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"Crude Cheap, Gold Fair, Stocks Rich"

Gold, crude oil and U.S. equities are dollar denominated, are notional inflation hedges, and have reliable long term price records. Two anomalies pop out in the relative value across this threesome...



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NY Fed's "Plunge Protection Team" Starts Chicago Trading Floor "In Case Of Disaster Or Other Eventuality"

We have known for quite some time now that the NY Fed's market group, aka the Plunge Protection Team, is opening a second office in HFT-capital Chicago. What was not known is what is the official reasoning behind the Fed's move to be even closer to its Citadel executions arm. Overnight, courtesy of Reuters we found that the "The New York branch of the U.S. Federal Reserve, wary that a natural disaster or other eventuality could shut down its market operations as it approaches an interest rate hike, has added staff and bulked up its satellite office in Chicago."



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WTI Spikes Above $55 After Crude Inventories Rise At Slowest Pace In 14 Weeks

For the 14th week in a row, US crude inventories rose; but against expectations of a 3.5mm build (and weak API overnight), DOE printed a mere 1.294mm bbl build - the lowest since the build streak began on the first week of January. Crude prices are spiking on the news (though we note last week saw the biggest build in 30 years with the 2 week average above trend). Total crude inventrory continues to make new record highs (and pressure Cushing capacity).



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Homebuilder Confidence In April Jumps Most Since July

It appears the homebuilders have got over the weather issues as NAHB optimism surged to 56 - beating expectations of 55. However this surge merely brings NAHB confidence back to its average stagnant levels of the last 2 years. Only Midswest saw confidence drop as homebuilders hope soared with future buyers at the highest since Dec 2014. Let's just hope sales follow through or the weather excuse is going to get old...



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"Staggering" Student Loan Defaults On Deck: 27% Of Students Are A Month Behind On Their Payments

A new St. Louis Fed study finds that the delinquency rate for student borrowers in repayment is 27.3%, meaning nearly one in three of the Americans laboring under a debt load that has now swelled to $1.3 trillion are more than a month behind on their payments. Ackman says there's "no way they are going to pay it back." We can hear the "cancel the debt" cries now. 



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The Changing World of Work 3: "Full-Stack" Skills

 

Opportunity, liberty and risk are not divisible. We either grasp the nettle of creating value or we devolve to wistful pining for what is irrevocably in the past


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US Industrial Production Plunges By Most Since Aug 2012, Utility Output Drops Most In 9 Years

Mortgage Apps tumble, Empire Fed slumps, and now Industrial Production plunges... Against expectations of a 0.3% drop MoM, US Factory Output was twice as bad at -0.6% - the worst since August 2012 (and lamost worst since June 2009). This is the 4th miss in a row. What is even more stunning is that despite the coldest of cold winters that crashed the US economy, Utilities saw their output crash 5.9% - the most in 9 years (explained as follows - largely reversing a similarly-sized increase in February, which was related to unseasonably cold temperatures). Motor Vehicles saved the data from being a catastrophe with a 3.2% rise (following a 3.6% drop In Feb).



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Weakest Chinese Economy In 6 Years Sends WTI Crude Surging To Highest Since Dec 2014

So the Chinese economy is weakest in 6 years, there is a record inventory, near-record production, and record drop in rig count... and now WTI Crude has surged to its highest since Dec 2014 (running stops above last week's highs).



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German FinMin Schaeuble Sees "No Contagion" From Grexit, Don't Show Him This Chart

Because all that matters is what some elite says, we are sure the following propaganda from German FinMin Schaeuble will be regurgitated by the mainstream media:

*SCHAEUBLE SAYS "YOU CAN’T SEE ANY CONTAGION"

However, if one actually looks at the data - European peripheral bond risk premia have soared in the last week as Grexit fears resurge.



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April Empire Fed Manufacturing Plunges, New Orders Crash To Jan 2013 Lows

But it's April... the weather-bounce is supposed to be here. Empire Fed Manufacturing tumbled to -1.2 in April (missing expectations of a post-weather-bounce to 7.17) from 6.9 in March. Across the board the report was painful as Prices Paid surged, employment plunged, and work hours tumbled. Hope rermains as the business outlook improved (but even there capex and new orders were weak) New Orders stood out as it crashed to its lowest since Jan 2013. It appears there is more afoot than just weather...



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Mario Draghi's "Q€ Is Working But We Need Moar" ECB Press Conference - Live Feed

Having been unleashed for just a few weeks now, German bond yields have collapsed since Q€ began and peripheral bond risk premia have risen dramatically... but still - economic data has coincidentally improved (despite tumbling earnings expectations still) and so we are sure Mario will take a moment to reflect on the success (stocks up, yields down, Macro up) as being due to his hard work... but do not fear, there is no taper coming soon. And as far as that whole shortage thing, we are sure he will calm market fears by explaining The ECB is working on a solution...



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Greek Bonds Tumble, Yield Highest In 2 Years On Report Germany Prepares For Greek Default

Berlin is drawing up contingency plans as Germany prepares for an increasingly likely Greek default, Zeit reports. The new plan purportedly is designed to prop up the Greek banking sector in the event Athens misses a payment, but it's contingent upon the Syriza government acting less "taxi-driver-ish" at the reform negotiating table. In the event Greece will not cooperate, Germany is prepared to let them go but Brussels will help "facilitate" the transition to the drachma (that currency Goldman recently said the country "can't just print"). 



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ECB Preview: Draghi To Address Bond Scarcity, Stress Full PSPP Implementation

"Mr Draghi during the press conference to stress the need for the full implementation of the expanded asset purchase programme as an important condition for the positive growth and inflation outlook to materalise," Goldman says, previewing the Draghi presser where the ECB chief will likely get more than a few questions about the possibility that the central bank will run out of bonds to purchase in the course of monetizing the entirety of euro net issuance.



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Bank of America Revenue Drops, Misses Due To Declining Trading Revenues, Loan Creation And Net Interest Margin

One look at BofA's earnings report shows why contrary to popular opinion, the bank that bailed out insolvent Merrill Lynch is far better off to be pnealized with tens of billions in legal fees than running its business unbothered by the racketeering government. The reason: a year after BofA reported $6 billion in litigation charges, moments ago Bank of America announced only $0.4 billion in legal fees, which meant it barely had any credible addbacks. So when looking at its numbers on a realistic, GAAP basis, BofA once again missed EPS, with the bottom line printing at $0.27, or below the $0.29 estimate.



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ECB Keeps Rates Unchanged As Expected

Nobody was expecting any actual rate change announcements by the ECB today, and none were made, with the ECB announcing moments ago that it kept all three rates unchanged, with depositors still expected to pony up %0.20 to keep their funds at a financial institution, while those who take out a mortgage can expect the bank to pay them a likewise amount.



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