Deserted US Embassy In Yemen Immediately Seized By Armed Rebels

Moments after its US inhabitants leave the embassy in Yemen for one final time, it is now officially owned by the new, less than supported by the US, rebel regime.

  • ARMED HOUTHI REBELS SEIZE U.S. EMBASSY VEHICLES AFTER AMBASSADOR, DIPLOMATS LEAVE COUNTRY - LOCAL MEMBERS OF EMBASSY STAFF

We could make a token witty comment about how this entire episode is emblematic and symbolic of all US foreign policy in recent history, but at this point, what difference does it make?

"Manipulated" WTI Tumbles To $48 Handle

We previously detailed the manipulations ("spoofing") that has occurred in oil futures but yesterday 'took the biscuit' in the outright bluntness of the algo's efforts to manage WTI Crude. As Nanex exposed, a 'wild HFT algo' oscillated oil 21 cents a dozen times in 18 seconds and the 'spoofing' continues. It appears though that after the squeeze of the last week, selling pressure has returned with WTI testing the $48 handle once again. But, but, but, the man on the TV news said oil prices had stabilized and bottom'd... it appears "it's a Brian Williams world" as business media anchors mis-remember their exuberant bottom-calls from last week.

Full Circle: Obama Asks Congress For Troop Deployment In Iraq, War Authorization On Islamic State

Update: OBAMA ASKS CONGRESS TO AUTHORIZE WAR AGAINST ISLAMIC STATE: AP

Several years ago, Obama impressed a handful of crusty, old people in Norway who believed the recent Illinois senator's vision of a world without war, validated by his eagerness to end the war in Iraq and withdraw US troops to their native country. He got an award for it. Today, Obama will finally complete the circle started in August when, under the premise of "humanitarian intervention", allegedly meant to save a group refugees stranded on a mountain, Obama launched an airborne coalition effort to destroy the same group of radical jihadist extremists that the US was assisting when they were merely fighting the Assad regime in Syria. Because today is when Obama will officially request that those same troops that he so liberally pulled out in compliance with his Nobel Peace Prize, be put back in Iraq in order to declare war on, drumroll, a nation that doesn't technically even exist: the Islamic State.

Complete Preview Of Today's Eurogroup Meeting

As noted earlier, the key macro event on today's calendar, and one which will likely be the origin of significant volatility, is the Eurogroup meeting to decide Greece's fate starting in a few hours where Yanis Varoufakis and his European Finance Minister peers will attempt to resolve two diametrically opposite and seemingly uncompromisable positions. Here is what to expect.

Frontrunning: February 11

  • Methodology change sees Indian economy grow faster than China's (Reuters)
  • Can Greek Businesses Even Survive? (WSJ)
  • Putin to travel to Minsk talks raising hopes of a deal over Ukraine (Euronews)
  • Ukraine contact group representatives deny ceasefire deal in Minsk (Reuters)
  • Moar buybacks! Hedge Fund-Backed Investor Puts Himself Up for G.M. Board (NYT)
  • Ukraine peace summit overshadowed by some of war's worst fighting (Reuters)
  • Time for non-non-GAAP excluding China: Tesla CEO threatens firings after dismal China sales - sources (Reuters)
  • Jon Stewart leaving Comedy Central's 'The Daily Show' (Reuters)

Stocks Coiled In Anticipation Of Today's Eurogroup Meeting

The only question on traders' minds today, with the lack of any macro news out of the US (except for the DOE crude oil inventory update at 10:30am Eastern expecting a build of 3.5MM, down from 6.33MM last week, and the 10 Year bond auction at 1pm) is which Greek trip abroad is more important: that of FinMin Varoufakis to Belgium where he will enter the lion's den of Eurogroup finance ministers at 3:30pm GMT, or that of the foreign minister Kotzias who has already arrived in Moscow, and where we already got such blockbuster statements as:

LAVROV: RUSSIA WILL CONSIDER AID REQUESTS, IF GREECE MAKES THEM; KOTZIAS: GREECE IS WILLING TO MEDIATE BETWEEN EU, RUSSIA

Or perhaps both are critical, as what happens in Brussels will surely impact the outcome of the Greek trip to Russia?

How Fast Would Contagion Spread If Greece Exits The Eurozone

It is very difficult for governments to control the progress of a monetary union break-up because the example of one country exiting will create a precedent in the eyes of other members of the monetary union. The transmission channel is not government bonds, nor equities, not currency markets, but banks. In the event of a Greek exit from the euro, the loss in the real value of Greek bank deposits would encourage bank depositors in other countries to withdraw their funds. 

The process can be very rapid indeed.

Tomorrow Greece Decides: Europe... Or Russia

"Greece's Foreign Minister Nikolaos Kotzias is to visit Moscow on Wednesday to hold talks with his Russian counterpart Sergei Lavrov, Russia's Interfax and TASS news agencies reported on Monday citing a source in the Russian Foreign Ministry." In other words, at precisely the same time as the FinMin is in Brussels discussing the fate, or lack thereof, of Greece in the Eurozone, the new Greek foreign miniser will be in the Kremlin, getting instant updates from Brussels and perhaps discussing the fate of Greece in the Eurasian Economic Union. Or put in the simplest of terms, tomorrow Greece will decide: Europe, or Russia.

Elizabeth Warren Opposes "Congressional Meddling" 'Audit The Fed' Bill

It would appear the powers that be are getting nervous. Yesterday, Fed Governor Jerome Powell (and Fisher and Plosser) stepped up the central bank’s push against what he termed congressional efforts to extend political influence over monetary policy, calling them "misguided" and "in violent conflict with the facts." Today we have Senator Elizabeth Warren trying to sound supportive of transparency but proclaiming that she opposes Rand Paul's "Audit The Fed" Bill because it promotes "congressional meddling in the Fed’s monetary policy decisions," and has "dangerous implications for financial stability and the health of the global economy."

Political Masters Of Parallel Universes

Much as we may dislike the fact, the results from quantum physics are unequivocal: parallel universes do exist. Oddly enough, such quantum effects are quite normal to observe within the political space. Here the physical objects involved are far too large to give rise to the parallel universes of quantum physics, but the narratives they give rise to are not. This is because the narratives are a matter of perception, and there can be historical periods, such as the present one, when the peephole through which the political establishment and the mainstream media allow us to see the world becomes so tiny that it becomes a toss-up as to whether or not any given photon will manage to find its way through it.

Too Big To Sail? Container Ship Cost-Cutting Creates Potential Of "Nightmare" Catastrophe

We remarked on the first notable casualty of the collapse of global trade and with it the cost of shipping freight last week when the first of the bulk shipping bankruptcies occurred, but as The South China Morning Post reports, over the past 10 years, shipping lines have endlessly invested in newer, larger vessels - flooding the market with additional capacity - yet the industry's profitability and return on capital have remained pitiful. This supply-demand imbalance has lowered the cost of ocean shipping, but has raised concerns among vessel operators, insurers and regulators about the potential for catastrophic accidents, as "cost cutting measures such as reducing crew numbers, overworking and lack of training” have exacerbated the risks.

The Keys To The Gold Vaults At The New York Fed ‘Coin Bars’, ‘Melts’ And The Bundesbank

 

‘Coin bars’ is a bullion industry term referring to bars that were made by melting gold coins in a process that did not refine the gold nor remove the other metals or metal alloys that were in the coins. The molten metal was just recast directly into bar form. Because it’s a concept critical to the FRBNY stored gold, the concept of US Assay Office / Mint gold bar ‘Melts’ is also highlighted below. Melts are batches of gold bars, usually between 18 and 22 bars, that when produced, were stamped with a melt number and a fineness, but were weight-listed as one unit. The US Assay Office produced both 0.995 fine gold bars and coin bars as Melts. The gold bars in a Melt are usually stored together unless that melt has been ‘broken’.

No! Lower Oil Prices Are Not An Economic Stimulus

It's been more than six months since oil prices started to plunge (and with them gas prices at the pump). That should (right?) be more than enough time for the status quo's narrative "tax cut" to filter through into the real economy and lift US Macro data... it hasn't... at all!

Brian Williams' "Mis-Remembering" Will Cost Him $5 Million, Suspended By NBC For 6 Months

Having signed a new five-year contract in December reported to be worth $10 million a year, Brian Williams - the mis-remembering NBC News anchor - has been suspended by the network for six months without pay this evening, according to The NY Times. NBC Universal CEO Steve Burke remarked, "by his actions, Brian has jeopardized the trust millions of Americans place in NBC News. His actions are inexcusable and this suspension is severe and appropriate."

How Russia Plans To Retaliate For The Saudi-Driven Collapse In Oil

"Pointing to one possible avenue of asymmetrical retaliation, the source said Moscow could give in to long-standing Chinese requests for sensitive defense technologies that would aid in its development of high-tech weapons capable of doing serious damage to U.S. naval forces in the Asia-Pacific. Moscow has so far declined China's requests on "politically correct pretenses," the source said." The punchline: "We can also encourage Iran, or even back Iran in a fight — a military operation — with Saudi Arabia, so then the prices for oil will skyrocket," the source said, explaining that these were just two possible responses."

Middle-Class Spending Expectations Crash, NY Fed Reports

It appears someone forgot to tell The Federal Reserve Bank of New York (FRBNY) how to 'seasonally-adjust' its data to meet the narrative. In Februrary's survey of consumer expectations, FRBNY reports a collapse in consumer spending growth expectations in January. Even more worrying for President Obama's "middle-class economic" strategy is that the biggest plunge is among the $50-100k income cohort. Not exactly the picture of the 'wreckovery' Americans are supposed to be buying right now. All those jobs, all that wealth created, all the low-gas-price-tax-cut, and spending expectations collapse...