The US Military's Stunning Conspiracy Theory Emerges From The Archives: "ISIS Leader Does Not Exist"

Having noted that voter angst has been riled, propagandized, and fear-mongered to the point at which the most pressing priority for Congress is to 'fix' terrorism, it is perhaps not entirely surprising that we discover - deep down in the archives - that giving the public someone to 'hate' as opposed to something may have been an entire fiction. As The New York Times exposed in 2007, Abdullah Rashid al-Baghdadi, the titular head of the Islamic State, according to Brigadier General Kevin Bergner - the chief American military spokesman at the time - never existed (and was actually a fictional character whose audio-taped declarations were provided by an elderly actor named Abu Adullah al-Naima). So he was a ghost back then.... is he a ghost again, designed purely to put a face on ISIS and the biggest bogeyman of the current global anti-terrorist mania?

Another Former Central Banker Finally Gets It: "The Idea That Monetary Stimulus Is The Answer Doesn't Seem Right"

What is it about central bankers who wait to tell the truth only after they have quit their post. First it was the maestro himself, the Fed's Alan Greenspan (most recently in "Greenspan's Stunning Admission: "Gold Is Currency; No Fiat Currency, Including the Dollar, Can Match It"), and now it is the Bank of England's former head, Mervyn King, who yesterday told an audience at the LSE that "more monetary stimulus will not help the world economy return to strong growth." That this is happening just as we learn that in one year the world's 1% will collectively own more wealth than the rest of the world combined, and two days before Goldman's Mario Draghi unleashed up to €1 trillion (if not unlimited) in QE, is hardly as surprise, and will be surely ignored by everyone until the inevitable outcome of another "French revolution" finally arrives.

Homebuilder Sentiment Misses, Future Sales Expectations Hit 7-Month Lows

NAHB Sentiment in January printed 57 (missing expectations of 58) down 1 from last month's upwardly revised 58 print. This headline mediocrity, however, hides a relative plunge in future sales expectations which tumbled to their lowest since June. Only the Midwest region saw improvement with the West region plunging 9 points to 66.

Silver Tops $18, Gold Nears $1300 - Highest in 5 Months

As stocks, copper, crude, and bond yields plunge this morning, gold (and silver) prices are surging. With gold near $1,300 - 5-month highs, and silver topping $18 - 4-month highs; it appears investor demand for non-fiat currency is growing (and not just for China and Russia)...

US Equities Give Up China GDP 'Beat' Gains As Oil Hits $46 Handle

It was all so awesome. Chinese GDP 'beat' expectations which means everything is great (apart from it being the worst growth in 24 years) and so stocks rallied, helped by even moar ECB QE jawboning. But this morning's plunge in crude and copper (global growth?) finally knocked on into equity market reality as the opening ramp quickly gave way to selling pressure and erased all 'wealth' created by Chinese data. US Treasury yields are 3-5bps lower with 30Y testing 2.39%.

"Short-Term Greedy & Long-Term Poorer"

In what Bloomberg's Richard Breslow calls "a sign of the times, and not a good one" the weekend has been dominated by politicians commenting on the ECB. Not only did Erdogan un-independently suggest Turkish policy action today (as we noted here), but now Merkel, Hollande, Noonan etc. are all telling you what the ECB should do or indeed will do and then telling you that, of course, the ECB is independent. Central Banks have essentially become enormous sovereign wealth funds manipulating the markets and very much in the thrall of geo-political events. This is a very problematic development which is an inevitable follow-on to the activism of central banks in their policy conduct.

First Schlumberger Fires 9,000; Now Baker Hughes Unleashes 7,000 More Layoffs

Another day, another unambiguously bad announcement from America's bettered energy sector which are bolting down ahead of the crude storm, and firing thousands. Last week it was Schlumberger which announced it would fire 9000, today it is Baker Hughes which just warned it too will hand out about 7000 pink slips in the first quarter. And as a reminder, when it comes to comp: each Baker Hughes job is equivalent to about 10 waiter and bartender jobs, which have been the basis of this "recovery." To wit: BAKER HUGHES SEES WORKFORCE REDUCTION OF 7,000 WORKERS

Crude & Copper Are Crumbling

WTI Crude prices are back below $48 having tumbled in the last few minutes. Copper prices are also sliding notably (as gold and silver slip). No immediate catalyst aside from delayed reaction from last night's slow and sure realization by The IMF that all is not well will global growth.

The Biggest Problem For European Stocks In One Chart

The problem, and the source of hope for Eurozone equity investors, is that Eurozone corporate profits have not matched this strong equity price performance. Headline EPS and DPS growth have not advanced since 2012. In fact, aggregate earnings and dividends as measured by MSCI are down by 7% and 5% respectively, whilst the equity index is up 50%."  We'll repeat that again: in the past 2 and a half years, Eurozone earnings are down 7%! So where did this upside come from? "This strength in share prices but not in profits has meant the reported P/E multiple on Eurozone equities has risen from 11.5x to 18.7x today – a multiple expansion of over 60% in 30 months – and now stands at a premium to both the rest of Europe and RoW."

Frontrunning: January 20

  • Obama to focus on middle class in State of Union address (Reuters) - all 4 of them?
  • European Stocks Buoyed by ECB Hopes (WSJ)
  • China's 2014 economic growth misses target, hits 24-year low (Reuters)
  • Federer on Swiss Franc Shock: "Does It Mean I've Got to Win Now?" (BBG)
  • First-time buyers help Christie’s reach record sales (FT)
  • So it was the NSA? U.S. Spies Tapped North Korean Computers Prior to Sony Hack (BBG)
  • Why Chinese Developer Kaisa's Default Risk Has Money Managers Spooked (BBG)
  • Morgan Stanley Misses Estimates on Drop in Bond-Trading Revenue (BBG)

Turkey's "Independent" Central Bank Is Latest To Leak Policy Decision To Government

Ahead of today's Turkey central bank decision, consensus was expecting no change in either the benchmark repurchase rate (at 8.25%), nor the overnight lending and borrowing rates (at 11.25% and 7.50%, respectively). And then, out of the blue, the Turkish deputy Prime Minister was kind enough to inform markets precisely what non-consensus move the Turkish central bank will do today: TURKEY SEES RATE CUT TOMORROW BY CENTRAL BANK, DEP. PM SAYS.  Sure enough, moments ago we got confirmation that when it comes to "independent" central banks leaking information to so-called heads of state such as France's Francois Hollande, Turkey is not far behind:  TURKEY'S CENTRAL BANK CUTS BENCHMARK REPO RATE TO 7.75%

Market Wrap: Global Markets Rebound On ECB QE Hopes After IMF Cuts Global Growth Forecast Again

Hours after the IMF cut its global economic growth forecast yet again (which for the permabullish IMF is now a quarterly tradition as we will shortly show), now expecting 3.5% and 3.7% growth in 2015 and 2016, both 0.3% lower than the previous estimate (but... but... low oil is unambiguously good for the economy) and both of which will be revised lower in coming quarters, and hours after China announced that its entirely made up 2014 GDP number (which was available not 3 weeks after the end of the quarter and year) dropped below the mandatory target of 7.5% to the lowest in 24 years, it only makes sense that stock markets around the globe are solidly green if not on expectations of another year of slowing global economies, which stopped mattering some time in 2009, but on ever rising expectations that the ECB's QE will be the one that will save everyone. Well, maybe not everyone: really only the 1% which as we reported yesterday will soon own more wealth than everyone else combined and who are about to get even richer than to Draghi.

Germany's Bundesbank Resumes Gold Repatriation; Transfers 120 Tonnes Of Physical Gold From Paris And NY Fed

A month ago we asked the following question: who in addition to the Netherlands has been quietly withdrawing their gold from the NY Fed. Was it Belgium? Or did the Dutch simply decide to haul back some more. Or did Germany finally get over its "logistical complications" which prevented it from transporting more than just a laughable 5 tons in 2013? And most importantly, did Germany finally grow a pair and decide not to let "diplomatic difficulties" stand between it and its gold? We now know the answer, and it was, indeed, the latter with confirmation coming from the Bundesbank itself. As the German Central Bank announced earlier today, after withdrawing an embarrassing 5 tonnes of gold from New York in  2013, its rate of repatriation soared, and in what appears to have been just the past two months, has transferred a whopping 85 tonnes of gold from 80 feet below street level at Liberty 33 back to Frankfurt!

"Next Time Around The Feds Are Going To Have To Confiscate Stuff"

Events are moving faster than brains now. Isn’t it marvelous that gasoline at the pump is a buck cheaper than it was a year ago? A lot of short-sighted idiots are celebrating, unaware that the low oil price is destroying the capacity to deliver future oil at any price. The table is set for the banquet of consequences. The next chapter in the oil story is more likely to be scarcity rather than just a boomerang back to higher prices. The tipping point for that will come with the inevitable destabilizing of Saudi Arabia. Next time around, the federals are going to have to confiscate stuff, break promises, take away things, and rough some people up. The question is how much of this abuse will the public take?

A Quick Sanity Check

In response to the 2008 crisis, the world's major central banks pumped an unprecedented amount of monetary stimulus into the system -- all in the name of kick-starting enough economic growth to pull the planet out of its fundamental sinkhole of Too Much Debt. More than six years and over $4 trillion later, what exactly can we say it did for us? Not enough, as the following short video summarizes...

SNB Decision Sparks Calls For Polish Mortgage Bailout; Central Bank Against It

As we noted last week, the Swiss National Bank's decision to un-peg from the Euro (thus strengthening the CHF dramatically) will have very significant repercussions - not the least of which is for Hungarian and Polish Swiss-Franc-denominated mortgage-holders. The 20% surge in Swiss Franc translates directly into a comparable jump in the zloty value of loan principles and and monthly payments for about 575,000 Polish families owing a total $35 billion in mortgages denominated in the Swiss currency which has prompted calls for Poland's government to bail them out. Never mind the FX risk, the low-rates were all anyone cared about and now yet another 'risk-free' trade has exploded, Deputy PM Piechocinski says, if the franc "remains above the 4 zloty level, the government may provide support" to debtors but Poland's Central Bank is not supportive of the bailout.

Chinese GDP Beats And Misses - Slowest Growth Since 1990's Tiannanmen Square Sanctions Hit

China's broad stock indices were flip-flopping between gains and losses from the open (although securities firms continued to get monkey-hammered on more tightening by regulators) heading into the avalanche of data that hit at 2100ET. GDP growth - which was estimated at sub-7% based on real-time hard-date - was released/leaked 10mins early - rising 7.3% YoY in Q4 (just beating expectations of a 7.2% rise) but grew only 1.5% QoQ (missing the 1.7% expectation). Then came Retail Sales - beating by the most since May 2014 with a 11.9% YoY gain (against 11.7% expectations). Industrial Production grew at 7.9% YoY (beating expectations of 7.4% by the most since July 2013). Of course the fact that Chinese GDP growth of 7.4% YoY was the weakest since 1990 was entirely ignored as the immediate reaction was Yuan and Chinese equity strength.

The End Of HFTs (And Price Discovery): America's Biggest Money Managers Launch Their Own Dark Pool

for years the big money managers stoically took it on the chin, and whether out of lazyness or some other unexplained motive, allowed their orders to continue being HFT-frontrun on public exchanges and 3rd party dark pools year after year, making VWAP and TWAP orders a cost center, boosting the case that HFTs aren't really bad for stocks. Until now. According to the WSJ, some of America's largest mutual funds and asset managers led by Fidelity Investments "are close to launching a private trading venue designed to let them buy and sell large blocks of stock without the involvement of Wall Street firms and high-speed traders, according to people familiar with the matter." The new venture is the who's who of traditional asset management and includes nine firms, including BlackRock Inc., Bank of New York Mellon Corp. , J.P. Morgan Chase & Co. and T. Rowe Price Group Inc., who are saying goodbye to "lit" markets, i.e. public exchanges, "and forming a company that will operate a their own "dark pool”...