Oil Producers Currency Collapse Continues, Nigeria's Naira Crashes To Record Low Against Dollar

Having proclaimed it is not Zimbabwe, Nigeria's currency is starting to look a lot like a hyper-inflating mess. After devaluing to a 168 peg in November, the Naira has crashed to 200 / USD today - smashing above the upper peg band of 176 as it appears Nigeria is losing control. The collapse of Oil Producer currencies had abated for a week or two but the last 2 days have seen the Ruble and Naira tumble (even as The USDollar weakens modestly ahead of the ECB QE tomorrow).

Yemen's Rebels Hold US-Backed President "Captive" In His House. Seize Country's Largest Ballistic Missile Base

As reported yesterday, Yemen became the latest foreign policy "success" story of the US after the local minority of Iran-friendly Shi'ite Houthi militiamen stormed, and captured, the presidential palane. At the same the whereabouts of Yemen's US-backed president Abed Rabbo Mansour Hadi were unknown. Moments ago we learned about his current location: according to AP, "two Yemeni presidential advisers say the Shiite rebels who are on a power grab campaign in the capital, Sanaa, are holding the president "captive" at his home, a day after seizing the presidential palace.

Building Permits Slide For 2nd Month, Miss Expectations; Starts Near Cycle Highs

For the 2nd month in a row, Building Permits dropped and missed expectations. The 1.9% MoM drop in December was a notable miss against expectations of a 0.6% rise and left YoY Permits at a mere +1.0% - hovering at the weakest growth since mid 2011. The long-heralded savior of permits - multi-family - tumbled to their lowest since June; with overall permits lower in all regions aside from the "weather-affected" Midwest. Housing Starts rose back near cycle highs (just don't tell KB Homes) beating expectations for the 4th month in a row.

Stocks Stumble As Gold Tops $1,300 & 30Y Yields Push Record Lows

Gold's 12-day swing of around 12% is the best since just before the Swiss capped the Franc in 2011 and the precious metal has topped 1,300 for the first time in 5 months this morning as, despite exuberance in Chinese stocks, it appears anxiety is setting in that tomorrow may not be all it's cracked up to be from Draghi. Bond yields are re-tumbling with 30Y pressing to 2.36% record lows (and 2s30s at new 6 year lows). US equities have given back about half yesterday afternoon's rampfest...

The Next SNB? Goldman Warns Bank Of Japan "At Risk Of Losing Credibility"

"...with the large downward revision to its core CPI outlook, the bank is more or less acknowledging a much lower possibility of achieving the 2% price stability target by around FY2015. Yet, at the press conference following the MPM, Governor Kuroda said he still held the view that 2% could be achieved by around FY2015. Domestic investors have been skeptical of the BOJ’s target from the outset, and now foreign investors are also beginning to question the BOJ’s logic and communication with the market. We believe the mixed signals the BOJ is sending may well serve to further undermine confidence in the bank." - Goldman

Frontrunning: January 21

  • Obama Targets Income Gap in Address That Shapes 2016 Election (BBG)
  • Republicans Reject Obama’s Main Economic Proposals (WSJ)
  • Senate’s Shelby Says White House Bank Tax Is Dead on Arrival (BBG)
  • Is Dollar Next? Investors Reassess After Swiss Shock: Currencies (BBG)
  • Bank of Japan Cuts Price Forecast, Maintains Record Stimulus (BBG)
  • Pound Weakens After BOE Policy Makers Drop Call to Raise Rates (BBG)
  • Putin not flinching on Ukraine despite economic crisis (Reuters)
  • Indonesia will not make public full preliminary AirAsia crash report (Reuters)
  • Party Hasn't Stopped for Russians at Davos Even With Ukraine Sanctions (BBG)

Market Wrap: Futures Lower After BOJ Disappoints, ECB's Nowotny Warns "Not To Get Overexcited"; China Soars

Three days after Chinese stocks suffered their biggest plunge in 7 years, the bubble euphoria is back and laying ruin to the banks' best laid plans that this selloff will finally be the start of an RRR-cut, after China's habitual gamblers promptly forget the market crash that happened just 48 hours ago and once again went all-in, sending the Shanghai Composite soaring most since October 9, 2009.  It wasn't just China that appears confused: so is the BOJ whose minutes disappointed markets which had been expecting at least a little additional monetary goosing from the Japanese central bank involving at least a cut of the rate on overnight excess reserves, sending both the USDJPY and US equity futures lower. Finally, in the easter egg department, with the much-anticipated ECB announcement just 24 hours away, none other than the ECB's Ewald Nowotny threw a glass of cold water in the faces of algos everywhere when he said that tomorrow's meeting will be interesting but one "shouldn’t get overexcited about it."

The Road To The Welfare State: Why 50% Of "Exceptional" America Gets Checks From Uncle Sam

Despite tactical, rhetorical opposition to further expansion of the entitlement state by many voices in Washington, and firm resistance by an honorable and principled few, collusive bipartisan support for an ever-larger welfare state is the central fact of politics in our nation’s capital today, as it has been for decades. Until and unless America undergoes some sort of awakening that turns the public against its blandishments, or some sort of forcing financial crisis that suddenly restricts the resources available to it, continued growth of the entitlement state looks very likely in the years immediately ahead. And in at least that respect, America today does not look exceptional at all.

Saxo Bank Warns "This Is The Endgame For Central Banks"

Major central banks claim to be independent, but they are totally under the control of politicians. Many developed countries have tried to anchor an independent central bank to offset pressure from politicians and that’s all well and good in principle until the economy spins out of control – at zero-bound growth and rates central banks and politicians becomes one in a survival mode where rules are broken and bent to fit an agenda of buying more time. What comes now is a new reality...

Presenting The 2015 "Shadow Of Crisis Has Passed" State Of The Union - Live Webcast & Full Speech

UPDATE: Full SOTU Speech released - "THE SHADOW OF CRISIS HAS PASSED"

By now it is well known that The State of The Union tonight will be about President Obama's Robin-Hood Agenda. Furthermore, it is entirely clear that his proposals have no chance of becoming law. As WaPo's Marc Thiessen notes, Obama is not delusional, his move is completely and transparently political... And just as Eric Cantor suggests will merely serve to inflame the GOP. From taxes to cyber security and from community college to housing... in 50-65 minutes, all will be clear...

The Thinking & Drinking Man's Guide To The State Of The Union

In Zero Hedge tradition we provide the thinking man's (unfortunately The State of the Union has just got dumber and dumber over the years) and drinking man's (for those who need libation to persevere through the populism) guide to tonight's imperial leader's prognostications of wealth redistribution. Last year's SOTU saw the most uses of the word "folks" and we are betting (figuratively of course) that tonight's speech will top that for "Peak Folks". Obama has used "love" more than Clinton and "Energy" more than Bush...

Spot The (IMF) Difference

Expectations for global economic growth in 2015 have been falling for almost 2 years... and so the ever hockey-stickian IMF has finally started to catch down to that consensus trend - don't worry though, we are sure 2016 (or 2116) will be a great year...

11 Facts That Won't Be In Tonight's State Of The Union

When President Obama ascends to the podium this evening to deliver his State of the Union address, he’ll undoubtedly shine a spotlight on the many strengths of America. The real issue, however, isn’t where the United States is today. The problem is where it’s going. And quickly...

Investors Are Losing Faith And "Markets Will Riot" Warns Albert Edwards

Global markets face three risks, according to Edwards: bearishness in the U.S. government bond market, a flawed confidence that the U.S. is in a self-sustaining recovery and undue faith in the relationship between quantitative easing (QE) and the equity markets. “It doesn’t matter how much QE is spewing out of the US,” he said. “The markets will lose confidence that the policymakers are in control of events, just as they did in 90's Japan. They lost faith that the policymakers were in control. This is the biggest risk out there.”

"This Is A Race To The Bottom Where No Fiat Currency Wins"

Following another frustrating year in the previous metals markets, 2015 is showing signs that change is afoot. As Santiago Capital's Brent Johnson notes in this brief presentation, while being 'wrong' for the last 2 years on gold has been painful, is it any less crazy to believe that it will turnaround that to believe the hype that The Fed will raise rates once again (just like it promised in 2010, 2011, 2012, 2013, 2014, and now 2015...) - who is really losing their credibility? With the world's fiat currencies waging war and dislocations mounting, gold is no longer the 'David' underdog fighting against the 'Goliath' central banks... but is - as Alan Greenspan opined - "the premier currency. No fiat currency, including the dollar, can match it."

Nisman Murdered? Suicide Story Crumbles After No Gunpowder Found On Argentine's Hands

When news broke of the death, by gunshot wound to the head, of Alberto Nisman - the prosecutor who was due within hours to deliver testimony implicating the Argentine President in covering up the investigation into a bombing in 1994 - it seemed oddly quick for police to rule it suicide within hours (especially after his earlier concerns that "I could end up dead because of this.") Today's news from The Buenos Aires Herald that the "unexpected result" of forensic analysis of Nisman’s body confirmed that there were no traces of gunpowder on his hands suggests (despite experts still proclaiming it does not rule out suicide) has prompted many questions over just how he died. Even the US has offered help... and protests are growing larger.

"Whiplash" & The Death Of The Last Industrialist

The fix for low oil prices is... low oil prices. Past some point high-priced producers will naturally stop producing, the excess inventory will get burned up, and the price will recover. Not only will it recover, but it will probably spike, because a country littered with the corpses of bankrupt oil companies is not one that is likely to jump right back into producing lots of oil while, on the other hand, beyond a few uses of fossil fuels that are discretionary, demand is quite inelastic. And an oil price spike will cause another round of demand destruction, because the consumers, devastated by the bankruptcies and the job losses from the collapse of the oil patch, will soon be bankrupted by the higher price. And that will cause the price of oil to collapse again. And so on until the last industrialist dies...

For IBM The Buyback Frenzy Ends With A Bang As Q4 Revenues Plunge Most Since Lehman

Unfortunately for IBM, it better resume its financial engineering fast because this is where the bang (not the whimper) comes into play: in Q4, IBM's revenue was a modest $24.11 billion, far below the Wall Street estimate of $24.8 billion, and a whopping 12% less than what IBM generated a year ago. In fact, as the following chart shows, the annual plunge in IBM Q4 revenue was the worst since Lehman.