Daily “Ways-to-Play” The News Before the Moves

Tables Turn on the Euro

Posted: 15 Dec 2009 01:58 AM PST

LONDON — Support for the euro has turned very soggy very quickly, with sovereign credit risk in Greece, banking stress in Austria and weak economic data all suddenly proving a major drag. The currency has plunged from over $1.51 against the dollar at the start of this month to trade under $1.4550 Tuesday for the first time since early October.

buy WisdomTree Dreyfus Euro Fund (EU)

buy ProShares UltraShort Euro (EUO)

buy Market Vectors Double Short Euro ETN (DRR)


Posted: 15 Dec 2009 02:12 AM PST

The Fed’s easing program is over two years old and the rampant Fed balance sheet expansion 15 months old, and still to this day, what the commercial banks have done (to Obama’s wrath) with all that liquidity is to keep it as cash on their balance sheet to the tune of $1.2 trillion.

buy UltraShort S&P 500 ProShares (SDS)

buy SPDR-Utilities (XLU)

sell S&P 500 SPDR (SPY)

buy iShares DJ US Utilities (IDU)

‘Substantial’ Bank Losses Are Needed to Fix Housing

Posted: 15 Dec 2009 02:19 AM PST

Banks will need to take “substantial” writedowns on home-equity loans to enable loan modifications that will allow the U.S. housing market to recover, according to Amherst Securities Group LP.

sell KBW Regional Banking ETF (KRE)

Best Buy Says Margin Will Be Lower Than Anticipated

Posted: 15 Dec 2009 02:55 AM PST

Seems like a trend, retailers focusing on lower margin products and clearance sales.

sell SPDR S&P Retail ETF (XRT)

Why Nouriel Roubini’s Case Against Gold Is Wrong On Every Count

Posted: 15 Dec 2009 05:09 AM PST

Late last week, Nouriel Roubini, the current go-to bubble diviner, published a report entitled, “The New Bubble in the Barbaric Relic that is Gold”. The report is scheduled to be released to the general public tomorrow, December 15. We have read the report and we disagree with its conclusion. In fact, our ongoing analysis indicates gold’s terminal value in this cycle will be multiples higher than current pricing.

buy Market Vectors Gold Miners ETF (GDX)

buy streetTRACKS Gold Trust (GLD)

buy Junior Gold Miners ETF (GDXJ)

Embracing the New Frugality

Posted: 15 Dec 2009 12:34 PM PST

In “A Permanent Change?” I highlighted a Los Angeles Times article that suggested Americans are embracing a “new frugality.” That said, if the change is truly secular rather than cyclical, one would expect it to reveal itself in a variety of ways, which would serve to reinforce the notion that it is — or has become — a fact of life.

sell PowerShares Dynamic Retail Portfolio (PMR)

sell SPDR S&P Retail ETF (XRT)

sell First Trust Consumer Discretionary AlphaDEX Fund (FXD)

sell iShares FTSE NAREIT Retail Index Fund (RTL)

Gold Buying by Central Banks May Send Signal to Sell

Posted: 15 Dec 2009 11:26 PM PST

Some of the biggest buyers of gold may be sending the strongest signal to sell it, if past performance is indicative of future results.

sell streetTRACKS Gold Trust (GLD)

Bill Gross to Manage Four Pimco Closed-End Funds

Posted: 15 Dec 2009 11:47 PM PST

Bill Gross, founder of Pacific Investment Management Company LLC, will take over primary responsibility for four closed-end funds immediately.

buy PIMCO Corporate Opportunity Fund (PTY)

buy PIMCO Corporate Income Fund (PCN)

buy PIMCO Floating Rate Income Fund (PFL)

buy PIMCO Floating Rate Strategy Fund (PFN)

buy Pimco Income Opportunity Fund (PKO)

A Legalized Ponzi Scheme?

Posted: 16 Dec 2009 12:23 AM PST

Cornerstone Progressive Return Fund’s (CFP) current share price ($9.10) has been vastly inflated by rookie investors chasing an ephemeral yield composed almost entirely of return-of-capital. It is estimated the correct price for the shares to be around $5.75. This would represent an 8.4% discount from its current NAV and a 37% decline from its current price.

sell Cornerstone Progressive Return Fund (CFP)


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