Ben Benanke's Incompetent

[flow5]

"Mr. Gross concludes the Fed’s pancaking of the yield curve through Operation Twist will destroy the banking system’s incentive to create credit by reducing the opportunity for banks to leverage a positively sloped yield curve"

[flow5]

"Here is the Case-Shiller data for the 20 city index shown above for the last 7 months:

2011-01-01 141.77
2011-02-01 141.27
2011-03-01 140.67
2011-04-01 140.90
2011-05-01 140.89
2011-06-01 140.94
2011-07-01 141.01

The variation in the index over the last 7 months is less than 1%, and on a seasonally adjusted basis we have not made a new low in 4 months.

In short, both Housing Tracker and Case-Shiller support the view that a bottom in house prices was probably made early this year."

=====================

Money flows bottomed in Jan.

[flow5]

With the CRB index @ 298.06 & down -7.90 today
With Crude Oil @ 78.61 down -3.53 today
With the dollar index @ 78.61 up -3.53 today:

the money supply & its rate-of-turnover is too tight.

[flow5]

The Federal Reserve Bank of New York is recognizing social media’s potential to shape public opinion, and requesting monitoring and analysis of Facebook and Twitter conversations.

The Fed’s “Request for Proposal for a Sentiment Analysis and Social Media Monitoring Solution” aims to identify online conversations by the public, bloggers, and other influencers for the department’s Communications Group. The program seeks to monitor billions of conversations on social media, generate text analytics, and also determine the sentiment of a speaker or writer with respect to some topic or document.

The Communications Group is tasked with proactively keeping the agency aware of the reactions and opinions of the public, as expressed in Facebook, Twitter, YouTube, blogs, and aggregate data from media outlets like the Wall Street Journal and CNN.

Some are comparing the proposal to counterespionage or surveillance, but the NY Fed says it reflects its commitment to “improving its communications and engagement with the public in order to enhance and improve the public’s understanding of its activities and the role it plays in supporting the U.S. Economy,” according to a Fed spokesman’s statement.

The real-time data will be categorized as “positive, negative or neutral,” so the agency can reportedly monitor public perception as it moves forward.

The announcement also underscores how social media is becoming the digital age’s “water cooler,” the place to gauge the population’s opinions and reactions, and the NY Fed isn’t the first to tap into it.

Wall Street now analyzes Twitter and other social media to inform investment decisions, in response to news pointing to a correlation between the collective mood expressed in millions of tweets and the Dow Jones Industrial Average.

And political parties are taking note, too. For example, President Barack Obama’s Twitter town hall drew nearly 170,000 questions and comments this summer.

The event followed news the President’s election campaign hired Harper Reed as its new chief technology officer to integrate technologies into the team’s digital strategy.

The NY Fed’s proposal, as controversial as it may be, demonstrates the growing realization of the importance of social media as a barometer of popular sentiment, ideas and as a way to gauge the mood of a population.

[Aman A.K.A. Ahamburger]

It's amazing how PEOPLE are shaping the world we live in!! Thanks JC!

[flow5]

Federal Reserve Chairman Ben Bernanke bluntly warned Congress on Tuesday of what most of America has sensed for some time: The economic recovery, such as it is, "is close to faltering."

[flow5]

INO US Dollar 79.237

Very close to 52 week high of 81.444

Crude Oil 77.72

Gold 1628.37

====================

QE2 drastically LOWERED the short-end of the yield-curve and thus lowered the exchange value of the U.S. dollar. QE2 thereby artificially raised PPP or purchasing power parity (commodity & consumer prices). And these price rises were as Bernanke predicted "transitory".

Operation twist INCREASED the short-end of the yield-curve & thus artificially raised the exchange value of the U.S. dollar. It thereby lowered PPP (commodity, consumer, & production input, prices). But in the long run (as a stronger dollar increases consumer spending & our international trade deficit), any protracted move could translate into a permanently higher price level, i.e., cause stagflation.

We need a neutral dollar policy (not an interest rate conundrum).

[flow5]

WASHINGTON: The chairman of the House Intelligence Committee on Tuesday accused China of waging an unprecedented campaign of cyber espionage aimed at stealing some of the most important US industrial secrets.

Rep. Mike Rogers, R-Mich, said Chinese efforts to pilfer the United States' technological know-how via the Internet have reached an "intolerable level," and called on the US and its allies to pressure Beijing to stop. He made his remarks during a congressional hearing.

Few intelligence insiders have discussed such concerns so bluntly. China is both a major US economic partner and the nation's biggest foreign creditor.

Rogers said the corporate victims of cyber spying, when they were willing to discuss it at all, are also reluctant to point the finger at China out of concern they could become the target of retaliatory attacks.

"In Washington there has been this big dance around the 800-pound gorilla in the room, and that is Chinese industrial espionage," Rogers told The Associated Press in an interview after the hearing. "Listen, this is thievery. At the end of the day, it is stealing."

China has said that allegations of cyber espionage against US companies were groundless, and the sources of Internet attacks are notoriously difficult to pin down.

Experts said the pace and scale of cyber attacks are increasing, and that the most sophisticated and effective attacks are mounted by criminal organizations and governments. Defense systems in particular are targets, and cyber raiders have stolen data about US fighter jets, missile systems and unmanned drones.

McAfee Inc, a leading Internet security firm, recently published a study of Operation Shady Rat, a hacking campaign that targeted more than 70 governments, international institutions, corporations and think tanks over the past five years. McAfee said the AP was among the organizations hacked.

Rogers and other experts also said US intelligence agencies are keeping too much secret about details of cyber espionage secret, instead of using the information to help corporate targets defend themselves.

A security expert, Kevin Mandia of Mandiant Corp., said that in more than 90 percent of the attacks that his company investigated, victims didn't even know they were under cyber assault until the Pentagon, FBI or another government agency told them.

After the Internet search giant Google was the target of attacks in January, Secretary of State Hillary Clinton asked China to investigate Google's claims it had been targeted by China-based hackers. Google said hackers had tried to access Google's proprietary software as well as the email accounts of Chinese human rights activists

=====================

Nothing ever changes.

[flow5]

How is it that the banks keep getting paid twice? Now they are charging account fees for the money they create (just like required reserves).

[flow5]

BERNANKE:

"Recent revisions of government economic data show the recession as having been even deeper, and the recovery weaker, than previously estimated; indeed, by the second quarter of this year--the latest quarter for which official estimates are available--aggregate output in the United States still had not returned to the level that it had attained before the crisis. Slow economic growth has in turn led to slow rates of increase in jobs and household incomes"

www.federalreserve.gov/newsevents/testimony/bernanke20111004a.htm

[flow5]

Bernanke responded that inflation has come down over the last 30 years and during his tenure has been “about 2 percent, which is essentially price stability.” (What index is he referring to, not one that includes housing prices).

“So I think the record on price stability has been very, very good actually,” he said.

South Carolina’s DeMint said during the hearing that the Fed’s stimulus has caused an “exponential increase in monetary supply relative to the growth of the economy.”

Bernanke responded that “the evidence is that all of the things we’ve done have not driven inflation above the price stability level.” In addition, while the monetary base, which includes $1.55 trillion in bank reserves, has “grown tremendously,” the money supply that “most Americans think about” which includes cash and checking accounts, hasn’t expanded “unusually,” he said.

=========================

Narrow money's increase has been unusal because of account shifts into lower yielding deposit classifications.

www.bloomberg.com/news/2011-10-05/bernanke-signals-pressure-from-congress-wouldn-t-halt-additional-easing.html

[flow5]

Operation Twist a bad idea:
Laurence Fink supported QE1 and QE2, but the head of the world’s biggest money manager is not a fan of Operation Twist.

“I’m not sure what it does other than flatten the yield curve, which CAUSES MUCH MORE PAIN FOR BANKS & INSURANCE COMPANIES IN TERMS OF MAKING THE PROPER RETURNS, and therefore their lending and their annuities are going to be probably hampered,” the BlackRock CEO said in an interview with the Globe. “So I don’t understand it.”

The Fed’s move will lower the cost of financing for corporations, but given where rates currently are the move WON'T BE SIGNIFICANT ENOUGH to spur them to finance new factories or operations, he says. “Corporations are SITTING WITH SO MUCH CASH ALREADY that my fear is the companies that are going to be taking advantage of the inexpensiveness of long-term debt now may just use it to buy back shares. I’m not so certain how that helps in job creation and building a more robust economy.”

[flow5]

OPERATION TWIST (selling short-term T-Bills):

BID-TO-ASKED RATIO 27:1 (an all time record?)
=================================
Total Par Amt Accepted (mlns) : $8,870

Total Par Amt Submitted (mlns) : $242,657
=================================
"The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system. Such transactions are arranged on a routine basis to offset other changes in the Federal Reserve’s balance sheet in conjunction with efforts to maintain conditions in the market for reserves consistent with the federal funds target rate set by the Federal Open Market Committee (FOMC)."

=================================

Must be a big shortage of short-term funding securities (@ the short-end of the yield curve).

[flow5]

DJIA bottom is now on Oct 3 @ 10,655.30

[flow5]

dealbook.nytimes.com/2011/10/05/details-emerge-on-draft-of-volcker-rule-proposal/

Details Emerge on Draft of Volcker Rule
By BEN PROTESS

The Volcker Rule was championed by Paul A. Volcker, a former Federal Reserve chairman.Federal regulators are planning to vote next week on plans to prohibit banks from making certain lucrative, yet risky trades, the latest step toward reining in risk-taking on Wall Street in the aftermath of the financial crisis.

...The American Banker on Wednesday published a document on its Web site that appeared to be the latest version of the proposal. The document spelled out the scope of the rule’s ban on proprietary trading and its broad exemptions for more routine business practices that can be mistaken for riskier trades.

...Still, the F.D.I.C.’s vote will start what is sure to be a long fight over the minutiae of the Volcker Rule, a centerpiece of the Dodd-Frank financial regulatory overhaul and one of the law’s most contentious provisions. Major banks have railed against it, saying it will eat into profits without making the financial system much safer. Many lawmakers, however, see the rule as a way to prevent future bailouts of Wall Street, which nearly collapsed during the financial crisis.

Named after Paul A. Volcker, a former Federal Reserve chairman who championed the rule as part of Dodd-Frank, it would order banks to limit their investments in hedge funds and private equity shops.

More significant, the Volcker Rule would prohibit federally insured banks from trading for their own benefit rather than for clients, a strategy known as proprietary trading. The rule, Mr. Volcker and Democratic lawmakers say, will prevent banks from using their own capital to place bets while the government guarantees their deposits.

... “The Volcker Rule is essential to protect taxpayers from banks’ excessive financial risk-taking, conflicts of interest, and from the resulting billion-dollar bailouts.

Banks have spent more than a year preparing for life under the Volcker Rule. Goldman Sachs was among the first major Wall Street firm to close its proprietary trading desk. JPMorgan Chase and Citigroup announced similar plans to spin off their desks, and Bank of America declared over the summer that its proprietary trading operation had closed.

But truly banning proprietary trading will take more than closing a few trading desks. The Volcker Rule exists in a gray area, where the line is often blurred between when a trade is proprietary or part of a bank’s routine market-making activity, which can include buying securities with an eye toward later selling them to clients.

Dodd-Frank provides several exemptions from the ban, including underwriting, hedging and market making. The draft proposal that emerged on Wednesday would exempt even more varieties of hedging than originally expected. This summer, noting the difficulty in detecting proprietary trading, a Government Accountability Office report painted the Volcker Rule as cumbersome and tough to enforce. At the time, Mr. Levin called the G.A.O. report “woefully incomplete.”

[flow5]

Percent change at seasonally adjusted annual rates M1 M2
---------------------------------------------------------------------
3 Months from May 2011 TO Aug. 2011 36.8 23.3
6 Months from Feb. 2011 TO Aug. 2011 25.3 14.5
12 Months from Aug. 2010 TO Aug. 2011 20.8 10.3

====================

short-term rates-of-change smokin!

[flow5]

...the Federal Reserve refers to it as the Maturity Extension Program,

...The Fed's first round of quantitative easing began in March of 2009 when it invested $1.7 trillion in U.S. securities. QE2 began in November 2010 and ended in June with the purchase of $600 billion in short- and medium-term Treasury notes.

..."Theoretically the Federal Reserve will be neutral this time in respect to expanding its balance sheet," he said. Rather than investing new money, "they will be selling $400 billion in short-term debt they already own, investing that money in long-term debt where the term ranges from six to 30 years."

The Fed will sell the shorter-term paper, all of which matures in less than three years, on a monthly basis starting in October. By June 2012, securities held by the bank will mature, on average, in 100 months, compared with 75 months for its current portfolio.

... "Operation Twist has brought rates lower already and promises to keep them at low levels for the next six to nine months."

Though rates had already moved downward over the previous two months, McBride said that decline was driven by a weak economy and worries over European debt.

... expects the program ultimately will lower rates by one-fourth to one-half point

washingtonexaminer.com/local/real-estate-news/2011/10/operation-twist-may-lower-mortgage-rates-may-not-move-market#ixzz1a5vAw500

[flow5]

Did Foreigners Bail Out The US Stock Market... By Dumping $56 Billion In Treasurys?
Submitted by Tyler Durden on 10/08/2011

www.zerohedge.com/news/did-foreigners-bail-out-us-stock-market-dumping-56-billion-treasurys

Something curious happened recently: for the first time in over a decade, perhaps ever, the US saw a record $25 billion worth of Treasury bond OUTFLOWS from the Treasury's CUSTODIAL ACCOUNT in the week ended September 28. Just as curious is that in the past 5 weeks we have seen RELENTLESS SELLING of Treasurys from the same custodial account which, with Treasury International Capital data 3 months delayed, and largely incorrect until its annual revision, is the only real source of recent (and somewhat accurate) foreign activity in US bonds. In fact, starting with the week ended September 7, through last Thursday, foreigners appear to have DUMPED A MASSIVE $56 billion worth of Treasurys (don't take our word for it - check it here, courtesy of the Fed). This is QUITE DISTURBING for two reasons. One explanation for this move would be to look back to the QUANT CRASH in early August 2007, which preceded the market's secular (and all time) high, when various quant funds blew up for reasons still not completely known. The reason why this date is important is that it was the catalyst for the next biggest concerted of Treasurys, when in a subsequent span of 4 weeks, foreigners sold $47 billion in Treasurys... but at least the market's precipitous move lower was prevented, if only for a few brief months. Also curious is that the recent move is in DIRECT CONTRAST to the Custodial Account reaction to the Lehman implosion in 2008 when 20 weeks of consecutive UST inflows, beginning September 10, saw $300 billion in "safe haven" purchases. So while the market plunge back then was accompanied by a shift into Treasurys, this time around, the biggest market volatility since Lehman has seen a record sequential exodus out of bonds. Which begs the question: did Tim Geithner make a few phone calls, and tell foreigners to Treasurys (knowing full well Op Twist was coming and the Fed would backstop the entire curve), and to buy stocks instead in order to prevent the next relapse of the Great Financial Crisis?

Of course, there is a far simpler explanation: the dreaded D-day in which foreign official and private investors finally start offloading their $2.7 trillion in Treasurys with impunity (although not with the element of surprise - China has made it abundantly clear IT WILL SELL ITS TREASURY HOLDINGS, the only question is when), has finally arrived.

Either way, if this is merely a function of money's fungibility (according to , as is all too well known, capital simply shifts from one asset allocation to another), and money was forcefully "funged" FROM BONDS INTO STOCKS (with or without the prodding of one Tim Geithner) to create a "natural" bid into the bidless market, expect to see even more bond liquidations should stocks continue sliding lower. That may be a big reason to panic as it means that finally the US has tipped its hand that its survival (read: that of the Russell 2000, thank you Ben Bernanke), is dependent on the generosity of our trade surplus partners.

If, on the other hand, the sell off is completely uncorrelated to any moves in the stock market, then the reason to panic is far, far greater, as it means that the international community no longer perceives US paper as a flight to safety...and has taken the first step to defect in the most important Nash equilibrium in modern history.

========================

Foreign selling of Treasuries & using the proceeds to buy stocks is bullish for the stock market, & bullish for the U.S. dollar. Zerohedge misses the positive implications.

[flow5]

In Jan 1978 (for the year end 1978), Business Week published their annual economic forecasts which included 27 price forecasts by individuals & 9 by econometric models. The lowest: (Gary Schilling, White Weld), the highest: (Freund, NY Stock Exchange, & Sprinkel, Harris Trust & Sav). The range CIP, 4.9 - 6.5%. For the econometric models, low (Wharton, U. of Penn) 5.7% high, 6.6 U. of Ga.).

The CPI started 1978 @ 6.8% & ended 1978 @ 9.0%.

This is just one example. Forecasts missed the 19.2% nominal gNp in the 1st qtr of 1981 by a much greater margin.

That's one reason why Scott Sumner's "model monetary policy as changes in the price of NGDP futures contracts" won't work.

www.usinflationcalculator.com/inflation/historical-inflation-rates/

[flow5]

FRANKFURT, Germany (AP) -- Banks are parking more money overnight with the European Central Bank in a sign the eurozone debt crisis is unsettling the banking system.

Banks deposited euro255.6 billion ($347.1 billion) overnight Friday, the highest this year, the central bank said on Monday. That surpassed the previous year high of euro229 billion from Thursday.

The deposits suggest banks would rather stash money with the ECB THAN LEND IT TO EACH OTHER. (i don't know about the ECB but the FED pays interest on excess clearing balances - so what's the benefit of holding balances at the Central Bank?). Banks are afraid that other banks could suffer losses on Greek and other government bonds in case of a default -- and not pay them back.

The increase follows a worsening of fears about a Europe-wide banking crisis and credit crunch that could hurt global economic growth.

The governments of Belgium, France and Luxembourg have had to come to the rescue of Dexia, a bank that had trouble borrowing on the interbank credit market because it is heavily exposed to Greek and Italian bonds...

[flow5]

Dow now @ 11,433.18 - a traditional 4th qtr rally.

[flow5]

seekingalpha.com/article/298523-what-s-the-minimum-needed-to-make-a-macroeconomic-model#comment-1965781

Outstanding set of graphs. They very clearly illustrate that the economy was faltering while Bernanke was still asleep. And what they say is that Bernanke should be fired. Nominal & real-gDp began falling after the 3rd qtr of 2007. Yet while AD was falling, Bernanke continued to DRAIN liquidity (despite 7 reductions in the FFR), Bernanke maintained a "tight" money policy (i.e., credit easing - lowering interest rates, not quantitative easing - open market operations of the buying type).

[jarhead1976]

Oct 10, 2011 16:50:50 GMT -5 flow5 said:

Dow now @ 11,433.18 - a traditional 4th qtr rally.

" Traditional" love it. Print Ben print.

[flow5]

SUMMARY: The Board is requesting public comment on proposed amendments to Regulation D, Reserve Requirements of Depository Institutions, to simplify the administration of reserve requirements. The proposed amendments would create a common two-week maintenance period for all depository institutions, create a penaltyfree band around reserve balance requirements in place of carryover and routine penalty waivers, discontinue as-of adjustments related to deposit revisions, replace all other as-of adjustments with direct compensation, and eliminate the contractual clearing balance program. The proposed amendments are designed to reduce the administrative and operational costs associated with reserve requirements for both depository institutions and the Federal Reserve. The Board is requesting comment on all aspects of the proposal. In connection with the proposed elimination of the contractual clearing balance program, the Board is requesting comment on several issues related to the methodology used for the Private Sector Adjustment Factor that is part of the pricing of Federal Reserve Bank services.

=======================

Just like in 1959, the FED confuses required with liquidity reserves thus making the job of monetary management impossible.

www.federalreserve.gov/newsevents/press/bcreg/bcreg20111011b1.pdf

[flow5]

LIBOR OIS & TED spreads reflect on-going Eurozone uncertainty & risk aversion (debt crisis), in the international inter-bank market funding markets (the unregulated eurodollar banking system). The exchange value of the U.S. dollar has benefited.

When Opertion Twist was announced on Sept 21 the 10 year Treasury Bond was @ 1.88% (lower than in 2008 & 2009). Now it is @ 2.17%.

If nominal gDp growth accelerates, yields will rise regardless of the FED's machinations with Operation Twist.

[flow5]

monetaryfreedom-billwoolsey.blogspot.com/2011/10/yes-fed-is-breaking-law.html?

Yes, the Fed is Breaking the Law!

The Federal Reserve pays .25 interest on reserve balances. While the payment of interest on reserves is a desirable policy, the current rate is too high. In my view, the Fed should float the rate it pays, setting it a fixed number of basis points below short T-bills. It my view, the Fed should be "paying" a rate that is less than zero under current conditions. In effect, the Fed should be charging banks a storage fee.


It turns out that while the Fed is legally permitted to pay interest on reserves that is less than other money market rates or to pay the same rate, it cannot pay more. David Pearson, commenting on David Glasner's blog quoted the low:


Balances maintained at a Federal Reserve bank by or on behalf of a depository institution may receive earnings to be paid by the Federal Reserve bank at least once each calendar quarter, at a rate or rates not to exceed the general level of short-term interest rates.


Steven Williamson noted this as well, and suggested that the Fed needs to break the law to "do its job." Williamson claims that it must be that T-bills are more liquid than reserves. Still, it is hard to believe that the Fed's job is to pay interest on reserves at a level that reflects the liquidity value of T-bills relative to reserves. With Williamson, it is hard to tell.


I would argue that if the Fed is going to use the interest rate paid on reserves as a policy instrument to restrain nominal expenditure on output, then it must sometimes lead the market. If banks are holding the relevant money market instrument, then it would seem that raising the rate paid on reserves would cause banks to sell the money market instruments, lowering their prices and raising their yields. But if the banks sell off all of them, then that avenue for adjustment no longer exists. What happens instead is that the higher rate paid on reserves pulls up the rate that banks pay on deposits, so that bank depositors also shift out of the relevant money market instrument and into deposits.


It is also possible that when banks respond to higher rates paid on reserves by raising bank loan rates, some borrowers might sell commercial paper rather than utilize bank loans. That would tend to raise the rates on money market instruments too. This would also involve the Fed "leading" the market.


However, I don't favor the use of the interest rate on reserves as a policy instrument. If there is an excess supply of base money, the Fed should reduce the quantity through open market sales. I don't think that the Fed should be using the composition of its asset portfolio to try to direct credit. (Keep nominal GDP on the target growth path and let the market allocate credit.)


More importantly, the Fed doesn't need to be restraining nominal expenditures on output now. Quite the contrary. If the Fed were to use the interest rate on reserves as a policy instrument, it would be "leading" the market lower. And there is nothing in the law that prohibits that--at least until the interest rate hits zero.


Could the Fed "get away" with charging the banks fees based upon the size of their reserve balances without some kind of authorization by Congress? Probably, if they could point to some financial cost to them when banks hold reserve balances. For example, if the yields on T-bills are so low, the Fed is earning next to nothing, or perhaps, literally nothing, or perhaps, receiving a negative yield like everyone else, then any operating costs would have to be covered. The Fed has to keep track of the banks' balances, collect on T-bills and reinvest the funds, and so on. The Fed could buy longer term Treasuries, but that involves a risk. The banks should share in that potential cost.


Of course, if the interest rate on reserve balances falls so low that the result is a currency drain, with either banks accumulating vault cash or the nonbanking public filing safes or stuffing mattresses, then it is too low. Here again, the Fed would need to "lead" the market by "paying" sufficient interest on reserves, regardless of whether market rates are lower, to avoid the cost of printing currency.

======================

This concept is more encompassing. It involves the stoppage in the flow of savings thru the financial intermediaries (non-banks). This is the most important financial sector (the one where savings are matched with investment). From the standpoint of the entire system, the member banks don't loan out existing deposits (saved or other-wise).

[flow5]

INTC - Intel Corporation (NASDAQ) 22.99

[flow5]

"...the recent money supply growth is a case for optimism (about the overall economic outlook and the economic outlook for manufacturing).

...European banks seem risky to some, and the FDIC now insures an unlimited amount of transaction deposits, so millions and millions of dollars flew across the Atlantic to take our safe haven.

What's the underlying trend of money supply growth excluding this hot money? One simple way to get an idea is to exclude non-interest-bearing accounts from core deposits. We call the non-interest bearing accounts Demand accounts. The other components of core deposits are interest-bearing checking, savings accounts and certificates of deposit less than $100,000.

...European hot money is a real phenomenon, but that the non-hot deposits are also growing rapidly, at a pace nearly as strong as in the wake of the Lehman Brothers bankruptcy. There is reason to be optimistic that we have some genuine money supply growth now, which will help the economy in the coming months"

seekingalpha.com/article/299012-money-supply-and-the-case-for-optimism-about-the-economy?ifp=0&source=email_macro_view

[flow5]

US Dollar - 76.994

Dollar index down - but no corresponding move in the precious metals. This indicates that Gold is weakening. Looking for after the traditional seasonal rally to enter shorts. Want to make a lot of money? Stay tuned. We've got to wait a couple of months.

[flow5]

Goldman Sachs (NYSE:GS - News) and Morgan Stanley (NYSE:MS - News) may shed the "bank holding company" classification in order to skirt the Volcker rule banning propriety trading with the firm's own capital,

===============

Big surprise.