that also pointed to a pickup in business at the nation's factories.The
report lifted stocks of companies that process raw materials because
increased manufacturing should boost sales. Newmont Mining Corp. and
glass maker Owens-Illinois Inc. each rose more than 2 percent.

The market's advance was limited by a Labor Department report that the
number of workers seeking unemployment benefits for the first time rose
31,000 to 473,000 last week. Economists polled by Thomson Reuters
forecast claims would fall. Unemployment is a major obstacle to a
sustained recovery.Meanwhile, Wal-Mart Stores Inc. reported a
drop in quarterly sales at its flagship U.S. stores and issued a
disappointing forecast.Investors have been buying stocks this
week on growing evidence of growth in the U.S. economy.

They seem to have stopped worrying, at least for now, about potential overseas
troubles derailing a global recovery. Investors have been concerned
that debt problems in Greece and other European countries could spread.
China's move to tighten lending standards and slow its growth to avoid
speculative bubbles has also worried investors.Eric Mintz,
assistant portfolio manager of the Eagle Mid Cap Growth Fund in St.
Petersburg, Fla., said traders were able to look past the latest jobs
report because heavy snow in parts of the country has skewed some of
the numbers to make unemployment look worse. He said the bulk of
economic reports still signal the economy is improving."We're in the early phases of the recovery and you are going to get spotty data," he said.

In mid afternoon trading, the Dow rose 36.13, or 0.4 percent, to 10,345.37.
The broader Standard & Poor's 500 index rose 3.00, or 0.3 percent,
to 1,102.51, and the Nasdaq composite index rose 5.67, or 0.3 percent,
to 2,231.96.Bond prices fell, pushing yields higher. The yield
on the benchmark 10-year Treasury note rose to 3.80 percent from 3.74
percent compared late Wednesday.The dollar mostly rose against other major currencies.Gold fell, while crude oil rose $1.47 to $78.80 per barrel on the New York Mercantile Exchange.Earnings
reports were mixed.

Wal-Mart reported a fourth-quarter profit that
topped analysts' expectations. But sales at stores open at least a year
fell. The company predicted sales at stores open a year will be down as
much as 1 percent or up as much as 1 percent for its U.S. namesake
stores this year. The stock fell 91 cents, or 1.7 percent, to $53.15.Hewlett-Packard
Co. reported a better-than-expected fiscal first quarter after the
market closed Wednesday. The computer and technology company, which
like Wal-Mart is a component of the Dow, also forecast full-year
revenue and profit that exceeds analysts' expectations. Its shares rose
37 cents, or 0.7 percent, to $50.49.

Newmont Mining rose $1.18, or 2.5 percent, to $48.42, while Owens-Illinois rose 70 cents, or 2.6 percent, to $27.85.

Four stocks rose for every three that fell on the New York Stock Exchange,
where volume came to 409.4 million shares compared with 488.3 million
shares traded at the same point Wednesday.The Russell 2000 index of smaller companies rose 0.44, or 0.1 percent, to 625.27.Britain's FTSE 100 rose 0.9 percent, Germany's DAX index and France's CAC-40 each
rose 0.6 percent. Japan's Nikkei stock average rose 0.3 percent.

Spanish government gaurenteed debt is trading at the same levels of Santandar debt. That is insane.

Via Alphaville:

Riding on a sovereign guarantee in Spain


Posted by Izabella Kaminska on Feb 19 14:39.


As FT Alphaville has pointed out, some strange distortions are emerging in the trading of Spanish Instituto Credito Oficiale (ICO) debt.
On Friday, for example, ICO paper — which carries the full and
explicit guarantee of the Kingdom of Spain — was trading at the same
rate as comparable Santander-issued covered bonds (+73 bps over the
mid-swap, according to Barclays Capital).
This is not normal. That government guarantee means the paper
should, we are told, be more expensive than non-guaranteed institutions
like Santander.
One explanation for the distortion provided to FT Alphaville is that
SSA issuers are suffering due a possible connection with Eurozone
bailout plans.
As Reuters reported last week, Germany’s own equivalent agency KfW was pitched in a bailout option for Greece specifically:

BERLIN, Feb 11 (Reuters) – Germany’s ruling coalition is
considering using state-owned development bank KfW to buy Greek
government bonds to ease Greece’s financing problems, a senior finance
source inside the coalition told Reuters on Thursday. Speaking under
condition of anonymity, the source with knowledge of the discussions
within the coalition said one plan involved using the KfW to issue a
bond, the proceeds from which would be used to purchase Greek debt.

The thing is, KfW spreads versus bunds have remained tight.
One explanation why ICO spreads have not, unlike their German peers,
could be speculation that the agency is underestimating its 2010
funding needs. The institution, we are told, could therefore end up
issuing much more than currently slated.
——————–
A bit of background on ICO comes in handy at this point:
The agency stepped in to support the Spanish lending sector on a
major level over 2008 and 2009. Among other things ICO, which
traditionally focused on providing and supporting private financing to
small- and medium-sized businesses, also began supporting Spain’s covered bond market in April 2008 with a €3bn fund generated in response to the crisis.
As the press release stated at the time:

The initiative is directed at banks, savings banks and
credit cooperatives, along with branches opened in Spain by foreign
credit institutions under the supervision of the Bank of Spain.
The participating institutions undertake to reinvest the full amount
of the funds obtained from the sale of the guaranteed tranche in the
financing of new Officially-sponsored Housing in the form of new loans
granted both to private individuals and to promoters and builders.
Through the facility, ICO guarantees solely those tranches of Asset
Securitisation Funds which have Triple-A credit rating prior to the
awarding of the guarantee and include mortgage loans (at least 80
percent) to enable private individuals to acquire an
officially-sponsored home.
With the facility, ICO is seeking to set up new ways to finance and
promote Officially-sponsored Housing by fostering the granting of new
loans while adding to its traditional task of financing VPO for rent.

In a more recent investor presentation ICO
stated it was also fighting “the consequences of the crisis on
disadvantaged groups” with the creation of new loan facilities in 2009
covering ICO Liquidity, ICO-Mortgage deferral, ICO-SME mortgage
deferral and ICO-Housing.
So that’s increased activities all round.
In fact, according to its latest investor newsletter, ICO’s balance sheet nearly doubled in the last three years to €60bn.
All that activity naturally has to be funded. ICO’s preferred option
happens to be tapping the debt markets. As the agency stated in the
same report:

In recent years, ICO has increased its funding resources
so as to cope with the sharp rise in its activity. The Funding
Programme for 2009 was €14,000m, and the preliminary target for 2010
stands at €15,000-18.000m range.

Its current projected funding schedule hence looks something like this:

And unlike like a more cash-rich corporate it can’t really afford to postpone when markets turn choppy.
——————–
On February 3 , for instance, Bloomberg reported ICO resorted to
offering investors a 65-basis point premium over the benchmark rate to
get €1bn worth of 3.25 per cent paper under way in difficult market
conditions. Emphasis FT Alphaville’s:

Feb. 3 (Bloomberg) — Instituto de Credito Oficial, a
Spanish government agency that lends to businesses, increased the yield
on its 1 billion-euro ($1.4 billion) bond sale as the cost to insure
Spain from default surged to an 11-month high.
Madrid-based ICO offered investors a 65 basis-point premium
over the benchmark swap rate to buy the 3.25 percent notes, according
to data compiled by Bloomberg.
That compares with a spread in the “low 50” basis-point area offered
to bond buyers yesterday, according to a banker with knowledge of the
transaction who declined to be identified because the information is
private.
A basis point is 0.01 percentage point. ICO marketed the deal as
Spain’s government seeks to pull the country out of the deepest
recession in 60 years. The nation’s unemployment level rose to the
highest in more than a decade in January as the country cancels
public-works projects to save money. Spain went from a record budget
surplus equal to 2 percent of gross domestic product in 2006 to a
deficit equal to 11.4 percent last year, according to the European
Commission.
“Spain is under pressure to cut its deficit as soon as possible and
the evolution of the ICO deal shows that,” said Ivan Comerma, head of
capital markets at Banc International- Banca Mora in Andorra, who was
invited to buy the bonds. An ICO official in Madrid declined to comment.

Granted the timing was bad. But the point is the paper has still not
settled. Here, meanwhile, is an indication of the rate of lending ICO
might have to support if 2008 accounts are anything to go by:


And as ICO itself stated regarding its lending activities in 2009 (emphasis ours):

In 2009, loans distributed through private
credit institutions, mainly to SME, went up by 50%: €15,000m were
distributed to over 360,000 enterprises. Summing up, ICO brokered 25%
of loans granted in the Spanish financial system in 2009, reflecting
the strength of our countercyclical approach in such a difficult year.
—————————–
Funds distributed by ICO to both small and large companies amounted to €18,000m. Considering
that the private system’s credit variation was negative (- 1.7% y/y as
at Nov. 2009), we can state that ICO was the benchmark credit
institution in lending to companies.
———-
Our plans succeeded, despite a year of much uncertainty and volatility
on the markets. Lastly, some of our year-end indicators reflect ICO’s
continued solvency level despite an intense pace of investment. The BIS
ratio was 11.61 with a Pre- Tax Income of € 30.26m.The default rate was
2.89 as against a credit sector average of 4.99 in October.

No surprise then it’s been going to market in as many currencies as
it can – ELEVEN no less: EUR, USD, GBP, NOK, AUD, JPY, SEK, BRL, CHF,
NZD, TRY.
Although, unlike Greece, at least it’s supposedly a prudent and
neutrally-focused hedger. As the agency noted in January (emphasis
ours):

As more of ICO´s lending activity is carried out
in EUR, most of our issues are swapped back into this currency so as to
avoid interest and exchange rate risks.

http://groupanlz.blogspot.com/2010/03/morning-updates-03042010.html

Palm Said to Tap Goldman, Quattrone to Find Buyers (Update5)

By Serena Saitto and Ari Levy

April 12 (Bloomberg) -- Palm Inc., creator of the Pre smartphone, is seeking bids for the company as early as this week, according to three people familiar with the situation. The company is working with Goldman Sachs Group Inc. and Frank Quattrone’s Qatalyst Partners to find a buyer, said the people, who declined to be identified because a sale hasn’t been announced. Taiwan’s HTC Corp. and China’s Lenovo Group Ltd. have looked at the company and may make offers, said the people. Palm, which helped pioneer the market for personal digital assistants, would offer suitors the WebOS software that competes against mobile operating systems from iPhone maker Apple Inc. and Google Inc. For Elevation Partners LP, the firm that owns about 30 percent of Palm, a sale would end the volatility associated with a stock that surged more than 10-fold since December 2008 before erasing most of the gain. “Palm still has quite a good brand in the U.S. market, and some strong technology, so you can do something with it,” said Frank He, a technology analyst at BOC International Holdings Ltd. in Hong Kong. “The shares have gone down a lot and the company may become attractive to anyone looking for a turnaround play.”
The Sunnyvale, California-based device maker surged 32 percent last week on the Nasdaq Stock Market on renewed speculation of a takeover bid. Before the rally, the stock had plunged more than 60 percent this year, dragged down by disappointing sales of the Pre and Pixi phones.

Missing Estimates
Palm rose 88 cents, or 17 percent, to $6.04 at 4 p.m. New York time in Nasdaq Stock Market trading. A record 149 million Palm shares traded hands today, more than 10 times the daily average over the past year. Chief Financial Officer Doug Jeffries last month forecast sales in the quarter ending in May will be less than $150 million, compared with the $300 million average of analysts’ estimates compiled by Bloomberg at the time. Palm, which had a market value of $870.8 million before today, lost about half of its North American market share between 2008 and 2009. Last year, it accounted for 4.2 percent of the region’s smartphone sales, down from 8.1 percent in 2008, according to Gartner Inc. Research In Motion Ltd., maker of the BlackBerry, led with 50.3 percent, followed by Apple’s 24.3 percent, according to the Stamford, Connecticut-based research company.

Chief Executive Officer Jon Rubinstein, who developed Palm’s latest operating system, was counting on the Pre and Pixi smartphones to attract customers. The company has patents from mobile hardware to software and power-saving technologies. Lenovo, Dell Lynn Fox, a Palm spokeswoman, declined to comment, as did Goldman’s Andrea Rachman. Qatalyst’s Sally Palmer didn’t immediately respond to requests for comment. Chen Hui-Ming, the chief financial officer of HTC, declined to confirm or deny the company’s interest in Palm. Wong Wai Ming, Lenovo’s chief financial officer, also declined to comment on the company’s acquisition plans. In January, Lenovo paid $200 million to purchase Lenovo Mobile Communication Technology Ltd., letting it re-enter the market for handsets. The company had sold the mobile-phone unit in 2008 to focus on personal computers. Palm shares have been buoyed in the past on speculation the company would be bought by Nokia Oyj. The Finnish company today declined to say whether it might be interested. “We never speculate or comment on market rumors,” said Arja Suominen, a Nokia spokeswoman. Dell Inc. looked at Palm, though it decided against an offer, according to two of the people familiar with the matter. Jess Blackburn, a spokesman for the Round Rock, Texas-based computer maker, didn’t respond to a call for comment.

Burning Cash
Unlisted Huawei Technologies Co. and ZTE Corp., China’s two biggest makers of phone equipment, may also bid for Palm, said Lu Chia-lin, a technology analyst at Macquarie Group Ltd. in Taipei. Chinese companies “have been quite eager to expand their international markets,” said Lu. Ross Gan, a spokesman at Huawei, said the company is always open to opportunities, though he declined to comment on speculation about mergers and acquisitions as a matter of policy. Margrete Ma, a ZTE spokeswoman, couldn’t immediately be reached for comment. Palm may burn $80 million every three months for the next five quarters as competition in the smartphone market intensifies, Berenberg Bank analysts including Adnaan Ahmad wrote in a March 25 report. The company held $592 million in cash and short-term investments at the end of its fiscal third- quarter, according to the report.

Market Pioneer
In the U.S. computer industry, there were 133 acquisitions announced in the past 12 months with an average premium of 56 percent, including net debt, according to Bloomberg data. That average, along with Palm’s enterprise value of $962 million before today, suggests that Palm may fetch $1.6 billion. After Palm introduced the Pre at the Consumer Electronics Show in January 2009, the stock jumped 80 percent in two days to $5.96. By September, the shares had climbed as high as $17.46. The stock then dropped 79 percent over the next six months as Palm’s sales growth was outpaced by marketing costs, and the company lost market share to Apple and phones equipped with Google’s Android. Palm has posted 11 straight quarterly losses. Founded in 1992, Palm helped pioneer the market for handheld organizers with its PalmPilot devices. The company was acquired by U.S. Robotics, which was in turn purchased by 3Com Corp. 3Com spun off Palm in 2000. Rubinstein joined the company after leading development of Apple’s best-selling iPod media player. He was recruited to Palm by Fred Anderson, Apple’s former finance chief and a co-founder of Elevation Partners. The Pre was Palm’s first phone based on WebOS. It went on sale in June 2009, followed by the smaller, cheaper Pixi in November. The phones let users send e-mail, surf the Web, stream video and run multiple applications at the same time. Both devices were sold in the U.S. exclusively by Sprint Nextel Corp., the country’s third-largest carrier, until Verizon Wireless began offering enhanced versions in January.

Apple continues to remain the most popular kid on the street...


Via FT:

Apple sells 2m iPads in two monthsBy Joseph Menn in San Francisco

A strong international debut for Apple ’s iPad had lifted sales of the tablet computer to 2m since its US launch two months ago, the company said, a rate exceeding the most recent public figures for its flagship Mac laptop and desktop computers. Monday’s disclosure followed three full days of sales in the UK, Germany, Japan and six other nations. It showed that the Silicon Valley company has taken advantage of the anticipation and long queues in many countries in spite of supply limitations in the US.

Analysts who projected sales of 1.5m units for the quarter ending in June might revise their projections upwards on Tuesday, providing a possible further boost to Apple’s stock market value. The sales debut has been stronger than that for the original iPhone, which took more than two months to reach 1m. But analysts said it had fallen short of the iPhone 3G, which came out in 2008 and sold about 3m units in the first month. Apple last week eclipsed Microsoft in market capitalisation, becoming the most valuable technology group in the world.

In the quarter that ended in March, Apple sold 2.94m Macs, or just below 1m a month.But Macs are intended to perform essential household and business tasks, while the iPad is a small luxury device aimed at consuming digital
media. The figures suggest the company has succeeded in creating a category of device between traditional personal computers and smartphones.

Apple sells more than 6m iPhones and iPods each month.Apple delayed the iPad launch overseas by weeks because of short supply, then shifted most of its inventory to those new markets, leaving many shelves bare in the US after the initial rush.
Apple had announced 1m sales in the US alone in the 28 days after it became available there on April 3 for a starting price of $499. It took another 31 days to sell the second million units, implying a fall-off in the US not quite compensated for by the international shipments.Apple did not break out the number of sales by country or by model. In the US, the less expensive Wifi-only versions have proved more popular, but anecdotal evidence over the weekend suggested stronger international performance for the type of iPad that remains connected to the internet with data-transmission plans from telecoms carriers.

Analysts said last week that the iPad, like the iPhone before it, should do as well in overseas markets as it does domestically and perhaps better, since more telecom carriers support the new device than for the iPhone at its debut. Bullish Apple supporters on Wall Street had predicted the company was on target, with internal estimates that it could sell 10m iPads a year. With 1m changing hands every month, Apple could surpass that target if more new markets show similar strong demand and the drop-off from early orders is modest.Nine more countries will get the iPad in July.

Dark Pools...Sauros do you have any insight? They are suppossed to create liquidity for large orders that cannot be filled on exchanges. However, I have to believe Dark pools and ECNs alike were partly responsible for the flash crash....

=========================================

Via FT:

Tora planning pan-Asian ‘dark pool’By Robert Cookson in Hong Kong

Tora, a trading technology vendor in which Goldman Sachs recently took a stake, has unveiled plans to create a pan-Asian “dark pool” in an ambitious move to break into an industry dominated by investment banks and brokers.The plans are another sign that Asia is moving towards fragmentation of trading away from established exchanges and is mirroring developments in Europe in the past three years, following similar changes in the US.


Dark pools, which allow investors to trade anonymously with prices revealed only after trades are completed, are starting to expand beyond the US and Europe into Asia. Tora launched its first dark pool in Japan in February, giving clients access to its own internal crossing network but also aggregating liquidity from other venues such as Credit Suisse’s Crossfinder, Japannext and Kabu.com. Tora plans to roll out the pool – known as Crosspoint – across the region, starting with Hong Kong in the second quarter and Singapore and Australia later in the year. “What’s significant about Crosspoint relative to a lot of the other players in the market is that we are Asia-focused – that’s the core part of our business,” said Robert Dykes, chief executive of Tora.

“We’ve benefited from being in the region for the past five years, and I think a lot of the other players are [using] repurposed US or European technology.”

Crosspoint has captured more than 4 per cent of total trading volume on the Tokyo Stock Exchange since its launch, with about $1.5bn of daily liquidity in more than 1,800 equities, according to Tora.The company, which was founded in 2004 to provide technology for fund managers trading in Asia, expects to connect its Crosspoint platform to about eight more Asian dark pools by the end of the year.

But Tora is not the only company in Asia seeking to aggregate liquidity from multiple dark pools. In March, US broker ITG launched a trading platform that gave traders access to multiple dark venues in Hong Kong and announced that it would expand to Australia in the second quarter and Japan later in the year. Instinet plans
to launch its Nighthawk algorithm this year, which will allow clients to access dark liquidity from multiple venues in Hong Kong, Japan, Australia and Singapore. Last year SGX, the Singapore exchange, said it would set up the first partly exchange-backed, pan-Asian dark pool, called Chi-East, in a joint venture with Chi-X Global, a subsidiary of Instinet, the broker owned by Nomura of Japan. Just 1 per cent of trading values in Asia were done off-exchange last year, according to Celent, a consultancy. It forecasts that the figure will rise to about 5 per cent by 2012.

Batman wrote:

Dark Pools...Sauros do you have any insight? They are suppossed to create liquidity for large orders that cannot be filled on exchanges. However, I have to believe Dark pools and ECNs alike were partly responsible for the flash crash....

Sorry I'm not really familiar with those dark pools
but if I'm not implied in these stuffs, they should be harmless

via bloomberg:

June 2 (Bloomberg) -- U.S. stocks rallied, sending
benchmark indexes to their third-biggest gains of 2010, and
Treasuries fell as growth in home sales and signs of improving
bank finances bolstered optimism in the economy.
The Standard
& Poor’s 500 Index climbed 2.6 percent to
1,098.38 at 4 p.m. in New York, with Halliburton Co. and
Schlumberger Ltd. leading gains in oilfield-services companies
after their shares slumped yesterday on BP Plc’s failure to halt
the worst oil spill in U.S. history. The MSCI
World Index of
stocks in 24 developed nations rose 1.1 percent, erasing a 0.9
percent earlier drop. Ten-year Treasury yields rose 8 basis
points to 3.35 percent. The yen slid versus 15 major currencies
following Japanese Prime Minister Yukio Hatoyama’s
resignation.



wrap up for the day, not exact morning update but it's my first time being here so...

gaoyi0915 wrote:

wrap up for the day, not exact morning update but it's my first time being here so...

So... Welcome Fellow Trader !!!

gaoyi0915 wrote:

via bloomberg:

June 2 (Bloomberg) -- U.S. stocks rallied, sending
benchmark indexes to their third-biggest gains of 2010, and
Treasuries fell as growth in home sales and signs of improving
bank finances bolstered optimism in the economy.
The Standard
& Poor’s 500 Index climbed 2.6 percent to
1,098.38 at 4 p.m. in New York, with Halliburton Co. and
Schlumberger Ltd. leading gains in oilfield-services companies
after their shares slumped yesterday on BP Plc’s failure to halt
the worst oil spill in U.S. history. The MSCI
World Index of
stocks in 24 developed nations rose 1.1 percent, erasing a 0.9
percent earlier drop. Ten-year Treasury yields rose 8 basis
points to 3.35 percent. The yen slid versus 15 major currencies
following Japanese Prime Minister Yukio Hatoyama’s
resignation.



wrap up for the day, not exact morning update but it's my first time being here so...

Welcome!

Sauros wrote:

Batman wrote:

Dark Pools...Sauros do you have any insight? They are suppossed to create liquidity for large orders that cannot be filled on exchanges. However, I have to believe Dark pools and ECNs alike were partly responsible for the flash crash....

Sorry I'm not really familiar with those dark pools
but if I'm not implied in these stuffs, they should be harmless

hahaha

gaoyi0915 wrote:

via bloomberg:

June 2 (Bloomberg) -- U.S. stocks rallied, sending
benchmark indexes to their third-biggest gains of 2010, and
Treasuries fell as growth in home sales and signs of improving
bank finances bolstered optimism in the economy.
The Standard
& Poor’s 500 Index climbed 2.6 percent to
1,098.38 at 4 p.m. in New York, with Halliburton Co. and
Schlumberger Ltd. leading gains in oilfield-services companies
after their shares slumped yesterday on BP Plc’s failure to halt
the worst oil spill in U.S. history. The MSCI
World Index of
stocks in 24 developed nations rose 1.1 percent, erasing a 0.9
percent earlier drop. Ten-year Treasury yields rose 8 basis
points to 3.35 percent. The yen slid versus 15 major currencies
following Japanese Prime Minister Yukio Hatoyama’s
resignation.



wrap up for the day, not exact morning update but it's my first time being here so...

Hello Sir Long term legalus Yi!

via WSJ:
The jobs report missed on the top line, generating 431,000 last
month, versus the consensus expectation of 515,000.
But more importantly, it missed on the private sector job count,
which is the most important number in Friday’s report. The U.S. only
created 41,000 private-sector jobs in May. That’s well below the median
projection of 188,000 private jobs of economists surveyed by Dow Jones.

gaoyi0915 wrote:

via WSJ:
The jobs report missed on the top line, generating 431,000 last
month, versus the consensus expectation of 515,000.
But more importantly, it missed on the private sector job count,
which is the most important number in Friday’s report. The U.S. only
created 41,000 private-sector jobs in May. That’s well below the median
projection of 188,000 private jobs of economists surveyed by Dow Jones.

Effing a man, despite this the dollar is rallying really hard -_-

Via FT beyond-brics blog:

Asia markets wrap: Export hopes boost China stocks
June 9, 2010 10:56amby Michael Hunter | Share

Mainland Chinese equities markets led the way after reports carried by the Reuters news agency said that the nation’s exports rose 50 per cent in May. There was a strong, positive reaction on the Shanghai Composite, which turned an intraday loss into its best one-day gain in over two weeks, on hopes that the impact of the stuttering US economic recovery could have been overstated. The main Chinese index rose 2.8 per cent to 2,583.8, its best reading of the month, taking it up from 13-moth closing lows touched earlier in the week. Banking stocks also continued to fare well after the Chinese central Bank signalled on Tuesday that monetary policy would remain loose. The Shenzen Composite rose 2.5 per cent to 1,066.92. In the wider region, there was less of an appetite for risk, as fears about the potential wider impact of Europe’s troubled fiscal postion lingered.

Taiwan’s Taiex lost 1.1 per cent 7,071.62.

The Korean Kospi was 0.3 per cent softer at 1,647.22.

The Straits Times Index was flat at 2,745.80.

The FTSE Bursa Malaysia rose 0.2 per cent to 1,290.08.

Thailand’s main index rose 0.9 per cent to 764.35.

Indonesia’s primary index fell 2.6 per cent to 2,750.23.

At 10:55 BST: The Indian Sensex was up 0.3 per cent at 16,666.13

DOT: Vehicle Miles Driven increase in April
by CalculatedRisk on 6/23/2010 11:59:00 PM

Note: on New Home sales, please see: New Home Sales collapse to Record Low in May

The Department of Transportation (DOT) reported that vehicle miles driven in April were up 1.2% from April 2009:

Travel on all roads and streets changed by +1.2% (3.1 billion vehicle miles) for April 2010 as compared with April 2009. Travel for the month is estimated to be 255.9 billion vehicle miles.

Cumulative Travel for 2010 changed by -0.2% (-1.6 billion vehicle miles).
Click on graph for larger image in new window.

This graph shows the rolling 12 month total vehicle miles driven.

On a rolling 12 month basis, miles driven are still 2.0% below the peak - and only 0.6% above the recent low - suggesting a sluggish recovery.
Posted by CalculatedRisk on 6/23/2010 11:59:00 PM 107 Comm

Thomson Rueters:

European Union countries that discover problem banks when they stress-test their lenders could turn to an existing EU state back-up scheme, the bloc's economy chief said on Monday. EU Economy Commissioner Olli Rehn said that should any government exhaust national funds in helping a troubled lender, it could turn to "EU financial backstops ... in the second line of defense."

"In order to use these European financial stability mechanisms in the case of any country we would need to have a program ... focused in particular on the restructing of the banking sector and addressing the potential needs of a possible recapitalisation," Rehn told lawmakers in the European parliament. "That is the strategy." It is the first time the European Commission or executive has spelt out that countries struggling to recapitalize stricken banks could tap a 500 billion euros scheme set up as a safety net should borrowing problems in Greece spread to Spain and beyond. By explaining what it would do should "pockets of vulnerability" be uncovered by stress testing, Rehn hopes to win back the confidence of jittery investors. Many are nervous that wider stress-testing of European lenders could exacerbate problems of a cash-strapped state which is suddenly forced to shore up the finances of one of its banks which fails to come up to scratch. Rehn also partially described one of the test criteria, which has proven controverial.

"We are including the criteria of sovereign debt shock in order to reinforce the credibility of results," he said, without shedding further light on how this would be tested. Some countries are nervous that placing too high a hurdle for banks in this regard, for example by simulating a default by countries like Greece, could shatter investor confidence. Rehn said that the testing of banks would now be wider than originally planned. The 27-country bloc had set out to examine just 25 of its biggest banks. "We are testing more banks including second-tier banks. For instance, regional banks," he said. "This gives a clear and more accurate picture of the resiliance of the whole European banking sector." The European Commission or executive helps set the criteria for testing longside the bloc's countries and the European Central Bank.

Get it ? hahaha…. well im sure the guys at blockbuster are not laughing while netflix maybe rallying…



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Blockbuster Files for Bankruptcy
One of activist investor Carl Icahn's big gambles has finally filed for bankruptcy.

Video retailer Blockbuster went into bankruptcy court Thursday with a pre-arranged plan to reduce its current $1 billion debt load to $100 million, the company said in a statement.

The bankruptcy filing had been expected for months as Blockbuster struggled with too much debt and competition from Netflix and movies available online.

Although the chain still has 3,000 stores in the U.S. -- it has already closed about 1,000 locations -- the company will likely have to close more.

Icahn waged a proxy fight which won him two seats on the Blockbuster board in 2005. In 2007, the investor was instrumental in the move to oust Chief Executive Officer John Antioco.

Although Icahn sold most of his Blockbuster equity stake and left the board earlier this year, he still is a significant debt holder in the company.



VIA HFN daily

(Bloomberg)--Oil rose for a fourth day in New York as equities climbed on signs of renewed capital purchases by businesses and consumers, boosting traders’ expectations of increases in fuel demand. Crude extended its 1.7 percent gain on Sept. 24 after the euro strengthened against the greenback following a report that German business confidence climbed to a three-year high. U.S. durable goods orders, not including volatile transportation items, increased a more-than-expected 2 percent in August. Capital equipment purchases rebounded 4.1 percent after falling in July, the Commerce Department said Sept. 24.

“The durable goods orders reflect a bit more of a buoyant manufacturing sector and that’s been a pivot point for the economy over the last six to 12 months.,” said David Taylor, an analyst at CMC Markets in Sydney. “With that better-than- expected data, it’s not surprising to see equity markets rally.”
Crude for November delivery climbed as much as 36 cents, or 0.5 percent, to $76.85 a barrel on the New York Mercantile Exchange, the highest since Sept. 14. It was at $76.60 at 9:39 a.m. Singapore time. The contract settled up $1.31 at $76.49 on Sept. 24.

Oil rose that day as the dollar fell to its lowest level against the euro since April 20, boosting the appeal of commodities. The gain was the biggest since Sept. 10, when the shutdown of an Enbridge Energy Partners LP pipeline curbed deliveries of Canadian oil to U.S. Midwest refineries. Brent crude oil for November settlement climbed as much as 28 cents to $79.15 on the London-based ICE Futures Europe exchange, and was at $78.82. The contract gained 76 cents, or 1 percent, to end the session at $78.87 on Sept. 24.

Asian Equities

The price difference between Brent and West Texas futures in New York has narrowed to $2.23 a barrel today from $4.46 a week earlier. Asian stocks rose today, extending a four-week rally, after a government report showed U.S. demand for capital goods increased more than expected. The MSCI Asia Pacific Index gained 0.5 percent to 126.19. Almost four stocks advanced for each one that declined in the gauge, which is set for its biggest monthly advance since July, having climbed 8.3 percent this month. Hedge funds and other market speculators reduced their bets that crude oil prices would climb. The net-long positions held by money managers declined by 16,286 contracts, or 13 percent, to 106,323 for the week ended Sept. 21, the U.S. Commodity Futures Trading Commission said in its weekly Commitment of Traders report.

Hedge funds also increased bets to the highest level in six weeks that diesel prices will climb as U.S. exports to Europe doubled for the industrial and transportation fuel. Bullish wagers on heating oil, a proxy for diesel, climbed by 58 percent in the week ended Sept. 21, the CFTC said.

To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net

Al Pacino to Star in Hedge Fund Movie
Michael Douglas, move over. There's a new hedge fund movie star in town -- Al Pacino.

The actor, famed for his roles in The Godfather movies and many other classic American films, is slated to play the lead in Nicholas Jarecki's film "Arbitrage."

"Arbitrage" is a thriller about a hedge fund manager who is trying to cover up fraud at his firm through its sale to a bank, according to Variety.

The movie is the first fiction full-length film for 25-year-old writer-director Jarecki. Previously, he directed the documentary "The Outsider" featuring filmmaker James Toback.

Susan Sarandon and French actress Eva Green ("Casino Royale") star opposite Pacino.

WSJ:

By MICHAEL ANEIRO And STU WOO

America's strapped states and cities took another hit Wednesday, with California seeing tepid demand for its latest bond sale and other governments pulling about $700 million worth of borrowing deals this week as investors continued stepping away from the municipal bond market.

The normally staid market has grown volatile the past week, posting its sharpest selloff in nearly two years, as investors demand higher interest rates to buy paper issued by states, cities and counties to finance their operations. Localities have been hammered by a drop in tax revenue amid the downturn—and unlike the federal government, most are barred constitutionally from running deficits.

"The tax-exempt municipal bond market is a cold, cold world right now for issuers and taxpayers," Tom Dresslar, a spokesman for the California State Treasurer, said late Wednesday. He added that the state decided to cancel another $267.3 million bond sale it planned to price next week "in light of market conditions."

California's $10 billion bond sale this week was seen as a test of access for governments to the bond markets, and the middling interest signaled that municipalities could have to pay more to attract investors. The state further jolted the market by delaying the close of the bond sale, citing a lawsuit filed Tuesday that challenges a separate tactic the state is using to raise funds.

"California's timing unfortunately couldn't be worse," said Gary Pollack, head of fixed-income trading and research at Deutsche Bank Private Wealth Management. "This creates a fear among individual investors and probably could hurt the state in terms of paying a higher borrowing cost than if they'd done a deal at a different time."

After pouring billions into municipal bond funds most of the year, investors pulled $115 million out of the funds last week, the Investment Company Institute said Wednesday. That was the first weekly outflow in seven months, ICI said.

The fragility of government finances was also evident in a move by Moody's Investors Service to downgrade the city and county of San Francisco, as well as the city of Philadelphia, and by a request by Hamtramck, a small Michigan city, for permission to file for bankruptcy.

California, facing a projected $25 billion shortfall through June 2012, aimed this week to sell $10 billion in so-called "revenue anticipation" notes. Over three days, it reported total orders of about 60% of that amount, or $6.06 billion, for the securities, according to the Treasurer's office. In September 2009, California sold 75% of a similar offering to retail investors. The remainder of an offering is typically bought by big institutional investors.

Referring to the sale of the notes, Mr. Dresslar said: "We would strongly disagree with characterization that 60% retail demand is tepid. You have to consider the circumstances, and given those circumstances, we believe that 60%-plus retail demand is pretty impressive."


The state surprised the market by extending the bond sale to retail investors for a day, citing a lawsuit filed Tuesday that challenged the sale and lease back of some state properties. If the state can't complete the $1.2 billion sale, its budget hole would be deeper, and state officials said the event was important enough that it needed to inform investors and extend the sale. While the delay added to nervousness, the bond sale was expected to go through.

Michael Pietronico, CEO of Miller Tabak Asset Management, said, "This is not a sign that California is having problems selling its debt in our view."

The short-term notes mature next May and June and yield 1.25% and 1.5%, roughly what California paid a year ago, though higher than other states. "It's still an incredibly low rate, and it's an awful lot of bonds," said Matt Fabian, senior analyst at Municipal Market Advisors.

Buyers of municipal bonds have mixed views on whether the events of the past week are a blip or reflect deeper concerns about the stability of municipal finances.


Rates on long-term municipal debt generally move in synch with long-term U.S. Treasurys, on which rates have risen since the Federal Reserve this month said it would focus its buying on shorter-term bonds.

Also, municipal borrowers, typically active at the end of the year, have been even more aggressive this year in an effort to exploit a subsidized borrowing program devised by the Obama administration called Build America Bonds that many expect to end this year.

At the same time, concerns have been mounting over whether, after the double whammy of 2008 market losses and the economic downturn, municipalities will be able to maintain their reputation for always paying their bondholders.

Average yields on 30-year municipal bonds rose 0.13 percentage point Wednesday to 4.77% and are up roughly 0.5 percentage point in recent weeks. Yields on 5-year bonds rose 0.06 percentage point to 1.58% on Wednesday.

About $700 million worth of bond sales were pulled this week, according to Thomson Reuters. That is roughly 3% of the week's planned sales, according to data from Ipreo. Many of the bond sales were to refinance outstanding debt at lower rates, meaning the governments didn't need the money.

But postponed deals are atypical, market watchers say, and they attribute them to investor demand for higher interest rates amid a glut of bonds as well as the impact of the move in 30-year Treasurys.

Prince George's County, Md., last week postponed until January a $151 million general obligation bond refinancing and a new bond issue of $25 million for public school construction for more-favorable market terms, says Jim Keary, communications director for the county. The deal was supposed to be priced Wednesday. In Arizona, the Tucson Unified School District postponed a refinancing because it couldn't meet its threshold to save at least $1 million with the refinancing of outstanding debt, says Dr. John Carroll, interim superintendent of the school district. "We're just going to have to wait," he says.

Some deals found buyers this week. Houston on Wednesday sold $503.69 million in debt, more than a third of which were Build America Bonds. The city wanted to capitalize on the popular subsidy program amid uncertainty about its extension, says Chris Brown, Houston's chief deputy city controller.

Moody's cited "continued weakness of the city's finances" in its downgrade of Philadelphia, affecting $3.85 billion in outstanding debt. Rob Dubow, the city's finance director, said, "We understand we face fiscal challenges, and we have, but for us the timing is odd, because we feel like we have stabilized." As for San Francisco, the bond rater said the "city ended fiscal 2009 with a balance sheet that was weaker than at any time in the prior ten years."

A spokesman for San Francisco's mayor said the ratings downgrade was "not unexpected" given the challenging economy, and that the city still had a better rating than many other local governments.

The lawsuit that the California Treasurer said prompted the extension of the sale concerned another controversy in municipal finance: the sale of public assets to raise funds. The suit concerned a plan to close an $18 billion budget shortfall in part by selling 11 state-owned properties, and then leasing them back from the new owners, to generate $1.2 billion this fiscal year.

California and the rest of municipalities seems like the next sovereign crisis?

Dollar weakness dollar strength dollar weakness….

Asian trading saw VERY stale dollar movement… more to the strength side.

As london hours led into the Euro open markets started to trade a weaker dollar. Stronger UK data, bail out for Ireland, basically risk back on… temporarily at least…


New York open and we are going back to risk on with mild dollar strength.


----

Looking to longer term charts this seems to be all in line with an uptrend, Midterm correction on a weekly basis with strong dollar, weak equities and surpressed commodities to be seen IMHO…

Lots of moral issues popping up in the news… check out the morality thread…


Lets see how things will end this week...

I know we are supposed to bring more traffic here, but there are some interesting chats with other trades on hedgefundlive.com a good place meet more people with differeing views and maybe try to bring them here

Worries on Irish Stress test; GBP getting killed going into US trading.

London Hours

Seems End of Asia trading will end up positive for equities; the only downers seem to be Japan and India

Crude fell from its yesterday highs through Asian trading

Overall Dollar largely unchanged over night with slight weakness over Asian Trading (overall strength from previous session)

European Equity futures point to lower open

Rumors on cheap Japan having cheap banking loans to the system

More US Fed speakers talking with Hawkish tone

Softer China PMI

Bloomberg comes up with more stupid headlines "Australia Boom Pays Men Without Degree More Than Bernanke" , the guy is a semi-public servant what do you expect? Its amazing how compelling this growth story has been. I was really correct on my NZD view on my targets however I didn't expect it to move with the speed that it did so I completely missed out on the action. Also, the effect of the RBA rate decision again had very limited effects over maybe two weeks. Asia fundamental growth is there, or this is all speculation at this point. While OECD growth has been largely inflated the past few years (QE one through infinity, pomo, stimulus, austerity sentiment blah blah blah blah).

Going into NFP within 6 hours I get the feeling these levels have been to hesitant. Expectations of anything less than 125,000 to 145,000 is bad while the bar is set even higher currently. I dunno the effect of missed expectations on this, but I'm leaning towards a dollar correction that will weigh in on crude initially. This will likely carry into early next weak before continuing a dollar weakness trend.

Going forward I'm looking at:

EUR/USD needs break about 1.425 then 1.428
Markets looking for rate hikes next week for the EUR/USD to support yields
GBP/USD continues its weakness within the majors breaks below 1.593 will see accelerated lower prices
In general large divergences of fundamentals and sentiment (AUD, EUR, USD)
ISM later today along with EUR employment data and PMI releases

Don't think the Eurozone can handle a rate hike for whatever reason. Fundamentally the region is too weak - essentially what we are seeing is the "buy the rumor sell the fact."

UK econ data is still very fuzzy with mixed reports which has definitely been weighing in on the pair. However, a bullish selling point is that 1.60 still remains a good support.

Again with Australia, it is either a true growth story or spectulation. I think this big move up to 1.03 the latter part of the highs have been speculation. Prices will give back some pips into next week. Overall though, greater than parity has been a good call. Just a matter of time before NZD follows.



To much risk to take leveraged positions today. Trade small today. Today and into next week I expect a reversal in the trends we saw all this week (Equities up, Crude up, Dollar down).

http://analyzecapital.blogspot.com/2011/03/april-fools-day-london-hours-april-1.htmlhttp://analyzecapital.blogspot.com/2011/03/april-fools-day-london-hours-april-1.html