• Pivotfarm
    08/03/2015 - 15:25
    The quest for perfection is man’s unattainable goal. Man can never be perfect if we are to believe the English philosopher Thomas Hobbes. Man is man’s wolf and all of that.

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US Equity Trading Volume Hits Fresh 15-Year Low

The apathy is deafening...



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McCain Says Take The Deal; Assad Warns It's Obama's Problem: "We'll Do Anything To Prevent Another Crazy War"

The first clips from Charlie Rose's interview with Assad are being released and given the Russia-Syria discussions, Obama's skepticism, and now John McCain's 'dubious support' for "the US getting on board with Russia's proposal for Syria to hand over its chemical weapons," we thought this brief view of Assad's response was telling...



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JPMorgan Warns: Increasing Rates Have "Reduced The Remaining Refinance Opportunity By More Than 50%"

About an hour ago, Bank of America served the latest indication that the US housing "recovery" (also known as the fourth consecutive dead cat bounce of the cheap credit policy-driven housing market in the past five years) may be on its last breath. Namely, the bank announced that it will eliminate about 2,100 jobs and shutter 16 mortgage offices as rising interest rates weaken loan demand, said two people with direct knowledge of the plans and reported by Bloomberg. In some ways this may be non-news: previously we reported, using a Goldman analysis, that up to 60% of all home purchases in recent months have been, which of course shows just how hollow the "recovery" has been for the common American for whom the average home has once again become unaffordable. However, judging by an update presentation given earlier today by the CFO of none other than JP "fortress balance sheet" Morgan, things are rapidly going from bad to worse for the banking industry as a result of the souring mortgage market for which, absent prop trading, loan origination is the primary bread and butter.



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Monday Humor: White House Selling "Peace On Earth" Xmas Ornaments

As Nobel Peace Prize-winning President Obama prepares to give his "Syria Strike" speech tomorrow, we thought the fact that The White House had begun selling its 'official' Christmas 2013 ornament was worth pointing out. The theme - "Peace On Earth" of course, is positioned in a wrath of olive branches, peace doves and the reverse of the wonderful tree decoration states in oh-so-ironic-language, "Peace must be planted upon the tested foundations of political liberty," - a phrase from Woodrow Wilson's address prior to World War I. Happy Holidays everyone...



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As Popular Opposition To Syrian Attack Grows; Obama "Skeptical", Reid Delays Vote & Assad Likens Obama To Bush

The last hour has seen a sudden escalation in the Syrian-Strike-Nado. Following earlier comments from Hillary Clinton, President Obama also confirmed the Russian offer on Syria is "potentially positive" though "skeptical" that it will be followed through on. Harry Reid then hits the tape with news of a delay in the 'test vote' - hardly a signal of resounding support. Then Assad, via his twitter account, compares Obama to Bush among other things. And then finally, Obama announces he has not made a decision on next steps if Congress doesn't support military strikes. Gold is modestly higher, oil slightly lower. Equities remain happy with the uncertainty and are extending gains. In the meantime, Reuters finds that 63% of Americans now oppose intervening in Syria.



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Goldman Pours Cold Water On The Exuberance Of European PMIs

Always on the look-out for a silver-lining, the world's commission-taking asset managers are flooding into the new cleanest dirty shirt of European stocks (the more beaten-down, the better) - apparently on the basis of the exuberance in surging PMIs. Aside from the fact Draghi himself already poured cold-water on people's belief in the strength of the European recovery last week, and our note this weekend on the 'roughness' of PMI survey "soft" data, investors remain unmoved and momentum has taken over now. However, as Goldman explains some of the optimism on the basis of recent manufacturing PMIs may not square with evidence of a structural break in the link between the PMIs and growth. While a reading of 50 may in pre-crisis days have indicated positive growth on the periphery, it today may only indicate flat (or even negative) growth, as the external financing constraint prevents better sentiment from translating into activity.



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Guest Post: On Syria: Don't Take Regime Change Off The Table

Two weeks ago, the Syrian regime reportedly ordered the use of chemical weapons, which U.S. sources state killed over 1400 people. Over one year ago, President Obama declared that any movement or use of chemical weapons would cross a “redline.” Right from the start, officials in the Obama White House assured the public that any decision to use force against Syria would not be designed to impose regime change. Why would the administration take such an option off the table? As strategists and policymakers have understood since time immemorial, any decision to use military force must be guided by a strategy. If Washington’s strategy is to stop Assad from using chemical weapons, demonstrate that America is committed to enforcing this international norm, and undermine states that support such atrocious actions, regime change remains the critical instrument for the United States. In fact, all other options are highly susceptible to failure. In the end, the failure to put the instrument of regime change on the table demonstrates a lack of resolve, commitment, or weakness—all of which will be interpreted by friend and foe alike as acquiescence in the face of states using chemical weapons.



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Visualizing The (High) Cost Of Living In New York City

The South Texas city of Harlingen is the cheapest place in the U.S. to live, according to the sixth annual cost of living index, a study conducted by the Council for Community and Economic Research. By contrast, the cost of living in Manhattan, one of the most expensive places to live in the world, is almost three times that of Harlingen. If someone with an annual income of $60,000 in Manhattan moved to Harlingen, she’d need to make just $21,768 a year to maintain her standard of living.



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US, Russian Naval Deployment Near Syria - Update

Last week we presented the most recent map of US and Russian naval deployments in the Mediterranean surrounding Syria. Over the weekend, things appear to have heated up once more as yet more ships - mostly of Russian origin - arrive in what is rapidly becoming a formation in search of the tiniest provocation.



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How Has This Not Led To Outright Revolution Yet?

These days, you could put ‘safety and security’ in front of just about anything and get people to readily comply. Well, OK. After all, who is against ‘safety and security’? Only criminal terrorists, apparently. This is now the easiest way for governments to exact their agendas... whether it’s invading new countries, monitoring all Internet activity worldwide, or bailing out the big banks at taxpayer expense. Apparently the citizenry has become so scared that we collectively lay down and let governments walk all over us. At this point, the Founding Fathers’ list of grievances nearly pales in comparison to the indignities and injustices to liberty that people suffer today under their government. We’ve been talking about this trend for four years now. This is no longer theory. It’s real. It’s happening. And it’s coming soon to a bankrupt, insolvent nation near you. Have you hit your breaking point yet?



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Kerry Tells Lavrov Chemical Disarmament Demand Was "Rhetorical", Not Meant To Be Proposal

To paraphrase:

  • Kerry to Syria: Turn over your chemical weapons!
  • Syria to Kerry: Ok
  • Kerry to Syria: I was being rhetorical. We will just bomb you anyway, as soon as we are done gassing you.


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Stock Bulls Pleased, Shorts Squeezed, Bond Bulls Teased

With the White House increasing its rhetoric in the face of Russia/Syria headlines and growth-inspired commodities like copper and oil suffering, the meme of the day that today's rally was a combo Asian growth and Syrian 'ease' is bullshit. Simply out, it's just another day in paradise as we noted earlier the 'most-shorted' names in the US equity market were squeezed dramatically higher - the most in 15 months (+2.8%). Interestingly, as the Russell surged to highs of the day, the Dow and S&P diverged lower in the afternoon. Homebuilders were the best choice for this idiocy as they soared 5% from Friday's lows (even as WFC and BAC shut their mortgage departments?) and are now 2% above pre-Kerry levels. Carry-mongers were equity bulls best friends as EURJPY lifted stocks all day and the USD dumped - led by EUR and SEK). Gold and silver flatlined for most of the day along with copper with WTI dumping into the pit close to around $109 (still its highest for this date ever). Treasuries were bid 5bps (belly) to 2bps (long-end). Trannies remain the only major index below pre-Kerry levels. War schmoar...



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Less Than 10% Of The House Support Obama: Congressional Support Update

Less than 10% of the House publicly supports President Obama's plan for a military strik on Syria. As Bloomberg notes in this updated visual description of the hill he faces, at least 202 House members currently oppose military action.



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July Student And Car Loans Soar As Consumers Continue To Pay Down Credit Cards

There has been much jubilation in recent months over the so-called end of the consumer deleveraging (and implicitly, the start of releveraging) - that key missing link so needed for a truly sustainable, Fed-free recovery. The problem, unfortunately, is that this jubilation has been once again misplaced (read wrong) and following the just released July Consumer Credit data, we know that US consumers continued to pay down their credit cards (i.e., delever) for the second month in a row, reducing total outstanding revolving debt by $1.8 billion, which when added to June's revised $3.7 billion reduction in credit card borrowings, is the biggest two month drop in revolving debt since January 2011. The offset? Same as always: non-revolving i.e., student and car loans, debt soared once more by $12.3 billion this month, representing 118% of the total increase of $10.4 billion (less than the $12.7 billion expected), and down from last month's downward revised $11.9 billion.



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Shorts Are Having Their Worst Day In 15 Months

It wouldn't be the US equity market if the worst-of-the-worst companies were not getting bid to the moon. With all the event risk ahead, those who suggest that "stocks dont like uncertainty," appear to be talking anally once again. Today's best day in stocks in 2 months is driven not just by EURJPY carry-mongers, but by the largest short-squeeze in US markets in 15 months. Why, we hear you ask? Why not... Just ask the homebuilders - which are up a new normal 5% from Friday's open.



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