Moody's: Bank writedowns at 2/3 of likely total AP

 

The agency estimated that 68 percent of residential mortgage losses have been taken, but only 49 percent of commercial real estate losses.

BASEL III

Basel should stand firm  FT

Shake-up set to raise costs of borrowing  FT

Fears for German banks under new rules  FT

Bankers poised for Basel III accord  FT

Germany's Push to Delay Basel Capital Requirements Meets U.S. Opposition  BL

 

7- RISK REVERSAL

8- COMMERCIAL REAL ESTATE

9-RESIDENTIAL REAL ESTATE - PHASE II

 GENERAL INTEREST

FLASH CRASH - HFT - DARK POOLS

Flash crash report: plunge still a mystery-sources   Fox

What can be done to slow high-frequency trading  FT

MARKET WARNINGS

Charting The Great Bear Market Fund Flow Vacuum  ZH

 

Many skeptics enjoy pointing out that the fear and loathing toward stocks as exhibited by the seemingly endless mutual funds outflows, now in the 18th consecutive week, is nothing but a contrarian play, and when the masses are stepping out is when the smart money should invest. Under other circumstances we would totally agree. However, in this case, we make the argument that it is in fact these "contrarians" (with the assistance of the Fed, the Primary Dealers, and the HFT scalpers) who have ramped the market in advance of this move for many months now, anticipating an inflow which never comes. In other words, the true contrarian move is to fade the market here. Why? Because as the below chart from ICI shows, stocks have experienced the biggest short-term equity return upswing in history on the smallest net amount of positive inflows also in history. The argument would go that the entire upswing is nothing but an engineered push on nothing but momentum, and QE, and that fair values are far, far lower. Once GDP passes below zero, and once S&P EPS forecasts are revised to +/- 60, as the double dip unwinds, and applying an appropriate multiple of 10-12x, the market will be far more credible, and will see far more inflows when it is at 600-700. For now, however, nobody is foolish enough to enter. And those buying on hopes that Joe Sixpack will finally put in his two remaining cents in Amazon will continue to be disappointed, entrusting their entire risk capital to the like of the Federal Reserve, Goldman and Getco.

No Volume- Don't Shut The Algos Just Yet ZH

 

The real reason why volume is so poor is that the market is fixed, I just don't know anyone who is a clever investor out there who thinks the market is fairly valued here and most buyers I talk to are motivated by the thought that the Fed will keep printing and debase the currency enough to make asset prices go up... talk about an optimist point of view: the only buyers are cynical!

P/E Expansion & Contraction Ritholtz

MARKET & GOLD MANIPULATION

IMF Resumes Direct Gold Dumping, Sells 10 Tons Of The Shiny Metal To Bangladesh  ZH

VIDEO TO WATCH

QUOTE OF THE WEEK

 

To paraphrase Oscar Wilde Investors know the price of everything but the value of nothing. Author Unknown In therapy, you have to accept a mistake to move on.  At times, this realization will be painful but in the end it is better for you.  Right now Wall Street is in complete denial and trying to pretend all is well.  Their profits are up but all that is happening is a wealth transfer from taxpayers to this unproductive group.