Apple's Tim Cook Defends The Firm's Tax Policy Before The House - Webcast

Yesterday we opined on the deteriorating situation surrounding the much anticipated government scramble to collect perfectly legal offshored capital, initially focusing on Apple (which having now entered the focus of the US government will be nothing but an "negative externality" free utility going forward or as long as Uncle Sam wishes it to be) but soon to turn to virtually every other multinational corporation with a hugh cash hoard and a low effective US tax rate. Today, it is Tim Cook's turn to explain why the firm is merely following clearly laid out rules and tax regulations as encoded by none other than the same people who are bringing you today's particular episode of "distract them with witchhunts."

Bill Gross On The Alpha And The Beta

We are now used to the daily dispensation of deep twitsight by Pimco's head. Today's installment does not disappoint: in under 140 characters, the bond kind breaks down the now thoroughly dis-proven Efficient Market Hypothesis for the "new normal" in which both alpha and beta are purely functions of virtual central bank printers. However, his view on what happens when said virtual ink runs out (or rather if) is well-known by all at this point. The only question is when.

Gross:Alpha is gr8ly a function of beta &the levered structurs that domin8 credit mkts. No beta? Skinnier alpha ahed 4 unsuspecting investrs

— PIMCO (@PIMCO) May 21, 2013

IRS Hearings II: The Steve Miller Band Plays On - Live Stream

He's back to reprise his role as stoic 'I know nuffin' scapegoat. Former IRS boss Steve Miller faces a second round of truth-seeking, grand-standing, and extended questioning at today's Senate hearing on the IRS debacle. Scheduled to start at 10ET, Miller will be joined by Russell George (the IRS IG - full report here) and former IRS commissioner Doug Shulman. Grab the popcorn...

South African Strike Season Is Back As Ten Workers Are Shot By Rubber Bullets

Reuters reports that following news that the South African gold mining union demands a wage hike up to 60%, "ten striking South African miners were taken to hospital on Tuesday after being hit by rubber bullets, police said, as labor strife swells in mines and factories ahead of mid-year pay negotiations."

Forecasting Today's Closing Print

Goldman Goes Uberhyper-Bullish, Hikes S&P500 Target To 1750 By Year End, Sees 2100 By 2015

"Our positive 2013 outlook for S&P 500 has played out much faster than we expected." That is how the latest equity update from Goldman Sachs, which until today had an S&P target of 1625 for the year end S&P, begins. And, logically, the only option for Goldman is to hike its outlook even more, because not even the Squid apparently could anticipate how quickly the policy it forced down the throats of central banks around the world, levitated markets to surpass its old price targets. The result is David Kostin (who until December had foreseen 1250 on the S&P for the end of 2012) and company were forced to goalseek even higher targets based on tried and true excel model fudging exercises, and such "value" creation as multiple expansion and dividend payments. To wit: "Our earnings estimates remain unchanged but we raise our dividend estimates and index return forecasts for 2013 through 2015. We expect S&P 500 will rise by 5% to 1750 by year-end 2013, advance by 9% to 1900 in 2014, and climb by 10% to 2100 in 2015. Our 2013 return implies a year-end P/E of 15.0x, a one multiple point premium to our fair-value estimate. We forecast dividends will rise by 30% during next two years. Dividend yield is likely to stay around 2%, in line with the 20-year average." For the record, Goldman had previously seen 1,900 in 2015. And now it sees another 200 points of value due to the magic of multiple expansion. That anyone can even pretend to forecast what happens three years into the future at a time when the central banks are injecting $160 billion (and soon $200 billion), and most likely will have to slowdown and halt such liquidity injection resulting in untold stock market carnage, is so beyond commentary we will leave it hanging for the ridiculous statement it is.

It's Tuesday: Will It Be 19 Out Of 19?

Another event-free day in which the only major economic data point was the release of UK CPI, which joined the rest of the world in telegraphing price deflation, despite bubbles in the real estate and stock markets, printing 2.0% Y/Y on expectations of a 2.3% increase, the lowest since November 2009 and giving Mark Carney carte blanche to print as soon as he arrives on deck. In an amusing twist of European deja-vuness, last night Japan's economy minister who made waves over the weekend when he said that the Yen has dropped low enough to where people's lives may be getting complicated (i.e., inflation), refuted everything he said as having been lost in translation, and the result was a prompt move higher in the USDJPY, quickly filling the entire Sunday night gap. That said, and as has been made very clear in recent years, data is irrelevant, and the only thing that matters, at least so far in 2013, is whether it is Tuesday: the day that has seen 18 out of 18 consecutive rises in the DJIA so far in 2013, and whether there is a POMO scheduled. We are happy to answer yes to both, so sit back, and wait for the no-volume levitation to wash over ever. The US docket is empty except for Dudley and Bullard speaking, but more importantly, the fate of Jamie Dimon may be determined today when the vote on the Chairman/CEO title is due, while Tim Cook will testify in D.C. on the company's tax strategy and overseas profits.