Which EU Economies Are Growing?
Submitted by Tyler Durden on 05/17/2013 - 11:30
As Europe ends another week comfortably in the green (near all-time highs) - the short answer - not many...as the region's longest recession in history rolls on...
- Comments: 85
- Reads: 22,991
Charting Irrational Credit Bubble Exuberance Euphoria
Submitted by Tyler Durden on 05/17/2013 - 10:57
If there is one market that represents the sheer unbridled lack of respect for risk it is the Greek Government bond market. In the last year, GGB prices have surged 380% from under EUR 14 to almost EUR 67% of par today! That is a plunge in yields from over 29% in May 2012 to a mere 8% currently (US Treasuries yielded 8% in 1994)... The driver for all this exuberance? Every major macro data point for Greece has worsened from a year ago - from unemployment to GDP growth... behond the 'wretch'-for-yield. Or perhaps we are overthinking it: it appears that Greek bond prices are merely matching Greek youth unemployment almost tick for tick: expect GGBs to hit par when every single Greek between the ages of 16 and 25 is out of a job.
- Comments: 33
- Reads: 9,756
Goldman Issues Q&A On Tapering: Says "Not Yet"
Submitted by Tyler Durden on 05/17/2013 - 10:32On one hand we have bad Hilsenrath sending mixed messages saying the Fed may taper sooner (with good Hilsenrath chiming in days later, adding it may be later after all), depending on whether HY bonds hit 4% YTM by EOD or mid next week at the latest. On the other, even resolute Fed doves are whispering that a tapering may occur as soon the summer, so in a few months, and halt QE by year end. Bottom line - confusion. So who better to arbitrate than the firm that runs it all, Goldman Sachs, and its chief economist Jan Hatzius, who issues the following Q&A on "tapering." His view: "not yet." Then again, Goldman is the consummate (ab)user of dodecatuple reverse psychology, so if Goldman says "all clear" the natural response should be just as clear.
- Comments: 46
- Reads: 7,160
Michigan Confidence Soars To Highest Since 2007, Biggest Beat Of Expectations On Record
Submitted by Tyler Durden on 05/17/2013 - 10:09
In a day devoid of any A-grade economic data, the stop hunting GETCO USDJPY algos had no choice but to look forward to such reflexive C-grade indicators as the UMich Consumer Confidence index, where the polled "consumers" are confident if the market is up and the market is up if "consumers" are confident. Sure enough, the USDJPY literally exploded by over 50 pips and broke the 103 level (send the Yen derivative, the S&P500 spiking) when moments ago the UMich index posted a hilarious reading of 83.7, the highest since August 2007, up from 76.4, and smashing expectations of 77.9 by the most in... ever. Whether this was driven by a near record low in consumer savings, by the collapse in real wages, by the deteriorating Q1 retail results such as WalMart's showing consumers are out of cash, or if all this was irrelevant as everyone on the UMichigan rolodex was long Tesla is unknown. It just is what it is because in a world in which collapsing economic data leads to a record high "market", one buys first, buys second, then BTFD if there is D, and only then are questions asked.
- Comments: 105
- Reads: 10,095
Chinese Profitability Squeezed Further By Third Year Of Double-Digit Wage Gains
Submitted by Tyler Durden on 05/17/2013 - 09:44
For the third year in a row (since the crisis) average pay at private companies in China surge by greater than double digits - far outstripping GDP growth. 2012 saw a 17.1% nominal rise in average wages for private companies to Yuan 28,752 per annum (still 9% after inflation) but dispersion remains high with "significant gap among regions, industries and specific jobs in some sectors." The continued rise in wages, as the Wall Street Journal notes, is likely to put further pressure on an already pinched manufacturing and construction sector (which accounts for over 41% of all Chinese employment) especially in low-end and labor-intensive positions. With slowing growth (demand) and rising costs (labor, energy), the profitability of Chinese companies is increasingly tenuous and only hindered by potential actions of the central bank.
- Comments: 15
- Reads: 3,987
IRS Witch-Hunt Congressional Hearing Begins - Live Webcast
Submitted by Tyler Durden on 05/17/2013 - 09:08
While unlikley to have the kind of fireworks of Holder and Issa, we suspect President Obama will be biting his nails a little at the inability to control the questions asked here as IRS ex-top-man Steve Miller faces an entirely "bipartisan" questioning into the IRS witchhunts of select political groups.
- Comments: 299
- Reads: 15,700
The Ugly Truth Behind Spain's First Trade Surplus In Over 40 Years
Submitted by Tyler Durden on 05/17/2013 - 09:04
Earlier today, Spain reported its first trade surplus since 1971, with exports of €20.3 billion finally surpassing imports of €19.7 billion and ending over four decades of constant trade deficits. That was the good news. The bad news is how this number came about. Because while the country will mark a GDP benefit as a result of the net trade number, the reality is that it was not due to a jump in exports, which rose by a lethargic €400MM Y/Y - hardly the stuff to write home about as can be seen on the chart below. It is the second chart, however, that tells the true story of Spain's economy: that of imports, which in a stable or growing economy would be, well, stable or growing. Instead, Spanish imports collapsed by €3.5 billion Y/Y: the biggest such downside annual drop since the start of the depression in 2008. Which begs the question: is the Spanish economy, after modestly growing in 2010 and 2010, set for the same spectacular collapse last seen in the days just following the start of the Great Financial Crisis? And what does this mean for the biggest risk factor for a nation whose banking sector has already been bailed out once, and where NPLs are slowly but surely soaring behind the scenes?
- Comments: 35
- Reads: 9,892
US Dollar Surges To Near 3-Year High
Submitted by Tyler Durden on 05/17/2013 - 08:44
Moments ago the USD value basket - the DXY - rose to highs not seen since July 2010. The recent 6.6% swing is at an annualized 25% rate of appreciation. The dollar appears to have now become the flight-to-safety currency, which historically has been associated with plunging risk values. However, now that the dollar strength is simply a function of other central banks perceived as diluting their currencies more, and injecting capital flows into the G-0 system, all of which is expected to sooner or later make its way to US stocks, this is paradoxically, now a risk on factor. For US companies that have to export into such an environment, this may not be quite risk on, but that is something one can roundly ignore for now.
- Comments: 139
- Reads: 11,911
Venezuela Runs Out Of Toilet Paper
Submitted by Tyler Durden on 05/17/2013 - 08:00
To vaguely paraphrase Mike Tyson, "everyone has a plan for a socialist utopia, until they run out of toilet paper." This is just what happened to Venezuela, where in the image vacuum left following the death of leader Hugo Chavez, things are rapidly falling apart for the oil-rich country.
- Comments: 136
- Reads: 21,466
Frontrunning: May 17
Submitted by Tyler Durden on 05/17/2013 - 07:31- Mine union threatens to bring South Africa to 'standstill' (Reuters)
- Russia Raises Stakes in Syria (WSJ) - as reported here yesterday
- Japan buys into US shale gas boom (FT)
- Bill Gates Retakes World’s Richest Title From Carlos Slim (BBG) - so he can afford a Tesla now?
- China Wages Rose Sharply in 2012 (WSJ)
- Regulators Target Exchanges As They Ready Record Fine (WSJ)
- Citi Takes Some Traders Off Bloomberg Chat Tool (WSJ)
- After Google, Amazon to be grilled on UK tax presence (Reuters)
- Apple CEO Cook to Propose Tax Reform for Offshore Cash (BBG)
- French, German politicians to pressure Google on tax (Reuters)
- Gold Bears Revived as Rout Resumes After Coin Rush (BBG)
- A stretched Samsung chases rival Apple's suppliers (Reuters)
- Comments: 7
- Reads: 2,630
Dull Overnight Session Set To Become Even Duller Day Session
Submitted by Tyler Durden on 05/17/2013 - 07:01Those hoping for a slew of negative news to push stocks much higher today will be disappointed in this largely catalyst-free day. So far today we have gotten only the ECB's weekly 3y LTRO announcement whereby seven banks will repay a total of €1.1 billion from both LTRO issues, as repayments slow to a trickle because the last thing the ECB, which was rumored to be inquiring banks if they can handle negative deposit rates earlier in the session, needs is even more balance sheet contraction. The biggest economic European economic data point was the EU construction output which contracted for a fifth consecutive month, dropping -1.7% compared to -0.3% previously, and tumbled 7.9% from a year before. Elsewhere, Spain announced trade data for March, which printed at yet another surplus of €0.63 billion, prompted not so much by soaring exports which rose a tiny 2% from a year ago to €20.3 billion but due to a collapse in imports of 15% to €19.7 billion - a further sign that the Spanish economy is truly contracting even if the ultimate accounting entry will be GDP positive. More importantly for Spain, the country reported a March bad loan ratio - which has been persistently underreproted - at 10.5% up from 10.4% in February. We will have more to say on why this is the latest and greatest ticking timebomb for the Eurozone shortly.
- Comments: 26
- Reads: 3,170
The View From The Highest Point In The Western Hemisphere
Submitted by Tyler Durden on 05/16/2013 - 22:29
For those vertiginously challenged, look away; for everyone else, the fastest trip up the new World Trade Center... (or is this what it feels like to be the Nikkei?)
- Comments: 172
- Reads: 36,001
Guest Post: The Trick To Suppressing Revolution: Keeping Debt/Tax Serfdom Bearable
Submitted by Tyler Durden on 05/16/2013 - 21:49
Parasites must balance their drive to maximize what they extract from their host with the risk of losing everything by killing their host. This is the dilemma of the parasitic partnership of the central state and financial Elites everywhere: to extract the maximum possible in debt payments and taxes without sparking rebellion and revolution. The 30 million whose labor funds the parasitic status quo don't have to rebel; they simply have to stop going to work, stop starting enterprises, stop being productive. They just have to tire of being the host, tire of being debt-serfs, tire of being tax donkeys. The trick to suppressing revolution is to keep debt-tax serfdom bearable. The parasitic Elites are keeping the host going, but at a high cost in resiliency. Let's see how long the host lasts once a crisis hits.
- Comments: 223
- Reads: 24,188
Austrian "Good" Banks Balk At Bad-Bank Bailout
Submitted by Tyler Durden on 05/16/2013 - 21:18
Since 2009, when Hypo Alpe Adria was 'nationalized', the Austrian government has dumped more than EUR2 billion into the troubled bank. It remains on life-support but this time the government-proposed 'aid' being offered is running into a wall. The rest of Austria's banks (as creditors as well as forced levy-payers from other bailouts) dismiss the government's plan for a "bad-bank" model a la Ireland adding that they "will not allow themselves to be put under pressure by politicians." Reuters notes that the 'bad-bank' plan is up against a deadline at the end of May from the European Commission, and among others Unicredit Austria is clear on its role, "decidedly rule out a commitment on our part." The increasing tension between Vienna and Brussels is evident as a quick sale of the bank will lead to a EUR5-6 billion loss for taxpayers (hurting the government's budget plans) but it seems the rest of Austria's banks are unwilling to throw more good money after bad, "if we go this way, some persuasion will be needed". Is it time for more non-templates?
- Comments: 15
- Reads: 6,433
10 Perspectives Into The Slow, Agonizing Death Of The American Worker
Submitted by Tyler Durden on 05/16/2013 - 20:38
The middle class American worker is in danger of becoming an endangered species. The politicians are not telling you the truth, and the mainstream media is certainly not telling you the truth, but the reality is that there is nothing but bad news on the horizon for workers in the United States. The American people inherited the greatest economic machine in the history of the world, and we have wrecked it. Decades of very foolish decisions have resulted in the period of steady economic decline that we are experiencing now. Today, American workers are living in an economy that is rapidly declining, and their jobs are steadily being stolen by robots, computers and foreign workers that live in countries where it is legal to pay slave labor wages. Politicians from both political parties refuse to do anything to stop the bleeding because they think that the status quo is working just great. So don't expect things to get better any time soon. The following are 10 charts that demonstrate the slow, agonizing death of the American worker...
- Comments: 154
- Reads: 27,830
