Game Change or Just ”Marketing” ?

1/26/2010 Investment Meeting Jan 25/26, 2010 Page 1

... Correction Time – Will Support Hold?

1/26/2010 Investment Meeting Jan 25/26, 2010 Page 2

... Correction Time – Will Support Hold?
• Will the market believe Obama or just view his intentions as
marketing gimick or a lame duck with no ability to get anything
implemented?
• Bernanke reconfirmation as the key short term support at the
1080 level?
• Month end effect
• ”Technical” oversold
• Next week will be the fight between new set of data (Post US
Q4 GDP) versus policy changes in broad terms

1/26/2010 Investment Meeting Jan 25/26, 2010 Page 3

... If not then 200 dma close to 1000

Jeff Cooper
1/26/2010 Investment Meeting Jan 25/26, 2010 Page 4
... If not then 200 dma close to 1000

1/26/2010 Investment Meeting Jan 25/26, 2010 Page 5

 Citygroup Surprice Macro Index
60

CCE 50 Asia
AUD EM
40
LtAm
30

20
Last Chg 1D Chg 5D Chg 1M Chg MTD Chg QTD SEK GBP
10
CESIUSD Index USD -0.7 1.3 11.1 -7.0 -19.1 -19.1

Level
JPY 0
CESIEUR Index EUR -14.9 -1.3 -4.6 2.2 0.6 0.6 G10
USD
-30 CAD -20 -10 0 10 20
CESIJPY Index JPY 0.9 -4.1 -7.0 -41.1 -38.3 -38.3 -10 NOK
EUR
NXD
-20
CESIG10 Index G10 -3.7 -0.5 1.6 -5.9 -10.8 -10.8
-30
CESIAPAC Index Asia 50.1 1.9 1.3 9.9 12.3 12.3 CHF
-40
CESICMEA Index CCE 48.4 -1.5 -20.9 -23.2 -20.1 -20.1
-50
CESILTAM Index LtAm 38.1 5.7 12.7 47.3 43.0 43.0 5 Day Change

CESIEM Index EM 46.8 2.3 0.8 14.2 15.1 15.1

CESIGBP Index GBP 13.7 -2.6 16.2 66.1 62.8 62.8 60

CESICAD Index CAD -8.0 2.7 -25.6 -37.3 -43.1 -43.1 CCE 50 Asia
AUD EM
CESICHF Index CHF -36.4 -4.3 -6.9 -75.0 -36.8 -36.8 40
LtAm
CESIAUD Index AUD 47.3 -3.1 -5.3 0.4 7.4 7.4 30
CESINOK Index NOK -9.1 8.8 14.3 -8.5 -7.7 -7.7 20
CESISEK Index SEK 15.7 1.7 2.5 43.0 46.6 46.6 SEK GBP
10

Level
CESINZD Index NXD -17.0 -5.0 -9.4 -41.4 -36.4 -36.4
JPY USD 0
G10
-60.0 -40.0
CAD -20.0 0.0 20.0 40.0 60.0 80.0
-10 NOK
EUR
NXD
-20

-30
CHF
-40

-50
Month to Data

1/26/2010 Investment Meeting Jan 25/26, 2010 Page 6

Citygroup Surprice Macro Index

1/26/2010 Investment Meeting Jan 25/26, 2010 Page 7

Weekly Scenario Update (-100 to 100)

100

80

60
V-Shaped
40

20

Scenario View
0
Limus CESI Sweet-Spot
-20

-40

Double Dip
-60

-80
Crisis2.0
-100
1 5 9 13 17 21 25 29 33 37 41 45 49

1/26/2010 Investment Meeting Jan 25/26, 2010 Page 8

Change Since Last meeting

Todays Last Week

Meeting Meeting Change Change%
S&P Dec Fut 1,085.50 1,145.75 -60.25 -5.26
IQQE(EEM in EUR) 26.04 27.97 -1.93 -6.90
EUR 1.4088 1.4294 -0.0206 -1.44
JPY 90.03 91.06 -1.0300 -1.13
GBP 1.6249 1.6378 -0.0129 -0.79
AUD 0.8968 0.9251 -0.0283 -3.06
T-Notes 118.02 117.08 0.94 0.80
Bunds 123.28 122.48 0.80 0.65
3M USD Dec10 98.995 98.889999 0.11 0.11
3M EUR Dec11 98.535 98.455002 0.08 0.08
Gold 1,094.40 1,141.20 -46.80 -4.10
Oil 74.35 79.32 -4.97 -6.27
DBA 25.93 26.10 -0.17 -0.65
-10.00 -5.00 0.00 5.00

1/26/2010 Investment Meeting Jan 25/26, 2010 Page 9

Asset Class Performance

REAL_TI REAL_TI REAL_TI

CRNC LAST_pri CHG_PC CHG_PC ME_TRR ME_TRR ME_TRR VOLATIL
Bticker Name Y ce T_1D T_5D _MTD _QTD _YTD ITY_30D
IUSA GY Equity ISHARES S&P 500 INDEX FUND EUR 7.72 -1.78 -2.28 -1.03 -1.03 -1.03 12.05
XMWO GY Equity DB X-TRACKERS MSCI WORLD TRN EUR 19.29 -1.13 -2.92 -0.62 -0.62 -0.62 11.76
XESX GY Equity DBX-TRACKERS DJ EU STX 50-1D EUR 28.87 -1.37 -5.41 -5.72 -5.72 -5.72 18.01
XACTOMX SS EquityXACT OMXS30 SEK 93.10 -0.59 -2.92 -0.80 -0.80 -0.80 13.97
SPIKFX DC Equity SPARINDEX OMX C20 AKTIER DKK 218.90 0.83 -2.49 3.94 3.94 3.94 16.30
XLPE GY Equity DB X-TRCKERS LPX MM PRV EQTY EUR 17.93 -2.40 -2.92 4.24 4.24 4.24 18.58
XMEM GY Equity DB X-TRACKERS EMERG MARKET EUR 24.78 -0.76 -4.69 -1.59 -1.59 -1.59 16.88
IQQC GY Equity ISHARES FTSE/XINHUA CHINA 25 EUR 79.41 -0.97 -4.00 -4.57 -4.57 -4.57 19.90
IUSM GY Equity ISHARES USD TREASURY BD 7-10 EUR 118.92 0.22 2.23 3.12 3.12 3.12 13.67
X710 GY Equity DB X-TR IBX EUR SOV EZ 7-10 EUR 173.30 0.34 0.33 0.83 0.83 0.83 3.68
XGIN GY Equity DB X-TR II IBX GBL INF-LKD EUR 164.72 0.18 0.04 0.81 0.81 0.81 5.63
XTXE GY Equity DB X-TR II TRX EUROPE 5 YEAR EUR 107.18 -0.07 -0.41 -0.45 -0.45 -0.45 1.50
XTXC GY Equity DB X-TR II TRX CROSSOVER 5 Y EUR 111.54 -0.50 -1.91 -0.81 -0.81 -0.81 5.92
XEMB GY Equity DB X-TR II EMG MKTS LIQ EURB EUR 222.77 -0.00 -0.56 0.98 0.98 0.98 5.64
IQQP GY Equity ISHARES FTSE/EPRA EUR PRPRTY EUR 22.48 -0.18 -1.83 0.27 0.27 0.27 13.86
OD7F GY Equity ETFS CRUDE OIL EUR 17.89 -1.11 -3.56 -4.84 -4.84 -4.84 24.10
OD7U GY Equity ETFS AGRICULTURE DJ-AIGCISM EUR 4.45 -0.45 0.11 -5.20 -5.20 -5.20 19.26
XDBC GY Equity DB X-TRACKERS DBLCI-OY BALAN EUR 28.74 -0.17 -2.84 -3.98 -3.98 -3.98 17.67
GG9B GY Equity GOLD BULLION SECURITIES LTD EUR 75.72 0.00 -1.68 1.64 1.64 1.64 14.36
XEON Gy Equity DB X-TR II EONIA EUR 138.23 0.00 0.01 0.01 0.01 0.01 0.04

1/26/2010 Investment Meeting Jan 25/26, 2010 Page 10

Cross Assets - Technical Status - NEW
EQY_BOLL EQY_BOLL EQY_BOLLI
LAST_PRI HIGH_30 MOV_AV MOV_AVG_ MOV_AVG_2 O/U DMI_DI DMI_A INGER_LO INGER_MI NGER_UPP Boll VOLATIL CHG_NET
CE d Low_30d RSI_3D RSI_14D G_5D 50D 00D 21D P DMI DX WER D ER Range ITY_30D _1D
5-21
MA DMI+/D ADX 1DayC Aroon_ Aroon_
Last H30D L30D Now RSI3 RSI14 MOV5 MOV50 MOV200 O/B MI- DMI 14d bLow21d bMed21d bUp21d Boll_Lev 30D Vol 1DVaR 1DChg hgVar dn10d up10d
EUR 1.4102 1.4591 1.4029 13% 19.68 30.89 1.4121 B 1.4557 B 1.4319 B B 0.45 DOWN 25.08 1.4059 1.4332 1.4605 7.9% 7.9 0.0114 -0.0050 44% 36 5
JPY 90.13 93.77 88.97 24% 35.69 43.80 90.36 B 90.15 B 92.92 B B 0.58 DOWN 16.12 89.43 91.54 93.65 16.6% 10.0 0.92 -0.11 12% 5 95
GBP 1.6228 1.6458 1.5833 63% 52.04 51.47 1.6213 O 1.6267 B 1.6195 O O 0.84 Neutral 16.03 1.5930 1.6168 1.6406 62.6% 8.0 0.0132 -0.0003 2% 64 18
DXY 78.46 78.81 75.90 88% 80.79 63.98 78.31 O 76.68 O 78.44 O O 2.70 UP 31.60 76.59 77.63 78.67 89.9% 7.0 0.56 0.26 46% 5 36
JYEU 127.11 134.38 126.13 12% 23.22 32.37 127.60 B 131.19 B 132.93 B B 0.25 DOWN 30.39 126.54 131.20 135.85 6.1% 10.5 1.37 -0.61 45% 27 100
AUD 0.8976 0.9328 0.8735 41% 18.43 41.21 0.9033 B 0.9094 B 0.8511 O B 0.60 DOWN 19.94 0.8904 0.9135 0.9367 15.6% 11.7 0.0107 -0.0065 61% 41 100
NKEU 8.2376 8.4769 8.1209 33% 91.18 49.82 8.2006 O 8.3335 B 8.6111 B O 0.90 Neutral 36.06 8.0984 8.2000 8.3015 68.5% 4.8 0.0401 0.0117 29% 100 14
SKEU 10.2686 10.4886 10.0801 46% 89.79 52.82 10.2190 O 10.3242 B 10.4573 B O 1.01 Neutral 24.94 10.1113 10.2036 10.2960 85.2% 5.7 0.0602 0.0263 44% 77 14
ESA 1084.25 1148.00 1081.00 5% 11.09 35.73 1102.55 B 1109.59 B 1000.21 O B 0.36 DOWN 19.67 1089.21 1125.23 1161.25 -6.9% 13.6 15.09 -8.25 55% 27 100
VG1 2,776 3,044 2,752 8% 5.77 29.82 2,838 B 2,908 B 2,673 O B 0.38 DOWN 17.64 2,807 2,951 3,094 -10.8% 15.5 44 -31 70% 5 100
GX1 5,585 6,101 5,550 6% 6.51 30.54 5,706 B 5,834 B 5,364 O B 0.38 DOWN 19.83 5,643 5,922 6,200 -10.4% 15.7 89 -57 64% 5 100
SHCOMP 3,019 3,307 3,002 6% 12.28 39.58 3,156 B 3,223 B 2,983 O B 0.59 DOWN 13.53 3,111 3,211 3,312 -45.8% 24.7 76 -75 99% 36 9
UKX 5260.31 5600.48 5194.49 16% 7.42 36.98 5366.47 B 5354.84 B 4825.63 O B 0.60 DOWN 18.35 5295.16 5452.76 5610.35 -11.1% 14.6 78.53 -42.68 54% 27 100
OMX 939.12 986.00 935.81 7% 10.86 42.39 957.24 B 960.22 B 872.78 O B 0.55 DOWN 12.20 946.87 965.56 984.25 -20.7% 14.2 13.64 -8.44 62% 27 100
KFX 351.63 363.84 329.48 64% 36.72 52.66 352.64 B 340.05 O 315.38 O O 1.21 Neutral 31.31 332.63 350.18 367.73 54.1% 16.7 5.99 1.76 29% 14 100
OBX 325.70 356.29 322.38 10% 7.98 36.21 332.38 B 332.82 B 284.29 O B 0.50 DOWN 24.06 327.50 342.10 356.70 -6.2% 18.0 5.99 0.00 0% 5 100
EEM 39.90 43.47 39.53 9% 23.36 37.61 40.92 B 41.44 B 36.34 O B 0.53 DOWN 16.59 39.82 41.93 44.03 1.9% 21.9 0.89 0.29 33% 27 100
DBA 25.93 27.09 25.88 4% 16.87 41.42 26.12 B 26.28 B 25.79 O B 0.62 DOWN 16.15 25.82 26.43 27.04 9.0% 13.1 0.35 -0.18 51% 36 86
SA 937.75 1077.25 935.25 2% 9.15 28.35 946.75 B 1024.01 O 988.70 B O 0.33 DOWN 28.83 916.07 1002.01 1087.95 12.6% 23.1 22.15 -2.75 12% 36 18
KCA 139.40 149.50 135.80 26% 35.15 45.07 139.56 B 141.06 B 134.99 O B 0.82 Neutral 12.91 135.00 140.59 146.17 39.4% 23.5 3.34 -0.20 6% 68 18
CLA 74.21 84.45 72.45 15% 18.14 34.34 75.56 B 78.43 B 73.60 O B 0.44 DOWN 24.61 73.95 79.67 85.40 2.3% 22.9 1.74 -1.07 61% 9 100
GCA 1093.80 1166.70 1076.50 19% 25.05 40.71 1099.84 B 1134.17 B 1013.06 O B 0.64 DOWN 16.66 1080.20 1119.57 1158.93 17.3% 18.3 20.46 -3.00 15% 36 100
NGA 5.63 6.11 5.20 47% 40.75 50.17 5.65 B 5.38 O 5.65 B B 1.21 Neutral 12.81 5.41 5.70 6.00 37.3% 52.0 0.30 -0.10 33% 5 91
SBA 29.80 30.10 23.12 96% 78.71 69.29 29.19 O 25.31 O 21.44 O O 2.84 UP 35.28 26.14 27.88 29.63 104.9% 37.0 1.13 1.02 90% 5 91
RXA 123.28 123.66 120.84 87% 90.56 63.99 123.15 O 122.42 O #N/A N/A O O 1.58 UP 18.00 120.67 122.14 123.61 88.8% 4.4 0.56 0.13 23% 77 27
TYA 118.08 118.25 114.89 95% 80.68 62.43 117.79 O 117.46 O 116.22 O O 1.76 UP 21.79 114.84 116.56 118.29 93.9% 5.6 0.68 0.34 50% 68 27
DUA 108.53 108.60 107.82 91% 69.50 67.86 108.52 O 108.14 O #N/A N/A O O 1.94 UP 22.62 107.88 108.27 108.66 83.3% 1.0 0.11 -0.02 18% 77 27
USA 119.00 119.25 114.50 95% 75.53 60.78 118.56 O 118.14 O 117.66 O O 1.75 UP 23.02 113.84 116.54 119.25 95.4% 9.9 1.21 0.72 60% 68 27
EDZ0 99.01 99.02 98.42 98% 92.04 67.73 98.96 O 98.77 O 98.19 O O 2.12 UP 22.96 98.42 98.77 99.12 84.3% 0.9 0.10 0.02 20% 68 23
ERZ0 98.55 98.57 98.08 96% 86.24 69.88 98.53 O 98.31 O 98.00 O O 1.77 UP 20.86 98.11 98.38 98.65 81.5% 0.6 0.06 0.00 0% 77 100
XLB 31.91 35.38 31.55 9% 23.90 38.83 32.78 B 33.04 B 29.49 O B 0.55 DOWN 18.06 31.91 33.70 35.49 0.0% 25.4 0.83 0.28 34% 27 100
XLI 28.02 29.61 27.68 18% 25.98 43.38 28.49 B 28.20 B 25.02 O B 0.55 DOWN 16.11 27.51 28.66 29.82 22.1% 16.8 0.48 0.18 38% 27 100
XLE 56.67 60.87 55.00 28% 22.38 40.23 57.86 B 57.57 B 52.83 O B 0.57 DOWN 19.36 56.21 58.67 61.14 9.3% 17.9 1.04 0.37 36% 5 100
XLU 30.02 32.08 29.75 12% 27.51 38.54 30.51 B 30.66 B 28.72 O B 0.47 DOWN 17.97 30.06 30.94 31.83 -2.3% 14.3 0.44 0.20 45% 95 9
IYT 72.35 76.69 71.84 11% 15.26 37.58 73.64 B 73.62 B 65.42 O B 0.60 DOWN 14.67 72.58 74.81 77.04 -5.2% 14.9 1.10 0.22 20% 5 100
XLP 26.34 27.18 25.96 31% 25.58 40.85 26.53 B 26.78 B 24.75 O B 0.48 DOWN 21.30 26.30 26.67 27.03 5.5% 9.8 0.26 0.05 19% 27 9
XLY 29.17 30.54 28.98 12% 25.85 40.22 29.63 B 29.57 B 26.16 O B 0.42 DOWN 14.82 29.28 30.02 30.76 -7.4% 14.0 0.42 0.15 36% 27 100
XLK 21.84 23.30 21.63 13% 26.02 38.23 22.33 B 22.41 B 19.93 O B 0.37 DOWN 20.75 22.01 22.83 23.64 -10.4% 18.1 0.40 0.18 45% 23 82
XLV 31.66 33.16 30.88 34% 24.26 49.41 32.21 B 31.25 O 28.07 O O 1.16 Neutral 27.21 30.92 31.84 32.76 40.2% 15.7 0.51 0.00 0% 27 100
IYR 44.12 47.94 43.29 18% 26.97 40.76 45.10 B 44.98 B 38.78 O B 0.51 DOWN 18.14 44.20 45.97 47.74 -2.3% 20.7 0.93 0.32 34% 5 55

1/26/2010 Investment Meeting Jan 25/26, 2010 Page 11

Cross Assets - Technical Status - LAST

1/26/2010 Investment Meeting Jan 25/26, 2010 Page 12

Rates Overview
Overview Interest Rates 26/01/2010 09:07

Swap Rates Change CHG_NET_5D

3M 2 yr 5 yr 10 yr 30 yr 3M 2 yr 5 yr 10 yr 30 yr
USD 0.25 1.10 2.64 3.70 4.40 USD 0 -5 -9 -9 -8
EUR 0.67 1.65 2.60 3.42 3.86 EUR -1 -5 -5 -4 -5
GBP 0.62 1.76 3.16 3.95 4.14 GBP 0 -13 -12 -8 -5
SEK 0.48 1.51 2.74 3.49 3.89 SEK 0 -3 -6 -8 -7
NOK 2.27 3.42 4.14 4.55 4.71 NOK -1 -3 -2 -7 -8
DKK 1.40 2.15 2.97 3.68 4.02 DKK -2 -3 -4 -4 -4

Spread to EUR Spread to EUR, Change

3M 2 yr 5 yr 10 yr 30 yr 3M 2 yr 5 yr 10 yr 30 yr
USD -0.42 -0.55 0.04 0.28 0.54 USD 1 -1 -4 -5 -3
GBP -0.05 0.12 0.56 0.53 0.28 GBP 1 -9 -7 -4 -1
SEK -0.19 -0.14 0.14 0.07 0.03 SEK 1 1 -2 -4 -3
NOK 1.60 1.77 1.54 1.13 0.85 NOK -0 2 3 -3 -4
DKK 0.73 0.51 0.37 0.26 0.16 DKK -1 2 1 1 1

Libor/Govt Change CHG_NET_5D

3M 2 yr 5 yr 10 yr 30 yr 3M 2 yr 5 yr 10 yr 30 yr
USD 20 30 32 12 -11 USD 0 4 5 2 2
EUR 42 54 31 22 -13 EUR 1 3 6 3 1
GBP 12 55 41 5 -26 GBP 4 -6 1 4 -2

1/26/2010 Investment Meeting Jan 25/26, 2010 Page 13

ITRX Europe vs Sovereign

1/26/2010 Investment Meeting Jan 25/26, 2010 Page 14

... For Keynes and Country (MS Credit Strategy)

1/26/2010 Investment Meeting Jan 25/26, 2010 Page 15

S&P 1H 2004 vs 2010 – NOT !

S&P 500 1H 2004 vs 2010

1.10

1.05

1.00

0.95

0.90
31/12 20/01 09/02 29/02 20/03 09/04 29/04 19/05 08/06 28/06

2004 2010 Hypothetical 2010

1/26/2010 Investment Meeting Jan 25/26, 2010 Page 16

Shanghai ... Broke ... Now 200dma

1/26/2010 Investment Meeting Jan 25/26, 2010 Page 17

Focus Next Week
• Equity Correction – Will suport at 1080-90 hold ?
• Obama ”State of the Union” Wednesday
• The ”Volcker Rule” real or marketing?
• News from Greece and China
• AIG Hearing
• FOMC will they also change tone (Discount rate and austerity back in
fashion?)
• Earnings (focus on Financials this week)
• IFO Tuesday
• Davos 2010
• Busy US data week, GDP Friday (GS 5.8% 4.6%)
• Bernanke reappointment vote and FED independence effect
• Healthcare deal in US dead?
• January month end effect to give support
1/26/2010 Investment Meeting Jan 25/26, 2010 Page 18
Asset Class Summary

FX Equities Fixed Income Commodities

• NFP ”-USD” • Correction Time. Will • Supported by Greece • Commodities

• China and less global 1080-90 support hold and equity weakness, negative effect from
imbalance ”+USD” ? but reluctantly so risky asset weakness
• Keynes vs Austrian ”- • ... Next stop 1000
USD”
• Greece (PIIGS)
”+USD”
• ”Volcker Rule” -USD?

1/26/2010 Investment Meeting Jan 25/26, 2010 Page 19

Market Picture

J. Robertson and China as the

others. US rates + worlds new super
10% power

The end of the Euro Currency

Debt Supercycle Big Picture Macro Survival

V-Shape,
Sovereign
Sweetspot, Double Mid Term Election
developments
Dip or Crisis 2.0
Status of US Government
Dollar, Strong involvement &
dollar policy.
Market Focused Macro Fiscal Policies

Will strong data

China overheating ? force CB Exit
Strategy
Geopolitics:
-Iran
-Terror attempt Greece not getting
.”Volcker much help yet!
China Tightning
Regulation”
.Bernanke and Correction time in
FOMC Tactical Considerations Stocks
Govies Seasonal
Gold, Oil and
support in
commodities
January

1/26/2010 Investment Meeting Jan 25/26, 2010 Page 20