Is This The Chart That Has Small Cap BTFATH-ers Nervous?

For the last year, every test below the 50DMA for the Russell 2000 has been met with a cavalcade of BTFD-ers (which then transformed into BTFATH-ers). However, we wonder, does the following longer-term chart suggest this time might just be different?

World's Largest Hedge Fund Uses Twitter For Real-Time Economic Modeling

As more and more amateurs have piled into Twitter, the data stream has been subject to the "Yahoo Finance effect" - there is far too much noise, and not nearly enough actionable signal, especially when one tries to strip away the bias behind any given message (see "Trading Twitter: Where Noise Becomes Signal"). Yet one entity that appears to have found significant functionality in Twitter is none other than the world's biggest hedge fund: Bridgewater.

Spot The Odd One Out

Following last week's exuberance, this week has seen a notable change of trend... one asset class looks different to the others...

South Carolina Is About To Pass A Bill To Nullify Obamacare

While we all know that the disaster that is Obamacare is extremely unpopular throughout the country, South Carolina is leading the charge to actually nullify the legislation. House Bill 3101 already passed the state House back in April by a wide margin, and is set to be voted on in the state Senate in January. It is widely expected to pass and then be signed into law by Governor Nikki Haley. If that happens, it would set up a huge states rights victory and likely encourage other states to follow suit. It will be extremely interesting to see how the feds respond to this…

RBS: The Dumbest Bank Of 2013?

"IMPORTANT: FOR ALL US DOLLAR PAYMENTS TO A COUNTRY SUBJECT TO US SANCTIONS, A PAYMENT MESSAGE CANNOT CONTAIN ANY OF THE FOLLOWING: 1. The sanctioned country name. 2. Any name designated on the Office of Foreign Asset Control (OFAC) restricted list, which can encompass a bank name, remitter or beneficiary."

Hilton IPO Opens Up (Only) 7%

Six years after Blackstone paid $26.7bn to LBO this hotel chain (and pretty much marked the top of the last cycle), Hilton is back with the largest ever lodging IPO. Pricing at $20 per share, the largest hotel oeprator in the world is not enjoying the kind of post-IPO euphoria that the likes of 'real' companies like Facebook and Twitter had... for now HLT is up a mere 7%... the question is will the largest hotel IPO also mark the top of this cycle? Finally, with the "dot com 2.0 mentality" raging, will the fact that HLT actually has PE multiple expansion-limiting earnings, be its biggest curse?

US-Backed Syrian "Rebel" Commander Chased Out Of Country By Al Qaeda

Syria may be old news as any escalation has been put on hold at least until next summer, but the hilarity resulting from the bungled US foreign policy intervention in the country lingers. The latest chapter in John Kerry's book of "Diplomacy for Idiots" is the case of General Salim Adris, a so-called moderate the top Western-backed commander of the Free Syrian Army, who was literally run out of the country by the more extremist, Al Qaeda based factions among the Syrian CIA armed and Qatar funded "rebel" forces. As the WSJ eloquently puts it, "Islamist fighters ran the top Western-backed rebel commander in Syria out of his headquarters, and he fled the country, U.S. officials said Wednesday." Any references to brave Sir Robin are purely accidental. It got better when the same Al Qaeda fighters "took over key warehouses holding U.S. military gear for moderate fighters in northern Syria over the weekend." In other words, as we repeatedly forecast over the summer, the US is now once again arming Al Qaeda fighters with weapons that sooner or later will be used against the US, at a time of the CIA's choosing.

Fact, Fiction, And 11 Bitcoin Myths

Haters gonna hate, but the “Bitcoin bubble” meme has become the financial equivalent of a viral online cat video – wildly popular but pretty vacuous. In an effort to separate fact from fiction, ConvergEx's Nick Colas reviews 11 bitcoin myths (and dispels them). Still, there’s no doubt that the public is entranced: there are now 3x more Google searches for “bitcoin” than “Western Union”, and 33x more than for “Gold coins”.  We started writing about bitcoin back in February because it was – and still is – a fascinating invention (for better or worse). How it plays out, we will just have to wait and see.

Living In A Steel Box: Londoners Live In Shipping Containers Due To Soaring Rents

With even Bank of England head Mark Carney admitting UK housing prices may be a little bubbley (and affordability plumbing new depths), RT reports that a hostel in east London has come up with the ingenious idea, to try and solve homelessness amid soaring rents in the British capital, of converting a shipping container from China into a tiny low cost home for hard up and desperate Londoners. The boxes, called mYpads, cost GBP75 per week - around one-quarter of the rent of most distant yet commutable borough in London - and are affordable for even those on minimum wage.

November Retail Sales Beat Modest Expectations Despite Another Decline In Clothing Sales

There was much concern that heading into the holiday season the US consumer would hunker down, which is why the just released retail sales came as a bit of good news: the headline and core (ex-autos) numbers both beat expectations of 0.6% and 0.2%, printing at 0.7% and 0.4% respectively, and refuting rumors of a big consumer slowdown into the holiday season. On the other hand, core retail sales, ex-autos, showed a declining growth rate, following the 0.5% increase in October, declining to 0.4% in the past month, while the ex-autos and gas number remained flat from October to November, or 0.6%. It is unclear if this number is good enough to send futures sliding on the back of the horrible claims report which has so far managed to push futures into green territory, but with the bulk of the monthly change contained in the seasonal adjustment, any 0.1% increments of change or beats of expectations are very much noise.

Initial Claims Spike Most Since Sandy To Worst In 9 Months

While the Labor Department admits "difficulties in seasonally adjusting" the data, this is the biggest spike ex-Sandy in the all-important initial claims data since 2005. At 368k (versus 320k expectations), this is the worst miss sicne Sandy also (absent the government shutdown debacles) and the Labor department says no states were estimated. This is the worst initial claims print since March... just enough bad news to provide the Fed some leeway? Of course, with enough statistical noise to sink an economy, it would appear another government-inspired data series has become next-to-useless ammo for the baffle 'em with bullshit brigade.

Gold And Silver Slammed

No new news as a catalyst this morning but it appears someone decided it was highly inappropriate for the precious metals to be holding their gains as stocks and bonds revert back to pre-payrolls 'taper' levels. Gold and Silver have been monkey-hammered lower this morning as heavy volume hit futures markets about 419ET and 645ET. Futures were not halted. Some speculation that gold's drop followed positive comments from Ukraine's foreign minister but that seems a stretch...

Cops Per Capita: Who Has The World's Most And Least Concentrated Police Force

The more the cops, the safer: that's what conventional wisdom says. The contrarian view, of course, is that when police per capita are far above average, there is usually a reason. Or, it the distribution could be just pure noise, depending on how much money can be allocated to police budgets or how prone to cop extortion a given country is. The chart below doesn't provide a definitive answer, with Russia leading the world in most police per 100,000 persons according to the UN and ONS, while Greece and Serbia mark the trailing end. Still, those who would rather avoid police brutality and paying a bribe to corrupt law enforcers, may be urged to avoid the left end of the chart below...

Frontrunning: December 12

  • J.P. Morgan to Pay Over $1 Billion to Settle U.S. Criminal Probe Related to Madoff (WSJ)
  • Ford board aims to pin down CEO Mulally's plans (Reuters)
  • Raising Minimum Wage Is a Bad Way to Help People (BBG)
  • Japan Lawmakers Demand Speedy Pension Reform (WSJ)
  • EU reaches landmark deal on failed banks (FT)
  • In which Hilsenrath repeats what we said in August: Fed Moves Toward New Tool for Setting Rates (WSJ)
  • Senators Vow to Add to Iran Economic Sanctions in 2014 (BBG)
  • Centerbridge in $3.3bn LightSquared bid (FT)
  • Banks, Agencies Draw Battle Lines Over 'Volcker Rule' (WSJ)

"Something Has Changed" In Overnight Trading As Futures No Longer Track EURJPY Ramps

It has been another session of overnight weakness, in which, to quote Deutsche Bank, "something has changed" as ES algos no longer track every tick of the EURJPY (or other JPY pair variants). Usually in such transition periods where the robots are not sure how to trade risk based on highly leveraged inputs, things go bump in the night, and they did just that with the E-Mini trading just off its overnight lows, despite a notable rise in the EURJPY from yesterday's close. Keep a close eye on the now traditional pre-market ramp in the EURJPY - if unaccompanied by an increase in the E-mini, it may be time to quietly exit stage left.

Goldman's Q&A On Stanley Fischer As The Next Fed Vice Chairman

Since the bank that decides what happens at the NY Fed, and by implication, at the broader Federal Reserve system, is none other than Goldman Sachs, it would be informative to read what none other than Goldman thinks of Ben Bernanke's thesis advisor Stanley Fischer, formerly head of the Bank of Israel, as the next vice chairman - as he is now actively rumored to become shortly. Conveniently, here is just such a Q&A from Goldman's Jan Hatzius - the man who feeds Bill Dudley all his economic and monetary insights over lobster sandwiches at the Pound and Pence.

Who Makes The Most Money? And How They Do It

Of the 25 companies with the largest corporate profits in the world; banking, energy and technology firms are absolutely raking it in. Despite stagnating incomes, these companies made $567,856,000,000 in 2012 alone... here's the subsidies, tax breaks, and offshoring that helped them do it...

Chinese State-Run Media Embarrasses Itself By Proclaiming "Unexpected Benefits Of Smog"

In case you weren’t aware, several of China’s major cities have experienced record-breaking, extremely dangerous levels of smog in recent days. Only today, Chinese authorities raised the "safe" level of pollution to reduce the frequency of alerts. So how did China’s state-run media decide to respond to this environmental and public health disaster? With ridiculous propaganda about the “unexpected benefits” of smog of course. You have to see this to believe it.

The Federal Reserve: 100 Years Of Boom And Bust

"If we evaluate an organization's performance by what it promised when it was created, the Federal Researve has clearly failed the American people," is how Murray Sabrin concludes this documentary on the first 100 years of the Fed's reign. The sad truth, he details, is that "the USD has lost more than 95% of its purcahsing power since the Fed was created and the cost of living has skyrocketed since Nixon severed the last linkage between the USD and gold in 1971." In short, the revolution of 1913 shifted power from individuals, communities and states to the federal government and its powerful allies in the private sector.