The Name Is Bond, Long Bond

Bob Farrell's rule #9 says: "When all the experts and forecasts agree, something else is going to happen." Why should you care? Because hardly anyone expects US Treasuries to outperform in 2015… and that’s exactly why they might. In the following analysis, we’ll look at 5 reasons why the long bond might be the best trade of next year.

Visualizing The 8-Year Evolution Of The-Last-Second-Of-Trading Panic

By now, every trader who watches markets every day is acutely aware of the increasing concentration of massive amounts of volume in the last second of the trading day. Here is 8 years of the last few seconds of the trading day and how 'efficiently' it has evolved...

President Obama Reminds Americans Of The Threat Of Ebola (& The Need To Spend $6 Billion To Fix It) - Live Feed

With Ebola off the front-pages of every media outlet, President Obama appears to finding it tough to get his $6 billion funding request to fight the deadly disease... time for some hope (things are good in America, Spain delcared Ebola-free) and fearmongery (5,987 deaths and 16,889 cases currently) as The White House increases Ebola response units in the US and sends more military and civilians into Africa...

Crude Carnage Resumes But Stocks Bounce As Hindenburg Omen Strikes

Following yesterday's dead-cat-bounce, oil prices resumed their downward push today, closing just shy of the flush lows on Friday back to a $66 handle for WTI. Gold also slipped modestly with copper and silver flat as the USD surged higher (+0.75% on the day). Stocks just melted up all day long (supported by USDJPY pushing to new cycle highs over 119), stop-hunting the whole way (with the S&P breaking back above its 5-day moving-average and back into the green on the week briefly). Yesterday's losers (Trannies and Small Caps) were today's BTFD winners. Treasury yields rose notably once again (up 11-13bps on the week) as we suspect oil-producers are selling to help support their collapsing currencies. VIX closed below 13 - slammed into the close to scrape the S&P back above its 5DMA.

The "Panic Premium": Beyond This Level In The USDJPY, Japan Collapses

If all it took to push stocks to ever recorder(est) highs, granted on no volume, but recorder(est) highs nonetheless, was for correlation algos to pick a carry FX pair trade du jour which to push the Nikkei, or the Dax, or - most frequently - the S&P higher, then all equity indices would already been in scientific digit territory. And since they aren't, it is only logical that prosperity through currency debasement can only "work" for so long.

But how long? Well, when it comes to the primary carry pair du jour, the Dollar-Yen, the answer may be just a few hundred pips more, before it all comes unglued for Japan's Prime Minister whose first stint in the role ended in a prophetic bout of epic diarrhea, Shinzo Abe.

Images From A Dark Detroit: "Major Cable Failure" Sparks Widespread Power Outage

Just 15 months after Detroit's Black Out 2013 debacle, spokespeople for the city and DTE Energy confirmed at around 11:00 a.m. local time on Tuesday that most of Detroit’s municipal grid is offline:

*DETROIT CITES 'MAJOR CABLE FAILURE' FOR POWER OUTAGE
*DETROIT: OUTAGE IS AFFECTING ALL CUSTOMERS ON THE PLD GRID

The outage is preventing power from being delivered to police stations, schools, traffic lights and other city-run facilities and services.

Ex EU President Van Rompuy "Hit The Jackpot", Paid Almost $1Million "For Doing Nothing"

It's good to be king (or Europe). Former European Council President Herman van Rompuy, derided for "damp rag" ineptness by UKIP's Nigel Farage, will receive around $900,000 over the next 3 years as a "transition allowance" for doing absolutely nothing in retirement. What is even more egregious, as The Telegraph reports, Van Rompuy will pay a reduced "EU Community" tax rate, considerably lower than the Belgian income tax rate on his ill-gotten gains. As Farage exclaims, having driven millions of Europeans into poverty and unemployment during his reign, Van Rompuy "hit the jackpot."

Close Encounter Between NATO F-16 And Russian MiG-31 Caught On Tape

Once upon a time, the only place where a western fighter jet could come within meters of a Russian MiG was on Top Gun. However, according to a video released earlier today by the Norwegian Armed Forces, that is no longer the case. In the clip, a Russian MiG-31 "suddenly cut in front of one of two Norwegian aircraft sent up by NATO to intercept Russian aircraft in international airspace north off Norway. “What the hell,” says the Norwegian F-16 pilot in the video, as he dodges the MiG-31 passing him at a distance estimated to be closer than 20 meters (65 feet)."

Fed Fischer's Complete & Bizarre Nonsense: Oil Price Collapse "Making Everybody Better Off"

"I'm not very worried," explains Fed Vice Chairman Stan Fischer in a very Bernanke-"contained"-like nonchalence about the total collapse of oil prices (and US oil producer stocks). Sharply lower oil prices will boost spending and aid U.S. growth, Fischer stated in a mind-blowingly naive speech for the 2nd-most-important-monetary-policy-maker-in-the-world, adding that lower oil prices were "a phenomenon that’s making everybody better off." We don’t understand his ignorance: as we noted earlier, Fischer is talking about money that would otherwise also have been spent, only on gas. There is no additional money, so where’s the boost? This is just complete and bizarre nonsense.

Citi Shutters Lavaflow - 5th Largest 'Dark Pool' In America

When the 5th largest dark pool trading venue (by volume) in America is shuttered, as Citi notes because its "capital, resources and efforts would be better redeployed elsewhere," you know there is a problem in US stock trading volumes and liquidity. Everyday we get 'glimpses' of this collapse - most recently yesterday's AAPL flash-crash - as human traders (who provide the 'fish' for the machines) disappear and HFT liquidity-providers pull liquidity in a flash. Crucially, as we hinted previously, we wonder if the large firms are exiting the dark pool business before some engineered market collapse is pinned on these opaque 'markets' who have come under increased regulatory scrutiny.

'Central Bankers' Say The Darndest Things - Bill Dudley Edition

Dudley’s overall message is that the US economy is doing great, but it’s not actually doing great, and therefore a rate hike would be too early. Or something. "The sharp drop in oil prices will help boost consumer spending?" We don’t understand that: Dudley is talking about money that would otherwise also have been spent, only on gas. There is no additional money, so where’s the boost?  This is just complete and bizarre nonsense. And that comes from someone with a very high post in the American financial world. At least a bit scary.

Government Construction Spending Surges Most Since 2006

After 4 months of missed expectations, US Construction Spending rose 1.1% in October, beating the 0.6% expectations, and the highest MoM since May 2014. Great news... the recovery is back, right? Scratch barely below the surface of this algo-loving headline though and the unsustainable reality peaks out. US Government construction spending spiked 19.3% in October, the most since 2006... seems like we need to dig some holes and fill them in again...

Wife, Daughter Of ISIS Leader Captured

In a surprise development involving the leader of the Islamic State, Abu Bakr al-Baghdadi, earlier today security officials announced that the Lebanese army had captured the wife and daughter of Islamic State leader Abu Bakr al-Baghdadi as they crossed from Syria nine days ago. According to Reuters, the woman was identified as Saja al-Dulaimi, an Iraqi, by a Lebanese security official and a senior political source. The Lebanese newspaper As-Safir reported she had been detained in coordination with "foreign intelligence." The official spin is clear: in Reuters' words, "the arrest is a blow to Baghdadi and could be used as a bargaining chip against his group, which has captured many foreign, Iraqi and Syrian prisoners and declared a caliphate in territory it has seized in Syria and Iraq." Unless, of course, it isn't, and it merely sets off the ISIS leader even more. 

How Goldman Sachs Became Broke Venezuela's Loan Shark

Add the title of "loan shark to Dictatorships" to Goldman Sachs many varied roles around the world. As Venezuela teeters on the brink of tearings its utopian social fabric apart (by which we mean paying its soldiers while impoverishing its people to in order to maintain 'peace') crushed by plunging oil revenues, everyone's favorite American bank 'generously' offered to buy (from Venezuela) $4bn worth of oil debt owed by the Dominican Republic for 41% of its value, according to El Nuevo Herald. Doing god's work indeed. "This is a tremendous bargain for Goldman," said one source, as Venezuela is "liquidating the few assets they have, trying to find the cash flow, cash, they do not have."

Is The Long Dollar Trade Over?

It seemed almost too obvious. The European Central Bank was imposing negative interest rates and devising new quantitative easing schemes to combat the growing threat of deflation; the SNB was buying foreign currencies in "unlimited quantities" to cap the value of the Franc; the Bank of Japan was madly printing Yen in a desperate frenzy to finally stir up domestic demand; and then the Bank of China responded with its own rate cuts. All this, while the Federal Reserve was quietly ending its quantitative easing policies and even hinting at forthcoming (2015) rate hikes. The long dollar trade, and all it's various expressions, soon became one of the most crowded trades of 2014.