So You Want To Work In JPMorgan's Legendary Gold Vault? This Is Your Chance
Submitted by Tyler Durden on 05/21/2013 - 20:51
For all those whose lifelong ambition has been to work with the recently reappointed joint Chairman/CEO of JPMorgan in the firm's legendary and infamous gold 'clearing' operation (whose formerly classified New York, the largest in the world, and London vault locations were exposed here and here), today is your lucky day...
- Comments: 59
- Reads: 17,785
"The Math Is Stacked Against Japan - It's Not 'If', It's When"
Submitted by Tyler Durden on 05/21/2013 - 19:40
As the BoJ prepares to thrill us with even moar in its latest policy meeting (or not as we discussed earlier) and with Amari et al. now jawboning JPY to some extent to control the out-of-control chaos in JGBs, it is perhaps worth taking 20 minutes to comprehend just what all this extreme policy action means. The following brief presentation covers it all in a Kyle-Bass-ian facts-and-fallacies manner, Christine Hughes sums it all up perfectly, for Japan, "The Math Is Stacked Against Japan - It's Not 'If', It's When."
- Comments: 76
- Reads: 26,863
Global Assured Destruction, Or How Bernanke Now Holds The Entire World Hostage
Submitted by Tyler Durden on 05/21/2013 - 18:49The one headline we have been waiting for for over four years has just hit:
- BOK KIM SAYS WORLD MAY FACE RATE RISK IF U.S. EXITS FROM QE
Not when, if. And there you have it: if the Fed exits, the world (and most certainly Japan) gets it. Thus, for the sake of the children (who will have inhert about $100 trillion in debt but don't worry: debt is an asset as some "analysts" will promise) Bernanke can never exit. QE...D
- Comments: 340
- Reads: 39,821
How To Arbitrage The People's Bank Of China
Submitted by Tyler Durden on 05/21/2013 - 18:39
Since there are now numerous hard proofs that China’s export data (and to some extent import data as well) were significantly distorted recently, we naturally wonder the incentives behind the distortion and the detailed mechanism of these manipulations. As BofAML notes, there are four reasons why the distortions have risen so sharply since Q4 2012 but the various arbitrages (described in actionable detail below) between onshore and offshore currencies and interest rate differentials (and the role of gold in this) remain in place to make judging China's real trade growth as much art as science.
- Comments: 17
- Reads: 8,389
Bank of Japan Policy Meeting Preview - Chance Of A Bond Crash?
Submitted by Tyler Durden on 05/21/2013 - 17:58
The current Bank of Japan policy meeting is possibly the most important thing going on this week (even more so than Bernanke's comments perhaps). If, as is distinctly possible, they don’t do anything to reinforce the immediacy of the Kuroda QQE package, we could be looking at bond markets reacting in a most "unfavorable manner". The effect would be to reinforce the latest round of 'fear-on' bond selling – certainly over the short-term, and the damaged sentiment could impact stocks also. In fact, there is probably not much the BoJ can say at this meeting – it’s got to give the policy (of massive QE) time to work. That leaves markets highly vulnerable to a sense of disappointment tomorrow. 'Back in the bond market, over the last few days the search for yield does seem capped. There have been some stumbles in new issues... That all tells me the bond market is nervous.'
- Comments: 25
- Reads: 8,131
IRS' Lois Lerner To Plead The Fifth Before House Oversight Committee
Submitted by Tyler Durden on 05/21/2013 - 17:32
For an affair that numerous media outlets will have you believe has been spun out of all proportion, and that it really is the conservatives fault that the IRS was targeting them, it is somewhat ironic that the IRS official who opened up the entire Pandora's box with her targeted apology two weeks ago, and who learned in 2011 about the improper targeting of political groups yet lied under oath to Congress to the contrary, has decided to plead the Fifth and will invoke her right not to testify on Wednesday for fear of self-incrimination, according to her lawyer. But this would mean that... she may have something to hide? And that would be rather problematic for the media's spin cycle, although we are confident it will take just a few minutes of deep though in the proper channels, before this all too overt admission of guilt is somehow spun as the IRS being the unwitting targets of an aggressive McCarthyesque campaign seeking to discredit the government's impartial tax collector whose only noble purpose is to enable the government to get even bigger.
- Comments: 250
- Reads: 15,980
The Housing Unrecovery Is Here: Lumber Enters Bear Market
Submitted by Tyler Durden on 05/21/2013 - 17:08
Despite the incessant belief that this must be too-much-new-supply-driven (as opposed to a lack of demand for new home construction), Lumber futures (after hitting limit down once again today) have now officially entered bear-market territory. Front-month lumber prices are down 23% from their highs in mid-March and given the 2-month lead that correlates so well to the market, it seems things are a little ahead of themselves in 'housing recovery' land.
- Comments: 83
- Reads: 17,920
And The New US Debt Ceiling Is...
Submitted by Tyler Durden on 05/21/2013 - 16:38The grace period between February and mid-May, when the US spent like a drunken sailor without regard for even structural limitations, and raked up over $300 billion in debt, or said otherwise when it was without an official debt limit, is over as of this weekend as we reported, and starting Monday the clock has been reset and wound up to the amount of the debt previously incurred in the phantom period. Courtesy of today's Daily Treasury Statement we now know that the new and improved debt target ceiling, at which the US immediately finds itself is: $16,699,421,095,673.60.
- Comments: 93
- Reads: 10,763
19 Out Of 19
Submitted by Tyler Durden on 05/21/2013 - 16:05
The Dow completes its 19th week in a row with a green close on a Tuesday - there are no superlatives left. As a gentle reminder, since February 1st, the Dow has gained 9.85%; absent Tuesdays it is up a mere 0.5%. Despite equity strength, bonds rallied, VIX rallied, the USD ranged violently (Fed's Bullard and Dudley) to end unchanged, and commodities drifted lower on another dismally low volume day. Correlations between stocks and the rest of risk-assets have completely broken down today.
- Comments: 70
- Reads: 8,263
"The Approximate Present Does Not Approximately Determine The Future"
Submitted by Tyler Durden on 05/21/2013 - 15:29
Chaos Theory turns 50 years old this year, celebrating half a century of flapping butterfly wings in Brazil creating tornadoes in Texas. That most famous example is especially appropriate, since it was a meteorologist named Edward Lorenz who first outlined why seemingly consistent and knowable systems can still go wildly wrong. As it turns out, as ConvergEx's Nick Colas reminds us, small errors in measurement or observation at the start of a time series can significantly change how things look at the end. In the current low volatility, one-variable central bank driven global equity markets, Chaos Theory may seem a quaint relic of past crises. However, its central lesson – that complex interrelated systems create unexpected outcomes from seemingly benign inputs – is still relevant. Students of economics like to think of their discipline as scientific, just like physics or other hard sciences. They would do well to embrace the intellectual honesty neatly encapsulated by the central lessons of Chaos Theory. The problem is that current market price action - that slow steady grind higher - indicates marginal buyers don’t fret very much about the future. No matter how little we really know about it.
- Comments: 88
- Reads: 9,183
Chart Of The Day: S&P 500 vs EBITDA
Submitted by Tyler Durden on 05/21/2013 - 14:58
We thought most readers would be rather surprised to learn what the result of a simple Bloomberg query comparing S&P EBITDA per share (BBG mnemonic TRAIL_12M_EBITDA_PER_SHARE) to the S&P looks like. For one: not only is corporate LTM EBITDA per share not at all time highs (it is well off the record levels seen in 2008), but it is at levels last seen in January 2007. But perhaps most surprising is what happens when on juxtaposes the S&P500's EBITDA level relative to the actual S&P. The stunning result is charted below:
- Comments: 55
- Reads: 18,967
Goldman Confirms 'Recovery' Hopes Have Gone As 'Slowdown' Deepens
Submitted by Tyler Durden on 05/21/2013 - 14:34
With US Macro no longer the clean dirty shirt, the 'hope' of a recovery from the Spring swoon has faded rather quickly according to Goldman's latest Global Leading Indicator (though obviously not David Kostin). The modest April pick up - driven mainly by sentiment indicators as opposed to hard data - has faded as the reality of economic deterioration was more pronounced as both the Philadelphia Fed headline and the New Orders less Inventories components (the advanced proxies for Goldman's Global PMI aggregate) fell to the lowest level in more than six months. The S&P GSCI Industrial Metals Index also made new lows and fell for the third month in a row. The CAD and AUD TWI Aggregates weakened, driven primarily by a weaker AUD, and US Initial Claims also worsened from last month. But apart from that... as Goldman notes, the decline in momentum was a bit more substantial in May than many had expected.
- Comments: 42
- Reads: 13,248
Tuesday Humor: The Story So Far
Submitted by Tyler Durden on 05/21/2013 - 14:02
Presented with no comment...
- Comments: 215
- Reads: 42,711
Farage Bashes Tax-Advantaged Hypocritical European Politicians
Submitted by Tyler Durden on 05/21/2013 - 13:33
With Tim Cook being fried on Capitol Hill, it is perhaps ironic that the issue of taxes is front-and-center in the European parliament today. However, as usual, the always-willing-to-tell-the-truth Nigel Farage points out the gross hypocrisy of a political elite calling for higher taxes (on the wealthy and more broadly in peripheral nations) when the reality is that the higher-ups in the European parliament have their marginal tax rates capped at 12%. Of course, none of that matters because stocks are rising and interest rates are falling; but perhaps the 60% of Greek youth or 57% of Spanish youth, as we discussed here, might be intrigued at the new normal idea of 'fair share' in Europe.
- Comments: 101
- Reads: 20,485
Dudley Terrified By "Over-Reaction" To QE End, Says Fed Could Do "More Or Less" QE
Submitted by Tyler Durden on 05/21/2013 - 13:12Up until today, the narrative was one trying to explain how a soaring dollar was bullish for stocks. Until moments ago, when Bill Dudley spoke and managed to send not only the dollar lower, but the Dow Jones to a new high of 15,400 with the following soundbites.
- DUDLEY: FED MAY NEED TO RETHINK BALANCE SHEET PATH, COMPOSITION
- DUDLEY SAYS FISCAL DRAG TO U.S. ECONOMY IS `SIGNIFICANT'
- DUDLEY: FED MAY AVOID SELLING MBS IN EARLY STAGE OF EXIT
- DUDLEY: IMPORTANT TO SEE HOW WELL ECONOMY WEATHERS FISCAL DRAG
- DUDLEY SAYS HE CAN'T BE SURE IF NEXT QE MOVE WILL BE UP OR DOWN
And the punchline:
- DUDLEY SEES RISK INVESTORS COULD OVER-REACT TO 'NORMALIZATION'
Translated: the Fed will never do anything that could send stocks lower - like end QE - ever again, but for those confused here is a simpler translation: Moar.
- Comments: 148
- Reads: 10,516
