Ukraine Fighting Shifts To Mariupol Whose Capture Would Grant Russian Land Corridor To Crimea

Yesterday, when we reported that the last Ukraine outpost in the rebel-controlled eastern territory, the town of Debaltseve, has fallen into separatist hands, we concluded that "perhaps the only question is whether fighting continues around Mariupol which would enable Russia to have a land corridor all the way to Crimea." Moments ago we got the answer when Reuters reported that "pro-Russian separatists have launched mortar attacks on government-held positions near the coastal town of Mariupol in southeast Ukraine and are building up their forces there, local military reached by telephone said on Thursday."

Walmart Slides After Cutting Sales Growth Guidance, Blames Strong Dollar

The chorus of companies complaining against the Fed's strong dollar policy just saw one more addition, when moments ago WalMart- which reported better than expected numbers but disappointing guidance - said that "like many other global companies, we faced significant headwinds from currency exchange rate fluctuations."

Texas Initial Jobless Claims Surge Higher As Continuing Claims Jump Most In 2015

For the 9th week in a row, the smoothed average of initial jobless claims in Texas surged (Other Shale States - PA, ND, and CO also saw a notable rise in claims). While Tennessee's levels were estimated, the broad levels of claims send a mixed message. Initial claims beat expectations, fell from 304k to 283k with the trend now clearly flat since September. However, Continuing Claims jumped 58k to 2.425 million - the biggest jump in 2015, notably missing expectations. The trend of employmenmt has clearly changed...

WTI $49 Handle, Brent Under $59 On Inventory Build Concerns

Following last night's dramatically larger than expected API inventory build (and ahead of today's EIA inventory and production data), crude oil prices are tumbling. WTI is back below the $50 Maginot Line and Brent has brokenm back below $59...

Frontrunning: February 19

  • Greece requests euro zone loan extension, offers big concessions (Reuters)
  • Germany Rejects Loan Request Saying Greece Must Meet Conditions (BBG)
  • Did the Fed Just Enter the Currency Wars (BBG)
  • French consumer prices fall for first time since 2009 (Reuters)
  • Oil falls sharply after U.S. crude inventories rise (Reuters)
  • High-Speed Firm Virtu Revives IPO Plans (WSJ)
  • Fed Tiptoes Into Rate-Hike Debate (Hilsenrath)
  • Rajoy’s Nemesis Is Back: Anti-Graft Editor Targets Vote (BBG)

Stocks Rebound On Hopes Of Resolution To Greek Impasse

After yesterday's FOMC Minutes, despite a huge dovish reversal by the Fed - one which increasingly puts its "credibility" and reputation at risk - stocks were unable to close green, or even above 2100, for one simple reason: uncertainty with the fate of Greece. Overnight there has not been much more clarity, when as previously reported Greece submitted a 6 month extension request to its master loan agreement but not to its bailout extension, a nuance lost in the annals of diplomacy. But is this the much-awaited Greek capitulation? Or will the Eurogroup reject this too? The answer may be available in a few hours after an emergency Eurogroup meeting due later today. However, as usual stocks are ready to "price in" yet another Greek conflict resolution, and after futures were lower by 7 points overnight, were up 4 points at last check: a rebound which will not correct if the latest Greek "compromise" fails to deliver.

Greece Requests Six Month Loan Agreement Extension, Denies It Requests "Memorandum" Extension

As had been leaked in advance, earlier today Jeroen Dijsselbloem first reported that Greece had submitted a request to euro-area creditors to extend the availability of bailout funds for six months, i.e., an extension to the "Master Financial Assistance Facility Agreement" not an extension to the Greek "bailout programme" aka the Memorandum per se, which has been the sticking point in all Greek government public addresses in recent days. Greece further asked for best use of flexibility in "current arrangement", which supposedly means an unconditional extension with Greece given the liberty to determine what happens in the next 6 months without Troika intervention. But was it a bailout extension or just a loan extension? GREECE DENIES HAS REQUESTED EXTENSION OF 'BAILOUT'-OFFICIAL: MNI

In short, confusion reigns once more.

A Moral Code For The Post-Collapse World

From “24” to “Breaking Bad” to “The Walking Dead,” American minds are being saturated with propaganda selling the idea that crisis situations require a survivor to abandon conscience. What we see developing is an extremely dangerous philosophy that rests on the foundation that victory (or survival) is the paramount virtue and that it should be attained at any cost. Moral compass becomes a “luxury” that “true” apex survivors cannot afford, an obstacle that could eventually get one killed, believing that the “survival of the fittest” is more important than the survival of the principled. However, if we cast aside our principles in the name of victory, then, ironically, we have still lost everything. If there is such a thing as the “greater good,” truth and honor must be the apex of that vision.

Central Banks Have Lost Control Of The World

With the world's oldest central bank - Sweden's Riksbank - taking the plunge into negative rates, there have been 19 'eases' by central banks this year, Morgan Stanley warns of "ghosts of the 1930s." With competitive 'easing' stoking fears of international currency wars, The Telegraph notes however that looser monetary policy is not the order of the day everywhere in the world, and herein lies potential danger for the world economy.

Why ZIRP/NIRP Is Killing Fractional Reserve Banking & Forcing Deposits Into Gold

With historically low long-term interest rates, the opportunity cost of holding gold and silver are close to zero or even negative, in other words you would “lose” money if you buy bonds (the benchmark) instead of gold and silver. When people realize that their money is not “safe” with the banks they will start withdrawing cash from their accounts and buy physical gold and silver instead. Depending on circumstances this could possibly bring down the (fractional) banking system. Why keep money in an account that gives you a negative return? Swiss banks are already witnessing stronger than normal interest for physical gold.

India Lifts Ban On Bank Gold Imports: Gold Can Again Be Used As Loan Collateral

Even with extended draconian measures created by India to prevent capital account outflows as a result of uncontrolled gold imports (which still take place only "under the table"), a whopping 1000 tons of gold ended up in the form of gold trinkets in 2014 mostly in India, and to a lesser extend in China. All of that is about to change: earlier today India's Economic Times reported that the RBI, surely facilitated by the drop in oil prices - a key import for India - has finally lifted its ban on imports of gold coins and medallions by banks and trading houses.  The RBI in a notification also said banks are permitted to import gold on consignment basis, anbd perhaps most impoytantly, "Banks are free to grant gold metal loans." This is key because as we wrote in January 2013 before the ban on gold imports took palce, the amount of gold loans being created in India was simply exponential.

Russia Dumps Most US Paper Ever As China Reduces Treasurys Holdings To January 2013 Levels

Back in December, Socgen spread a rumor that Russia has begun selling its gold. Subsequent IMF data showed that not only was this not correct, Russia in fact added to its gold holdings. But there was one thing it was selling: some $22 billion in US Treasurys, a record 20% of its total holdings, bringing its US paper inventory to just $86 billion in December - the lowest since June 2008.

An Inside Look At The Fed's Rate Decision Flow Chart

The flow-chart every Fed member carries with them at all times to ensure they know exactly how to react to the ever-changing macro-economic and geopolitical backdrop in global markets to ensure maximum employment and stable prices...

"Current Equity Markets Are No Place For Long-Term Investors"

"Suffice it to say that current equity markets are no place for long-term investors, and that even a resumption of risk-seeking investor preferences would demand a considerable safety net. For now, we believe the best interpretation of recent market action is as a hopeful, low-volume short-squeeze to marginal new highs, despite early deterioration in market internals following a period of extreme overvalued, overbought, overbullish conditions. This pattern is much like we observed in September 2000 and October 2007."

Marc Faber: "This Is The Year Investors Lose Faith In Central Banks"

"2015 could the year when worldwide investors, traders and normal people lose a total faith in central bankers," Marc Faber tells Boom-Bust's Erin Ade, forcing investors to "re-evaluate their views on gold." Faber begins this brief interview with an excellent summary of the great rotation of money-printing around the world and how USD strength will excuse-wise lead, inevitably, to The Fed re-opening the spigot (something that today's FOMC Minutes show they are dovishly inching towards).