UniCredit To Fire 10,000 As EU Bank Pink Slip Pandemonium Continues

First it was Deutsche Bank, and now UniCredit. "Italy's biggest bank by assets, is planning to cut around 10,000 jobs, or 7 percent of its workforce, as it seeks to slash costs and boost profits, a source at the bank told Reuters on Monday," Reuters reports.

Obamacare Backfires - 400,000 Immigrants Lose Benefits

With tens of thousands of "lucky" Syrian immigrants due to arrive on American shores, it appears these hope-full refugeese may face life in the US is not as 'free' as they hoped. As AP reports, new government procedures have caused more than 400,000 current immigrants to lose healthcare coverage they received under Obamacare this year. The change in procedure shortens the timeframe during which foreign-born citizens can resolve eligibility issues, which has caused 423,000 people to lose their state-sponsored benefits - more than four times more than last year.

Russian Tanks, Artillery Massing Near Syrian Airfield, US Officials Tell Reuters

According to Reuters "Russia has positioned about a half dozen tanks at a Syrian airfield where it has been steadily building up defenses." The sources of this material escalation: two U.S. officials...  speaking on condition of anonymity to discuss the matter. Just like the "sources" on all Greek developments over the past 5 years. We can only hope the "anonymous" US officials will soon provide photographic evidence of their claims.

In This Globally Interconnected Economy, "Nobody Wins" If Fed Hikes Rates

The USD strengthening since last July is the core driver of the global recession. Is the Fed insane enough to deepen the global recession by raising rates and pushing the U.S. dollar even higher? Who wins if the USD strengthens due to the Fed raising rates? In a globally interconnected economy, nobody wins.

 

Telegraph Calls UK's New Shadow Chancellor "Nutjob", Promptly Retracts

The UK Labor Party's new leader Jeremy Corbyn has, rather unsurprisingly, is making controversial headlines already. His appointment of John McDonnell - an outspoken opponent to the independence of central banks: "in the first week of a Labour government, democratic control of the major economic decisions would be restored by ending the Bank of England’s control over interest rates," - as shadow chancellor has been met with derision in the British press. Initially described as a "nutjob" by The Telegraph, McDonnell's 'plan' to close the deficit is simple - instead of cutting spending, he will dramatically raise taxes on businesses and the rich. The Telegraph then watered-down their perspective, we think, slamming McDonnell's policy as "cloud cuckoo land economics."

Europe Approves "Military Action" Against Refugee Smugglers As Germany Warns 1 Million Coming

Europe's refugee crisis is getting worse by the day. Less than 24 hours after Germany announced it would impose border controls with Austria, followed promptly by the Czech Republic, Slovenia and now the Netherlands, German vice chancellor Sigmar Gabriel predicted that as many as 1 million refugees may arrive by the end of the year as other nations moved to fortify their frontiers. In the meantime, however, Europe is dramatically escalating measures to halt the influx and as AFP reported earlier today, the European Union has now approved military action against human traffickers in the Mediterranean Sea.

US Equities Give Up Friday 'Panic-Buying' Close Gains

A disappointing lack of massive monetary manipulation in China overnight (despite terrible data), has helped provide some impetus to the downside in stocks as the major US indices have now given up the gains in the melt-up from Friday's close...

EM FX Bloodbath Continues As Lira Slides To New Low, Tenge Plunges

The EM FX carnage continues unabated heading into the FOMC as the Kazakh tenge plunges for a seventh consecutive day and the beleaguered Turkish lira slides to a new low as an obstinate central bank and an extraordinarily unstable political situation conspire to undermine confidence ahead of elections scheduled for November 1.

To JPM, Both A Rate Hike And A Delay Would Be Bullish For Stocks

"The eagerly awaited Fed meeting is upon us. Regardless of the actual decision, we suggest that the market impact could end up being positive. If the Fed does raise rates, but at the same time reassures the market that this will be a gradual process, it would be received well. If, on the other hand, the Fed delays the move, this could be interpreted as a signal that the Fed is aware of and is responding to recent market concerns." - JPM

Frontrunning: September 14

  • China stocks slide as data raises fresh economy worries (Reuters)
  • Was Tom Hayes Running the Biggest Financial Conspiracy in History? (BBG)
  • The Fed’s Policy Mechanics Retool for a Rise in Interest Rates (NYT)
  • Germany re-imposes border controls to slow migrant arrivals (Reuters)
  • Thousands flee California wildfire as homes go up in flames (Reuters)
  • Bavarian minister says German border controls could last for weeks (Reuters)
  • China sells record FX in August, shows pressure after devaluation (Reuters)

Futures Fade Early Euphoria After Chinese Stocks Resume Slide

While any moves in the US stock market ahead of Thursday are largely irrelevant, as only Yellen's statement in 4 days will unleash epic algo buying or short covering (yes, according to JPM the Fed statement is bullish no matter what), it is what happened in China that is concerning, because while we had expected Chinese stocks to go nowhere in particular now that index future trading volumes have plunged by 99% or perhaps rise on hopes of even more easing after the latest terrible economic data, the Shanghai Composite dropped 2.7%, but it was the retail darling Shenzhen Composite which tumbled 6.7% - its worst selloff since August 25, while China's Nasdaq, the ChiNext crashed -7.5%.

The Week Ahead

 

· Thursday brings the much anticipated FOMC rate decision, with analysts split in their forecasts as to whether the central bank will hike rates after recent volatility in global markets

· A number of other events take place this week including rate decisions from the BoJ and SNB as well as releases of the German ZEW survey and the latest UK inflation & employment data

 

A Refugee Crisis Made In America

We Americans are in something approaching complete denial about how truly horrible our nation’s recent impact on the rest of the world has been. We are universally hated, even by those who have their hands out to receive their Danegeld, and the world is undoubtedly shaking its head as it listens to the bile coming out of the mouths of our presidential candidates. Shakespeare observed that the “evil that men do lives after them,” but he had no experience of the United States.

US Futures Jump Unaware Gartman Short Has Been Stopped Out, China Hugs Flatline

For now, US equity futures are higher on the day, rising by 9 point after being 14 points higher ealier, driven mostly by USDJPY correlation algos, and perhaps by Goldman's conviction that the Fed will not hike in September and may delay hiking until 2016 altogether. However, we expect this initial euphoria higher to fade momentarily, once the vacuum tubes realize that the catalyst of Friday's surge higher, namely Gartman's latest flipflopping is no longer on the table: as of tonight, just 1 trading day after his latest reco, Gartman has been stopped out as his 1.5% limit was hit when futures rose above 1962 this evening.