Monday, May 9, 2011

Doing the double tap

Commodities rose 2% today with oil up 5% as money began to flow into the markets again. That trillion in new cash the Fed printed up is having an effect, mostly it’s draining the wallets of the middle class, but hey you have to make money somehow and doing something useful is so 20th century. Where do you think you are, China?

Not everybody on Wall Street is humming a happy tune however, many of the hedge funds that were banking on oil going to $140/barrel were caught flat footed by last week’s flash crash. Many are reported to have taken double digit losses with Clive of London losing $400 million against 5 billion in assets. Rumors are that Goldman Sachs and BoA who dominate the dark pool trading crashed the price to create a buying opportunity.

The USD continues to rise against the Euro even as gold rises (usually the move in opposite directions). This is being driven by traders needing to make margin calls in dollars and at the same time some investors who didn’t go broke from the 15% drop in oil see gold as a hedge against doomsday.

The Obama Adm is talking about ending dark pool trading (these are anonymous back room deals that can be half the market) this has only been legal since 2006 and that by a rule issued the Bush dominated SEC so the SEC could now end it. This has Wall Street insiders spitting nails but Obama has got the upper hand with voters and no amount of money will change that.

Especially if he were to crack down on Wall Street, re-election would be a sure thing. Of course they might try to crash the economy out of spite. There is the law Bush left behind that would make that terrorism at the discretion of the President. Ah yes, time to drift off into a daydream of Seal teams hunting pinstriped terrorists.


Messy Kitchen, Frazzled Cook said...

I have noticed that no one is leaving comments lately. I wonder is that because you are so "spot on" that people are speechless, or the posts you write are so damned depressing that to respond would hurt too much.

Between you, Orlov and Encho, there are nights when I lie awake and wonder if anyone will recognize the USA in 5 years? I sometimes read them and then suggest to my better half that he skip-it for the night; one of us needs to get some sleep.

In a past life I worked for a brokerage house as first an administrative assistant and then as a wire-operator. I finally left when I witnessed the absolute greed of the manager - who thought nothing of taking paper stock-certificates from old people, whom he had told they had no value, then laughing that he would "hold on to them in-case they had some value the office. He was a pig, and I wanted no part of it.

Anonymous said...

The prospect of hunting pin-striped suits would be enough to make me want to become a Seal.