Posts Tagged ‘losses’
RICHARD RUSSELL: 2012′s Market Moving Event Will Be An Iran/Israel War
Richard Russell senses something momentous building in the markets and he’s waiting for the right catalyst. He thinks that catalyst will be an eventual nuclear stand-off between Iran and Israel. In his Friday note he said:
“I’ve been sensing something BIG and ominous is in the offing. What could it be? Ah, a front page article in Sunday’s NY Timessupplies the answer. Israel will attack Iran with nuclear bombs. Israel must attack this year for this is the year when Iran will have nuclear capabilities.
Actually, the stock market is acting as though something momentous and frightening is ‘out there.’ The roof of a monster top is building. Gold keeps creeping higher.
If Israel attacks the Mid-East will go up in flames.
Suggestion — dollars and gold. If the dollar collapses, gold will make up for the losses by sky-rocketing.
The next target for gold — to trade into the 1800s, and it’s getting close.
The Dow is fluctuating around the 12700 area, not surging above it or falling decisively below it.
If you listen carefully, you can hear the heart-beat of the market. It’s a slow, heavy beat, as if the market is waiting for something. That something is going to be BIG. Bigger than what anyone is expecting.
2012 is fated to be a monster year. Keep your eyes on the dollar and gold, and the newspaper headlines!”
It might sound far fetched, but the tension between the two countries is building with every day. As the LA Times noted just yesterday, there’s no telling where this is all headed. The ripple effect would be staggering if tensions flare up into something bigger. The asset class most effected would certainly be oil prices as the Middle East would become a war zone again. Surging oil prices might be temporarily viewed as bullish for equity markets, but would likely turn into a repeat of last year with surging prices ultimately causing recession fears.
I think it’s irrational to make big bets on outlier events like this, but if the headlines deteriorate it would be wise to understand the market impact before the market begins to price everything in. And yes, while gold would certainly benefit, oil prices would be the primary beneficiary….
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See Also:
- More And More Developing Countries Are Accumulating Gold
- Chinese Gold Sales Up 49.7% In The First Week Of The Year Of The Dragon
- The Price Of Export-Driven Growth In America
With A Key Lawsuit Dismissed, Bank Of America Is On A One Game Winning-Streak
Bloomberg reports that a lawsuit filed against the troubled Charlotte-based bank by Allstate has been dismissed.
The lawsuit related to losses stemming from $700 million in mortgage securities that the insurer purchased from Countrywide Financial.
Bank of America acquired Countrywide in 2008.
The dismissal could end up having larger, positive implications for Bank of America, becasue the judge found that the evidence Allstate submitted “wasn’t sufficient to support its allegations that Bank of America set out to defraud Countrywide’s creditors.”
This could allow Bank of America to shield itself in the future from similar claims against it related Countrywide’s actions.
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See Also:
- People E-Mail Their Horrible Bank Of America Stories To YouTube Star Jackie Ramos All The Time Now
- You Will Laugh Really Hard Watching This Funny Or Die Video Slamming Bank Of America
- The New Task Force For Investigating The Mortgage Crises Has Already Subpeonaed 11 Banks
The ECB’s Next 3-Year LTRO Is Going To Be Gigantic
Back in December, the ECB held its now famous 3-year LTRO operation, allowing banks to pledge all sorts of liquidity for cheap cash. In the end, banks pledged about 489 billion EUR.
Well there’s another operation coming up at the end of February, and it sounds like it’s going to be ginormous.
FT:
Several of the eurozone’s biggest banks have told the Financial Times that they could well double or triple their request for funds in the ECB’s three-year money auction on February 29.
“Banks are not going to be as shy second time round,” said the head of one eurozone bank at last week’s World Economic Forum in Davos. “We should have done more first time.”
So it sound like it will be easily over EUR 1 trillion.
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See Also:
- ECB’S GONZALEZ-PARAMO: Actually, The LTRO Is Bigger Than The Bazooka Everyone Was Hoping For
- The Euro Takes A Tumble After Lagarde Suggests The Public Sector Could Take Losses
- A New Watershed Moment In The Euro Crisis?
Markets In Asia Rally Higher As Apple’s Blockbuster Earnings News Circulates Overseas (AAPL)
Asian markets started the day sharply higher, after Apple posted one of the most impressive earnings beats in recent history.
The company reported revenue of $46.3 billion, topping estimates by $7.57 billion.
A market update is below.
Japan’s Nikkei has increased 1.0% to 8,869.
Australia’s S&P/ASX 200 is up 1.0% to 4,266.
The South Korean Kospi has added 0.9% to 1,968.
Singapore’s FTSE Straits Times Index is up 0.9% to 2,875.
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See Also:
- Asian Markets Open The Day In Positive Territory
- Asian Markets Are Rallying, Japan Already Up More Than 1%
- Asian Markets Reverse Earlier Losses And Start Heading Higher
Credit Suisse Does It Again And Pays Bankers In Derivative Backed Bonds
Bloomberg is reporting that Credit Suisse has informed senior employees that they will be compensated in part with bonds backed by derivatives.
The derivativesare linked to about 800 entities and the bonds will pay a 6.5% coupon rate to U.S. holders.
CEO Brady Dougan said the move was a “risk transfer from the firm to employees.”
Credit Suisse will absord the first $500 million in losses in the pool of bonds, with any additional declines reflected in the value of employees stakes.
This is not the first time the Swiss bank has made this move. In 2008, the bank paid bonues comprised of toxic assets that have since increased in value by 75%.
More to come shortly.
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See Also:
- Morgan Stanley’s CEO Pay Package Is In And Gorman Is Practicing What He Preaches
- WOOPEE! Today Is Bonus Day At Goldman Sachs
- Goldman Sachs Bonus Day Was A Tearjerker