The long anticipated and often rumored move of Facebook to the S&P 500 has finally arrived or technically will arrive on December 20 when FB will replace Teradyne, only this time we get two for the price of one. From BBG:
- FACEBOOK TO JOIN S&P 100 AND S&P 500
We can't wait for TWTR to move up in sympathy. As for the reasons behind the move - one must do whatever is needed to keep what little is left of retail speculators happy.
And in other news, Alliance Data Systems (ADS) and Mohawk (MHK) are also joining the S&P 500
With the Ukraine situation increasingly precarious, and now even the US state department getting involved with the occasional unexpected harsh warning into what Putin has made very clear is his brand new sphere of influence (it is unclear just why the US is responding in such a way: did the pro-Europe protesters not use Made in the US tear gas or chemical weapons?), Russia casually threw it out there earlier today that it would use nuclear weapons if it comes under an attack. As vice prime minister and defense industry chief made clear, "One can experiment as long as one wishes by deploying non-nuclear warheads on strategic missile carriers. But one should keep in mind that if there is an attack against us, we will certainly resort to using nuclear weapons in certain situations to defend our territory and state interests." Just in case it wasn't quite clear...
On a day when Sebelius faces more music, but small golf-claps are heard around Democrat offices at the sign-up rates for Obamacare, The Hill reports - rather dishearteningly, Capitol Hill staffers who signed up for ObamaCare through the Washington, D.C. healthcare exchange are being told to confirm their enrollments in person, and not to rely on data provided by the website... "Do not rely on your 'My Account' page or other correspondence from DCHL... do not assume you are covered."
S&P futures dumped their most in almost 4 months on marginal volume today as a budget deal (moar fiscal means less moar monetary policy) and a potentially hawkish Stan Fischer on the Fed spread taper fears across all assets with gold lower, Treasury yields higher, and USD rising. New 52-week-lows spiked to 4 month highs as higher beta muppetry took Trannies down most in almost 4 months. The S&P tested back below the payrolls-data and FOMC Minutes launchpad levels from last week as rather notably, while most sectors are still up 5-10% from the debt-ceiling lows, Utilities are now unch. Treasuries weakened back to unchanged from the payrolls print for 5Y (though 7s-130s are -3 to 4bps still). This is the biggest jump in VIX in 2 months as the term structure is the most inverted since US downgrade levels in Aug 2011. Dow <16,000; S&P <1,800; NASDAQ ~4,000 - Retirement Off!
Former OMB director David Stockman rages to none other than Rick Santelli that the budget deal is a "betrayal and a joke" and "the final surrender of the House Republican leadership to beltway politics." The dismal reality - that little to no one in the mainstream media will dare utter - the budget adds $70 billion to spending this year and next year, and "then they're going to pretend to save it in '22 and '23." Stockman blasts, "they've not only kicked the can down the road, but kicked it into low-earth orbit." The only hope of getting our fiscal house in order was if House Republicans stand up, and Stockman warns "will trigger an enormous negative reaction from Tea-Party Republicans." The truth hurts...
As tensions escalate in Ukraine, risk indicators flash redder than red, and the US is now considering "sanctions" against the divided nation, parliamentarians in Georgia (ironically Stalin's birthplace) have a different way to solve their differences... as the following fight suggests...
We’ve recently been treated to two mutually exclusive forecasts: that the Great Bull Market will run until 2016 or 2018, so no worries; and that markets are exhibiting bubble-like characteristics that presage another crash. So which forecast is more likely the correct one? Though it is unsatisfyingly imprecise, the “new normal” phase strongly implies that future declines will be as dramatic as the advances and that the five-year clock is ticking on the current Bull market. Forecasting an advance that lasts years beyond this five-year pattern is equivalent to forecasting that the “new normal” phase is now ending and a new phase of much longer Bull advances is beginning. That is a bold claim, and there is little historical data to give it much weight. Stripped of complexity, the charts suggest that the current run will top out within the next few months and retrace most of the advance from 2009; i.e., a crash of significant amplitude.
Curious how much the various banks who stood to be impacted by or, otherwise, benefit from either a concentration or dilution of the Volcker rule? According to OpenSecrets, which crunched the numbers, here is how much being able to continue prop trading meant to some of the largest US banks and lobby groups:
- American Bankers Association: $6.495 million
- JPMorgan: $4 million
- Wells Fargo: $4.440 million
- Citigroup: $4.240 million
- Independent Community Bankers of America: $3.581 million
- Bank of America: $2 million
Not bad considering the loophole-ridden Volcker Rule will effectively permit "hedge" books (where an army of lawyers paid $1000/hour defines just what a hedge is) to continue piling on billions of dollars in wildly profitable, Fed reserve funded trades.
Despite hope (and talk) that Greece is on the path back to recovery, our recent discussion of the record deflation the nation is undergoing (and record unemployment) suggests Stournaras propaganda is just that. As Bloomberg's David Powell writes, the embattled nation continues to push further into depression and a state of insolvency and appears highly unlikely to be able to reduce the domestic price level in order to restore competiveness and simultaneously avoid a second restructuring of its sovereign debt. Perhaps that is why Troika delayed its appearance in Athens as it is easier to ignore the truth that way? Especially as beggars, once again, will become choosers in the "grexit" debate.
"You can’t expect the Fed to spell out what it’s going to do. Why? Because it doesn’t know." - Stanley Fischer
Big Tail Highlight Of 10 Year Reopening Auction, In Which Direct Bidders Get Least Since August 2012Submitted by Tyler Durden on 12/11/2013 - 14:13
Moments ago the Treasury sold $21 billion in 9 Year-11 Month paper in today's 10 Year reopening of CUSIP WE6, which pricing at 2.824% was a sizable 0.7 bps tail to the 2.817% When Issued trading at 1 pm, and easily one of the bigger tails in the past year for the benchmark bond auction. And while the closing yield indicated a sudden drop off in demand into the auction, the internals were hardly as ugly, with a Bid to Cover of 2.61, below last month's 2.70 (and below the TTM average of 2.73) but hardly a cliff drop in bidside demand. Breaking the allotment by final purchaser, Dealer got 40.5%, in line with the 39.2% average, while Indirects took down nearly half the auction, or 49.8% to be precise, far above the 38.3% LTM average, and the highest Indirect allotment since the 51.7% from June. Directs were therefore left holding 10.6% of the auction, the lowest such portion since August 2012. Overall, hardly an impressive auction, and one which probably reflects concerns what the taper could do for longer duration in the months ahead.
Following yesterday's "selfie-gate" furore at Nelson Mandela's memorial service, it is perhaps unsurprising that the AFP photographer responsible for the series of incriminating photos come out with a wordy (and picturey) response to explain what we all saw. Roberto Schmidt notes, "it was interesting to see politicians in a human light because usually when we see them it is in such a controlled environment. Maybe this would not be such an issue if we, as the press, would have more access to dignitaries and be able to show they are human as the rest of us." Indeed, especially for a president whose only focus is to be seen as "one of the people" and not actually doing, you know, work to help the people.
JPY carry trades are not helping and stocks just keep testing lows and finding no new BTFATH-ers for now. This will come as a little surprise to those who have watched the saturated and less exuberant credit markets unable to join the party for the last 2 months.
A senior manager at a small tech company had some time-consuming data analysis that needed to get done on a regular basis, and the manager was considering recruiting a (paid) intern to do the work. Instead, he spent four hours writing a Python script which did the work in a few minutes. He named the program "Intern." This story is repeated thousands of times a day across millions of tasks. The paid human labor that can't be replaced by a script will increasingly require the knowledge and skills needed to collaborate with technology as an essential work partner. We are already well into the "end of work." Digital pythons have been eating jobs for some time now, and because organizations only have expenses, they will continue to do so indefinitely until the only paid jobs left are those that cannot be fully replaced by a script or a robot operating on standardized scripts.
Two days ago, supposedly in an attempt to demonstrate how "contained" the radiation fallout from Fukushima was, an event was held in Tokyo to demonstrate that safety of the rice grown in the vicinity of the evacuated area around the exploded nuclear power plant according to the original source, NHK. And since officials from Fukushima Prefecture said "no radioactive materials were detected in any of the harvested rice" a whopping 540 kilograms of the non-radioactive rice would be served in a government office complex in Tokyo for 9 days from Monday. We further learned that Senior Vice Environment Minister Shinji Inoue and Parliamentary Vice Environment Minister Tomoko Ukishima tasted rice balls made of the crop on the first day. Inoue said the rice tasted good especially when he thought about the great effort that went into cultivating the crop. A farmer from Kawamata Town said he will continue to cultivate rice now that he knows that it's possible to grow a tasty product if the paddy fields are properly decontaminated. He said he travelled from his temporary home to the paddy to tend the rice as it grew.