Who's On The Other Side Of Your Selling Equities...

Interesting to see who's on the other side of the doom and gloom crowd - myself nearly convinced aswell...

Number 1: (statement made today by BlackRock)

"BlackRock’s top performing European Equities Style Diversified team believes that worries over indebted European territories are obscuring powerful factors that will work for investors in the years ahead. Greece’s problems have delivered a wake-up call to European governments which are increasingly making firm plans to tackle budgetary problems urgently and effectively. Add to this the fact that Europe possesses competitive companies exposed to global growth, which now have the added advantage of a devalued euro."

Number 2: (research out of BofA Merrill Lynch couple of days ago)

"History suggests that intelligent austerity works.
Many countries in the Western world have to rein in their budget deficits, often by significant amounts. Can this derail the recovery from the post-Lehman recession? May austerity even be self-defeating, as a tighter fiscal policy hits demand and tax revenues? These are among the key concerns rattling financial markets. In this report, we examine the historical evidence. We find that the opposite can often be the case. Intelligent austerity can even raise GDP growth."

Number 3: (research out of Barclays Capital last Friday)

"We would caution against any substantive re-evaluation of the economic outlook, however. Although recent data highlight modest downside risks to our forecast of US GDP growth of 4.5% in Q2, they have not been uniformly downbeat. In particular, within the GDP release, both the household income and corporate profit data were revised up, while the May personal income and outlays report indicated that a rebound in labour income will support consumer spending as income from government transfer payments fades. These developments are consistent with our expectation that the recovery will continue to build momentum and that GDP growth will be stronger in Q2 than it was in Q1."

So - breather for equities or just a little blip in the downtrend....?!

How Goldman gambled on starvation

Worthwhile read!

Johann Hari: How Goldman gambled on starvation

Speculators set up a casino where the chips were the stomachs of millions. What does it say about our system that we can so casually inflict so much pain?

By now, you probably think your opinion of Goldman Sachs and its swarm of Wall Street allies has rock-bottomed at raw loathing. You're wrong. There's more. It turns out that the most destructive of all their recent acts has barely been discussed at all. Here's the rest. This is the story of how some of the richest people in the world – Goldman, Deutsche Bank, the traders at Merrill Lynch, and more – have caused the starvation of some of the poorest people in the world.

http://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-how-goldman-gambled-on-starvation-2016088.html

Also on a sidenote, this from a Barclays report today I found interesting:

Financial markets’ focus on Europe switched from sovereign debt to the banks this week as the expiration of last year’s 12-month long-term repo operation loomed. Despite fears that the event might uncover severe stress in funding markets, the headline news was positive. The combined demand for liquidity in Wednesday’s 3-month operation and Thursday’s 6- day fine-tuning operation left the liquidity surplus in the eurosystem at about half of the level it had been recently. We believe that the normalisation of Eonia is likely to come ahead of the current market expectation of end-2011.

This is not to say that concerns about the European banking system have dissipated. It still seems likely that a number of Greek banks and Spanish Cajas, for example, are heavily reliant on the ECB for funding. The impending stress tests of European banks may shed further light on any latent vulnerabilities. If conducted effectively – which means applying appropriately designed and calibrated stress scenarios, with the details and results made public – the exercise has the potential to instil greater confidence in the banking system, even if (perhaps especially if) some governments have to provide capital injections to support fragile institutions. It remains unclear, however, how close the practice will come to this ideal, and there is a resultant risk that market concerns about the robustness of some segments of the European banking sector will not be fully dispelled.

Sometimes Algos Are Your Friend

I've been trying to stabilise this puny stock for the 3rd party account I trade. To my delight the moment I put in a 2x usual size bid, an algo lifted the offer. So even though these coder wiz kids coding these algos are right in trying to front run your typical aggressive buyer, it can backfire when someones bluffing. I like bluffing.

So the best thing to do if you want to sell is actually bid like a world champion and sell to the front runners or order depth gamblers.

It's also interesting to see what happens when you lift 4-5 offers of a algos "market making" and see it immediately switch side, sometimes bidding higher than last sale...

Algos aren't good market makers, they're front runners. And they're good at it!

Is this ethical? You fucking bet! ;)