Ruble Plunges To Record Low As US Stocks Give Up Scotland "No" Poll Gains; Bond Yields Sliding

Well that didn't last long. The late-day exuberance inspired by a small sample size poll of Scottish independence voters has been entirely removed as America went back to war, the West prepares (boomeranging) new sanctions for Russia, and US macro data showed weakness (and for once bad news appears to be bad news). AUDJPY is in charge of stocks so far (as USDJPY fades back from 107). The Ruble has tumbled 4 days in a row and is now at record lows against the USD. Treasury yields are sliding this morning, as is the USD and gold is bouncing back modestly from early weakness...

Initial Jobless Claims Surge Most Since June

For the 2nd week in a row, initial claims missed expectations and on the heels of last week's dismal payrolls data (which was "unbelievable" according to the smartest people in the room) it surged to 315k - the highest since June. Perhaps most critically, on both an adjusted and unadjusted basis, initial claims are highher year-over-year (SA 315k vs 307k, NSA 234k vs 229k respectively). Is this noise? It has been 7 weeks now from the mid-July lows... and the 4-week-average many look at, has risen for 4 of the last 5 weeks.

Frontrunning: September 11

  • Obama orders U.S. airstrikes in Syria against Islamic State (Reuters)
  • Obama Relying on Mideast Allies to Counter Islamic State (BBG)
  • Scotland Nationalists Claim U.K. Oil in 40-Year Campaign (BBG)
  • Scottish Polls Embolden Catalans Pushing Rajoy for Vote (BBG)
  • Royal Bank of Scotland: RBS will leave Scotland if voters back independence (Guardian)
  • Most Hedge-Fund Managers Are Overpaid, Unigestion Says (BBG)
  • China Inflation Softens to Four-Month Low (WSJ)
  • Munger Hosts Groupies, Mocks Wall Street, Praises Buffett (BBG)

Futures Slide On Renewed Catalan Independence Jitters, Disappointing Chinese Inflation

Following yesterday's confusing exuberance, which saw the sluggish market rise in the last hours of trading as the latest Scottish poll showed a reverse of the "Yes" momentum (and fading Gartman's latest reco of course), overnight European jitters have re-emerged once more following a speech by Catalonia's Artur Mas, who has long pushed for independence of the region, and who said that while there are different ways Catalonia can vote, the important issue is that Catalans vote somehow. Mas says Spanish govt will likely try to block Catalan vote "the reasons why the central government is blocking the vote are political not legal", which in turn has once again brought attention to Europe's artificial, unstable and temporary political and monetary union, which threatens a reversion of the nightmare days from 2012 when Mario Draghi was promising he would do everything in his power to send the EUR higher (as opposed to now).

The Era Of Widespread Biometric Indentification And Microchip Implants Is Here

Are you ready to have your veins scanned every time you use your bank account?  Are you ready to use a "digital tattoo" or a microchip implant to unlock your telephone?  Once upon a time we read about such technologies in science fiction novels, but now they are here.  The era of widespread biometric identification and microchip implants is upon us, and it is going to change the way that we live.  Proponents of these new technologies say that they will make our private information and our bank accounts much more secure.  But there are others that warn that these kinds of "Big Brother technologies" will set the stage for even more government intrusion into our lives.  In the wrong hands, such technologies could prove to be an absolute nightmare.

Goldman Declares The "End Of The Iron Age"

Back in the summer of 2008, when crude seemed poised to take out $150, Goldman decided to declare the start of a commodity supercycle and boosted its oil price forecast to $200. Shortly thereafter crude cratered, plunging to the low double digits, and causing many to scratch their heads whether Goldman was merely taking advantage of the pre-Lehman panic to sell into the euphoria. The same questions, but inverted, will likely follow today's just as seminal note, one which this time calls for the end of a supercycle, this time of iron, with "The end of the Iron Age."

What Petrodollar: Russia, China To Create SWIFT Alternative

Russia and China are discussing setting up a system of interbank transactions which will become an analogue to International banking transaction system SWIFT, First Deputy Prime Minister Igor Shuvalov told PRIME on Wednesday after negotiations in Beijing. "Yes, we have discussed and we have approved this idea," he said.

President Obama Unveils The "It's Different This Time" ISIS Strategy - Live Feed

Previewing tonight’s televised prime-time address to the nation, The Onion reports that White House aides confirmed that President Obama will reassure Americans that the impending military campaign against ISIS will be the exact same type of open-ended, drawn-out conflict that they are used to. “The president’s message is clear: This will be just another one of our routine intractable engagements in the region - it’s going to be unending, it’s going to be expensive, and it’s going to affect our credibility within the international community. There will not be any surprises for folks to worry about.”

And in The President's own words, "But I want the American people to understand how this effort will be different from the wars in Iraq and Afghanistan."

The Black Swan Of Scotland

Billions of dollars have already been lost in just a few days, since everybody realized the UK may actually split up. Many more billions will be lost in the coming week, as measures of volatility go through the roof. Neither the Yes side nor the No side have gone into this thing terribly prepared; there are a zillion questions surrounding the independence issue that won’t be solved before the vote takes place. Passports, currencies, central banks, monetary unions, there’s too much even to mention. Somewhere, emanating from the old crypts and burrows in which Britain was founded, we fear a hideous force may emerge to crush the Scottish people’s desire for self-determination, if only because that desire is a major threat to some very rich and powerful entities who found themselves as unprepared as Downing Street 10.

Paul Krugman: "We’ll Only Feel Prosperous During Bubble Periods"

While hardly able to match the wit, sophistry or, allegedly, satire of yesterday's MarketWatch grandslam in market insight "Why This Stock Market Will Never Go Down", we are confident readers will enjoy the following interview from none other than the Nobel prize winner in Keynesianomics, Paul Krugman, who in this interview with Princeton Magazine, had some comments on bubbles, inflation,  student loans, minimum wages, artificially low rates, the Fed's dual mandate, and, of all things, Bitcoin.

Defying Gravity: The Case For Hedging Against A Market Downturn

Today's markets exist in an Oz-like, fantasy world. For 5 years now, stock and bond prices have risen like Dorothy's balloon, with hardly a puff of downdraft to spoil the fun. Everybody likes higher prices, so let's have them always go up! Forever! But what if...

On The Massive Signal Failure In European Markets

European financial markets are still "partying their heads off," notes Punk Economics' David McWilliams, as even countries like Italy, Spain, Greece, and Ireland "are issuing more and more IOUs at lower and lower interest rates, " as investors "drunk on years of easy profits, seem to think that risk has all but disappeared." They are wrong! Right now, McWilliams explains in this brief clip, "there is a massive signal failure between the reality of the European economy - which is low growth, aging population, and falling prices - and the financial markets which are telling us everything is rosy." This can't last... here's why.

Trust In US Government On Domestic, International Issues At Record Lows

Just a few hours ahead of President Obama's strategy oration, we thought worth noting that Americans' trust in the federal government to handle international problems has fallen to a record-low 43%. According to Gallup, confidence in the government to handle international problems slid 17 percentage points last year, when the Obama administration was planning military action against Syria. Unsurprisingly, Democrats remain the most confident in the government as Republicans' faith has collapsed. But it's not just international, only 40% of Americans have any confidence that government can handle domestic problems - also a record low.

How The China Boom Unravels: One Person At A Time

The dashing of youthful expectations of open-ended wealth and security for everyone with a college degree is highly combustible when combined with a popping real estate bubble, systemic corruption, the implosion of a shadow banking credit bubble and the impending global recession.

On The Cusp Of Exposing The Full Iceberg

The current environment is distinct from the period of 2009-2013 when governments and central banks were quasi-coordinated in providing gargantuan amounts of stimulus, and when the geo-tensions were only chirping modestly. This year, governments and central banks have focused more generally on domestic issues. This is good in theory, but it has splintered coordination into a quasi-fracturing of the global monetary system. Diverging policies serve as a trigger for capital flow movements. They are shaking the foundation of capital markets, which in turn is causing second order effects like a mini-contagion. Amplified volatility in FX and commodity markets are warning signs. They appear on the cusp of spilling more broadly into other markets, exposing the full size of the iceberg.

More Lies: NFL Had Rice Tape In April

In a world of no consequences and where lying is justified "when it's serious enough," it is hardly surprising that mere hours after stating unequivocally that none of the law enforcement entities the league approached "was permitted to provide any video or other investigatory material to us," AP reports that, in fact, a law enforcement official says he sent a video of Ray Rice punching his then-fiancee to an NFL executive five months ago. More lies - but then we are sure, just as we have heard many times before, Roger Goodell was 'unaware' of the situation...