FXstreet.com (Córdoba) – Cable failed in the last hour to confirm levels above 1.6600 and fell below 1.6500 to 1.6460 (lowest price of the American session). From there GBP/USD rebounded to 1.6510. Currently the pair is testing the lows of the session.

Not much information on market flows so far this morning so I’m left to surmise on what’s moving the market. Early buying flows in AUD/JPY and NZD/JPY look like the culprit in thin markets, with NZD/USD now fast approaching it’s .6885 high from last week where there are bound to be some stops.

Dear Zero Hedge readers and blogger fans, it is time to move on…

…to our new home: www.zerohedge.com

For a little over 6 months blogger has served us well, and yet it reached its limitations some time ago. Our new website, in addition to all currently existing features, now has a full RSS feed, a Contributors section, a complete term Glossary, and a full Forum for reader initiated content, and after a one month beta testing period, is now fully functional (not to mention faster).

And this just the beginning – the flexible architecture of the new site has allowed us to develop some really cool, brand new features which we will be launching in a few weeks. We are extremely excited about these.

We will keep blogger until such time as google/blogger decides to shut it down: it will be a repository for the roughly 2,600+ posts put on here since January 9. Going forward, no more posts will be uploaded to blogger. Also, this website will be preserved as a backup blogsite in case of some unpredictable infrastructure failure at www.zerohedge.com

Readers who wish to continue following our analyses, reports, presentations and opinions are kindly invited to visit us at www.zerohedge.com: you will find it a very hospitable new home.

While it saddens me to leave blogger, it is time to move on to the next phase of the project.

Farewell, blogspot

TD

Read more….

Hey Ron, didn’t realize your new position as a contributing editor on CNBC came with the contributing title of “Portfolio Manager.” Didn’t Stevie put a one year kibbosh on that? But I digress… And in all honesty I am surprised that you seem to have the correct spin on things (as per letter below from Jim Cramer’s failed media experiment TheStreet). When you say:

I’d prefer that regulators look into whether a firm like Goldman Sachs (GS) unfairly view [sic] order and information flow ahead of its customers and clients.

we are pleasantly surprised… Yet when you follow up by saying:

But the press won’t touch that topic

we are totally ecstatic that you do not lump us into the definition of that derogatory word. Then again, feel free to do a search for “Goldman Sachs” here. Even an erudite portfolio manager such as yourself may learn a thing or two.

High-Frequency Distraction

By Ron Insana

Portfolio Manager

7/27/2009 11:40 AM EDT

The New York Times and The Wall Street Journal are taking aim at a new form of computerized trading known as “High Frequency” trading. The algorithm-based trading is allegedly an illegal form of front-running, as high-frequency traders hook into exchange computers and use “flash trades” to suss out incoming order flow and use the lightning speed of their own programs to jump ahead of customer orders. Critics argue that individual investors are at a distinct disadvantage for this reason and a variety of others. The proximity of high-frequency computers, which can be placed next to exchange computers for a fee, allows for an almost-osmotic transfer of information. Senator Charles Schumer (D, N.Y.) is asking the SEC to ban “flash trades,” which are phony orders placed by high-frequency programs that aim to fool market participants into entering orders. The programs jump in front of customer orders and gain a trading advantage. If that is indeed what is happening, it qualifies as “front-running,” an illegal practice on Wall Street. If high-frequency traders are just faster than everyone else and not illegally jumping in front of others or paying off the exchanges to get preferential trading treatment, then this new area of technology-based trading is no less legitimate than the use of the telegraph, the telephone, the ticker, computers, handheld devices or older-style “black box” or “dark pool” programs that give sophisticated traders the ability to simply trade faster. I’d prefer that regulators look into whether a firm like Goldman Sachs (GS) — whose former executives continue to run the New York Stock Exchange (NYX) ; advised on the merger between NYSE and Archipelago, and formerly owned a portion of the combined entity; own Speer, Leeds & Kellogg, the largest specialist firm on the Big Board floor; and control the greatest number of seats in the equity markets — unfairly view order and information flow ahead of its customers and clients. I am far more concerned about that than I am about the emergence of “high-frequency” trading. But the press won’t touch that topic. It’s easier to go after the dreaded speculators and dark pool traders than lose access to the most profitable and prestigious firm on Wall Street.

Read more….

After numerous posts on this blog discussing speculation of assorted forced buy ins, it seems that this phenomenon is quite factual and quite pervasive among the asset management community. As Zero Hedge has noted previously, forced buy-ins are a critical issue as it leaves shorts at the mercy of their securities lenders and repo desks (most of which are TARP recipients and thus beneficiaries of higher stock prices) which generically have the option of recalling lent out shares at a moment’s notice, and thus creatingartificial purchasing pressure: i.e. a forced short squeeze. According to Securities Industry News, in a recent survey by Callan Associates, over half of the respondents said they are undergoing a “controlled unwind” with their securities lending desks (aka State Street, BoNY, and Northern Trust).

Firms participating in securities lending programs are trying to reduce their risks and push for greater disclosure of what happens to cash given as collateral, according to a survey released this week by Callan Associates, a San Francisco-based investment consulting firm.

About half of the respondents to the Callan survey said they are undergoing a process called “controlled unwind” to reduce the risks in their existing securities lending programs and minimize current and future losses. Properly executed, an unwind involves recalling securities out on loan without incurring any financial loss or restricting either the number of transactions or the types of securities lent.

Almost all the respondents are using their current custodian or securities lending provider for the unwind and most believe it will take one to three years to complete, said Callan.

More than half of the 44 respondents who said they wanted to make changes to their securities lending programs rank fine-tuning their cash collateral reinvestment guidelines as their top priority. This reflects a common concern among respondents about losses coming from the reinvesting of cash used as collateral against the securities that are lent out.

The firm surveyed 72 fund and plan sponsor organizations of which public and corporate funds comprised the majority of survey respondents. About 54 percent of the respondents were mid-sized funds that hold from $1 billion to $9 billion in fund assets. Nineteen percent of the respondents were small funds with less than $1 billion. The remaining respondents were split between “mega” funds with more than $25 billion in assets and large funds with between $10 billion and $24 billion in assets.

Bottom line – in a market where an unknown but significant amount of trading is based on widely permitted and pervasive advanced looks compliments of the exchanges, ECNs and the regulators, and the balance consists of artificial buying from rolling buyins, only the most insane, or foolhardy or both, believe they can trade with any hope of short or long-term success.

Read more….

From an interview earlier with NYSE’s Larry Leibowitz, who is surprisingly vocal against Flash trading. Larry – since the NYSE does not engage in Flash trading, can you please indicate whether or not the SLP program provides advance notice to Goldman Sachs ala Direct Edge’s ELP program. Regardless, the escalation in the ECN wars is starting and should be a very interesting one to follow, especially now with a toothless and clueless Mary Shapiro stuck in the middle.

Read more….

It seems only yesterday that Zero Hedge had some questions in regard to Goldman’s VaR Fed exemption. No response was received from 85 Broad. Today it appears several Congressmen, lead by Alan Grayson, are willing to drive a sharp stick pretty deep into the hornets’ nest, by sending a letter directly to Wall Street Don Ben Bernanke, demanding an explanation exactly to the question of Goldman’s VaR Exemption.

Among the reasons provided as casue for potential alarm are the following:

1) In the letter granting a regulatory exemption to Goldman Sachs, you stated that the SEC-approved VaR models it is now using are sufficiently conservative for the transition period to bank holding company. Please justify this statement.

2) If Goldman Sachs were required to adhere to standard Market Risk Rules imposed by the Federal Reserve on ordinary bank holding companies, how would its capital requirements differ from the current regulatory regime?

3) What is the difference in exposure to the taxpayer between these two regulatory regimes?

4) What is the difference in total risk to the portfolio between these two regulatory regimes?

5) Goldman Sachs stated that “As of June 26, 2009, total capital was $254.05 billion, consisting of $62.81 billion in total shareholders’ equity (common shareholders’ equity of $55.86 billion and preferred stock of $6.96 billion) and $191.24 billion in unsecured long-term borrowings.” As a percentage of capital, that’s a lot of long-term unsecured debt. Is any of this coming from the Government? In this last quarter, how much capital has Goldman Sachs received from the Federal Reserve and other government facilities such as FDIC-guaranteed debt, either directly or indirectly?

6) Many risk-management experts, most notably best-selling author Nassim Taleb, note that VaR models can dramatically understate risk. What is your overall view of Taleb’s argument, and of the utility of Value-at-Risk models as regulatory tools?

Zero Hedge had a rather comparable battery of questions, and believes it would be in the general interest of whatever remains of the general investing public, the one that for some reason or another still has not lost all faith in a fair and efficient marketplace, compliments of several major monopolists who have usurped exchanges and ECN as their personal taxpayer and speculator funded piggy banks.

goldman-var-exemption-question.html>Read more….

“I write out of concern that the integrity of our capital markets is being compromised by the ability of some insiders to view order information before it is available to the entire market, and use electronic trading strategies to profit from that information at the expense of other investors.”

Full letter here:

Schumer Letter

Read more….

Damage control… Or is Goldman a little worried what Direct Edge may disclose.

From the appended Schumer piece on Bloomberg:

“Goldman Sachs believes high-frequency trading should have an accompanying obligation to provide liquidity, and be subject to appropriate regulatory oversight,” Canaday said.

Ed, we have been giving you the chance to provide your side of the story for months. Please take us up on the offer.

Read more….

The mythical “TRADER – The Documentary” is finally available on You Tube. Relevant “full frontal” insights on the making of a hedge fund legend, and a paleolithic market dominated by monochrome PCs (what, no Bloomberg?), running to the municipal library for that 10-K, and no Flash orders frontrunning every trade.

Part 1, and related series (2-7) are on You Tube.

hat tip j.m.

Read more….

Bearish bets made impossible, compliments of UBS. Either that, or UBS’ recently upgraded (with i7 chips of course) computers just cant handle the basis calculations. Either way, is something very fried with ETFs going on behind the scenes?

IMPORTANT NOTICE: Inverse, Leveraged and Inverse-Leveraged Exchange Traded Funds are no longer available for new or additional purchases at UBS

Effective July 27, 2009, UBS is suspending the offering of Inverse, Leveraged and Inverse-Leveraged Exchange Traded Funds (ETFs). You will no longer be able to make new or additional purchases and will only be able to liquidate current positions through UBS at this time. Any attempt to execute a trade of such ETFs will be rejected.

Please contact your Financial Advisor with questions.

Hopefully iShares and Direxion have some good class action defense lawyers.

Read more….

• Administration looking for Chinese help to narrow trade gap and boost US jobs.
• Advertisers are getting cheaper rates than a year ago on television commercials.
• Aetna 2Q profit dropped to $346.6M due to greater commercial expenses and cuts full year forecast.
• Asian markets were higher Monday on hopes for further earnings recovery, Nikkei hits 10,000 mark.
• China’s new small-company stock exchange gets 108 IPO applicants on 1st day as launch nears.
• China shares up for 4th day on high liquidity-driven sentiment, led by metals and airlines.
• Euro rises to $1.4263 in European morning trade as investors continue to leave dollar.
• EU says Iceland’s entry talks will likely be simpler, shorter than others.
• German consumer confidence rises amid lower prices and stable job market.
• Oil rises above $68 in Asia as economic recovery hopes fuel 3-week rally.
• US Economy probably shrank at slower pace, signaling recession abated.
• US stock futures point to higher open ahead of earnings, new home sales update.
• Aetna Inc. puts its pharmacy-benefit management business on the block.
• ArcelorMittal exploring a JV spin off of its stainless steel business, est. $3B.
• Citigroup trader is pressing it to honor a 2009 pay package that could total $100M.
• Corning’s June net income declines from $3.2B to $611M.
• De Beers qtrly net drops 99%; but sees sales of uncut diamonds improving.
• Eastman Chem beats by $0.15, posts Q2 EPS of $0.86. Revs fell 31.7% to $1.25B.
• Ericsson to buy Nortel’s North American Wireless unit for $1.13B.
• Fortune Brands’ net falls 27% on continued weakness in home-products segment.
• Honeywell’s June net income declines from $723M to $450M.
• Julius Baer profit falls 47% to $204.3 million as managed assets slump.
• MSFT bows to pressure, gives European users of Windows choice of Web browsers.
• Pearson raises earnings guidance for 2009, shares rise 9 percent to top FTSE.
• RadioShack 2nd-quarter profit rises to $48.8 million as company trims expenses.
• Verizon added 1.1M customers in Q2 vs. 1.4M added by AT&T in the same period.
• Virgin Blue of Australia airline reports losses, launches capital raising of $189M.
• Volkswagen plans to raise up to $5.7B via rights issue to fund purchase of Porsche.

Recent Egan-Jones Rating Actions

SCHLUMBERGER LTD (SLB)
FORTUNE BRANDS INC (FO)
DELUXE CORP (DLX)
FOOT LOCKER INC (FL)
AMAZON.COM INC (AMZN)
AMERICAN EXPRESS CO (AXP)
CIT GROUP INC (CIT)
BRISTOL-MYERS SQUIBB CO (BMY)
AIRTRAN HOLDINGS INC (AAI)
VF CORP (VFC)
NABORS INDUSTRIES LTD (NBR)
UNITEDHEALTH GROUP INC (UNH)
BOEING CO/THE (BA)

Read more….

EURUSD Today’s support: – 1.4272, 1.4243 and 1.4220(main), where correction is possible. Break would give 1.4196, where correction also may be. Then follows 1.4172. Break of the latter would result in 1.4127. If a strong impulse, we would see 1.4084. Continuation will give 1.4040.

Read more….

No break of 93.32 and a solid recovery back above 94.55. Be aware that having achieved this new high there is a strong risk of reversal lower at any time. However, while support at 94.12-18 remains intact I feel the immediate risk is higher back to 94.70 and after a…

Read more….

Euro 1.4340 Initial support at 1.4046 (AUG 17 low) followed by 1.4008 (Jul 29 low). Initial resistance is now located at 1.4447 (Aug 5 high) followed by 1.4621 (61.8% retrace 1.6038 -1.2330)

Read more….

The EURUSD had a significant bullish momentum on Friday, topped at 1.4375 and closed at 1.4324. On h1 chart below we can see that the bearish channel has been convincingly violated to the upside indicating bearish failure and potential bullish scenario. The bias is bullish in nearest term targeting 1.4446…

Read more….

On the daily chart shown below, we are looking for a higher wave 5 target of a red wave C, as the market is trading higher and higher, driven by higher commodities and equities in the last few days. The prices are also threatening our critical resistance area at 1.4326,…

Read more….

While scanning the Forex news recently, I noticed quite a few disturbing headlines. June 10, 2009 SEC Pulls Plug On Alleged $80M Forex Ponzi Scheme The Securities and Exchange Commission yesterday charged two California men and two companies they control for conducting an $80 million Ponzi scheme that targeted Korean-American investors with promises of extraordinary returns from currency trading. July 9, 2009 GA Man Charged With Running $15 Million Forex Ponzi Scheme -CFTC A Georgia man was

Read more….

I have made my mark in trading and trading education by thinking differently. One of the things I am always fascinated with is how we are taught to do certain things and how we learn, specifically when it comes to anything that has to do with competing. In the United States for example, we compete for jobs, money, better this, and better that… Have you ever realized that in the biggest democracy in history, our school systems don’t teach classes on how to compete? In capitalism, there is

Read more….

This article is taken from the YourTradingEdge magazine (MAY/JUNE 2009 issue) The author, Kel Butcher , is a full time futures, equities and derivatives trader. He is the author of ‘A Step-by-Step Guide to Buying and Selling Shares Online’. He also acts as a mentor and coach to other traders. The rout experienced by all the world’s equity markets during 2008 will be etched in the memories of share traders and investors for many, many years. Tales will be told, long after the bear market has

Read more….