Morning Reading – December 23, 2010 *** XXL Edition

DEALBREAKER: Bank Of America Needs Help Coming Up With All The Domain Names A Brian Moynihan Hater Might Want To Buy

Bank of America has apparently registered for the domain names,,, and, possibly out of fear that Team WikiLeaks would want them (though the decision could just be a defense against haters in general).

KID DYNAMITE’S WORLD: How Does Bank of America Suck? Let Me Count The Ways

I mean, come on. If I wanted to talk shit about Bank of America or its people, this would just give me ammo and easy publicity.  The best thing about the WSJ article is that it lists the actual domain names registered!  For example, on the above mentioned Mr. Holliday Jr, the registered domains are…

ProPublica: The ‘Subsidy’: How a Handful of Merrill Lynch Bankers Helped Blow Up Their Own Firm

Two years before the financial crisis hit, Merrill Lynch confronted a serious problem. No one, not even the bank’s own traders, wanted to buy the supposedly safe portions of the mortgage-backed securities Merrill was creating.

Bank executives came up with a fix that had short-term benefits and long-term consequences. They formed a new group within Merrill, which took on the bank’s money-losing securities. But how to get the group to accept deals that were otherwise unprofitable? They paid them. The division creating the securities passed portions of their bonuses to the new group, according to two former Merrill executives with detailed knowledge of the arrangement.

The Big Picture: Its All Greek to Me!

I love this series of quotes:

1. “Spain is not Greece.”
Elena Salgado, Spanish Finance minister, Feb. 2010

2. “Portugal is not Greece.”
The Economist, 22nd April 2010.

3. “Ireland is not in ‘Greek Territory.’”
Irish Finance Minister Brian Lenihan.

4. “Greece is not Ireland.”
George Papaconstantinou, Greek Finance minister, 8th November, 2010.

5. “Spain is neither Ireland nor Portugal.”
Elena Salgado, Spanish Finance minister, 16 November 2010.

6. “Neither Spain nor Portugal is Ireland.”
Angel Gurria, Secretary-general OECD, 18th November, 2010.

The Big Picture: Tonight I’m gonna party like its Oct 2007

Coincident with a 6% rally thus far in Dec and joining almost every single strategist on Wall St that is bullish for 2011, Investors Intelligence said the number of bullish newsletter writers has reached its highest level since mid Oct ’07, 1 week after the S&P 500 had its all time record high close of 1565.

The Big Picture: Looking Into 2011, Everyone Is Bullish On Stocks

This is what I was referring to Monday on Fast Money: Too many folks are too bullish…

The Big Picture: Twitter mood predicts the stock market

We find an accuracy of 87.6% in predicting the daily up and down changes in the closing values of the DJIA and a reduction of the Mean Average Percentage Error by more than 6%. sentiment from blogs. In addition, Google search queries have been shown to provide early indicators of disease infection rates and consumer spending [14]. [9] investigates the relations between breaking financial news and stock price changes.

The Big Picture: Scraping Twitter to Find the Mood of the Monkeys

Bloomberg reported yesterday that the Derwent Absolute Return Fund was seeded with an initial 25 million pounds ($39 million) and will begin trading in February.

Its model? Following posts on Twitter, and tracking emotionally significant words to anticipate the market’s next jag up or down. A recent study concluded that short term market moves can be anticipated this way with a high degree of confidence.

The Big Picture: 10 Reasons I Am Thinking About Japan

As of late, I have been intrigued by Japan. It is a part of the world that investors seem to detest ignore, despite signs of technical improvement.

I’ve talked about this in the office, and with some of our clients who either own specific Japanese names — or live there. The thought process is Japan is a potential surprise in 2011.

The Big Picture: Update on the Chicago Fed National Activity Index of 85 indicators

Speculative momentum investors continue to whistle past the graveyard of a stalled-out economic recovery

The headline on the Chicago National Activity Index (CFNAI) a composite measure that closely tracks real U.S. GDP – thus it is a coincident economic indicator – came in at -0.46 (consensus was 0.00) and the prior monthly reading was at -0.25.

The index is now down four months in a row, something not seen since mid-2009 when the U.S. economy was hitting the recession’s depth. On a three-month basis, the more “smoothed” index remains at -0.4 for the past two months (-0.41 in November and -0.42 in October).

FT Alphaville: Something familiar about this IPO preview

Care for another parallel between the current year-end optimism and last year’s?

At this time in 2009, analysts were waxing optimistic that internet IPOs would boom this year, and a lot of the big names were thrown around as potential listings — Facebook, Zynga, Skype, LinkedIn.

FT Alphaville: Normalisation of 5% at the BoE

We all know the Bank of England has an inflation problem.

As revealed in Wednesday’s MPC minutes, BoE governor Mervyn King and crew are more worried about inflation than they have ever been in the post Lehman crisis environment.

FT Alphaville: Fitch brings Hungary a little bit closer to junk

You know how we really don’t see the case for Hungarian government bonds? Here’s Fitch’s take. The agency downgraded Hungary’s credit rating to BBB- on Thursday.

The Slope of Hope: The Magic of Leveraged ETF Erosion

The Slope of Hope: Holiday Patterns (by Springheel Jack)

It’s been very boring watching the market grind steadily higher this week, and I’m wondering now whether we’ll see any correction next week. We’re overdue a visit to the SPX daily 20SMA and I’m expecting to see a return to that soon, but quite a number of significant milestones were passed this week, and I’m wondering now whether we’ll see 1280 before correcting. I’ve marked up the current rising wedge on the daily SPX, and also the main SPX rising channel since March 2009, onto my daily 20SMA chart to give a good idea of exactly where SPX is now within that bigger picture…

The Slope of Hope: This Simply Blows Me Away

This chart is self explanatory, well maybe a bit will be helpful.  Every time net free credit was this low with SPY stretched to the 200 EMA, pressure was released through a correction through the 200 EMA, which is 113.50.  Buyer beware.

Daily Options Report: VXX: Even Volatility of Volatility is Contracting

It probably means nothing. Actually I’m sure it means nothing. Just don’t overpay for VXX options if you trade them.

VIX and More: VIX and the Week Before Christmas

I guess I should not be surprised that a VIX of 15.45 – the lowest since July 2007 – has all manner of pundits scrambling to pull some sort of explanation out of a hat and weave it into their favorite bullish or bearish forecast for the markets.

Bespoke Investment Group: MIA: 1% Days

It wasn’t too long ago that a 1% move up or down in the S&P 500 was considered a run of the mill day.  After all, back in the thick of the credit crisis, the average daily move peaked out at around 4%.  Nowadays, 1% days are hard to find.  The last time the S&P 500 had a 1% move was 13 trading days ago on 12/2, when the index rallied 1.28%.  Since the S&P 500 bottomed back in March 2009, the only other period where the S&P 500 had a longer streak of days without a 1% move was in April 2010.  In the chart below, we highlight the 13th day in that streak.  Ultimately, the April 2010 streak peaked out (along with the market) at 26 days.

Self-Evident: Default and bankruptcy in the municipal bond market (part two)

This post is about the Chapter 9 bankruptcy process. My commentary here will probably make a lot more sense to you if you have already read my earlier post on default. The same caveats, entreaties, and citations apply (because I am too much of a slacker to reiterate them).

This entry was posted on Thursday, December 23rd, 2010 at 9:12 am and is filed under Daily Reading. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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