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ADP March Private Jobs Miss, Lowest Since October

Remember the now traditional economic data weakness that the US experiences come every Spring in the past 3 years courtesy of the rotation out of artificially boosting winter seasonal adjustments? Well, after a big miss in the PMI and ISM we may be getting just that, with the ADP private payrolls data moments ago posting the lowest monthly increase since October at just 158,000, well below the 200,000 expected, and far below last month's revised 237,000 (was 198,000), which means that post the revision the February number is just 1,000 off the NFP print of 236,000: ADP, under Mark Zandi, now and always desperately trying to be a BLS echo chamber. Notably in the breakdown of jobs, March saw +0 Construction jobs added: hardly the stuff great housing recoveries are made of. The good news, if any, is that small business finally were the biggest generator of jobs, adding 74,000, or just less than half of total, with medium and large accounting for 37,000 and 47,000 respectively. And since, empirically, the revised ADP methodology has been far more accurate than previously, the question is how to pre-spin this Friday's jobs number, which stands at the near-ADP consensus of 196,000, which suddenly looks far more in peril of a downside miss.



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Turkey’s Silver Imports Surge 31% And Gold Imports Climb To 8 Month High

Physical gold and silver demand remains robust in many markets internationally. Demand from the Middle East remains robust as seen in the near record imports of gold and silver into Turkey. Turkey’s gold imports climbed to an eight-month high in March as prices averaged the lowest since May, according to the Istanbul Gold Exchange. Silver imports rose 31% from a month earlier according to Bloomberg. Gold imports increased to 18.26 metric tons, the most since July. That’s up from 17.34 tons in February and compared with 2.91 tons a year earlier, data on the exchange’s website show. The country shipped in 120.8 tons last year. Turkey was the fourth-biggest gold consumer in 2012, according to the London-based World Gold Council. Bullion averaged $1,593.62 an ounce last month and is trading about 17% below the record nominal high of $1,921.15 set in September 2011.



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Best And Worst Performing Assets In 2013



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Bill Gross Channels Michael Jackson In Latest Monthly Letter, Asks "What Makes A Great Investor?"

Am I a great investor? No, not yet. To paraphrase Ernest Hemingway’s “Jake” in The Sun Also Rises, “wouldn’t it be pretty to think so?” But the thinking so and the reality are often miles apart. When looking in the mirror, the average human sees a six-plus or a seven reflection on a scale of one to ten. The big nose or weak chin is masked by brighter eyes or near picture perfect teeth. And when the public is consulted, the vocal compliments as opposed to the near silent/ whispered critiques are taken as a supermajority vote for good looks. So it is with investing, or any career that is exposed to the public eye. The brickbats come via the blogs and ambitious competitors, but the roses dominate one’s mental and even physical scrapbook. In addition to hope, it is how we survive day-to-day. We look at the man or woman in the mirror and see an image that is as distorted from reality as the one in a circus fun zone.



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Frontrunning: April 3

  • Cyprus leader invites family firm probe (FT)
  • How the Fed fueled an explosion in subprime auto loans (Reuters)
  • Wal-Mart Customers Complain Bare Shelves Are Widespread (BBG)
  • JC Penney CEO gets no bonus, stock award after dismal year (Reuters)
  • New Bird Flu Virus Kills 2 in China, Sparking WHO Probe (BBG)
  • Algorithms Play Matchmaker to Fight 7.7% U.S. Unemployment (BBG)
  • Fed hawk Lacker and dove Evans face off over inflation (Reuters)
  • Infamous silver market "cornerer" WH Hunt Becomes Billionaire on Bakken Oil After Bankruptcy (BBG)
  • Japan Auto Sales Fall on Subsidy End as Korea Extends Drop (BBG)
  • Black Hawks Near North Korea Show Risk in U.S. Command Shift (BBG)
  • SEC Embraces Social Media (WSJ)
  • Tesla Touts ‘True Out of Pocket’ Financing for Model S (BBG)
  • U.K. Banks Try to Dodge Bonus Caps by Defining Risk-Taker (BBG)


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Overnight Sentiment: Driftless

The driftless overnight sessions are back. After the Nikkei soared by 3% following several days of declines, and the Shanghai Composite continued its downward ways despite Non-Manufacturing PMI prints for March which rose both per official and HSBC MarkIt data, Europe was unsure which way to go, especially with the EURUSD once more probing the 1.28 support level. The USDJPY was no help, and even with the BOJ meeting at which new governor Kuroda is finally expected to do something instead of only talking about it, imminent, has hardly seen the Yen budge and provide the expected carry-funding boost to global risk. In terms of newsflow there was little of it: European CPI in March printed at 1.7%, above expectations of 1.6%, but below February's 1.8% rise in inflation. UK continued telegraphing the inevitability of Mark Carney's imminent QE, with construction PMI the latest indicator missing, at 47.2, below expectations of 48.0 (above 46.8 last).  Elsewhere, Spanish Prime Minister Mariano Rajoy on Wednesday called for Europe to implement growth policies to balance its austerity drive and for countries with room for fiscal manoeuvre to increase public spending. "Europe is the only region in the world in recession. To overcome this situation we need three things: every country needs to do its homework, we need more (European) integration and we need growth policies," Rajoy said in a televised speech to leaders of his People's Party. "That's why countries which can afford it should spend more." Surely Europe will get right on it: after all, it's only "fair."



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RANsquawk EU Market Re-Cap - 3rd April 2013



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From North Dakota To New York - Let Freedom Ring In The 50 States

Every two years the 50 states compete for the title of "Most Free State," and George Mason University's Mercatus Center rankings based on 200 factors generalized under Fiscal Policy, Regulatory Policy, and Personal Freedom, provide significant color on just how free (or not) the various states are. New Hampshire was the 'free-est' state in 2011 but fell to 4th this year as North Dakota is 2013's 'free-est' state. New York and California bring up the rear as the least free states but the following clip and charts show just where the freedom is spreading - Georgia, Arizona, and Idaho; and where it is not - Oregon, Kansas, and Colarado.



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Guest Post: Ben Bernanke Must Be Hoping Rational Expectations Doesn’t Hold...

In the theory of rational expectations, human predictions are not systematically wrong. This means that in a rational expectations model, people’s subjective beliefs about the probability of future events are equal to the actual probabilities of those future events. Now, we think that rational expectations is one of the worst ideas in economic theory. It’s based on a germ of a good idea - that self-fulfilling prophesies are possible. Mainstream economic models often assume rational expectations, however. And if rational expectations holds, we could be in for a rough ride in the near future. Because an awful lot of Americans believe that a new financial crisis is coming soon - 75 percent of respondents said that it’s either very or somewhat likely that the country could have another financial crisis in the near future.



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"Last Symbol Of Inter-Korea Cooperation" Falls As North Bans South From Gaeseong

While the world twiddles it thumbs, buys stocks, and ignores any and every risk, tensions continue to mount on Korea. Bloomberg is reporting that:

*N. KOREA BANS S. KOREANS FROM ENTERING GAESEONG, S. KOREA SAYS
*N. KOREA ENTRY BAN HINDERS 'STABLE OPERATION' OF GAESEONG: KIM
*S.KOREA SAYS N. KOREA GAESEONG ENTRY BAN IS 'EXTREMELY SERIOUS'

The city of Gaeseong, due to its situation on the border, hosts cross-border economic exchanges ($2bn per year in trade for the impoverished North) between the two countries and is seen as "the last symbol of inter-Korean cooperation." In light of this, perhaps it is no surprise that the WSJ reports, the U.S. positioned a ship capable of shooting down ballistic missiles near the Korean peninsula amid South Korea demands that the military should "make a strong and swift response in initial combat without any political considerations."



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Guest Post: The Myth Of U.S. Energy Independence

There is no hope whatsoever of so-called U.S. "energy indepedence" unless three things happen. First, environmental rules have to be wound back to 1970 standards -- in other words, disband the EPA and make civil plaintiffs show actual harm, not just hypothetical harm because someone goofed on a sheaf of mandated paperwork. Second, stop wasting taxpayer money on nonsense like $25 per gallon biofuel. Third and most urgently, stop subsidizing Wall Street. Let the market decide what interest rates make sense, rewarding companies who can find and produce oil, instead of gorging themselves sick on artificially cheap junk bonds that money-losing shale swindlers will never pay off.



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Hollande's 'New' 75%-Wealth-Tax Catches French Soccer Pros Offside

The ever-changing rules of the French 'tax-the-rich' socialist state have mad eyet another unintended consequence. Bloomberg reports that Prime Minister Jean-March Ayrault confirmed this evening that France's professional soccer players will be liable for the 75% 'surcharge' on salaries above EUR1 million. After the country’s top administrative court said any rate above 66% could be rejected as confiscatory, Hollande revived the tax, saying the rate would remain 75%, though it would be paid by corporations, not individuals, circumventing the courts’ objections. That solution left open the question of whether self- employed artists and athletes would be taxed - Ayrault confirmed it today. We suspect the transfer window will be wide open as soon as possible as "with these crazy labor costs, France will lose its best players, our clubs will see their competitiveness in Europe decline, and the government will lose its best taxpayers." Paris St. Germain, David Beckham's current team, has over a dozen players/coaches paid more than EUR1mm and with Zlatan Ibrahimovic at EUR15mm per year, we suspect the Swede will be heading back to England as soon as possible - or maybe Cyprus needs some players?



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Biderman Nominates Krugman For 'The Big Lie' Award

Biderman's back and belligerent as ever. The TrimTabs CEO is perplexed at Krugman's (empirically) flawed assumptions that the US government can manage the US economy (better than a free market), destroys Krugman's cornerstone argument that the deficit is reducing to sustainable levels (thanks only to a big jump in taxes and not growth), and suggest he win an award for perpetuating "The Big Lie" that deficits don't matter because 'we owe it to ourselves'. The bottom line is thanks to simple supply and demand, the Fed is blowing a huge bubble in stocks "that will explode," since the typical growth in incomes is not there. Biderman wholeheartedly agrees with David Stockman and goes on to warn of the "Ides of April" as, while many proclaim the calendar as indicative of it being a great month; in bull runs, he notes, taxpayers are 'trained' to sell at the last moment and with tax-day arriving soon, he expects this week to remain bid (on quarterly flows) and next week to be trouble (as taxes weigh).



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Guest Post: Should China Keep Its 'Africa Dreams' To Itself?

Since taking over as party chairman Xi Jinping has repeatedly invoked the theme of the “Chinese Dream,” which heralds “the great revival of the Chinese nation.” During his first trip abroad, Xi gave a speech in Tanzania laying out his idea of “Africa Dream,” which entailed, among other things, “unity and achieving development through rejuvenation.” We have covered the race to re-colonize the African continent in depth while Xi's concepts are bound up with the growing economic influence China now exercises over Africa; African states would do well to be cautious in embracing Xi’s African Dream wholeheartedly. As innocuous as “Africa Dream” sounds, it signals a shift in which Beijing is pushing a revised form of its internal ideology on African countries. While the dissemination of such as term might result in policies that produce some domestic growth and rejuvenation in Africa, there is also the danger that it will come to resemble the CCP’s vision of the dream.



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Oil Tanker Market In "State Of Panic" As Charter Rates Plunge, Cargoes Rejected

While everyone knows about the epic oversupply of dry bulk containerships as a result of the pre-bubble surge in charter rates (and subsequent collapse), which sent many shipping companies to an early bankruptcy or outright liquidation and also resulted in very depressed shipping rates for the last several years as the supply overhang continues to be cleared out of the system (coupled with still depressed end-demand for "dry" commodities) , few may be aware that in the past several months the same fate has befallen the oil-tanker industry. As Bloomberg reports, John Fredriksen's oil-tanker behemoth Frontline Ltd., said it’s rejecting some cargoes after a rout in rates for the vessels. "Frontline is offering tankers for charters “selectively” and the market is in a “state of panic” as excess ship supply drives down charter costs, Jens Martin Jensen, chief executive officer of the Hamilton, Bermuda-based company’s management unit, said by phone today." The reason for the charter rate crunch: plunging rates. "Crude rates remain in the doldrums,” RS Platou Markets AS, an Oslo-based investment bank, said by e-mail today. VLCCs earned $17,000 a day on average in the first quarter, down 32 percent from a year earlier, it said.  Fredriksen split Frontline Ltd. in two in December 2011, forming Frontline 2012 to withstand a slump in returns that put the original company at risk of running out of cash. Frontline Ltd.’s shares fell to the lowest since May 1999 last month and slumped 95 percent since the end of 2007.



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