Archive - Nov 2013

At first it was the cars, now it is Tesla's Fremont, California plant that has caught fire... according to local newsfire trucks and an ambulance are on scene.

• *TESLA SAYS FAILURE IN A LOW PRESSURE ALUMINUM CASTING PRESS
  
• *TESLA SAYS THREE EMPLOYEES INJURED BY HOT METAL

Despite rewriting history as usual, proclaiming that the administration 'knew' early numbers would be low (not true since they estimated 500,000 and are rumored to only have ~50,000), and changing the definition of what an enrollee is, and managing our expectations via Carney's press conference, we are intrigued to see what the "huge demand" Kathleen Sebelius expected for Obamacare has actually resulted in... Perhaps she needs to call the helpline! Remember, as Peter Schiff noted, the website can be fixed, but Obamacare can't (unless, of course, more keg-standers and sluts sign up).

*OBAMACARE ENROLLS 106,185 IN PRIVATE HEALTH PLANS IN OCTOBER (26,794 on Federal Exchange,79,391 on State Exchanges)

Lately not a day seems to pass without some tragic mass shooting. The latest comes from Pittsburgh, where Channel 11 News reports that three people were shot Wednesday afternoon outside Brashear High School.

The following statement and chart from the RBS' Drew Brick pretty much explains it all: "QE has seen the Fed extend its dominion on the US curve away from the short-end and into longer duration paper is patent, too. On a rolling six-month average, in fact, the Fed is now responsible for monetizing a record 70% of all net supply measured in 10y equivalents. This represents a reliance on the Fed that is greater than ever before in history!"

A timely tiding for Santa's 2013 ZH wishlist...

Press Secretary Jay Carney is desperate to manage expectations ahead of Secretary Sebelius' announcement of the Obamacare enrollment data in an hour:

• CARNEY SAYS ENROLLMENT FIGURES WILL BE LOWER THAN ANTICIPATED

To watch him squirm under a press corps unwilling to take their foot off his throat (for now)... Maybe we can read into this...

• REID SAYS HAVING FULL CAUCUS TOMORROW ON HEALTH CARE
• REID SAYS WHITE HOUSE INVITED TO HEALTH-CARE CAUCUS

...just how bad it is!

Attracting some attention in Russian media today is proposed legislation by State Duma lawmaker Mikhail Degtyaryov of Vladimir Zhirinovsky's controversial Liberal Democratic Party and former candidate for mayor of Moscow (where he got 2.86% of the vote), who seeks to ban dollar deposits and transactions at Russian banks warning that the U.S. dollar is on the brink of collapse. As Moscow Times reports, "Mikhail Degtyaryov said the dollar will collapse in 2017 if U.S. national debt continues to grow at the current rate, and he cautioned that countries with a high dependence on the currency would suffer an economic disaster... In light of this, the fact that confidence in the dollar is growing among Russian citizens is extremely dangerous," he said in an explanatory note attached to the bill, according to Interfax. But before anyone scrambles to convert all their dollars into crisp rubles, keep in mind this is the same candidate who previously proposed banning gay and bisexual men from donating blood, paid days off for menstruating women, and has said he believes Russia will lead the world in vanquishing the Antichrist.

The UST market grinded higher today, right into the 1pm (ET) 10yr auction. The 10yr auction came at the EXACT high print of the day on the current 10yr note @ 2.75%.

On the back of yet another VIX smashing and "most shorted" squeeze, amid the glory of a news-less, macro-data-less day, the S&P 500 has managed to get back above its record intraday highs at 1775.22 ignited by some minor EURJPY momentum sparks.

It's been a tough year for John Taylor - cursed by the CNBC Squawk Master monicker - but it appears to be getting worse. As Hedge Fund Alert reports, less than a year before his currency-trading shop filed for bankruptcy, the FX Concepts founder personally guaranteed a chunk of the debt his firm owes to its largest creditor. AMF, the Credit Suisse hedge fund incubator, is owed $34.4 million with Taylor on the hook for $5 million and "is going to clearly try to get the money out of John," but, "by any stretch of the imagination, it's not there." Recent court documents suggest the fund was in even worse shape than previously understood as the liquidation of FX Concepts' four main assets is ongoing but as a whole, however, the trading programs probably are worth little, one source said. “If their models worked, they would have produced returns,” he said. “Their brand has no value, unless you want to advertise negative returns.”

Today's $24 billion in new 10 Year paper, with a 2.75% cash coupon, sold with a perfect par, or 100.000, price, for a yield of 2.75%, which stopped through the 2.754% When Issued. The auction was strong in every aspect: the Bid To Cover was a solid 2.70, higher than last month's 2.58, the second highest of the past 6 months, and just a fraction below the TTM average of 2.73. The Primary Dealers took down 33.8%, as there was a scramble by the Indirects to buy paper, leaving them with 47.7% of the takedown, well above the 38.3% TTM average, and the second highest going back all the way to November 2011. Directs were therefore left with 18.6%, modestly less than the 22.52% TTM. Overall, a solid auction which added some much needed collateral to an otherwise very illiquid market.

What happens when the government sets the precedent that what was private is now public property? Encouraged by President Maduro's seeming incitement "Leave nothing on the shelves, nothing in the warehouses... Let nothing remain in stock!" crowds of Venezuelans looted the local DAKA stores after the government's 'occupation'... "this is good for the nation," Maduro concluded... You decide...

Congratulations to our new managing directors, http://t.co/gqrsGKrKvY

— Goldman Sachs (@GoldmanSachs) November 13, 2013

... Is shown on the chart below, which compares indexed growth, or lack thereof, in G-5 GDP and compares it to consolidated central bank balance sheets. We bring this up because following this morning's announcement by the ECB's Praet that the European central bank may launch a round of QE (of questionable legality) it is only a matter of time before the red line really takes off and insanity hits truly unseen levels.

Milan prosecutors ordered the seizure of a substantial batch of computer and telephone equipment from Apple's Italian HQ as part of an investigation into allegations of a one billion euro tax fraud. As L'Espresso reports, the allegations surround false representation of accounting records (EUR206mm in 2010 and EUR853mm in 2011) which were recorded by the Irish entity 'Apple Sales International' but, Italian authorities suggest were services rendered for business carried out in Italy. Beyond this investigation, it seems the growing tax divergences (and loopholes) that we have previously discussed (such as the Double Irish) are becoming a key focus for an increasingly cash-strapped European periphery (among others).