Morning Reading – Thursday, March 3, 2011

PIMCO: William H. Gross – Two-Bits, Four-Bits, Six-Bits, a Dollar

Who will buy Treasuries when the Fed doesn’t? The question really is at what yield, and what are the price repercussions if the adjustments are significant.

Zero Hedge: A Deep Walkthru For Silver Manipulation – Redux

Prior to going out on my own, I traded at a small market making firm. When a trader finished training there, he had top-tier options knowledge but was not educated in whom the players were, the fundamentals of the markets, and how probabilities were useless when information was asymmetric. That wasn’t their business, they taught option’s theory. Since I had drunk the kool-aid, I thought fundamentals and gamesmanship were useless in the face of the almighty Standard Deviation model. That was a mistake.


The copper/oil divergence is a clear sign that markets are now worried about the negative impact of oil prices on global growth.

FT Alphaville: Bahrain’s strategic importance, graph du jour

Wondering why Saudi Arabia is so fussed about Bahrain?

FT Alphaville: Quick, to the MRO

Borrowing from the ECB’s emergency overnight facility has dropped from record highs — €15.1bn recently — to a more normal €1.24bn.

The Slope Of Hope: The Obvious Cover

Back on February 11, there was a widely-circulated story that the hedge fund manager Whitney Tilson – who had very publicly and loudly broadcast a huge short position months earlier in Netflix (NFLX) – had finally thrown in the towel and decided to accept the massive losses he had suffered from this short.

Naturally, the world of contrarians (such as here, and on ZeroHedge) declared that there was no better signal to short the stock, but anyone sensible knew that shorting NFLX was still kind of insane, so I doubt anyone really did anything about it.

The Slope Of Hope: AAII Sentiment Survey

This week’s AAII sentiment survey is relatively unchanged.

Bloomberg: Cargill Buys Almost 1 Million Tons of Sugar in Expiring Futures Contracts

JPMorgan Futures accepted delivery on 18,748 ICE futures contracts, or the equivalent of 952,398 tons, from five brokers, the New York exchange said yesterday on its website. The delivery was the biggest for ICE since 2009.

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