• Tim Knight from...
    10/06/2015 - 17:03
    As we head into another earnings season, the bulls better pray to whatever pagan gods they worship that company after company magically defy the downturn that the economy is quite obviously entering.

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One "Big" Problem With Bitcoin...

Bitcoin is on fire. Mainstream media coverage is everywhere. No doubt, digital currency is a growing trend in Latin America… particularly in neighboring Argentina where the government has been nationalizing everything that isn’t nailed down. As a result, Bitcoins in Argentina frequently trade for more than 30% higher than in neighboring countries… presenting a rather interesting arbitrage opportunity. With all the mainstream attention, though, Bitcoin has been building its share of detractors. Most of these pieces roll out the same tired points– that nobody knows anything about the mysterious programmer who put it together… that it’s too volatile… etc. But, for the US investor, there is one big issue that remains entirely unclear...

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Complete Hedge Fund Performance For November And Year To Date

With November in the books, a month in which the S&P rose 2.85%, and a centrally-planned 27% year to date, it is time to check how the most prominent US hedge funds are doing heading into the home stretch. As usual - it is not pretty. And yes, while hedge funds don't benchmark to the S&P, after 5 years of underperformance, their LPs sure start asking themselves why do they pay 2 and 20 at a time when one can buy the SPY for free and thanks to CIO Bernanke, outperform 98% of all hedge funds?

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BofAML Warns Rising Treasury Volatility Suggests Either Higher Rates "Or" Lower Stocks

The broad-based measure of Treasury bond volatility - MOVE - has broken higher, and, as BofAML's MacNeil Curry notes, confirms a base and change in trend (to higher or more volatility). With the month of December traditionally a strong month for the MOVE Index and Treasury volatility in general, Curry warns there are two ways the volatility can move higher - either higher rates or lower equities.

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Stocks Are Having Their Worst Day In A Month

Since Friday's holiday-shortened session, US equities have tried and failed to sustain the exuberance of the month, quarter, year. Volume is heavy but postive breadth is becoming narrower with fewer and fewer names leading the rise and the break in EURJPY is weighing heavily on the overall markets as stocks catch down to recent indications from bonds, the USD, precious metals, VIX, and credit that the Fed taper may be coming sooner than many hoped. And it's a double-POMO Day... get to work Mr. Henry.

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With Website "Fixed", President Re-Pitches Obamacare 2.0 - Live Webcast

Amid proclamations of hundreds of thousands accessing the "fixed" website (though no details on who is signing up), admissions that work continues to be needed, delays, and broken promises; President Obama has deemed it fit to utilize his lectern to market the Affordable Care Act once again.


From "easy" women to keg-standing kids, there is something for everyone in this special one-time offer... grab your popcorn...

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Chart Of The Day: What's Bad For America Is Good For... Washington, D.C.

Much has been said about how the median household income in the US has gone nowhere since the great financial crisis (and in real terms has been declining for the past decade). We won't add much to this topic suffice to say that please don't take your declining income grievances to Washington D.C. for the simple reason that, as the chart below shows, what's bad for America is good for its (heavily lobbied) politicians.


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The "Google Maps" Of Bitcoin Has Arrived

The past several weeks have seen the emergence of several innovative and user friendly websites related to Bitcoin specifically, and crypto-currencies generally. The site is CoinMap.org and it serves as a sort of Google Maps for Bitcoin. The site attempts to plot the various brick and mortar retail locations across the globe that accept BTC.

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Herbalife Soars As Belgian Court Confirms Not A Ponzi Scheme

Unfortunately for Bill Ackman, another leg of the "short Herbalife to the grave" thesis just broke when a Belgian Appeal Court hearing overturned its previous findings:


The stock is up 5% on the news, breaking to a new record high above $75.

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JPM Comes Out Against Bernanke's Helicopter: "Raising Inflation Expectations Is A Bad Idea"

As we explained over two months ago, and as the Fed is no doubt contemplating currently, the primary topic on the agenda of central bankers everywhere and certainly in the Marriner Eccles building, is how to boost inflation expectations as much as possible, preferably without doing a thing and merely jawboning "forward expectations" (or more explicitly through the much discussed nominal GDP targeting) in order to slowly but surely or very rapidly and even more surely, get to the core problem facing the developed world: an untenable mountain of debt, and specifically, inflating it away. Of course, higher rates without a concurrent pick up in economic activity means a stock market tumble, both in developed and emerging countries, as the Taper experiment over the summer showed so vividly, which in turn would crush what many agree is the Fed's only achievement over the past 5 years - creating and nurturing the "wealth effect" resulting from record high asset prices, which provides lubrication for financial conditions and permits the proper functioning of capital markets. Perhaps this is the main concern voiced by JPM's chief US economist Michael Feroli who today has issued an interesting piece titled simply enough: "Raising inflation expectations: a bad idea." Is this the first shot across the bow of a Fed which may announce its first taper as soon as two weeks from today, in order to gradually start pushing inflation expectations higher?


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Guest Post: Dow 40,000, SPX 4,000: Is This Fed-Fueled Stock Rally Sustainable?

Now that the eminently trustworthy financial pundits are claiming the current stock market rally is good to go until 2016, it's appropriate to see where the market will be in 2016 if current trends hold.

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US Weakness Sparks Biggest European Stock Drop In 10 Weeks

Led by Italy and France (with Portugal and Greece relatively outperforming), European stocks extended yesterday's losses with the worst day in broad equities in over 10 weeks. EUR's weakness from yesterday was entirely dismissed as EURUSD surged back from the open in Europe this morning back up to 1.3600. EURJPY's swings are the big driver of equity weakness around the world but sovereign bonds remains relatively flat. Europe's VIX topped 17% for the first time in 3 weeks with its biggest jump in 2 months.


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GM Channel Stuffing Surges To Second Highest Ever

Confused why the various US manufacturing indices have been on a tear in the past few months? Perhaps the fact that GM dealer lots are so full of cars they just couldn't wait for even more deliveries has something to do with it. Which is also why in addition to reporting sales numbers for November that were largely in line with expectations, amounting to 212,060 (even if total Chevy Volts sold YTD of 20.7K were -0.6% less than in the same period in 2012), or 13.7% more than last year (estimated called for 13.% increase), of which a whopping 51,705 was in the form of "channel stuffed" units to be parked on dealer lots. In fact, as the chart below shows, in the past three months, GM channel stuffing has exploded and soared by 150K units (the most ever for a 3 month period) from 628.6K to 779.5K. This represents the second highest amount of channel stuffing and is lower only compared to the 788.2K units "stuffed" exactly one year ago.

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House Hearing On Obama's Unilateral Action To Cease Enforcing Laws - Live Webcast

The House Judiciary Committee is about to discuss what it calls “The President’s Constitutional Duty to Faithfully Execute the Laws,” focusing on the Obamacare delays, enforcement of immigration laws, and more. As Mediaite notes, the question of whether the president can take unilateral action to cease enforcing laws stretches back at least to last summer, when President Barack Obama said he would stop deporting young undocumented immigrants, an end-run around congressional refusal to pass the DREAM Act. Executive orders have played a part in everything from the non-enforcement of the Defense of Marriage Act to the administration’s “fix” two weeks ago allowing insurance providers to renew policies cancelled after the implementation of the Affordable Care Act. It seems the constitutional lawyers want to have their say in the "most transparent" administration ever.

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Detroit Eligible To File Chapter 9; Pension Haircuts Allowed Bankruptcy Judge Rules


As somewhat expected - though hoped against by many Detroit union workers - Judge Steven Rhodes appears to have confirmed Detroit is eligible for bankruptcy protection (after pointing out that the city's accounting was accurate and it is indeed insolvent) making this the largest ever muni bankruptcy.


The city will now begin working toward its next major move - the submission of a plan to re-adjust its more than $18 billion in debt - including significant haircuts for pension funds (possibly 16c on the dollar recovery) and bondholders. With Detroit as precedent, we can only imagine the torrent of other cities in trouble that will be willing to fold.

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Brits Draw Down Record Amounts Of Savings To Cover Rising Cost of Living

In the most dramatic evidence yet that Britons are paying for the rising cost of living by raiding savings, Yahoo UK reports that households are pulling money out of their savings accounts at the fastest rate in modern record, according to Bank of England figures. Since the recent recession began, millions of workers have suffered repeated effective pay cuts as inflation has outstripped pay rises, and while consumer spending was one of the main contributors to the sharp rise in gross domestic product in the third quarter, "consumer strength usually reflects increased borrowing but this hasn't been the key factor recently."

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