Archive - Nov 22, 2013

OK all you Zero Hedge Tin Cats, it's November 22, 2013!

Just out from Reuters:

• EURO ZONE COUNTRIES CONSIDERING CHEAP LOANS AS INCENTIVE FOR GOVERNMENTS TO ENACT ECON REFORMS-DOCUMENT
• TO QUALIFY, COUNTRIES WOULD HAVE TO DRAW UP LEGALLY BINDING PLAN FOR REFORM APPROVED BY MEMBER STATES-DOC
• LOANS WOULD NOT BE LINKED TO COST OF REFORM BUT MEANT AS GENERAL SUPPORT FOR THE ECONOMY-DOCUMENT
• LOANS FOR REFORMS WOULD NOT BE AVAILABLE TO COUNTRIES RUNNING EXCESSIVE MACROECONOMIC IMBALANCES OR UNDER BAILOUT-DOC

In other words, "encourage" debt-cutting reforms by dangling the carrot of even more debt. But the punchline:

• NO FIRM PLAN YET HOW TO FINANCE THE LOANS, WHICH COULD BECOME THE NUCLEUS OF A EURO ZONE BUDGET-DOC

Oops.

"Bubbles are breaking out everywhere," exclaims outspoken former-insider David Stockman in this brief FoxTV clip, warning that "its like 2007/2008 all over again." Of course, we have heard 'bubble' talk before but Stockman steps methodically from the broad market (exposing the incredible numbers behind the Russell 2000) to junk bonds (and the record-breaking issuance and risk ignorance) and Fannie Mae (as an example of the idiocy). Crucially, Stockman explains to Neilo Cavuto who tempers the bubble-talk with aggregate measures, "bubbles don't form at the heart of the Dow, they form on the speculative periphery of the economy and work their way in," - something that is very evident in today's market.

In the aftermath of the devastating, vicious, tax-deductible DOJ settlement with JPMorgan, its stock may have responded by soaring to new all time highs (unclear if it was JPM's prop desk - in violation of the Volcker and every other rule - doing most of the buying) but that doesn't mean the benefits go out equally to all. According to Reuters, while JPM's shareholders will reap the benefits of yet another year in which Jamie Dimon uses nearly $600 billion in excess reserves, aka excess deposits, to ramp product risk around the globe and corner assorted markets (until various unknown teapot tempests blow up in his face), JPM's employees - unable to manipulate every market as much as they want to, and as much as they have in the past now that every action by JPM is scrutizined - will be stuck with total all in compensation that is unchanged from last year. Oh the humanity.

Want to spend your #bitcoins? How about a ticket to space! Will discuss today live on @SquawkCNBC @virgingalactic

— Richard Branson (@richardbranson) November 22, 2013

Many have wondered why one of the greatest boxers of our generation, Philippines' Manny Pacquiao, has not retired gracefully into hero-dom following his loss to Marquez late last year. For a fighter - it could be pride, ego, or, sadly, lack of funds. In Pacquiao's case it is none of the above, we suspect as a politician, the diminutive boxer has realized the wealth effect-creating impact of his victories of the nation - which at no other time in history needs something positive to reflect on. While in the US, investors have POMO to almost guarantee an up-day in stocks, in the Philippines, stocks rise 73% of the time after a Pacquiao win (compared to 52% average) and rise a stunning 0.5% (against a 0.04% average). Pacquiao is 6-1 on to win against Brandon "Bam Bam" Rios on Saturday (86% likely to win); is there a Philippines ETF?

Someone must have had an odd sense of humor to name a conference in which the most prominent US hedge funds appear, after Robin Hood - it seems in the New Normal the prince of thieves takes from the Middle Class and gives... to himself. Snyde remarks aside, yesterday was Day 1 of the Robin Hood investor conference, with such speakers as David Einhorn and Dan Loeb putting on their best book-talking face and pitching their currently marketable ideas (which they have put on long ago and are likely selling into strength). Below is a summary of the top recommendations from Bloomberg.

• Wonder why: JPMorgan plans to keep pay roughly flat from last year (Reuters) - maybe this: Charles Schwab Warns "We Are In A Manipulated Market"
• Democrats overturn filibuster rule, increasing Obama’s power (FT)
• Day JFK Died We Traded Through Tears as NYSE Shut (BBG)
• When even dictators snub Obama - Afghanistan rejects U.S. call for quick security deal (Reuters)
• Obama Plunges in Investor Poll as Stocks Make New Highs (BBG)
• Iran, six powers struggle to overcome snags in nuclear talks (Reuters)
• Derision for China’s ‘rejuvenation index’ (FT)
• Bottom is in: Paulson Said to Inform Clients He Won’t Add More to Gold (BBG)
• German business sentiment rebounds strongly (WSJ)
• WTO on verge of global trade pact (FT)

There were two events of note in the overnight session: first was the return of the Japanese jawboning, because now that the Nikkei has upward momentum - nearly hitting 15600 in early trading only to close unchanged - and the Yen has downward momentum, the Abe, Kuroda, Amari trio will do everything to talk Mrs. Watanabe to accelerate the momentum. In this case BoJ Governor Kuroda said he does not think JPY is at abnormally low levels and consumer inflation likely to hit 2% by fiscal year to March 2016. Kuroda also said he does not think JPY is excessively weak or in a bubble now and JPY has corrected from excessive strength after Lehman. This also means look forward to the daily bevy of Japanese speaker headlines in overnight trading to push the USDJPY and EURJPY higher on an ad hoc basis. The other notable event was the German IFO Business climate which jumped from 107.4 to 109.3, beating expectations of 107.7 and in the process pushing the EUR notably higher, and particularly the EURJPY which moved from 136.30 to nearly 137 or a fresh four year high. At this point European exporters must be tearing their hair out, as must the ECB whose every effort to talk the Euro lower has been met with relentless export-crushing buying.