Tailing 30 Year Auction Is Weakest In A Year Despite Near Record Foreign Takedown

Yesterday's 10 Year auction played a trick on the repo market, which was so short the underlying the repo was trading very special at -1.8%. Today, as we noted earlier, the shortness persisted, and not only in the 10Y but the 30Y as well, whose repo was negative for the second day in a row. Well, while the bet yesterday was wrong, today it was spot on, with the 30 Year reopening of 29-Year-11-month CUSIP RK6 pricing surprisingly weak, stunning the bond market when a whopping 2.1 bps tail was announced moments ago, following a High Yield announcement of 2.681%, well above the 2.66% When Issue.

German Bond Scarcity Could Turn Into Shortage, BNP Says

"For the time being, the problem is one of a scarcity of bonds – where it is difficult to find all the bonds across the curve that need to be bought – but, if yields keep falling further; eventually it will become a problem of shortage of bonds due to the 25% threshold in terms of ECB ownership – where there is not enough bonds for the ECB to buy the required amounts," BNP warns. At that point, there will be an effective Q€ taper — and the tantrum that comes with it.

The Great Immoderation: How The Fed Has Sown The Seeds Of The Next Recession

There was a point in 2010 when American capitalism might have had an opportunity to heal itself and commence on a long march toward sustainable growth and real wealth gains. But the monetary politburo would have none of it - keeping the pedal to the metal until this very moment... and the rest is history. The Fed and the other central banks around the world have fomented a new and even more virulent and dangerous financial bubble.

US "Urges" Vietnam To Stop Helping Russian Bombers Re-Fuel

It appears Washington is losing some control among its allies. Amid a flurry of high-level visits to Vietnam last year, the US has been pouring in aid and assistance in health, education, landmines clearance, scholarships and nuclear energy. The reason is now becoming clear. As Reuters reports, Vietnam has been allowing Russia to use a former US military base to refuel nuclear-capable bombers as it rattles its sabre over the Asia-Pac region.. and America would like that to stop: "we have urged Vietnamese officials to ensure that Russia is not able to use its access to Cam Ranh Bay to conduct activities that could raise tensions in the region." All that was missing was the "or else."

Why I Don't Want An Apple Watch (And It's Not Battery Life)

The reason I don't want an Apple Watch has nothing to do with its look, functionality, price or battery life. Stated very simply: the Apple Watch, like every other enslaving you to the network device, is a productivity destroyer.

Business Inventory-To-Sales Ratio Surges To Worst Since Lehman

And to complete this morning's trifecta of disappointment, Business Inventories miss (for the 8th of the last 9 months) and show no change MoM - the weakest since May 2013. Building Materials, Furniture, and Autos saw inventories fall as Department Store inventories rose. Coupled with sales weakness (retail sales -0.9%), this is the highest inventory-to-sales ratio since Lehman... just as with Wholesale inventories...

Is This Why Stocks Are Soaring, And Some Context For Today's Melt-Up

Despite no help from USDJPY, credit, or bonds; US equity markets have algo-ised vertically since the US Open as investors machines BTFWRSSL (Buy The F###ing Worst Retail Sales Since Lehman). It appears investors are once again listening to a certain "world-renowned" talking head on CNBC. But we have seen this divergence before...

Are Alarm Bells Ringing Over Greece's Pivot To Russia?

With German media asking "who is more dangerous for us? Greece or Russia," recent actions by both 'antagonists' in that question suggest they may become one and the same sooner than many expected. With tensions rising between Greece and the Eurogroup, recent and future visits to Russia have gained in importance since Russian FinMin confirmed that Moscow "could consider financial help to Greece." While this Russian pivot meme was the stuff of conspiracy theorists just weeks ago, The BBC is now asking directly, "could Europe lose Greece to Russia?" and with more Greeks positive on Russia (61%) than Europe (23%), it should not shock anyone.

The "Warnings" Begin: Intel Slashes Q1 Revenue Forecast by 7%, Blames "Weak Demand"

Unpossible? Chipmaker Intel just took an ax to its Q1 global revenue expectations:

*INTC SEES 1Q REV. $12.5B-$13.1B, SAW $13.2B-$14.2B, EST.$13.72B

Of course, we will be told this is one-off and that Intel is now no longer a belwether but "weaker than expected conditions in Europe," is not what the talking heads have been telling us.

Retail Sales Crumble, Suffer Worst Run Since Lehman

Earlier today we warned readers that based on actual credit card spending data, today's retail sales data would continue the worst trend since Lehman, and sure enough that's what happened: moments ago the Commerce department reported that in February, retail sales missed once again and missed big and across the board, the third big miss in a row, with the headline print coming at -0.6%, far below the 0.3% expected, and in line with the -0.8% drop last month. Putting the headline numbers in context: December -0.9%, January -0.8%, February -0.6%. Excluding the volatile autos and gas, sales dropped once again, sliding -0.2%, below the 0.3% expected - in fact below the lowest estimate - and worse even than last month's downward revised -0.1% decline. And with that the worst run in retail sales since Lehman is now in the record books.

US Import Prices Plunge 9.4%, Most Since Lehman

February Import Prices to the US droped 9.4% YoY - the biggest drop since the month after Lehman's bankruptcy i 2008. January's drop was also revised lower. The YoY drop is dominated by a 43.2% drop in petroleum prices (but MoM in Feb petroleum prices jumped 8.1%). Ex-fuel, import prices fell 1.2% YoY as the price of imported capital goods fell the most since March 2009.

Initial Jobless Claims Average Holds Above 'Dreaded' 300k Level

Despite a 36k drop week-over-week, the less noisy four-week average initial jobless claims remains above 300k for the 2nd week in a row - something we have not seen since in 6 months. At 289k, initial claims beat expectations of 304k but continuing claims printed higher than expected at 2.418 million. Shale state claims remain below the peak levels of January but well above average. The trend remains 'changed' from the QE3 regime.

From Yellen Put To Yellen Massacre

Yellen has created a narrative about the US economy, especially the (un)employment rate, and with the narrative is now firmly in place, Yellen and her stooges can claim they have no choice but to hike In short, Janet Yellen will go down into history as the person responsible for what may be the biggest economic crash ever, or at least delivering the final punch of the way into it, a crash that will make the rich banks even much richer. And there is not one iota of coincidence in there. Yellen works for those banks. The Fed only ever held investors’ hands because that worked out well for Wall Street. And now that’s over. Y’all are on the same side of the same trade, and there’s no profit for Wall Street that way.

Fed Will Open "Pandora's Box" With Rate Hike, UBS Warns

"While equity prices look expensive relative to real economic activity, they are arguably cheap relative to bond valuations. S&P 500 earning yields are similar to BB/B bond yields, as opposed to A/BBB yields historically, indicating excessive yield-seeking behavior in the face of reduced bond market liquidity," UBS cautions.

Two Police Officers Shot Outside Ferguson Police Department: Shooting Caught On Tape

Just hours after Ferguson, MO police chief Thomas Jackson submitted his resignation - the latest in a string of Ferguson officials to resign in the week since a scathing Justice Department report found widespread racially biased abuses in the city's policing and municipal court, and also found that the city used police as a collection agency, citing traffic citations to black residents to boost city coffers through fines, creating a "toxic environment" - two police Ferguson officers were shot during a protest outside Ferguson, Missouri police headquarters early on Thursday.

Frontrunning: March 12

  • As reported here first: The U.S. Has Too Much Oil and Nowhere to Put It (BBG)
  • Dollar Drops From 12-Year High as S&P Futures, Bonds Gain (BBG); Dollar Bulls Retreat From 12-Year High to Euro With Fed in View (BBG)
  • Clinton Private Email Plan Drew Concerns Early On (WSJ)
  • ECB Bond Buying Not Needed With Economy Improving, Weidmann Says (BBG)
  • China Feb new yuan loans well above forecast (Reuters)
  • U.S. probing report Secret Service agents drove car into White House barrier (Reuters)
  • Kerry tells Republicans: you cannot modify Iran-U.S. nuclear deal (Reuters)
  • PBOC Pledges to Press on With Rate Liberalization Amid Slowdown (BBG)
  • China Prepares Mergers for Big State-Owned Enterprises (WSJ)