Bloomberg:
- Expectations for Stocks Plunge at 23-Year High, Survey Says. The following are results from Investors Intelligence’s analysis of investment newsletters for Jan. 20 through yesterday. % Bulls 40.0 this week versus 52.2% last week. % Bears 23.3 this week versus 18.9% last week. Those expecting 10% decline 36.7% versus 28.9% last week. The percentage expecting a correction is the highest since November 1986.
- The Federal Reserve kept interest rates near zero and restated its intention to cease buying mortgage-backed securities in March, while losing unanimity on how long to keep borrowing costs low. At the same time, “the Committee will continue to evaluate its purchases of securities in light of the evolving economic outlook and conditions in financial markets,” the Federal Open Market Committee said in a statement today in Washington. Policy makers are keeping interest rates “exceptionally low” for an “extended period” as they wind down the record amounts of credit they have provided since the bankruptcy of Lehman Brothers Holdings Inc. in 2008. Kansas City Fed President Thomas Hoenig dissented, saying “financial conditions had changed sufficiently that the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted.”
- Apple Inc.(AAPL), seeking to revolutionize the publishing business in the same way the iPod transformed the music industry, introduced a tablet computer starting at $499 with a touch-screen, Web browsing and e-mail functions. The iPad can display full Web pages and has a touch-screen keyboard that’s almost full size, Chief Executive Officer Steve Jobs said today at a company event in San Francisco. The iPad supports Wi-Fi communications and runs the more than 140,000 applications already available for the
- As many as 40 percent of the world’s hedge funds won’t have access to European Union investors if EU plans to oversee funds and private equity are passed in their current form, an official at Britain’s regulator said. Investors from the 27 member-state bloc won’t be able to access 40 percent of hedge funds and 35 percent of private equity firms under EU proposals because of so-called equivalence requirements, a Financial Services Authority official said, citing a report. The requirements test whether countries where funds are based have similar tax and legislation to the EU.
- Credit-default swaps on Greek sovereign debt surged to a record on concern the government won’t be able to plug the largest deficit in the European Union, a day after it priced 8 billion euros ($11 billion) of bonds. Contracts on Greece soared 48 basis points to 373, according to CMA DataVision. Swaps on Spain rose 17 basis points to 127, Portugal climbed 18.5 to 149 and Italy was up 10 basis points at 114, CMA prices show. The European Commission said today that Greece hasn’t done enough to rein in its deficit that reached 12.7 percent of gross domestic product in 2009. Greece denied a Financial Times report it’s wooing China to buy as much as 25 billion euros of bonds.
- The International Energy Agency will meet OPEC, banks and U.S. and U.K. regulators in Tokyo next month to discuss limiting energy-price speculation. IEA Executive Director Nobuo Tanaka said today he has asked U.S. Commodity Futures Trading Commission Chairman Gary Gensler, officials of the U.K. Financial Services Authority, and bank executives including Lawrence Eagles, head of commodities research at JPMorgan Chase & Co., to take part. The two-day meeting will start Feb. 25. The CFTC has proposed curtailing investments by large banks and swaps dealers in oil, natural gas, heating oil and gasoline amid concern speculators drove crude prices to a record $147.27 a barrel in 2008. Speculative net-long positions in oil futures, or bets prices will rise, were the highest in at least 27 years in the week ended Jan. 12. “OPEC and regulators must have come to the conclusion that a flow of big money from bloated global banks into the commodities market is responsible for big swings in prices for oil and metals,” said Tetsu Emori, a chief fund manager at Astmax Co. Ltd. in Tokyo.
- New York Mayor Michael Bloomberg said he wants the U.S. government to move the trial of five suspects in the September 2001 terror attacks away from its intended site in lower Manhattan. Bloomberg said it would cost as much as $1 billion to provide security for the trial, should it proceed over several years, and suggested the U.S. Justice Department consider an alternate venue such as a military base outside the city. “It would be great if the federal government could find a site that didn’t cost $1 billion, which is what using downtown will and it will also impact traffic and commerce and people’s lifestyles downtown,” the mayor said during a news conference today in the city borough of Brooklyn. “If they were to move it elsewhere I’d be very happy with that.”
Wall Street Journal:
- U.S. lawmakers blasted decisions that allowed American International Group Inc.'s(AIG) major trading partners to make out with billions, as the architects of the government's 2008 response to the financial crisis defended their actions. "In effect, the taxpayers were propping up the hollow shell of AIG by stuffing it with money, and the rest of Wall Street came by and looted the corpse," Rep. Edolphus Towns (D, N.Y.) said in opening remarks before a standing-room only crowd in a Capitol Hill hearing room on Wednesday. Rep. Darrell Issa (R, Calif.) said before the hearing began that he has "lost confidence" in Treasury Secretary Timothy Geithner, who was head of the Federal Reserve Bank of New York when the government made the controversial decision to rescue AIG, in part by paying the insurer's counterparties a total of $62 billion to tear up troubled insurance contracts, at the height of the financial crisis.
CNBC:
Istockanalyst.com:
- Since the Match 2009 bottom many correlations have held extremely well. We covered one in a previous post titled "US Dollar Correlation Breaking Down" and other ones here. We can now add one more broken correlation to the mix. TIPS and GOLD have been trading very much inline with each other over the last nine months or so. The primary reason for the correlation is that since they are both seen as inflation hedges they should trade together. As you can see in the chart below gold and TIPS have trade very much in line for most of the last nine months. Over the past two weeks however the two instruments have diverged with TIPS going higher and gold going lower.
Politico:
- Top Senate Republicans want answers from the man they believe decided the FBI should read the suspected Christmas Day bomber his Miranda rights: Attorney General Eric Holder. “It appears that the decision not to thoroughly interrogate Abdulmutallab was made by you or other senior officials in the Department of Justice,” Senate Minority Leader Mitch McConnell (Ky.) wrote in a letter to Holder Wednesday. “We remain deeply troubled that this paramount requirement of national security was ignored —or worse yet, not recognized — due to the administration’s preoccupation with reading the Christmas Day bomber his Miranda rights.”
- President Barack Obama, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid will be all smiles as the president arrives at the Capitol for his State of the Union speech Wednesday night, but the happy faces can’t hide relationships that are fraying and fraught. The anger is most palpable in the House, where Pelosi and her allies believe Obama’s reluctance to stake his political capital on health care reform in mid-2009 contributed to the near collapse of negotiations now. But sources say there are also signs of strain between Reid and White House chief of staff Rahm Emanuel, and relations between Democrats in the House and Democrats in the Senate are hovering between thinly veiled disdain and outright hostility. In a display of contempt unfathomable in the feel-good days after Obama’s Inauguration, freshman Rep. Dina Titus (D-Nev.) stood up at a meeting with Pelosi last week to declare: “Reid is done; he’s going to lose” in November, according to three people who were in the room.
Naked capitalism:
- How Many Quants Does It Take to Screw in a Lightbulb?
Institutional Investor:
- January 26, 2010 - Recent articles in both the New York Times “Hedge Fund Strategies, at Smaller Prices” and The Economist “The Feeling Is Mutual,” about the convergence of the hedge fund and mutual fund industries is both scary and thought provoking. The articles detail how mutual fund and hedge fund managers both are hot for each other’s products.
Reuters:
TimesOnline:
- UK Science Chief John Beddington Calls For Honesty On Climate Change. The impact of global warming has been exaggerated by some scientists and there is an urgent need for more honest disclosure of the uncertainty of predictions about the rate of climate change, according to the Government’s chief scientific adviser. John Beddington was speaking to The Times in the wake of an admission by the Intergovernmental Panel on Climate Change (IPCC) that it grossly overstated the rate at which Himalayan glaciers were receding. Professor Beddington said that climate scientists should be less hostile to sceptics who questioned man-made global warming. He condemned scientists who refused to publish the data underpinning their reports. He said that public confidence in climate science would be improved if there were more openness about its uncertainties, even if that meant admitting that sceptics had been right on some hotly-disputed issues. He said: “I don’t think it’s healthy to dismiss proper scepticism. Science grows and improves in the light of criticism. There is a fundamental uncertainty about climate change prediction that can’t be changed.” He said that the false claim in the IPCC’s 2007 report that the glaciers would disappear by 2035 had exposed a wider problem with the way that some evidence was presented. He said that it was wrong for scientists to refuse to disclose their data to their critics: “I think, wherever possible, we should try to ensure there is openness and that source material is available for the whole scientific community.” Phil Jones, the director of the University of East Anglia’s Climatic Research Unit and a contributor to the IPCC’s reports, has been forced to stand down while an investigation takes place into leaked e-mails allegedly showing that he attempted to conceal data. In response to one request for data Professor Jones wrote: “We have 25 or so years invested in the work. Why should I make the data available to you when your aim is to try and find something wrong with it?”
easyBOURSE:
AFP:
- Iran's supreme leader Ayatollah Ali Khamenei is confident Islamic nations will one day watch the destruction of arch-foe Israel, his website Wednesday quoted him as saying. Khamenei made the remark during a meeting with Mauritanian President Mohammed Ould Abdel Aziz in Tehran, the website said. The all-powerful Iranian leader also said that Israel's continued "pressure to erase Palestine from the world of Islamic nations" will fail. Surely, the day will come when the nations of the region will witness the destruction of the Zionist regime... when the destruction happens will depend on how the Islamic nations approach the issue," Khamenei told Aziz, who arrived in Tehran on Monday. Relations between the two nations have deteriorated particularly under Ahmadinejad who has often said that Israel is "doomed to be wiped off the map" and has termed the Holocaust a "myth".
Les Echos:
- Luxembourg’s Prime Minister Jean-Claude Juncker, who heads the group of euro-area finance ministers, told French daily Les Echos that divergences in the euro zone, which increased during the financial crisis, could threaten the cohesion of the area. He also said that the Chinese yuan and the US dollar are undervalued and that the euro is overvalued.
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