The Big Picture - Macro Perspective on the Capital Markets, Economy, Technology, and Digital Media

Lots of news today helped to drive an overbought market downwards. SPX got shellacked, and the Dow closed near the lows of the day. Which means its time for an open thread!

Overdue correction — or the beginning of the end?

What say ye?

Volume on the consolidated NYSE is on track to be the busiest non expiration day since Dec 18th ’09 with Citi 20% of total volume.

The great Tom Toles:

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I am on Dylan Ratigan’s new show today at 4:30pm, discussing the Goldman Sachs — apparently, some of the mortgages int he CDO were “shitty.”

I’ll post the video after it goes live . . . Its up here.

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I am on this provocatively titled NYFWA panel this evening:

PARASITES OR WATCHDOGS: Have Bloggers Reinvented Financial Journalism?

The New York Financial Writers Association is sponsoring a panel on financial news blogging, its impact and its future, on Tuesday, April 27, 2010 at 7 PM at CUNY Graduate School of Journalism, 219 West 40th Street, Room 308.

Panelists:

· Barry Ritholtz, author, blogger and financial analyst
· Jesse Eisinger, senior writer, ProPublica
· Todd Harrison, founder Minyanville.com
· Eric Starkman, owner, Starkman Associates

Moderator:

Dan Colarusso, Managing Editor, Bloomberg Television

All invited. RSVP: nyfwa@aol.com

Should be fun. If you want to attend, be sure to RSVP.

As part of its 2 notch downgrade for Portugal to A-, S&P is saying under their revised base case economic growth scenario, “we expect the Portuguese gov’t could struggle to stabilize its relatively high debt ratio over the outlook horizon until 2013. Portugal’s public finances in our view remain structurally weak, notwithstanding the gov’ts substantial public sector reforms of recent years.” “We believe past dependence on now more scarce external financing as a source of economic growth, and weak external competitiveness add to the likely adverse growth dynamics in Portugal. As a result, to reach its current targets we expect that the Portuguese gov’t would need to implement fiscal consolidation over and above its current plans.” “The negative outlook reflects our assessment of the risk of a further downgrade should fiscal consolidation fall short of expectations or should concerns over gov’t liquidity mount.”

April Consumer Confidence rose to 57.9 from 52.3 and was 4.4 pts above expectations. It’s the highest level since Sept ’08 as the Present Situation rose 3.4 pts and Expectations were up 7.2 pts. While a definite improvement off the record low of 20.2 in Dec ’09, the high in the last cycle was 138.50 in ’07. The answers to the labor market questions were better. Those that said jobs were Plentiful rose .8 pts to 4.8, the most since May ’09 and those that said jobs were Hard To Get fell 1.3 pts to the lowest since Aug ’09. Those that said Business Conditions were good rose to the most since Nov ’08 and those that said it was bad fell to the lowest since Nov ’08. After falling to just shy of the lowest since 1967, those that say they plan to buy a car within 6 mo’s rose 1.2 pts. Those that plan to buy a home within 6 mo’s (w/o the tax credit) fell .8 pts to 2.0, the 2nd lowest reading since 1982. One yr inflation expectations fell .1% to 5.3%.

The non seasonally adjusted gain in the S&P Case/Shiller home price index in Feb was .64% y/o/y, below expectations of 1.3%. 9 of the 20 cities surveyed saw a y/o/y gain. On a m/o/m basis, prices fell .85% with 19 of 20 cities down. Adjusting for seasonal adjustments saw a price decline of .1% m/o/m. While a focus of course, as is all the recent housing data seen of late that has been so well celebrated, the game changes after Friday. We will finally be able to see how much of an influence the home buying tax credit was and how many sales it pulled forward. The true supply/demand dynamic will finally be shown and under that scenario we can more accurately gauge the state of the market.

You know things look dire for GS when Jim Cramer, an alum and longtime company fan, suggests Goldie is in trouble.

According to the CNBC “Mad Money” host, the release of e-mails from Goldman traders, including Fabrice Tourre, are quite damning.

Cramer told MSNBC’s “Morning Joe” (April 26) that Goldman really has no defense if, as the government alleges, Goldman misled investors when it established a mortgage-backed security in 2007 for a hedge fund client looking to bet against the housing market. And that’s in addition to facing heat from shareholders for not revealing that it received a Wells Notice from the SEC.

“What makes this worse than most situations is that it’s entirely possible this young guy, who’s now holding the whole firm hostage, Fabrice Tourre – it’s entirely possible that he sold it fraudulently [as the SEC complaint alleges].

If he did, then Goldman has no defense.

So, what I would emphasize at this particular moment is that this guy is way too powerful. The hearings are going to go badly. Goldman knew they were going to have a Wells Notice, knew they were going to get prosecuted. They didn’t reveal it. It was totally material. Again they did that wrong.”

You can see the full video here.

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Hat tip James Bianco

DJMT has the exclusive inside testimony of Llyod Blankfein:

“The issue here is not whether we broke a few rules, or took a few liberties with our in-the-dark counterparties; we did.

“But you can’t hold a whole bank responsible for the behavior of a few sick, perverted individuals. For if you do, then shouldn’t we blame the whole banking system? And if the whole banking system is guilty, then isn’t this an indictment of our financial institutions in general?

“I put it to you, Carl Levin! Isn’t this an indictment of our entire American society? Well, you can do what you want to us, but we’re not going to sit here and listen to you bad-mouth the United States of America! Gentlemen!”

Live video feed

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Oh, wait, that’s Eric Stratton’s testimony . . .