The fairy dust peddlers who moonlight as Wall Street economists were out in force yesterday after March retail sales came in with a positive m/m change for the first time since November. This purportedly confirms that we’re back on track for a big rebound in Q2. In any event, what happens next is not too hard to figure. Unless you are a Wall Street economist.
Exactly one month ago we wrote that "Japan Ties China As America's Largest Creditor" when, according to Treasury International Capital in the month of January, China sold just over $5 billion in Treasurys while Japan bought $8 billion in US paper. Fast forward to today when we are pleased to announce that, as expected, the trend has continued and for the first time since the great financial crisis, Japan is once again America's largest foreign credito.
Sandisk is down around 5% after-hours after drastically lowering expectations (sees $5.4bn FY Revs vs Prev Est. $6.1bn). As a result, the CEO just announced that SANDISK LOWERING NON-FACTORY HEADCOUNT BY 5% IN Q2. It did not take long to discover why they felt the need to do that as the Sandisk CEO shunned Larry Fink and unveiled an ADDITIONAL $750M IN BUYBACKS THIS YR. So to the 5% of employees about to get laid off - Thank you for your service and thank you more for the wealth you are creating for 'others'.
Because when the macroeconomic backdrop is as bad as it's ever been... there's only one thing for it - panic-buy equities...
It was bound to happen sooner or later: moments ago Mario Draghi was attacked by what appears to be a female (non-Greek) protester screaming "End ECB Dick-tatorship" while delivering his prepared remarks.
Yesterday we were told about Hillary's "Everyday Americans" and exposed the ugly reality of just who stands behind her. Today she meets with some "Everyday Iowans" but as you will read... the attendees were carefully selected and students were locked inside classrooms to avoid any embarrassing questions being asked... We wonder if Wall Street employees are locked in their offices when she visits the executives suites. Somehow, I doubt it.
Just days after Russia lifted sanctions on providing anti-aircraft missiles to Iran, Reuters reports that The Greeks are in talks with Russia to purchase missiles for the S-300 defense system. Greece, a NATO member, has been in possession of the advanced Russian-made systems since the late 1990s and in a defiant show of independence towards Troika, is now negotiating with Russia for the purchase of additional missiles and for their maintenance.
The Asian Infrastructure Investment Bank will establish an AIIB currency basket with China set to push for the yuan to take a prominent role and for “special currency funds” to be established in order to issue yuan-denominated loans through the fund. "The AIIB's grand vision for infrastructure investment [comes] with challenges but China should do its best to establish the yuan as a currency for settlement and denomination," one analyst says.
NFLX Goes Full Amazon: Burns Record Amount Of Cash But Stock Surges On Jump In International SubscribersSubmitted by Tyler Durden on 04/15/2015 - 16:24
The Amazon model of burning countless amounts of cash in hopes of one day reaching profitability has fully arrived at Netflix.
SEC Reaches "Appropriate" Settlement With Freddie Mac Execs Who Will Pay Nothing And Receive No PunishmentSubmitted by Tyler Durden on 04/15/2015 - 15:25
Three former Freddie Mac executives who understated the amount of subprime exposure on the GSE's book by a factor of 28 came to terms with the SEC today on a settlement which imposes fees no one has to pay and "limitations on future behavior" that "will not limit [anyone] in any practical way."
"We could now be at a crossroads," warns Deutsche Bank in its annual default study report. As the 'artificial bond market' is exposed and yield curves flatten on Fed rate hikes so carry risk-reward is reduced and default cycles have often been linked to the ebbing and flowing of the YC through time with a fairly long lead/lag. With HY defaults having spent 12 of the last 13 years below their long-term average (with the last 5 years the lowest in modern history), "a perfect default storm could be created for 2018 if the Fed raises rates in 2015."
This will make every American feel much better about handing over that check today... as Simon Black notes today "I believe we have an obligation to starve the beast..."
There were the usual trite, forgettable highlights in the just released beige snow book, which as summarized by Bloomberg, had the following highlights:
FED: ECONOMY EXPANDED IN MOST REGIONS MID-FEB. TO END-MARCH; HIGHER RETAIL SALES REPORTED BY MAJORITY OF REGIONAL FED BANKS; BEIGE BOOK: LABOR MARKETS STABLE OR SHOWED MODEST IMPROVEMENT; REGIONAL FEDS NOTED MODEST UPWARD WAGE AND PRICE PRESSURE;
One can ignore all of the above, because the only word that matters in the latest beige book was one: "Weather"