Category Archives: Financial Markets

Socio-Economics History Blog

  • No Fly Zone Over Syria: Trigger Point For Larger Conflict ! 
    “The planned deployment by NATO countries of Patriot air defense systems on Turkey’s Syria border will actually amount to an imposition of a no-fly zone for Syrian aircraft in circumvention of the UN Security Council.” This is according to Vladimir Kudelev, a leading research fellow of the Russian Institute for Oriental Studies, reports Voice of Russia.

    Kudelev argues that the mere presence of the Patriots will “drastically” influence events on the ground in northern Syria, because the insurgents will automatically get a 200-250 km wide “umbrella” along the Syrian-Turkish border (Kudelev’s numbers aren’t quite right. The maximum range of the Patriot PAC-3 missile is actually on the order of 160 km). More importantly, the deployment of the Patriots would undermine the role of the UN Security Council, by taking another step towards creating a no-fly…

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Can the Tea Party ever become a reasonable voice


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How About the TP rolls out internationally and becomes a political combination in both Europe and US. Considering that every second deal is a trans atlantic opportunity the Pond’s Tea Party aficionados can then shine and shimmy on a Harley or with just Barley



Where Justice rolls down like Waters and righteousness flows like almighty stream …MLK’s the Dream recently on a Harley for the Whistlestop Tour of the Palin S. 

California Dreamin’ | Advantage zyaada

Organization of the Federal Reserve System

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Even as China maintained a vice-like hold on its multifarious spread of economic activity, its banks managed to lend out $1T in 10 months of this year and China thus wants to keep up more control on its economy thru regulated lending.

What we found more surprising was that US’s own bankrupt test state California managed to raise $4.4 billion in Revenue Anticipation Notes and will continue with $2bln in Build America Bonds at hardly a 1.5% premium in short-term markets even as concerns over the $2.8 T muni market continued to hold everyone in a tizzy. The Fed treasuries ( TBT for the 20 yr Treasury ETF) also managed to right themselves having spiralled after the QE2  program took wind out of their sails in an argument with the market and California ill get another reprieve this week as it completes the $10 bln borrowing program in tough conditions anticipated.The US in fact managed a cool $80 bln in October in Foreign investment interest ( in the case of US, this is dominantly in debt)

Check for the latest on banks and changing worldviews

Marcus Goldman (1821-1904)

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Goldman stops trading

Even as Reuters reports that Investment Banks are getting ready to shake hands with “fat cat” insinuation led Obama as soon as polls end, Goldman Sachs has brought down its share of trading in the business to 19% among the large global banks from a peak of 29% in June 2009 ( as reported by Christine Harper on Bloomberg TV)

David Viniar, 55, Goldman Sachs’s chief financial officer, told analysts on a conference call last month that the firm had lowered its VaR because it didn’t see opportunities to take risk as client trading dropped.

“The world is still not a very safe place,” he said.

Goldman Sachs’s lead peaked in the fourth quarter of 2009, when it had 45 percent more fixed-income trading revenue than its closest competitor, New York-based JPMorgan Chase & Co., which remained profitable throughout the credit crisis.

The Goldman Sachs Tower - Jersey city, NJ.

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Dwindling Lead

Since then, its advantage over the second-place bank and over the average of the seven firms has dwindled in each of the last three quarters. In the third quarter, the bank

Category:JPMorgan Chase

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had a 6.8 percent advantage over its nearest competitor, Charlotte, North Carolina-based Bank of America, which reported fixed-income trading revenue of $3.53 billion.

Aviation revival catches fire


The mega merger between United and Continental yielded devastatingly simple benefits for investors as both corporate independently reported

Approved. Closed. Trading as One.

Image by davidciani via Flickr

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$2.12 and $2.16 in profits(earnings per share for the September quarter. Q3 was sweeter as load factors were above 80% for Continental and exceed 85% for United and as the new parent reported, Continental made revenue realisations go up by as much as 16% per seat and United 18%

WSJ quotes: The former UAL Corp. and Continental Airlines Inc. each swung to the black in their final quarters as standalone companies amid a much improved revenue environment, according toUnited Continental Holdings Inc., which reported results for both units on Thursday.

The parent of the two airlines was formed Oct. 1, creating the world’s largest carrier by traffic as the sector is benefiting from rebounding demand. The airlines will continue to fly separately for up to 18 months while they seek regulatory approval to mix planes, crews and maintenance programs.

While JetBlue increased capacity by 9% United and Continental also managed a near 4% increase. Both companies reported standalone this quarter

The new conglomerate is likely to operate with just under $10 billion in Cash, coming from profits of $387 million for United and $354 million for Continental. Their combined revenue is already north of $9 billion, United bringing in $5.39bln out of the same

Low fare provider (LCC) Ryanair in Europe also proved Low cost model detractors like us wrong upping likely profit guidence by a 5-ish %

Ryanair update (

In the six months to September, Ryanair carried 40.1m passengers, up 10 per cent from the 36.4m it carried in the same period last year. Average fares rose by 12 per cent in the period to €44 and total revenue per passenger – including ancillary revenues – also rose 12 per cent.

For the half-year ending in September, pre-tax profit increased by 15 per cent to €483m on revenues that rose 24 per cent to €2.2bn. Earnings per share rose from 25.21 cents to 28.31 cents.

Do You Remember To Spend Some Daily Time @ ADVANTAGES.US

That’s where we moved the crisis and the economics of US Banks too…

The Abacus instruments that GS is getting the flak for.. | Advantage Banks

S.E.C. Sues Goldman Over Housing Market Deal –

Shorts? SEC doesn’t like any structures right now

Goldman Sachs, which emerged relatively unscathed from the financial crisis, was accused of securities fraud in a civil suit filed Friday by the Securities and Exchange Commission, which claims the bank created and sold a mortgage investment that was secretly devised to fail.

The move marks the first time that regulators have taken action against a Wall Street deal that helped investors capitalize on the collapse of the housing market. Goldman itself profited by betting against the very mortgage investments that it sold to its customers.

The suit also named Fabrice Tourre, a vice president at Goldman who helped create and sell the investment.The instrument in the S.E.C. case, called Abacus 2007-AC1, was one of 25 deals that Goldman created so the bank and select clients could bet against the housing market.

Those deals, which were the subject of an article in The New York Times in December, initially protected Goldman from losses when the mortgage market disintegrated and later yielded profits for the bank.As the Abacus deals plunged in value, Goldman and certain hedge funds made money on their negative bets, while the Goldman clients who bought the $10.9 billion in investments lost billions of dollars.According to the complaint, Goldman created Abacus 2007-AC1 in February 2007, at the request of John A. Paulson, a prominent hedge fund manager who earned an estimated $3.7 billion in 2007 by correctly wagering that the housing bubble would burst.

via S.E.C. Sues Goldman Over Housing Market Deal –

Citibank, a General Counsel and CDO Trading

While I can still defend greed as it forms a basis of capitalist society, Citibank and AIG (Financial Products’) Teams have really shown how deals must not be done in the Financial world. While seemingly simple statements from Tom Mahera ( AM) who himself left ‘Invetsment Bankign’ for just a more intensive ‘Bond Trading’ in his career never bothered to assess his portfolio, the entire market has been surviving these last two years on quick assessments on spreadsheets by the same dozen analysts used in each bailout from the first one s with FDIC and Sheila Bair at Lehman ( which just dropped off the chart while others got the dole) , AIG, Morgan Stanley, AIG, GE, GMAC which borrowed again in 2009 and the FDIC candidates thru Wachovia, WaMu and Citi itself.

Chuck may be all apologetic and Vikram Pandit may be surviving on $1, but it does not change the fact that the entire top team at citi than and even now has made it a habit of living life under a cloud, trying brinksmanship and cat and mouse games to cover financial knowledge.While AIG seemingly victimised by GS esp from the NY Times team of CDO and Insurance analysts (lol!) never seemed to have any idea of what it had in the bank, it seems Citi’s bond Traders and Hedge Fund Principals never bothered why CDO markets were falling apart . CDOs hapen to be sure fire indicators and much nearer the calamity date, so picking them up at the wrong time in end 2006 is like picking up your meat sandwich when it is already assured of a free knuckle sandwich side dish…

Amazon’s penultimate Draw | Advantage O’nomics

Holiday sales took fourth Quarter performance to $9.52 billion and they also upped Q1 forecasts to $6.45bn to $7 bn

Amazon seems quite ready to open the war front with iPad, but as of now it is fair for both companies to hedge their bets with Kindle choosing a 70% commission on each sale over a smaller base than the $10 plus billion in real books, while the iPad would like to be compared with Samsung and Nokia,”part of the iPod and iMac family?” This is probably the penultimate fr Amazon to draw but it has one more fight in it to get to $100 billion

Amazon’s Operating Margins YOY growth does not mean much but the margins are healthy at 5% with net income of $384 mn at 4.03% based on the use of cash to drive down costs and get more volumes online. It mustt be remembered that Black Friday was beaten by Cyber Monday again this season. Amazon’s Warehousing and delivery modelling is a treat to watch in liquid motion.

The $2 billion buy back should keep the Amazon investors happy while the Kindle franchise develops more lung power in the market place. Kindle recently reworked its commission structures to 50% for the Author/Publisher

WE WILL WAIT for the content library on the iBook store to be updated for a more valid comparison, Amazon’s market development strategy is economically more powerful in the new digital footprint, while Apple is great at marketing. Amazon is also getting better at publisher deals, so it is a fun game for consumers and subscribers..It’s tempting to get everyone to plan a subscription model in the digital media game, but it hasn’t worked, with or without paywalls. Also an idle mind starts wondering if they can get to Facebook and Twitter to use as a backbone for the next digital age effort?

To reiterate our stand, Amazon has single handedly done more to bring this economy out of recession than the others in the Top 100, tech or mobile or even Media

High speed trains, lower Job claims, the ‘uprising’ is here and USA won’t be number 2

Legg Mason fights a new war | Equities vs Fixed Income

As fixed income loses the temporary sheen from 2008, Legg Mason bore the brunt of investor displeasure and lack of confidence losing $24 billion from fixed income schemes and close to $33 billion overall in the last quarter, 4 times more than the July – September Quarter. Most banks worldwide have reported losses in Fixed Income in the latest quarter as yields spike with China ready to go off the Charts from doubt in its banking system :lol

However that all seems to be passed as in after its results last week, news filtered in that new board member Nelson Peltz is selling an over 15% in H J Heinz ketchup worth $32 million and another $8 million in Tiffany’s Diamonds.

Interestingly, Legg Mason’s flagship Value fund is heavily invested in healthcare, read health insurers like Humana, Wellpoint and United Health who are celebrating after Scott Brown’s victory in Massachusetts! O What a tangled web we weave. Bill Miller, the fund’s Equities star also mentions of late his trust in the growing US GDP and in Equities. While we agree with the second, Obama’s latest belt-tightening measures may cloud America’s way on growing in double digits a year.

Fund Managers on Bills side in London and New York also feel more wary of heavily weighted China and India investments which we propose is heresy except that in China one must watch the for the bull entering the China Shop. And who’s invested in India? Not many more than 5 years about oversimplification!!!

Note: From a September 09 flyer of the World #10 Asset manager, outflows of $33b would close out fixed income offerings in its entirety, leaving Bill Miller and $8 billion in equity that would be worth $800m, $40m seems at the top of the fair price range for 5%