September Retail Sales Come In Line With Expectations As Unclothed Americans Buy iPads

Moments ago hopes that the S&P would hit 1800 on an epic miss in the September retail sales were dashed after both the headline and ex-auto/gas numbers came largely in line. The total Seasonally Adjusted retail sales for September dipped modestly by 0.1%, on expectations of an unchanged print. Excluding autos the number was exactly in line with expectations at 0.4%, while ex autos and gas was also a very modest miss of 0.4% vs Exp. 0.5%. Still, hardly bad enough to send the S&P500 futures into the stratosphere. The biggest outliers by business category were motor vehicles which tumbled -2.2 in September, the biggest decline since October 2012 (did the US government suddenly stop making NINJA loans?), Miscellaneous stores and Clothing stores, down 1.2% and -0.5% respectively, while electronics and appliance stores rose 0.7% in September. In short: Americans may have no clothing as we enter the winter season, but at least they have the new iPad.

Obama Knew Most Americans Would Not Be Able To Keep Their Existing Insurance Under Obamacare As Early As 2010

The news keeps going from worse to worse-er for the administration and Obamacare. The latest hit, however, does not revolve around the dysfunctional healthcare.gov website, whose hundreds of millions of lines of faulty code will take a very long time to fix, but relates to Obama's promises that individuals would be able to keep their existing healthcare plans following the rollout of the Affordable Care Act. The truth, as NBC reports, is they can't but what's worse is that Obama knew as early as July 2010 that 40 to 67 percent of customers will not be able to keep their policy. And that's not all: since the 14 millions consumers who buy their insurance individually will be forced into comparable plans, they are all set to experience a "sticker shock" when "opting" for the mandatory alternatives.

Frontrunning: October 29

  • U.S. spy chiefs face Congress amid spying rift with Europe (Reuters)
  • Deutsche Bank income hit by €1.2bn of legal provisions (FT)
  • China's second tapering attempt fails: China central bank seeks to reassure money markets after rate spike (Reuters)
  • UBS Takes Action Against Staff in Foreign-Exchange Probe (WSJ)
  • Saudi Arabia frees man jailed for Mohammad tweets (Reuters)
  • Tax Revolts Hit Hollande as Farmers, Soccer Clubs Protest (BBG)
  • German parliament to meet over U.S. spying scandal (Reuters)
  • Google Nears Smartwatch Launch (WSJ)
  • How to end gridlock in DC? Pork projects (Reuters)
  • UBS ordered to increase capital reserves (FT)

Futures Flat As FOMC Begins 2-Day NOctaper Meeting

For those curious what Bernanke's market may do today, we flash back to yesterday's AM summary as follows: "Just as it is easy being a weatherman in San Diego ("the weather will be... nice. Back to you"), so the same inductive analysis can be applied to another week of stocks in Bernanke's centrally planned market: "stocks will be... up." Add to this yesterday's revelations in which "JPM Sees "Most Extreme Ever Excess Liquidity" Bubble After $3 Trillion "Created" In First 9 Months Of 2013" and the full picture is clear. So while yesterday's overnight meltup has yet to take place, there is lots of time before the 3:30 pm ramp (although today's modest POMO of $1.25-$1.75 billion may dent the frothiness). Especially once the market recalls that the NOctaper FOMC 2-day meeting starts today.

Mizuho President Busted For Giving Loans To Yakuza, Apologizes

While the biggest problem facing US bands is lack of demand (and supply, since it is far more profitable for banks to "invest" reserves in risk assets using excess deposits as initial margin) for loans, Japan doesn't have such a problem. At least not, when the loans are made to "gangsters" such as the Yakuza. AFP reports that executives at Mizuho Financial Group, one of Japan's largest banks, knew the firm was doing business with gangsters but failed to stop it, a panel said Monday, as Japan's finance minister slammed the banking giant over the affair. The bank has been in the public spotlight since it emerged last month that it processed hundreds of loans worth about $2 million for the country's notorious yakuza crime syndicates. And while in the US the punishment for banks caught in criminal behavior is a simple slap on the wrist and a settlement paid using TARP money, in Japan bank CEO still have some semblance of honor. Bloomberg adds that in the aftermath of the revelations, Mizuho's president Yasuhiro Sato will give up six months of pay ahead of more penalties, and will resign his Chairmanship at Mizuho Bank while keeping the post at the parent company. Some 52 other current executives will also be penalized.

 

False Alarm: Obama Will Continue Spying On "Allies" After All

In a dramatic change of events that is a) sure to not win the administration any goodwill point with the citizens of the free, or enslaved, world or their insolvent leaders so desperately reliant on the US for day to day funding, and b) will confirm the state of complete policy chaos that is at the core of the Obama administration's handling of the ObamaPhone spygate (where for some reason the fact that the US spied on foreigners, as it should, has taken far more precedence over the NSA intercepting and recording each and every domestic communication, with neither checks nor balances), the earlier reported news originating from the Chair of the Senate Intelligence Committee Dianne Feinstein, who said that "the White House has informed me that collection on our allies will not continue, which I support" was a fabrication.

29 Uncomfortable Truths About Soaring Poverty In America

Did you know that the number of Americans on welfare is higher than the number of Americans that have full-time jobs?  Did you know that 1.2 million public school students in the U.S. are currently homeless?  Anyone that uses the term "economic recovery" to describe what is happening in the United States today is being deeply insulting to the nearly 150 million Americans that are considered to be either "poor" or "low income" at this point.  Yes, things are great in New York City, Washington D.C. and San Francisco, but almost everywhere else economic conditions continue to steadily get worse.  The gap between the wealthy and the poor is at a level that America has never seen before, and this is beginning to create a "Robin Hood mentality" that could cause a tremendous amount of social chaos in the years ahead. Despite unprecedented borrowing by the federal government in recent years, and despite unprecedented money printing by the Federal Reserve, poverty in the United States keeps getting worse with each passing year. The following are 29 incredible facts which prove that poverty in America is absolutely exploding

Abenomics One Year Later

One year later and due mainly to the fact the Japanese stock market has risen an astounding 70% year-over-year, talking-heads, politicians, and central bankers proclaim Abe's trip into the monetary policy black hole as a success (it would seem on that basis that the head of Venezuela's central bank deserves a Nobel prize). Abe has managed to devalue his nation's currency by 25.5% against the USD in that time and the price of Japanese government bonds (despite some early teething trouble with the government's repressive activity) is practically unchanged up 0.75% on the year. But away from the 'market', inflation is rising (but thanks to import prices) and wages languish down 0.9% as the trade balance is collapsing. One thing is for sure - dueling QEs between Japan and the USA make for highly correlated FX and equity market co-movements...

Nobel Prize Winner: Bubbles Don't Exist

No wonder investors don't take economists seriously. Or if they do, they shouldn't. Since Richard Nixon interrupted Hoss and Little Joe on a Sunday night in August 1971, it's been one boom and bust after another. But don't tell that to the latest Nobel Prize co-winner, Eugene Fama, the founder of the efficient-market hypothesis. No matter the facts, Fama has his story and he's sticking to it. "I think most bubbles are 20/20 hindsight," Fama told Cassidy. The rest of us, who lived through the tech and real estate booms while Fama was locked in his ivory tower, know that in a boom people go crazy. There's a reason the other term for bubble is mania.

 

As Obama Asks If He "Should Be Worried" About Bitcoin, ATMs Arrive In 5 Canadian Cities

The world's first Bitcoin ATM will be ready for use this week at a coffee shop in Vancouver, Canada. Created by Las Vegas based Robocoin, the new ATM in Vancouver will allow users to turn bitcoins directly into Canadian dollars, or turn Canadian dollars into bitcoins. As The Telegraph reports, the ATM first scans the user's palm to ensure security and transfers are limited to CAD$3,000 per day. Until now, the currency existed only on the web but the introduction of these ATMs brings bitcoin-as-cash usage closer. The RoboCoin kiosks are expected to make the process of buying and selling Bitcoins much easier says Jordan Kelley, the company's chief executive. "Our goal is to make Bitcoin truly grandma-friendly," says Kelley. This is especially notable in light of President Obama asking Eric Schmidt if "Bitcoin is anything he has to worry about?"

Gold Tests 5-Week Highs. "Should Continue Pushing Higher": Citi

On the back of dismal data this morning merely compounding the belief that whatever happens, there will be no Taper anytime soon (and record high physical premiums over spot as Indian demand surges), gold prices broke back above $1360 this morning to five-week highs. Of course, that 'rise' was very quickly squelched as stocks POMO'd higher from the US open; but, as Citi's FX technicals group notes, the break of $1343 points to a test of $1430 and a bias to testing back above the $1522-32 region.

Did The Fed Kill The Long-Term Investor?

Gone are the days where people looked towards next year when building their portfolios, or five years down the road as they approach retirement. Now from a combination of apprehensiveness and shear paranoia in our unstable markets, investors are looking only as far as they can throw for their personal investment decisions. In more than 30 years of money management, Lance Roberts has never seen such a rapid change in the way people make financial plans. Instead of saving for the future, many are opting for fast gains - yet at the same time they want low risk. Others are playing it completely safe. In fact, in a quarterly poll, 83% of respondents said they were holding on to their cash versus investing in the stock market.

White House To Stop Spying on Allies, Dianne Feinstein Promises

Continuing to play Obama like a fiddle, the Snowden revelations have done more to change US foreign policy in a few short months, than all laws passed since the advent of the Patriot Act. In the latest example of just this, moments ago, USA Today first and the WSJ and others subsequently, reported that according to Dianne Feinstein, chair of the Senate Intelligence Committee and an NSA supporter, the National Security Agency has stopped gathering intelligence on allied political leaders, a practice that has drawn global criticism. "The White House has informed me that collection on our allies will not continue, which I support," according to Feinstein. It was not immediately clear if this is an implicit admission that the White House actually did know about the NSA's spying on foreign leaders over the past decade, and lied about being unaware. Recall that Obama denied just this last night, but at this point the pit of lies is so deep, few actually care or are keeping track.

5 Years & 6000 Points: Can Janet Yellen Make It Different This Time?

The NYSE Composite is indicating some uncomfortable symmetry currently. As NewEdge's Brad Wishak notes, the index (which represents 61% of the market capitalization of globally listed companies) has risen about the same amount over the same period as in the run-up of the last debt-fueled bubble (only this time the valuations are notably richer). Will Janet Yellen make sure this time is different...? Or is the right question, 2007 USA or 2006 Zimbabwe?

Guest Post: Culture Of Ignorance - Part I

The kabuki theater that passes for governance in Washington D.C. reveals the profound level of ignorance shrouding this Empire of Debt in its prolonged death throes. Ignorance of facts; ignorance of math; ignorance of history; ignorance of reality; and ignorance of how ignorant we’ve become as a nation, have set us up for an epic fall. It’s almost as if we relish wallowing in our ignorance like a fat lazy sow in a mud hole. The lords of the manor are able to retain their power, control and huge ill-gotten riches because the government educated serfs are too ignorant to recognize the self-evident contradictions in the propaganda they are inundated with by state controlled media on a daily basis.

Ron Paul On Faux Fed Transparency: "Believe Me, The 'Big Stuff' Is Done In Secret"

As Rand Paul grows more vociferous with regard the Janet Yellen nomination, he and his father are once again pressing for more transparency into what really occurs at the Fed. While some argue that there has never been a more 'transparent' Fed as we are plagued with volumes of double-speak (projections and prognostications), Ron Paul explains in this brief clip that "the big stuff is done in secret," including international central bank bailouts. His hope, based on the fact that Janet Yellen is a self-described agent of transparency that "the time is ripe," to truly audit the Fed.

Did Apple's Cash Holdings Of $146.8 Billion Just Peak?

While the market is focused on AAPL's income statement, we decided to take a quick glance at its balance sheet, where we looked at - what else - its infamous cash hoard. Once the envy of every company in the universe, AAPL's cash and equivalents, while still very impressive at a record $146.8 billion, is potentially a reason of concern. Because while AAPL's Q4 $9.9 billion in cash from operations were certainly impressive as a result of the company's recent shareholder friendly overtures it has been burning cash at a far faster clip than in prior quarters and spent $7.8 billion in Q4 in dividends and share buybacks. So much so, that the amount by which its total cash holdings grew in the quarter was a tiny $140 million, a far cry from prior quarters when it generated billions in cash in any given quarter. So one wonders: was this the peak for the most fantastic cash balance growth in history?

Apple Beats Q4 Earnings But Guides Lower On Q1 Margin Sending Stock Lower

Moments ago, AAPL beat the top and bottom line as follows:

  • Q4 EPS of $8.26, Est. $7.92
  • Q4 Revenues of $37.5 billion, Est. $36.84
  • Q4 gross Margin: 37.0% vs Est. 36.9%

That was the good news: the bad is as follows:

  • IPad sales of 14.1 million missed estimates of 14.3 million
  • Q1 margin between 36.5-37.5%, below the street estimate of 37.74%, which is what according to some is pushing the stock lower after hours

Welcome to the commodity world: after all this is what AAPL wanted with the 5C right?

Last-Minute Buying Frenzy Sends S&P 500 To New All-Time Higherer High

Shitty data, worse earnings, worst volume, new highs. Among the lowest volume days in NYSE single-stocks, S&P futures trading, and VIX options saw stocks levitate back to overnight highs during the day only to slide lower to around unch by the close. Trannies have managed 11 up days in the last 13 and gained 10.3% - sure why not? S&P 500 hit new all-time highs but ended the day well off its highs. Gold hit 5-week highs but faded back to modest gains. The USD rallied early and faded to unch by the close. Treasuries rallied early on but faded into close +/1bp on the day... The pattern was the same across most assets but a very last minute 4.5 point rampapalooza closed the S&P at all-time highs.