Courtesy of Zero Hedge

This is so much more than just a short covering rally. Oh wait, it’s not. 72.19% drop in Short Interest across securities, compliments of stock loan-cum-TARP bailout recipients. So you see, if you are a taxpayer, who believes that fundamentals are more critical than an artificially inflated market compliments of the biggest, most orchestrated short squeeze in history, you got Got by the same people you bailed out.

Update: Apparently Bberg had not completed filling its data at time of posting. We apologize for Bloomberg not having the perspicacity and alacrity of a 10 million SPARC turbo cluster. The end result: 21.05 billion shares short at 1.72% of float. The odd discrepancy is the increase in short-interest on NYSE-issued securities. Any readers who have an idea what is going on here, please chime in.

Nonetheless, below is the trend chart for the % of float as most recently reported by Bloomberg. If this data changes in 24 hours, an update will be posted.

Zero Hedge recently has some choice words against a subset of HFT, namely Flash Trading, and as even Irene Aldridge confirmed earlier, there is something very wrong with this critical component of program trading. It seems our admonitions have not fallen on deaf ears. In a startling development of anti-establishmentarian activism, Senator Charles Schumer has asked the SEC to ban Flash Trading in its entirety, as it “gives high-speed traders an unfair advantage over other investors.”

From Bloomberg:

Senator Charles Schumer asked the U.S. Securities and Exchange Commission to ban “flash orders,” saying the transactions give high-speed traders an unfair advantage over other investors.

Nasdaq OMX Group Inc., Bats Exchange Inc. and Direct Edge Holdings Inc. hold these orders for milliseconds, giving their customers the opportunity to gauge demand before traders on other exchanges get the chance to bid, Schumer said in a letter to SEC Chairman Mary Schapiro. Brian Fallon, a spokesman at Schumer’s office, confirmed the authenticity of the letter.

“Flash orders allow certain members of these exchanges to obtain access to order flow information before that information is made available to the public,” Schumer wrote. That allows “those members to use rapid trading programs to trade ahead of those orders and profit from advanced knowledge of buying and selling activity,” he added.

The implications of this development are immense: if politicians are willing to take a major chunk of out exchanges’ primary revenue streams, one may even hope that they won’t stop there but will in fact continue much higher in the food chain and start investigating the perpetrators of real market malfeasance.

Courtesy of The Pragmatic Capitalist

JPMorgan Said to Increase Some Investment Banker Salaries Starting in 2010 (Bloomberg)
“The plan, unveiled yesterday at a meeting with investment bank co-heads Steven Black and William Winters, affects those who earn half or more of their total compensation in year-end bonuses, the person said, declining to be identified because pay matters are confidential. It will be implemented in 2010 and details will be announced closer to the end of this year. The salary increase doesn’t change total pay.”

Fortress Plans Buying Spree (FT)
Wes Edens has a message for any hedge funds that haven’t made back last year’s losses by the end of ’09: “It’s all over for you,” so you might as well turn over the keys to the place now.

Citigroup Board Names Three New Outside Directors (C)
Vikula welcomes (Mike Bloomberg gal-pal) Diana Taylor, Timothy Collins, and Robert L. Joss.

Calpers Hopes Riskier Bets Will Restore Its Health (NYT)
The fund’s new head of investments aims to sink a few billion into “beaten-down private equity and hedge funds. Junk bonds and California real estate also ride high on his list. And then there are timber, commodities and infrastructure.”

Blindsided By Bear, Mr. Miller Sees Bull (WSJ)
In a quarterly report to fund shareholders, Mr. Miller said that a new bull market is under way and that technology and financial-services stocks would be among its leaders.

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“How high can gold rise? Last July I suggested that $2,000 an ounce on a two to three-year view was possible, as this would bring gold back up to its historical peak in real terms (constant dollars) last seen in 1980. This could now turn out to be a substantial underestimate as the stage is now set for gold to rise to $3,000 an ounce or higher as a wave of freshly printed liquidity sparks a renewed global surge into the only asset that investors will trust in these circumstances, writes Ian Williams, Chairman of Charteris Treasury Portfolio Managers in Telegraph. [Ian is one of 75 experts who all agree "Gold's Future is Bright!"]

* “The IMF is now on the verge of taking a big leap towards a new currency system, with a proposal to increase the supply of SDRs by eightfold (special drawing rights, are basically a bundle of several currencies including the dollar, yen, sterling, and the euro). The IMF will vote on the measure August 7th and would start issuing the new currency by the end of the month. If it passes, this would be the first time the IMF would have increased the number of SDRs since 1981 – a pretty substantial shift. The world is taking a big step away from the dollar as the de-facto global reserve currency,” reports Newsweek.

* “President Obama showed great fluency in the intricate details of health policy at his news conference on Wednesday night, but experts said some of his points were debatable. Mr. Obama said doctors, nurses, hospitals, drug companies and AARP had supported efforts to overhaul health care. Far from supporting this proposal, the American Hospital Association is urging hospital executives to lobby against it,” reports NYtimes.

* Healthy debate: “A major legislative overhaul of U.S. healthcare seemed to be a sure thing just weeks ago, and some sort of change remains likely. But as details emerge and costs become apparent, industry groups and moderate Democrats are starting to balk. Conservatives argue that such a public plan threatens the existence of private insurers by creating an unlevel playing field where the government acts as both competitor and industry regulator. Studies show as many as two-thirds of customers may lose their private insurance as companies try to compete with the government,” reports Worldmag.

* “Health care is turning into a major test of Obama’s leadership. One Republican senator says if the party can stop Obama on health care, it will break him. ‘No one wants to tell the speaker (Nancy Pelosi) that she’s moving too fast and they damn sure don’t want to tell the president,’ said Rep. Charles Rangel, D-N.Y.,” reports AP.

* “When Charles Hummel wrote his classic essay “The Tyranny of the Urgent,” in 1967, he identified the telephone as among the worst offenders against our peace and complacency. The issue, Hummel said, is not so much a shortage of time as a problem of priorities. Or, as a cotton mill manager once told him, “Your greatest danger is letting the urgent things crowd out the important,” reports ANS.

* “Stocks rallied Thursday as investors shrugged off a rise in jobless claims and focused on encouraging earnings from Ford and 3M. A third straight rise in home sales also buoyed the market, helping propel the DJIA above the 9,000 mark for the first time since January. Existing-home sales rose 0.3%, ” reports CNBC.

* “Another flood of earnings reports left major stock-market benchmarks mixed on Wednesday as bank stocks fell but some technology and consumer stocks rose. Financial stocks were mostly lower after a wave of quarterly reports from banks. Morgan Stanley dropped 5.1% after earnings dropped sharply,” reports WSJ.

* “This is nothing but a relief rally in a secular bear market and we’ll be in a secular bear market for another 10 to 15 years,” said David Hefty, principal of Cornerstone Wealth Management. “Right now, being bearish is nothing more than being realistic with what’s going on around us,” Hefty told CNBC.

(Marketwire – 07/22/09) – BioElectronics Corp. (Pinksheets:BIEL), the maker of inexpensive, disposable drug-free anti-inflammatory devices, today announced a conference call will be held at 11AM (EDT), Tuesday, July 28th to discuss the results of a clinical study recently completed under the direction of David G. Genecov, M.D. FACS FAAP and Joel Brook, DPM, MS, FACFAS. The management team will also provide its stakeholders with an update on corporate activities and information on the status of FDA filings.

Read Here

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US Files Indictment Against Danny Pang (WSJ)
Basically just a restating of previous charges which were that the PEMGroup, as Pang once told a colleague, is a scam. A spokesman for Mr. Pang, however, said the businessman “believes these charges are false and he looks forward to being vindicated at trial.”

Howard Marks: Stem Those Fees (NYP)
The Oaktree Capital Management founder has a problem with huge incentive fees. Only the best (like Oaktree) should be getting them. “Incentive fees on the order of what we’ve seen are a big deal and they should only go to extraordinary portfolio managers,” said Marks.

Credit Suisse Reports $1.5 Billion Profit (NYT)
Up 29 percent from year-on-year but down from the first quarter profit of 2 billion francs. Brady Dougan is confident the team can keep this up, and that the other Swiss bank in town will blow Toblerone bars when it reports on August 4.

Fannie & Freddie: The most expensive bailout (CNN Money)
“We’re assuming they each will cross the $100 billion mark fairly soon. They could be hitting the $200 billion barrier by the end of next year,” said Bose George, mortgage analyst at Keefe, Bruyette & Woods, an investment bank specializing in financial services firms.

Hamptons Luxury Market Stalls With Four-Year Inventory Pileup (Bloomberg)
Only 37 homes above $2.37 million sold last quarter. Will no one step it up? How about this baby, any interest here? “The asking price for a 13,500-square-foot oceanfront home in Southampton Village with nine bedrooms, 11 bathrooms and a tennis court was reduced 25 percent in April to $60 million after sitting on the market for a year, and still hasn’t sold.”

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• US Initial Jobless Claims (Jul 18) W/W 554K vs. Exp. 557K (Prev. 522K, Rev. to 524K)
• “If there’s a blue pill and a red pill, and the blue pill is half the price of the red pill and works just as well, why not pay half price for the thing that’s going to make you well?”- Obama (Washington Examiner)
  
• Zero Intelligence trading closely mimics stock market (New Scientist)
• Jonathan Weil: Accountants gain courage to stand up to bankers (Bloomberg)
• Obama’s Fed Risk Regulator plan fading as lawmakers back council (Bloomberg)
• Looks like that CIT bankruptcy will still happen after the soon to be failed bond exchange offer (Bloomberg)
• Michael Milken, 60,000 deaths, and the story of Dendreon (Deep Capture)
• Ford burns $1 billion, earns $2.3 billion, accountants everywhere highfiving on a job well done(WSJ)
• NPR: Bin Laden’s son may have been killed by U.S. missile in Pakistan (Bloomberg)
• Thoughts on U.S. personal consumption (David Malpass, Enicma Global)
• Bond market leadership: what does that tell us (Green Faucet)
• Howard Marks: stem those fees (NY Post)
• Ignoring watchdog report, treasury gives three major banks sweetheart deals (HuffPo)
• Wendelin Wiedeking gets €50 million departure gift for destroying Porsche (FT)
• FINalternatives Survey: High-Frequency trading has a bright future (FINalt)
• Fed’s exit strategy: a deft and fortunate fed (Global Commentary, Northern Trust)