The Banking and Strategy Initiative

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Global Mid-Day Report: If you know where you are going to be..

..it may be easy enough to find yourself here

WASHINGTON, DC - JANUARY 18: Commodity Futures...

WASHINGTON, DC – JANUARY 18: Commodity Futures Trading Commission Chairman Gary Gensler (L) talks with Federal Reserve Chairman Ben Bernanke during an open session of the Financial Stability Oversight Council at the Treasury Department January 18, 2011 in Washington, DC. The council discussed recommendations of the Volcker Rule and the Concentration Limit, both part of the Dodd-Frank Act. (Image credit: Getty Images via @daylife)

Markets remain confused by trends and counter trends in between bouts of hope and despair. Spanish yields at 6.7% are a new high for bulls as they come after a 7% mark yesterday while indices are nearly flat in the afternoon , Dow Jones up barely 20 points after startin gup 80 points in the morning. European stocks closed higher but after a bout of profit taking. The Indian Markets are likely to trend further up tomorro but because China imports were subdued in June and Copper, Oil and Gold are hurting in mid day commodities trade.

New CFTC definitions of Swaps passed muster even with Bart Chilton opposing the move. Banks are likely to end up giving up half their pre tax profits on these derivatives which exchange routines Fixed for floating interest rate risk (LIBOR) , any other currency or indexed risk or price and have insured governments towards their favored market moves in Europe raising questions on the originators. CFTC based swaps will thus be the first to get regulated thru exchange based trading. That should make for only less than 20% of the trades and even lower if commodities remain subdued. Other regulators also have to sign off on such definitions and regulations that ensure Saps and other structured products are traded thru exchanges where unfortunately they lose the first mover advantage as multitudes copy the structure to trade and thus hit Pre Tax profits anywhere between 20% to 80% International derivatives are difficult to be regulated thru exchanges/clearing mechanism

CNBC is smart enough to look at Facebook and Netflix trades today even as banks still trade in the green Facebook is currently trading at $32 and there is no stopping it as we learnt when we picked it up fearing the worst at $26. Another such ‘pioneer’ mentions that CBA is trying to put up a complete banking platform on Facebook with the company and they very well could. Apart from Mike Murphy ( CNBC 10/07) Citi analyst Mike Mahaney has also recently upgraded the stock but interestingly is willing to unlike them for their mobile ads effort.

Hon. mention: The morning JOLTS report showed a balance of 195,000 new job openings or 3.6 mln total job openings after people quit as on the last day of May from 3.4 mln in April, most in Construction and remarked as healthy for the most people quitting private sector jobs ( because they are firm openings?). The report from the Labor Department lags the BLS report by a month

 

 

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