Goldman Turns Bearish: Squid Releases Top Trades For 2012... And It's Not Pretty

The much anticipated Goldman Sachs list of "Top Trades Recommendations for 2012" is out... And the squid is very, very bearish. Let's dig in.

Market Snapshot: European Close

Equity and Credit markets rallied significantly on the day with credit catching up to equity's recent strength in an unusually biased move. The higher beta XOver (high yield European credit) and Subordinated financial credit outperformed close to close but lags overall relative to equity and investment grade credit, suggesting less than stellar demand to lay out new risk and more likely shorts covering in a hurry. Seniors underperformed Subs in financials - again suggesting some covering on the SEN-SUB decompression trade on the back of the ratings actions this week. Sovereign spread moves were actually largely unimpressive with spread curves flattening, some decompressing, and the fulcrum security BTPs, not exactly ripping across the curve.

Fed Cancels POMO Due To "System Difficulties"

Ok, what the hell is going on? This is the first POMO ever cancelled in QE/Lite/Twist history. As a reminder, today the Fed was supposed to sell $8 billion in 2013 bonds: a liquidity withdrawing operation. Just how little liquidity is there in the "system"?

Did The Fed Leak The European Bailout Decision On Monday Morning? A Visual Exhibit

We talked about the total disconnect between US equities and the rest of the global financial market on Monday morning. At the time, many market participants commented that they had not seen this kind of disconnect so broadly and how strange it was - and with reasonable volume (unusual for an upswing). Well, now we have some details on what exactly was said and done on Monday with the Fed decision, perhaps it is clear that someone somewhere was tipped off that this was coming as the rest of the world's risk assets leaked inexorably lower and US equities hugely outperformed.

Fed Made Decision To Bail Out Europe On Monday

It appears that the Fed decision to bail out Europe was not made this morning, or yesterday, but on Monday as per the following two headlines:

• LACKER DISSENTED AGAINST FOMC SWAP DECISION ON NOV. 28
• LACKER VOTED INSTEAD OF PLOSSER, WHO WAS UNAVAILABLE

It also means that the decision was leaked on Monday, and explains the relentless surge in stocks since then despite progressively worse news out of Europe. Q.E.D. - a plan so good Hank Paulson could have leaked it to his hedge fund buddies.

RANsquawk US Afternoon Briefing - Stocks, Bonds, FX etc. – 30/11/11

Submitted by RANSquawk Video on 11/30/2011 - 11:16 ETC RANSquawk

Did A Large European Bank Almost Fail Last Night?

Need a reason to explain the massive central bank intervention from China, to Japan, Switzerland, the ECB, England and all the way to the US? Forbes may have one explanation: "It appears that a big European bank got close to failure last night.  European banks, especially French banks, rely heavily on funding in the wholesale money markets.  It appears that a major bank was having difficulty funding its immediate liquidity needs. The cavalry was called in and has come to the successful rescue." Granted the post is rather weak on factual backing and is mostly  speculative, but it would certainly make sense. That said, it harkens back to our original question: just how bad was the situation if the global central banking cabal had to intervene all over again, and just what was not being told to the general public? Lastly, and most important, slapping liquidity bandaids on solvency gangrenes does nothing but buy a few days at most. Furthermore, we now expect the stigmata associated with borrowing from the Fed to haunt each and every European bank as vigilantes will now use the weekly ECB update on borrowings from the Fed as a signal to hone in on this and that weak Italian and French, pardon, European bank.

Anti Tilson Once Again Best Performing Investment As It Trades At Lifetime High

While being caught short stocks in the face of the global Bernanke Put, or long Chinese IPOs this year, it seems relative-value trades remain preferential from a risk-reward perspective. That is of course unless you are our old friend Whitney Tilson. The Anti-Tilson ETF (Long GMCR / Short NFLX) is up 8% today and stands at an impressive +43% (lifetime highs) in the 20 days since we recommended it. NFLX weakness this morning attributed to Wedbush's 30% downside target downgrade.

Video: Fox Business News Interview

Admin at Marc Faber Blog - 5 minutes ago

Latest Fox Business video interview. *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.* 

 

 

 

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Central Bankers Are Pushing On A String

Eric De Groot at Eric De Groot - 10 minutes ago

The message of the market says distribution in the financial sector. This, in turn, implies that central bankers are pushing on a string despite their ability to “beat the grass to startle the snakes” – sell the hype. A quick review of trend energy in the financial sector reveals distribution and increasing downside force. The negative divergence in trend energy relative to price, lower highs in... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

 

 

 

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Europe Will Monetize, It Will Postpone The Problem

Admin at Marc Faber Blog - 35 minutes ago

The big picture endgame in Europe is that they will also monetize like in the US and that will postpone the problem, but it will not solve it. - *in Fox Business News* *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.* 

 

 

 

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Bloomberg Video Interview: November 29

Admin at Jim Rogers Blog - 1 hour ago

Latest Bloomberg video interview, November 29. *Jim Rogers is an author, financial commentator and successful international investor. He has been frequently featured in Time, The New York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The Financial Times and is a regular guest on Bloomberg and CNBC.* 

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