GS & MS Working Hard With "YOUR" Tarp Money...
Tellin' it like it is...
GS & MS using TARP money to prop up the markets...
zerohedge.blogspot.com
Wednesday, May 6, 2009
Working Hard For Your $10
Posted by Tyler Durden at 9:29 AM
Dear Morgan Stanley,
We like you. Well, not in that way, but we are taxpayers. If we didn't like you, why would we give you billions of our money to insure your survival? So we kind of have to like you, same way we like our deviant, foster kids.
Agreed? Let's move on. As a recipient of our generous TARP contribution and FDIC guarantees, we expect you to be active in the capital markets, lend into the economy (you know, that progressively angrier Main Street) and provide liquidity when needed.
Now at this point, form our perch, we don't see much improvement in lending from you, dear deviant child, but we do see non-stop attempts to avoid pay caps and so on. Don't you want to spin of PDT just for that reason? Great! Just making sure we are on the same page...
Let's get back to our favorite pet topic liquidity. You, sweet child of ours, recently advertised about 2x to 3x of SPY volume than the next lucky broker in the hierarchy. As our favorite captain of vertical take off/landing aircraft said yesterday, too big to fail is not a policy, it's a problem. We, the taxpayers, don't want our TARP funds making the problem worse. We want it to get better.
So what was that 10% of SPY volume all about? Was it natural volume? If so, please go ahead and advertise that. We would love to know how your agency business is doing. We want that. Was is PDT trading? In that case this is very troubling. Did you advertise internal prop trading volume? Now that, as you very well know, is kind of creepy.
You know, dear MS, with 10% ADV of SPY volume applied at strategically important time frames you can affect markets.
And no, we the taxpayers here at Zero Hedge don't want to see that. We don't want our levered up TARP funds to be used in this way. How about you tell us how much of this 10% of ADV was your customers, how much was ETF desk and in-house props? That will help a lot and avoid any future confusion.
And please keep our $10 that we gave to you in the first place to lend to Main Street, not to bet against anonymous financial blogs... and loose
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Thank GOLDMAN, MS & The PPT for this Kool-Aid Rally...
Message 25612470
zerohedge.blogspot.com
According to the NYSE, last week program trading was 8% higher
than the 52 week average, which on almost 4 billion shares is
a material increase. It is probably safe to say that the
1 billion in program trades last week does not account for
significant additional low- to high-frequency trades
originated at non NYSE members, implying the real number for
the overall market is likely even higher. Some more program
trading statistics: principal trading is running 21% above 52
week average, agency trading is 11% below average, while NYSE
weekly volume is running about 9% below 52 wk average.
A very interesting data point, also provided by the NYSE,
implicates none other than administration darling Goldman
Sachs in yet another potentially troubling development. The
chart below demonstrates the program trading broken down by
the top 15 most active NYSE member firms. I bring your
attention to the total, principal, customer facilitation and
agency columns.
Key to note here is that Goldman's program trading principal
to agency+customer facilitation ratio is a staggering 5x,
which is multiples higher than both the second most active
program trader and the average ratio of the NYSE, both at or
below 1x.
The implication is that GOLDMAN Sachs, due to its
preeminent position not only as one of the world's largest
broker/dealers (pardon, Bank Holding Companies), but also as
being on the top of the high-frequency trading/liquidity
provision "food chain", trades much more often for its own
(principal) benefit, likely in tandem with the other top dogs
on the list: RenTec, Highbridge (JP Morgan), and GETCO. In
this light, the program trading spike over the past week could
be perceived as much more sinister.
For conspiracy lovers, long searching for any
circumstantial evidence to catch the mysterious "plunge
protection team" in action, you should look no further
than this.
----------------
SOTB
PS: Mo greenshoots...
blogs.reuters.com
A stress test shocker
Posted by: Felix Salmon
So much for anchoring. You thought BofA might need $10 billion in new capital? Try $35 billion. Or, in English, lots and lots and lots of money — much more money than the bank could conceivably raise privately.
The first obvious question is “if BofA needs $35 billion, how much does Citi need?”. Which leads straight into the question of how much the other 19 banks need, in aggregate — it’s likely to be a shockingly enormous sum.
The second obvious question is “when will Ken Lewis and Vikram Pandit resign?” — I can’t imagine either of them surviving a forced capital injection of this magnitude.
And the third obvious question is “what on earth does Treasury think it’s doing”, leaking the stress tests in such a ham-fisted way, with each iteration worse than the last.
I don’t blame the banks for being angry. They have hundreds of people making sure that they’re well capitalized; Treasury then sends in a handful of wonks to look over the books and a few weeks later determines that they’re off by $35 billion? That’s quite a shortfall, especially when there’s really no indication that Treasury is better at working these things out than the bankers are.
I fear that in the wake of these stress tests, Treasury will have created an atmosphere of antagonism and mistrust which is going to make it almost impossible to push through the kind of root-and-branch regulatory reform that’s desperately needed. Without the banks’ buy-in, no new regulatory structure is going to work — but right now the banks have every incentive to hide things from Treasury and the regulators, rather than to work with them to strengthen the system as a whole. The stress tests might end up improving the banks’ TCE ratios — but that doesn’t mean they will end up improving the health of the financial system as a whole. |
