Archive - Dec 27, 2013

One of these is not like the others. Well, two...

Muammer Akkas, the prosecutor who complained his government corruotion investigation efforts were being blocked by the government - has been removed from the investigation. Prime Minister Erdogan's efforts to rein in "the final attack" on "new Turkey" are failing even after his cabinet reshuffle but this morning's rhetoric has sent asset prices tumbling once more:

*'THE NEW TURKEY IS UNDER SERIOUS ATTACK': ERDOGAN
*IN NEW TURKEY, SOVEREIGNTY CAN'T LIE WITH JUDICIARY: ERDOGAN
*LAWMAKERS SHOULD AVOID REMARKS HURTING ERDOGAN: ARINC
*ERDOGAN SAYS HE'S ISSUING LEGAL COMPLAINT AGAINST MEDIA LEAKS

As one analyst noted, "Erdogan continues to present the developments as a conspiracy despite having to shuffle his cabinet, which indicates that there may be some serious findings behind the probe."

As the 10Y broke solidly through 3.00% so precious metals began to move and after testing $20 in Silver overnight a few times, both gold and silver have just run stops through key levels and are jumping like Twitter (or Bitcoin) for a few minutes. WTI Crude has also just broke $100.

The only leverage available to all is extreme frugality in service of accumulating productive capital. There are only three ways to better oneself financially: marry someone with money, inherit money or accumulate capital/savings and invest it in productive assets. (We'll leave out lobbying the Federal government for a fat contract, faking disability, selling derivatives designed to default and other criminal activities.) Debt is serfdom, capital in all its forms is freedom.

While a few media outlets had premature releases yesterday, Bloomberg data just confirmed that for the second time this year, 10Y US Treasury yields have crossed 3% (it was 3.005% in Sept 2013) breaking to the highest since July 2011 (right before the yield collapse after the US debt-ceiling downgrade debacle). We are sure the media will proclaim this as 'proof' that the recovery is different this time, except the term structure continues to flatten (suggesting less faith in the future) and to spice things up 30Y mortgage rates have surged to 4.63% - almost the highest since May 2011 - but again, apparently, this won't affect the housing recovery either (even though mortgage apps are down two-thirds from their highs).

On Thursday, Japan prime minister Shinzo Abe stunned the world by defying everyone - including the EU and the US whose embassy sent a tersely worded letter in which is said that it is "disappointed that Japan's leadership has taken an action that will exacerbate tensions with Japan's neighbors" - when he visited the Yasukuni Shrine where Japanese leaders convicted as war criminals by an Allied tribunal after World War Two are honored along with those who died in battle, for the first time in 7 years. The response was fast and furious. Below, courtesy of Reuters, is a snapshot of the morning after in the Chinese media. The reviews of Abe's action were not glowing.

• Millions of Tons of Metals Stashed in Shadow Warehouses (WSJ)
• Moguls Rent South Dakota Addresses to Dodge Taxes Forever  (BBG)
• Fastest Japan Inflation Since ’08 Stokes Wage Pressure (BBG)
• Thai crisis deepens as army chief hints at intervention (Reuters)
• Anti-Assad Lebanese ex-minister killed in Beirut bomb (Reuters)
• Foreigners Unload Turkey Bonds as Probe Tarnishes Erdogan Growth  (BBG)
• Small ISS Change Shakes Up Boards: Tweak to Influential Shareholder Adviser's Recommendations Has Directors Rethinking Proposals (WSJ)
• Japan’s Nishimura Calls for Quick Corporate Tax Cut to Under 30% (BBG)
• Japan's Abe bets U.S. alliance, ratings can weather shrine visit (Reuters)

It's the last Friday of 2013. Here is what happened overnight.

After last night's clear pursuit of the 105 one touch digital option concluded with success, this morning, the stop hunts continue, only this time in the EURUSD, which has been on a steady upward trajectory and starting below 1.37 has crossed nearly 200 pips in the matter of 12 hours, and moments ago stopped just shy of 1.3900 where it seems another one touch digital threshold can be found.Depending on how much money the seller stands to lose should 1.39 be taken out, expect a fierce (or not so fierce) defense of the barrier.