Today's Read...

Impact of Mid-Term Election on Stock Market

The US mid-term election is tomorrow but the market is largely ignoring it, and rightly so. Given the BoJ's massive stimulus last Friday, oil price gyration due to Saudi Arabia today, the ECB on Thursday and Payroll on Friday, investors have a lot on their plate. For what its worth, Nate Silver gives 72% chance of Republicans taking over the Senate. But we may not know that for a while because (1) ballot counting in Alaska can go on for days (2) if winning candidate in Louisiana does not get over 50%, the run-off elections will be held on December 6, and (3) if winning candidate in Georgia does not get over 50%, the run-off elections will be held on January 6.

 

There is a fair bit of research on the impact of mid-term election on stock market. Fidelity says, the 12 months after midterm elections tend to be good for stocks, averaging 16.1% gain. UBS technical analyst, puts the mid-term election in the context of 4-year US Presidential Election Year Cycle Theory. Again the outcome is good for the market. The reason is that, after the mid-term election, the political machinery of the incumbent focuses on the Presidential election and that produces favorable policies towards the market in the 3rd and 4th year of the Presidency.

 

M&A Continues

French advertising group Publicis Groupe SA agreed to buy Boston-based Sapient for $3.7 billion in cash, a massive premium to Friday's close. The deal will expand Publicis into fast growing digital business.

Lab Corp agreed to buy Covance, a CRO (Clinical Research Organization) or a clinical trial outsourcing company for $6.1 billion. Investors were disappointed with the deal given that there are no synergies between the two , and duly punished Lab Corp, whose shares were down 7.37%.

Saudi Move the Oil Market
Crude oil initially rallied after the newswire said they raised December Arab Light to Asian customers by 95c/bbl to a 10c discount to Oman/Dubai average.

However when another headline hit that said Saudis lowered the premium for Arab Light relative to the US Gulf Coast benchmark by 45c/bbl, oil markets took a beating.

Professor Kenneth Goldsmith of University of Pennsylvania Offers a Course to "Waste Time Online"
Yeap, that's what you get for $47,000/year in tuition (also on Yahoo!Finance).
 

The Japanese Bombshell - The BoJ Launches QE4 & Japanese Pension Fund Switches into Equities

Wall Street received a Halloween treat from Japan on Friday, 31 October 2014. And it was very sweet indeed!

First, the Bank of Japan (BoJ) launched Quantitative Easing 4 (QE4) making it the most aggressive central bank in the world.

Second, Government Investment Fund, Japan, the $1.2 trillion pension fund decided to change its asset allocation dramatically. Under the new scheme, allocation to domestic bonds fall to 35% (from 60%) while domestic stock increases to 25% (from 12%), international bonds to 15% (from 11%) and international stocks to 25% (from 12%).

What exactly did the BoJ do?

After a very close vote (5-4), the BoJ initiated QE4. It decided to increase the monetary base by 80 trillion yen (US$700 billion) a year or an addition of about 30 trillion yen compared with the past. As part of the program, they will conduct the outright purchases of Japanese government bonds approximately 8-12 trillion yen (~US$70-110 billion) per month in principle effective from November 4, 2014.

The BoJ will purchase ETFs and Japan-REITs so that their amounts outstanding will increase at an annual pace of about 3 trillion yen (tripled compared with the past) and about 90 billion yen (tripled compared with the past), respectively. The Bank will make ETFs that track the JPX-Nikkei Index 400 eligible for purchase.

Why did they do it?

To pre-empt deflationary pressures given weakness in demand following the consumption tax hike in April and a substantial decline in crude oil prices have been exerting downward pressure recently. The Bank will continue with the QQE, aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner.

History of Quantitative Easing (QE) in Japan?

QE1 (March 19, 2001)

The BoJ changed its policy tool to the “outstanding balance of the current accounts (CAB) at the BoJ” from the “uncollateralized overnight call rate” and said the policy will continue until CPI registers stably a zero percent or an increase year on year. As part of the program, the BoJ decided to immediately increase CAB by 1 trillion yen to 5 trillion yen.

QE1 ended on March 9 2006, and the central bank's policy tool reverted back to the “uncollateralized overnight call rate”. The BoJ also decided to reduce CAB to the towards a level in line with required reserves.  

 

From March 2001 and March 2004, CAB rose from 5 trillion yen to 33 trillion yen, and it stayed at that level until March 2006. Within few months of QE1 end, CAB fell to 8 trillion yen.  

QE2  (October 5, 2010)

The BoJ decided to initiate asset purchase program in principle but the details were announced on October 28, 2010 (JGBs) and on November 5, 2010 (ETFs, JREITs). Essentially the Program authorized purchase of 35 trillion yen of assets.

QE3 (April 4, 2013)

The BoJ expanded QE2. With an unanimous vote, the BoJ decided to (1) conduct money market operations so that the monetary base will increase at an annual pace of about 60-70 trillion yen and (2) purchase ETFs and Japan real estate investment trusts (J-REITs) so that their amounts outstanding will increase at an annual pace of 1 trillion yen and 30 billion yen respectively.

References

Bank of Japan’s Quantitative and Credit Easing: Are They Now More Effective? (IMF)

Quantitative Easing: Entrance and Exit Strategies (Alan Blinder)

Quantitative Easing in Japan: Past and Present (St. Louis Fed)

Sage Kelly, the "Real Wolf of Wall Street"

My investor husband pushed me into sex swaps for biz deals

NY Post, 29-Oct-2014

By Emily Smith, Julia Marsh and Kate Sheehy

Christina Kelly says her investment-banker husband made her go the extra mile to help him land a client — pushing her into a partner-swap with the business honcho and his wild girlfriend.

The mom of two revealed details of the kinky alleged hookup — and every drug binge, extramarital pool fling and sex encounter in between — in salacious Manhattan court papers targeting her husband, Jefferies & Co. wunderkind Sage Kelly.

And now, she and her reputed real-life “Wolf of Wall Street’’ hubby are “the talk of the town,’’ a Wall Street source said.

“All the top Wall Street and hedge-fund guys are talking about it. They are all ­e-mailing it to each other,’’ the source said of Christina’s 26-page affidavit.

“It is a complete bombshell and a shocking and wild read. It’s just irresistible.

“The most astonishing thing is that the complaint says Ben Lorello, who is head of investment banking at Jefferies — a top health-care banker and very powerful guy on Wall Street — was part of a cadre of guys who do cocaine all of the time,” the source noted.

Another source added, “We know what this is all about — this is revenge.”

Christina Kelly alleges in nearly every page that her $7-million-a-year hubby is nothing but a coke- and Ecstasy-loving, booze-swilling, abusive spouse and dad who lives for seamy sex romps.

Christina, 39, said her husband, 42, was trying to woo Aegerion Pharmaceuticals honcho Marc Beer the night she wound up having sex with Beer — and “sexual contact’’ with his prancing, big-breasted girlfriend, according to the papers.

The former Ralph Lauren event planner said the sex jaunt occurred in a hotel room at the Ritz-Carlton in Boston in 2012 after a booze- and cocaine-fueled evening.

“Soon, Sage and I were having sex with each other on one bed, and Marc and his girlfriend were having sex on the other bed,’’ Christina says in her affidavit.

“Then, Marc said, ‘Let’s switch,’ ” she claims in the papers. “Marc suggested that his girlfriend and I have sex with each other.

“Mindful of [Sage’s] goal of securing business from Marc, I felt responsible not to disappoint Marc. So, his girlfriend and I had sexual contact for a few minutes, while Marc and Sage watched.

“Then, Marc’s girlfriend joined Sage on our bed, and Sage and she started to have sexual relations.

“Then, I joined Marc on his bed, and he and I engaged in sexual relations,’’ Christina said in the sworn affidavit.

“Following that evening, Marc Beer has been an important client of Sage and, presumably, a substantial reason for Sage’s enormously successful career at his current investment bank, Jefferies and Company Inc.,’’ she said.

Christina, a graduate of the tony Horace Mann school in Riverdale, said her husband of 12 years routinely pestered her into engaging in threesomes.

She also alleged his sexual conquests outside their marriage included a romp with the wife of co-worker Dung Nguyen in the swimming pool at the Kellys’ family vacation home in Sag Harbor, LI.

A few months after Boston, during a visit from Nguyen and his wife, “I noticed Sage sitting on the stairs in the shallow end of the pool,’’ Christina said in the court papers.

“I heard Jessica moaning, ‘Oh, Sage.’ ’’

Christina and Sage Kelly have two daughters, ages 10 and 6.

Christina noted that at least one of their kids’ bedrooms overlooked the pool.

She also said Nguyen and a slew of other business associates of her husband did drugs with Sage — and she included names in her affidavit.

The list also included Myriad Solutions CFO Mark Hosny, UBS’s Bjorn Koch, Sage’s boss Ben Lorello, and the head of Seattle Genetics, Clay Siegall, the filing claims.

Beer said through a spokeswoman, “Ms. Kelly’s accusations as to me are categorically false and baseless. I do not use ­cocaine or any other illegal substance.

“All of the allegations which Ms. Kelly has made regarding me and my girlfriend are ridiculous, baseless and grossly irresponsible.”

Lorello said through a Jefferies rep that he also “categorically denies all the allegations regarding him raised by Ms. Kelly in her matrimonial case.”

Nguyen said through the rep that he, too, “categorically denied the allegations made about him by Ms. Kelly.”

Siegall said in a statement, “Ms. Kelly’s accusations as to me are baseless and absurd. I have never used cocaine in my life. The allegations as to me are completely and unequivocally false.”

Messages to Hosny and Koch weren’t ­returned. Sage Kelly hung up on a Post ­reporter Tuesday. He has said in previous court filings that his wife’s claims are an “outrageous lie.”

“While [she] and I used recreational drugs on occasion at certain social events in the past, the ‘Wolf of Wall Street’ tale she tells this court is a work of fiction,” he said in an August filing.

The tall, handsome Boston College grad won temporary custody of their kids after he secretly installed cameras in the couple’s Fifth Avenue apartment that caught Christina drinking and snorting coke, ­according to her suit.

Besides her admitted cocaine use, the ­petite blonde drunkenly drove her Range Rover into a utility pole in the Hamptons in 2010 with her two kids in the car, Sage says in court papers. She is currently on a conditional probation, he adds.

In a bid to get the girls back, Christina filed a countersuit claiming it’s Sage who is the real danger to the kids.

She said he once slapped one of the little girls across the face for saying she was afraid she might pee herself — and routinely calls the kids “f–k­ing retard’’ and “f–k­ing idiot.’’

“Mommy, can you please tell Daddy to stop calling me a f–k­ing retard?’’ one of the little girls asked her, the filing says.

And Christina said one of her husband’s pals also “inadvertently left a bag of cocaine on a pool table’’ at the family’s Sag Harbor home — and one of the kids stuck her finger in it. Christina says she stopped the child before she could ingest it.

Christina said Sage was so into drugs that he once hosted “Mushroom Day” in the Hamptons where “he continually ­ingested [psychedelic] mushrooms throughout the day . . . while the children were present.”

He also urinated and defecated on himself in bed, she said in the papers.

Explosive trading in Treasury futures today

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Mergers Could Clog Flow of Junk Bonds

Mergers Could Clog Flow of Junk Bonds

WSJ, Jan. 23, 2014 

By Mike Cherney

Investors' healthy appetite for "junk" bonds may be tested in coming months if two supersize corporate takeovers take place.

Sprint Corp. has been pursuing a possible $31 billion purchase of T-Mobile US Inc., TMUS -3.24% and Charter Communications Inc. has launched an unsolicited $37 billion bid for Time Warner Cable Inc. Both would-be buyers have credit ratings below investment grade and each could sell enough bonds to break Sprint's record $6.5 billion junk-bond sale, set last year.

For years after the financial crisis, the thought of junk-bond-fueled megadeals would have been unthinkable, as Wall Street's merger machine struggled to shake off the rust of the financial crisis. But the $49 billion bond sale in September from Verizon Communications Inc., VZ -0.48% an investment-grade deal that was the largest corporate-bond offering on record, showed corporate executives and bankers alike that almost any sum is within reach.

Now, many investors say Sprint and Charter would likely have little problem selling the new bonds, underscoring the hunger for income-generating investments at a time of uneven economic growth, low interest rates and easy central-bank policy.

"It's a different world than it was just a few years ago," said Craig Elder, fixed-income analyst in the private-wealth-management arm of Robert W. Baird & Co.

Junk-rated bonds in the past have done better than investment-grade debt during periods of rising interest rates, in part because the higher yields on these bonds provide an additional cushion against falling prices.

Gary Herbert, a portfolio manager at Brandywine Global Investment Management, which oversees more than $38 billion in fixed-income assets, said he would consider buying new debt from Sprint or Charter if their mergers come to fruition. His firm has sold some bonds recently to make room for new junk-rated deals in the pipeline, he said.

"There's an appetite from the issuer, there's an appetite from the investor, and so when you have the two meet, it gets done," Mr. Herbert said.

Sprint and Charter would be selling new debt at an opportune time: Many investors say they have bought more bonds from junk-rated companies recently. Investment-grade firms sold about $1.1 trillion and junk-rated companies sold about $361 billion in the U.S. in 2013, according to data provider Dealogic.

Many analysts expect strong bond issuance in 2014 but less than in 2013, since interest rates have risen from last year's lows, increasing borrowing costs for companies. When rates rise, bond prices fall.

Junk bonds now yield 3.68 percentage points more than benchmark U.S. Treasurys. In 2007, before the financial crisis, that figure fell as low as 2.33 percentage points. In contrast, investment-grade corporate bonds are yielding 1.11 percentage points more than Treasurys, compared with recent lows of about 0.76 point in 2005, according to Barclays data.

The figures show that prices on junk debt have more room to rally than investment-grade bonds, some analysts say.

Mr. Herbert said the demand for junk debt was on display last week, when Community Health Systems Inc. sold $4 billion in bonds to help pay for its takeover of another hospital company. He said demand was so strong that he didn't get all the bonds he wanted.

"I think most investors felt the same way," Mr. Herbert said.

There are signs, though, that investors may be overindulging on the debt binge. The amount of debt carried by low-rated U.S. companies is approaching levels seen just before the last recession, according to Standard & Poor's Ratings Services.

Hundreds of billions of dollars of debt is scheduled to come due starting in 2016.

A sharp rise in interest rates or a drop in demand from investors could make refinancing challenging for some weaker borrowers.

"The question becomes, what does the capital market environment look like then?" said David Tesher, a managing director at S&P. "Many investors are concerned, but they can't predict what that environment will look like."

For now, investors are waiting to see whether Sprint and Charter ultimately succeed in their takeover bids. A merger between Sprint and T-Mobile would have to clear regulatory hurdles, and Charter has taken its takeover proposal directly to Time Warner Cable shareholders after being rebuffed by the company's management.

Putri Pascualy, senior credit strategist at Pacific Alternative Asset Management Co., which oversees $16 billion, said she would consider buying bonds from Sprint or Charter, depending on the interest offered on the debt.

She said companies offering large amounts of debt often reduce prices compared with already-outstanding debt in order to lure investors, who can then decide whether to hold the bonds for a period or "flip" them for a quick profit.

"If you could make a quick easy return at the beginning of trading, then in an environment where return is hard to come by, hey, we can't afford to be picky," Ms. Pascualy said.

Related

2013 High Yield Bond Issuance Hits $324B, Short Of Record $345B In 2012

Cramer's Game Plan for Week of January 26, 2014

What's in Store for the S&P500?

Tudor Sees First Global Monetary Policy Divergence Since 2010

Tudor sees first global monetary policy divergence since 2010

Bloomberg News

January 21, 2014

Tudor Investment, the $13.7 billion macro hedge-fund firm run by Paul Tudor Jones, said global central bank policies will diverge this year for the first time since 2010. 

Tudor anticipates the U.S. and U.K. will raise interest rates earlier than expected, while rates will be cut in the euro area this year, according to a Jan. 15 weekly note to investors written by five members of the firm's research team. 

"We believe that 2014 will be a year of contrasts when it comes to the outlook for monetary policy across the major developed markets," Filippo Altissimo, global head of research at Tudor, and four colleagues wrote in the note. "For the first time since 2010, there will likely be an unfolding divergence in monetary policy." 

Betting against Canadian interest rates, as opposed to those in the U.S., may offer "better risk-reward" amid positive economic activity in both countries, according to the note. The Greenwich-based firm is finding near-term value in wagering against U.K. fixed income, "especially around unemployment releases," as it expects the country's rates to rise, while betting on European monetary union debt. 

Macro funds, which wager on macroeconomic trends by buying and selling stocks, bonds, currencies and commodities, have struggled to beat other strategies since 2010 as managers such as Louis Moore Bacon cited central bank action as a factor distorting markets. Funds in the strategy on average returned a cumulative 4 percent in the past four years, while those across all strategies climbed 15 percent, according to data compiled by Bloomberg. 

Fund returns

The Tudor BVI Global fund climbed 14 percent last year, a person familiar with the matter said, and 6.3 percent in 2012. 

Tudor expects an increase in the federal funds target rate, now at a range of zero to 0.25 percent, in the summer of 2015, according to the note. Economists anticipate the gauge will rise to 0.5 percent at the end of that year's third quarter, according to the median forecast of 59 people in a Bloomberg survey. 

An improving U.S. economy is underpinning inflation, limiting firings and lifting consumers' moods, brightening the outlook for growth at the start of 2014. Policy makers began reducing monthly bond purchases by $10 billion in January to $75 billion, citing an improving job market. Still, Federal Reserve Bank of Chicago President Charles Evans, who has supported record stimulus, said Jan. 15 that the central bank's slowdown should be seen as a shift in emphasis toward keeping interest rates near zero for a longer time, partly because of still-low price pressures. 

Inflation may be the spark persuading the Bank of England to raise rates in the fourth quarter, according to the Tudor note. Bank of England Governor Mark Carney will change forward guidance next month, according to economists, as they forecast that unemployment will hit a key level far earlier than previously anticipated. More than 60 percent of respondents to Bloomberg's monthly survey said Carney will refine the policy when the BOE publishes its quarterly Inflation Report on Feb. 12. Almost one-third of economists said the jobless rate will fall to 7 percent in the first half of the year, a juncture that will require Carney to consider raising borrowing costs. 

New Zealand may increase interest rates in March because of "robust business surveys, rapid house price appreciation, strong output growth prospects and a surge in terms of trade," according to the Tudor note. Reserve Bank of New Zealand Governor Graeme Wheeler last month abandoned his earlier stance that policy tightening could wait, saying interest rates may need to rise to 4.75 percent by the first quarter of 2016 from a record-low 2.5 percent. 

Tudor anticipates a Norway rate increase in the second half of the year. 

 

Millionaire Smallcap & Microcap Traders Speaking Panel

Technical Analysis - MACD

Cramer's Game Plan for Week of January 19, 2014

What Five Days of Trading Tell Us About 2014

What Five Days of Trading Tell Us About 2014
By Jim O’Neill Jan 14, 2014 
Bloomberg

Over the course of more than three decades in finance, I got into the habit each January of developing investment themes for the coming year. Some habits are hard to break, and even though investment strategy is no longer my day job, my mind has turned to the same task. Usually I come to a pretty strong view, one way or the other, about the year ahead. This year, things don’t look so clear.

To begin with, there’s an odd little thing called the five-day rule -- an unlikely guide, you’ll think, but one I came to value as an aid to confidence. The rule simply states that when the main U.S. stock-market indexes show a combined positive return after the first five days of trading, the year as a whole is very likely to be a good one; if the return after the first five days is negative, it’s a coin-toss whether the market will be up or down for the year.

Usually, stocks rise in the first five days -- as you’d expect, because over the long term they return about 8 percent to 9 percent a year. This year they didn’t rise, despite the consensus among market analysts that 2014 is going to be a good year.

Jose Ursua, a former colleague of mine at Goldman Sachs, has run these numbers all the way back to 1928. He finds that when stocks rallied during the first five days, there was a 75.4 percent chance of a rally for the year. For the period since 1950, the probability rises to 82.9 percent. Few rules in finance are as unambiguous as that. So when the first five days has been net positive for the Standard and Poor’s -- and I’m feeling bullish in any case -- I’m especially confident.

This year I’m still feeling pretty bullish, but the five-day rule is against me. U.S. stocks fell 0.5 percent -- nothing drastic, but down nonetheless. Over the whole period since 1928, a negative start implies a 47.8 percent chance of a negative year; since 1950, the figure’s about the same, 46.4 percent. In both cases, call it 50-50.

As I say, I’m in the bullish camp for the world economy in 2014. I’m expecting gains in the so-called developed economies and in a number of so-called emerging economies -- including some of my old friends the BRICs (Brazil, Russia, India, China) and some of my newer ones in the MINTs (Mexico, Indonesia, Nigeria and Turkey). I think there’s a decent chance that world gross domestic product growth will exceed 4 percent this year. And that would be good news for financial markets -- right?

Not necessarily. Stronger growth in the U.S. and other developed countries would be bad news for bond markets. In the future, they can’t depend on the Federal Reserve to press down so hard on interest rates with quantitative easing. Expect more “taper tantrums” in 2014. This could be quite a challenge not just for bond markets but also for financial markets more generally. I say this even though I think Janet Yellen’s Fed will go out of its way to pursue “dovish tapering,” in the hope of avoiding a 1994-type bond-market rout.
Here’s another complication. The U.S. trade deficit just dropped to its lowest since 2009, consistent with a current-account deficit of about 2 percent of GDP. This news was too little noticed: It shows that the post-crisis U.S. will be a different and better-balanced economy, refuting the idea that the U.S. would inevitably face a widening external deficit when it started to grow again.

But there’s a downside. A narrower external deficit could imply a diminished supply of global saving, and upward pressure on inflation-adjusted interest rates. You could see this, and even welcome it, as a necessary transition to more normal conditions -- but it adds to my concern about investments that might not get along with normalcy.

On top of all this, investors start 2014 with a perennial concern about the major currencies. Most seem to think the dollar is the least exposed -- for the reasons just mentioned -- and I go along with that. But I’m not as confident in this view as I’d like to be, partly because U.S. policy makers won’t want the dollar to rise too much.

A lot will depend on whether other economic leaders can step forward to support global activity as the U.S. strengthens. China, Germany, India and others are possible candidates. I’m convinced that a new and healthier Chinese economy is emerging. If others join in that assessment, the mood of global investors will lift appreciably. But will Germany act decisively on fears of euro-area deflation? Will India elect a government that can make effective decisions and turn that country’s vast potential into reality?

In all three cases, improvements in the credibility of economic policy could deliver excellent results both at home and in global terms. Those improvements are certainly achievable. I’d like to say I’m sure they will happen -- but hopeful is the best I can do. Happy New Year.

H&R Block (HRB) - Play on the Tax Season

12 days Before Christmas My Boss Said To Me.....

12 days before Christmas my boss said to me 
HITC Business


On the first day of Christmas,
my boss said I'm key
So he's got a great bonus for me.

On the second day of Christmas,
my boss winked at me
Two regulators a-probing,
But there's still a great bonus for me.

On the third day of Christmas,
my boss said to me
Three staff a-resigning,
Two regulators a-probing,
But there's still a very decent bonus for me.

On the fourth day of Christmas,
my boss said to me
Four subpoenas arriving,
Three staff a-resigning,
Two regulators a-probing,
And there's still a decent bonus for me.

On the fifth day of Christmas,
my boss said to me
Five Goldman stings,
Four subpoenas arriving,
Three staff a-resigning,
Two regulators a-probing,
And there's probably a decent bonus for me.

On the sixth day of Christmas,
my boss said to me
Six board members a-praying,
Five Goldman stings,
Four subpoenas arriving,
Three staff a-resigning,
Two regulators a-probing,
And there might be a decent bonus for me.

On the seventh day of Christmas,
my boss said to me
Seven clients a-suing,
Six board members a-praying,
Five Goldman stings,
Four subpoenas arriving
Three staff a-resigning,
Two regulators a-probing,
So there might not be a decent bonus for me.

On the eighth day of Christmas,
my boss said to me
Eight Feds a-raiding,
Seven clients a-suing,
Six board members a-praying,
Five Goldman stings,
Four subpoenas arriving
Three staff a-resigning,
Two regulators a-probing,
So there's probably not a decent bonus for me.

On the ninth day of Christmas,
my boss said to me
Nine shareholders a-complaining,
Eight Feds a-raiding,
Seven clients a-suing,
Six board members a-praying,
Five Goldman stings,
Four subpoenas arriving
Three staff a-resigning,
Two regulators a-probing,
So there's hardly any bonus for me.

On the tenth day of Christmas,
my boss said to me
Ten traders arrested,
Nine lawmakers a-complaining,
Eight Feds a-raiding,
Seven clients a-suing,
Six board members praying,
Five Goldman stings,
Four subpoenas arriving
Three staff a-resigning,
Two regulators a-probing,
So there's probably not much bonus for me.

On the eleventh day of Christmas,
my boss said to me
Eleven lawyers a-worrying,
Ten traders arrested,
Nine lawmakers a-complaining,
Eight Feds a-raiding,
Seven clients a-suing,
Six board members a-praying,
Five Goldman stings,
Four subpoenas arriving
Three staff a-resigning,
Two regulators a-probing,
And there's probably no bonus for me.

On the twelfth day of Christmas,
my boss said to me
Twelve jurors a-deciding,
Eleven lawyers a-worrying,
Ten traders arrested,
Nine lawmakers a-complaining,
Eight Feds a-raiding,
Seven clients a-suing,
Six board members a-praying,
Five Goldman stings,
Four subpoenas arriving
Three staff a-resigning,
Two regulators a-probing....
Now there's no bloody bonus for me!

And the very next day, my boss got fired.

Did This Guy (David Tepper of Appaloosa) Moved the Market Yesterday?

Time to Short SPY?

No one can dispute the fact that the S&P500 has had an amazing run since November 2012. Once the President and the Congress signed a deal to avert the Fiscal Cliff at the beginning of this year, investors have piled into US equities. Any weakness have been bought notwithstanding macro or corporate news.

SPY, the S&P500 ETF, is now at the top end of its channel and looks tired. Case in point, yesterday's price action. What should have been a good news for equities - April retail sales beating estimates handily and the ensuing sell-off in bond - did not end up being so - S&P500 managed to eke out a small gain. Moreover, the gains came from defensive sectors rather than cyclical names.

Bottom line, it looks like equities are in search of marginal buyers to drive them higher. Sure the big trend is still up, with the S&P500 breaking above its 2000 and 2007 highs, but looks like we are heading into  a short-term consolidation. I would short SPY at these levels with a very tight stop loss.

Corn Crop Planting At Third Slowest Pace in Three Decades

Corn Crop Planting At Third Slowest Pace in Three Decades
CNBC, 13-May-13
By: Patti Domm

Less than a third of the corn crop in key planting states is in the ground, the third lowest level for this time of year since 1980.

The U.S. Department of Agriculture Monday reported that 28 percent of the expected corn crop has been planted, and in key farm belt states, like Iowa and Illinois, the levels are even lower.

"Obviously, we have significant problems," said Rich Nelson, director of research at Allendale. "The trade after this week will begin dropping by both acreage and yield expectations. That's the message right here."

The cold, wet spring has wreaked havoc with farmers' efforts to plant, but even so, analysts and the government still expect a bumper crop. <Click Here for More>

Did China "Cook" the April Trade Data?

Program Videos From Milken Institute 2013 Global Conference