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  Tuesday, 9 Nov 2010 | 4:50 PM ET

Hedge Fund Manager Tepper Tells You His Secret: Follow the Government

Posted By: Ash Bennington
  Tuesday, 9 Nov 2010 | 4:47 PM ET

Translating Victor Neiderhoffer: Flexonic Payment Edition

Posted By: John Carney

We love Victor Neiderhoffer's blog, Daily Speculations . One of the things we love most about it is that it's so damn difficult, at times, to figure out what Neiderhoffer is saying.

Today's entry is:

No sooner said that increase in inflation expectations might change the schedule of flexionic payments, then bonds go to a 3 month low. The vigilantes finally do their thing.

Anyone care to translate that into language the rest of us can understand?

»Read more
  Tuesday, 9 Nov 2010 | 3:50 PM ET

CME Taps the Brakes on Silver

Posted By: Lori Spechler

Tapping the brakes on the silver rally, the CME sent a letter to its clearing member firms and others Tuesday raising the amount of margin needed to trade silver futures contracts.

The change will go into effect after the close of business Wednesday, November 10th, 2010.

Silver bar and coins
Thomas Northcut | Photodisc | Getty Images
Silver bar and coins

The reason cited for the increase was a “…normal review of market volatility to ensure adequate collateral coverage…”

» Read More
  Tuesday, 9 Nov 2010 | 3:33 PM ET

Is There a Tequila Bubble?

Posted By: Ash Bennington

Will the next major asset bubble to burst be the tequila bubble?

Tequila Shot
AP
Tequila Shot

According to a recent article in tequilaaficionado.com , 159 new tequila brands hit the market this year in the United States. There are now a total of 1,128 tequila brands on the market in the U.S.—more than double the number available just five years ago.

Christopher Zarus sets the scene for the tequila carnage to come in his article It’s The End of the Tequila World as we know it…and I feel fine. He describes the coming tequila "sucker hole" like this:

» Read More
  Tuesday, 9 Nov 2010 | 3:19 PM ET

China Ratings Agency Downgrades America

Posted By: Ash Bennington

You had to see this coming: The Chinese cut our debt rating — again.

AP

This time, the Chinese rating agency Dagong reduced our sovereign credit rating from "AA" to "A+". Why? No surprises here either: Quantitative Easing.

This report citation is reposted on The Financial Times Alphaville blog: "The new round of quantitative easing monetary policy adopted by the Federal Reserve has brought about an obvious trend of depreciation of the U.S. dollar, and the continuation and deepening of credit crisis in the U.S. Such a move entirely encroaches on the interests of the creditors, indicating the decline of the U.S. government’s intention of debt repayment."

» Read More
  Tuesday, 9 Nov 2010 | 2:38 PM ET

Is the Stock Market Fundamentally Unfair?

Posted By: John Carney

Recent findings that much—or perhaps all—of the ability of some investors to outperform others raise the question—is the stock market unfair? And if it is unfair, what should be done about it?

Traders work on the floor of the New York Stock Exchange during morning trading.
Getty Images
Traders work on the floor of the New York Stock Exchange during morning trading.

The Brookings Institute recently completed a study which found that the returns to a passive investor in a diversified portfolio can differ strikingly over the long-term depending on the market conditions the occur over the lifetime of the investor. Similarly, findings by scholars studying the markets with an eye to the efficient market hypothesis suggest that there is little support for the idea that skill plays a large role in the success of actively managed funds. It seems to be mostly luck at work.

» Read More
  Tuesday, 9 Nov 2010 | 11:55 AM ET

Is Citigroup Being Misled by Its Auditors on Put-Back Risk?

Posted By: John Carney

Citigroup is very confident that it has properly reserved for the potential impact of mortgage repurchase requests. But if Citi’s confidence is based on the work of KPMG, it may be misplaced.

Citigroup
Mark Lennihan
Citigroup

As NetNet has reported , Citi has an enormous portfolio of mortgages it services but does not hold—which it says is a good proxy of mortgages it sold to outside investors in mortgage-backed securities. All told, Citi has over a half-trillion dollars of these mortgages that could potentially create put-back exposure.

To date, Citi says it has only set-aside slightly less than $1 billion of reserves against repurchase risk. The bank has told us that they feel comfortable with this level of reserves because historically realized repurchase risk has been quite small. In short, they haven’t had to pay out much on these claims in the past, so they figure they won’t pay out much in the future.

As my colleague Ash Bennington and I have explained at length, we think that the historical size of claims and payouts may not be a good guide to future claims and payouts. A quick summary of our reasoning:

» Read More
  Tuesday, 9 Nov 2010 | 11:29 AM ET

Rumors That Credit Markets Were Closed to BP Were True!

Posted By: John Carney

Truth is a rare commodity in a crisis.

BP CEO Tony Hayward
Getty Images
BP CEO Tony Hayward

The truth of this is borne out once again today by FT Alphaville's discovery of two statements by top BP executives that the rumors of credit markets and trading partners shutting down business with BP over the summer were accurate. At the time, company representatives as well as other market players were denying the rumors.

As it turns out, it wasn't the rumors that were wrong. It was the denials.

» Read More
  Tuesday, 9 Nov 2010 | 9:01 AM ET

Risk Arbitrageurs Return

Posted By: Ash Bennington

Risk Arbitrageurs Return (CNBC via NYT) Is the resurgence of the arbs a leading indicator of an uptick in M&A deals to come?

»Read more
  Tuesday, 9 Nov 2010 | 8:55 AM ET

Darrell Issa: Wall Street Has to Accept New Scrutiny

Posted By: Lori Ann LaRocco

The GOP leadership have been out in force in the media to communicate their message for change.

From kick starting jobs to slashing the deficit, Americans are getting an earful of what the Republicans hope to achieve in the next two years. One of the strongest voices on the bailouts, cutting spending as well as oversight is Representative Darrell Issa, incoming Oversight and Government Reform Committee Chairman. Issa's not shy about his mission in overhauling oversight.

I decided to kick off the decision on what will be his first item on his agenda when he becomes Chairman.

» Read More

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  • Jeff Cox is finance editor for CNBC.com.

  • Lawrence Develingne

    Lawrence Delevingne is the ‘Big Money’ enterprise reporter for CNBC.com and NetNet.

  • Stephanie Landsman is one of the producers of "Fast Money."

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