First Mario Draghi made some strong statements speaking in Asia that "It is essential to bring back inflation to target and without delay," which sent EURUSD tumbling BUT did not spark moves in the S&P 500 (though Gold slipped). It was not until the PBOC cut rates (and sent AUD surging) that the US equity market perked up and started ripping... along with gold and as the morning progressed, gold has kept going as it is clear the Central Banks of the world have only one policy left... (no wonder the Dutch want their gold back)
Recent polls show pro-default parties growing popular in peripheral euro-area countries such as Greece, Italy and Spain. As Bloomberg Brief's Maxime Sbaihi notes, in a depressed economic environment, their promises to restructure public debt might soon bring them to power and tempt traditional parties to adopt their ideas. This return of political risk in the euro area doesn’t appear to be priced in by market participants. As Italy's Beppe Grillo recently exclaimed, "we will leave the Euro and bring down this system of bankers, of scum."
- They go all in: China’s PBOC Cuts Interest Rates for First Time Since 2012 (BBG)
- And all in-er: ECB's Draghi throws door to quantitative easing wide open as recovery wanes (Reuters)
- Global Markets Rally: ECB Head Says Central Bank Is Ready to Expand Stimulus Program After China Cuts Rates (WSJ)
- Obama unveils U.S. immigration reform, setting up fight with Republicans (Reuters)
- U.S. increasing non-lethal military aid to Ukraine (Reuters)
- Russia warns U.S. against arms to Ukraine as Biden due in Kiev (Reuters)
- Ukraine slashed gold holdings in October, Russia added more - IMF (Reuters)
- Abe Dissolves Japan’s Lower House of Parliament (WSJ)
While the biggest news of the day will certainly be China's rate cut (and the Dutch secret gold repatriation but more on the shortly), here is a list of all the other central-banking/planning events which have moved markets overnight, because in the new normal it no longer is about any news or fundamentals, it is all about the destruction of the value of money and the matched increase in nominal asset values.
"The People's Bank of China decided to cut financial institutions RMB benchmark interest rate loans and deposits with effect from November 22, 2014. The one-year benchmark lending rate down 0.4 percentage points to 5.6%; one-year benchmark deposit rate down 0.25 percentage point to 2.75%, while the combination of market-oriented reforms to promote the interest rate, the upper limit of the floating range of interest rates on deposits of financial institutions by the benchmark deposit 1.1 times the adjusted interest rate is 1.2 times; other grades adjusted accordingly benchmark interest rate loans and deposits, and to make appropriate benchmark interest rate maturities degenerate."
The bad news: every central-planner is now all in. The good news for the liquidity addicts, is that the S&P futures are now 12 points higher on what is clearly the only growth strategy left in a centrally-planned world, and are approaching 2070 and just 30 points away from Goldman's 2015 year end target.!
A sinkhole 20 by 30 meters (65 by 98 feet) in size has been found near a Uralkali mine in Russia's Perm region. As Mining.com reports, while stunningly no casualties have been reported so far, the situation is expected to worsen as locals fear that the hole could get bigger and swallow their houses.
"Give me your corrupt, your crony, your oligarch masses yearning to launder money free,
The criminal masterminds of your destroyed environment and police state.
Send these, the pampered, the private jet setter to me, I open my hands to your golden yuan."
"this sentence is a big surprise to me as I did nothing wrong..."
Are you waiting for the next major wave of the global economic collapse to strike? Well, you might want to start paying attention again. Three of the ten largest economies on the planet have already fallen into recession, and there are very serious warning signs coming from several other global economic powerhouses.
First the Japanese central bank proceeds to monetize all new debt issuance and is on route to holding 50% of all 10 Year bond equivalents within 2 years, sending the Yen year plummeting to 7 years lows daily, and then - just like Europe - Japan gets cold feet and realizes that the next steps are USDJPY 145+, meaning a complete collapse of the Japanese economy and a full on FX, if not shooting, war in Asia. So what does Japan's finance minister Aso do? Why he talks the Yen higher, in the process completely confounding the FX algos, and risking a full blown collapse in the Nikkei just 3 weeks ahead of the Japanese snap elections.
For America’s 44 million senior citizens, plus tens of millions of others who are on the threshold of retirement, last month marked a watershed moment that is worth celebrating. At the end of October, the Federal Reserve announced the first step in returning to a more normal monetary policy. After nearly six years of near-zero interest rates and quantitative easing, the Fed is ending its bond-buying program and has signaled a plan to eventually begin raising the federal-funds rate, raising interest rates to more normal levels by 2017. U.S. households lost billions in interest income during the Fed’s near-zero interest rate experiment.
“When I came to this country 11 years ago, it was in the hope that one day, if I worked hard enough, I could be granted a temporary, tenuous reprieve from the threat of being forcefully removed,”
Having been shunned by all the major broadcast networks (unlike his predecessor 8 years ago), President Obama's 'prime time' address to the nation - which will be seen by dominant Spanish-language channel Univision viewers (and CNN and PBS) - will lay out the new steps he (and he alone in his executive order) is taking "to fix our broken immigration system." As Politico comments, Obama appears to be going all-in as he speaks from Las Vegas, as the cooperation talk has disappeared - “Make no mistake. When the newly elected representatives of the people take their seats, they will act,” warned incoming Senate Majority Leader Mitch McConnell.
They may be able to engineer a stock market rally to further enrich themselves, but they can not propel the real economy of 318 million people. Our consumer society is dying – asphyxiated by debt – shorter of breath and one day closer to death. I’d love to offer some sage advice on how to fix this problem, but it’s too late. Too many people missed the starting gun.