Archive - Dec 2013

December 30th

Tyler Durden's picture

Bonds Best, Bullion Battered, But Protection Well Bid...





For the 3rd day in a row, traders in credit and equity markets bid for protection. VIX rose 1 vol to 13.5% (diverging notably from stocks) and High-yield and investment-grade credit protection is back at 1-week wides (again diverging notably from stocks). USD weakened back to pre-FOMC levels (-0.4% on the day) led by EUR liquidity needs by the look of it, was ignored by the commodity markets which saw silver and gold tank (gold < $1200) and WTI crude back under $100. Treasuries rallied modestly (yields -3bps) as stocks wriggled sideways on super-low volumes (with NASDAQ underperforming and Dow outperforming to break the new record-high 16,500 level). Homebuilders outperformed even after the dismal home sales data with Energy worst on the day.

 

 

Tyler Durden's picture

"What The Bubble..." Chart Of The Day: Half Of Loans Issued In 2013 Were "Covenant Lite"





If you ask anyone at The Fed (apart from Jeremy Stein) if there is a bubble in the credit markets, the answer is definitive "no" since bubbles are always obvious. Well, hopefully, the following chart will make it "obvious" that the Fed's policy has driven a 'reach for yield' so excessive as to explode the growth of so-called cov-lite loans. This 'riskiest of risky' loan issuance, while already at record high levels, has now massively exceeded the previous bubble in terms of percent issued as the demand for anything with yield 'enables' the worst of the worst companies to refinance their zombie-like existence.

 

Tyler Durden's picture

Jane Austen Explains Monetary Policy





Who knew? Jane Austen was a dyed-in-the-wool, easy-money-loving, stimulus-demanding 'expert' on monetary policy. As Citi's Steven Englander finds in his eloquent new year's note, it seems the antiquated authoress has much sense-and-sensibility to reproach those of us who believe in real money and a return to a real economy. From justifying QE, "Money is the best recipe for happiness," to the importance of the wealth effect, "If this man had not twelve thousand a year, he would be a very stupid fellow;" Austen offers some 'balance' to offer on Fed transparency, tapering, and congressional spending.

 

Tyler Durden's picture

Shorting Stocks On These January POMO Days May Be Hazardous For Your Health





Death, (rising) taxes, and shorting stocks on POMO days resulting in lots of margin pain: those were the near certainties of 2013 even admitted by the US Treasury. So how does the first POMO schedule of 2014 look like? Well, as is by now well-known, the Fed will taper its monthly purchase of Treasury securities by $5 billion so instead of the old $45 billion per month, the NY Fed will "only" monetize $40 billion next month. However, since the reduction will be prorated across all POMO days, the old maxim still stands: shorting stocks on these POMO days can and likely will be hazardous for your health. Of note: no POMOs in the first week of the year until Monday January 6.

 

Tyler Durden's picture

Obamacare Rollout COO Retires "After 41 Years Of Outstanding Public Service"





The COO of the Centers for Medicare and Medicaid Services, who supervised the disastrous rollout of Obamacare, is retiring. Michelle Snyder is the second official to depart the sinking ship CMS following CIO Tony Trenkle's resignation in November. While in charge of day-to-day activities, the allocation of resources, and “standing up new programs and activities required by the Affordable Care Act," the NY Times reminds readers that Kathleen Sebelius said "Michelle Snyder is not responsible for those debacles." We can only wonder at the retirement package this 41-year veteran will receive...

 

Tyler Durden's picture

Day After Saudi Arabia Gives Record $3 Billion To Lebanese Army, Lebanese Troops Fire At Syrian Warplanes





That didn't take long. A day after Saudi Arabia pledged a record $3 billion to prop up Lebanon's armed forces, in what the WSJ described as "a challenge to the Iranian-allied Hezbollah militia's decadeslong status as Lebanon's main power broker and security force", Lebanese troops fired at Syrian warplanes for what is thought to be the first time since the conflict in Syria began. Quid pro quo.

 

Tyler Durden's picture

Daniel Hannan Crushes The Euro-Enthusiasts' Contempt For The Masses





How do you get a poll to register a large majority in favour of EU membership? Easy. Confine your survey to quangocrats, charity heads, civil servants, CEOs of multi-national corporations and the like. The pro-EU lobby group, British Influence, has been trying to get people excited about its poll of “leading figures” – that is, 700 bien pensant metropolitans of whom, sure enough, 69 per cent want to stay in the EU. Not that we blame them, when every poll of the general population shows an anti-EU majority, you have to clutch at whatever support you can find. When the vote was extended to all adults, the moderate men, the sensible men, the men of bottom and judgment, suddenly remembered that they had favoured the idea all along. The same will happen with Brexit. Just watch.

 

Tyler Durden's picture

Presenting The Definition Of Irony





The trapped-in-the-Antarctic-ice Australian research vessel's mission, among others, is to examine the effect of global warming on a receding Antarctic ice shelf...

 

Tyler Durden's picture

Shots Fired At German Ambassador's Home In Athens





This morning we were treated to the usual stupifying comments from Greek leadership that "Greece won't need more loans," and will "start becoming a normal country," because the Greek 'recovery' is "built on solid foundations." However, it appears the public-at-large is not so happy as the BBC reports shots were fired at the German ambassador's residence in Athens. Samaras said Greeks "have gone through hard times." With over 60 bullets fired, it seems the someone is upset that their union overlords won't lift those hard times anytime soon...

 

Tyler Durden's picture

How The NSA Hacks Your iPhone (Presenting DROPOUT JEEP)





Following up on the latest stunning revelations released yesterday by German Spiegel which exposed the spy agency's 50 page catalog of "backdoor penetration techniques", today during a speech given by Jacob Applebaum (@ioerror) at the 30th Chaos Communication Congress, a new bombshell emerged: specifically the complete and detailed description of how the NSA bugs, remotely, your iPhone. The way the NSA accomplishes this is using software known as Dropout Jeep, which it describes as follows: "DROPOUT JEEP is a software implant for the Apple iPhone that utilizes modular mission applications to provide specific SIGINT functionality. This functionality includes the ability to remotely push/pull files from the device. SMS retrieval, contact list retrieval, voicemail, geolocation, hot mic, camera capture, cell tower location, etc. Command, control and data exfiltration can occur over SMS messaging or a GPRS data connection. All communications with the implant will be covert and encrypted."

 

Tyler Durden's picture

Meet The Minimum-Wage Homeless Who Are "Cleaning Up" Fukushima (For The Yakuza)





"We're an easy target for recruiters," one homeless man explains. "We turn up here with all our bags, wheeling them around and we're easy to spot. They say to us, are you looking for work? Are you hungry? And if we haven't eaten, they offer to find us a job." As Reuters exposes, 3 years after the earthquake and tsunami that caused the meltdown at Fukushima's nuclear facility, Northern Japanese homeless are willing to accept minimum wage (from yakuza-based entities) for one of the most undesirable jobs in the industrialized world: working on the $35 billion, taxpayer-funded effort to clean up radioactive fallout across an area of northern Japan larger than Hong Kong.

 

Tyler Durden's picture

Guest Post: The End Of Pretend





If being wealthy was the same as pretending to be wealthy then people who care about reality would have a little less to complain about. But pretending is a poor way for a society to negotiate its way through history. It makes for accumulating distortions which eventually undermine the society’s ability to function, especially when the pretending is about money, which is society’s operating system. The dislocations of 2008 when the banking system nearly imploded were Nature’s way of telling us that dishonesty has consequences. In the meantime, we amuse ourselves with fairy tales about “the shale oil revolution” and “the manufacturing renaissance.” 2014 could be the year that the forces of Nature compel our attention and give us a reason to stop all this pretending.

 

GoldCore's picture

Yellen Draghi Carney Wrecking Ball Cometh ... Prepare





Draghi's ECB and Carney's BoE have put in place plans for bail-ins and deposit confiscation. Yellen's Fed is quiet allowing the FDIC to do the controversial bail-in 'dirty work' by stealth. Bail-ins cometh ... Prepare ... http://info.goldcore.com/protecting-your-savings-in-the-coming-bail-in-era-international-edition  

 

Tyler Durden's picture

Americans React To End Of Jobless Benefits: “I Just Don’t Know What To Do, Except Pray”





"It's going to put my family and me out on the streets," is a perspective shared by many of the 1.3 million Americans about to lose their emergency unemployment claims. The program, started during the recession, was intended to help jobless people after they exhausted state benefits, typically lasting six months. House Republicans resisted continuing the benefits without budget cuts elsewhere to cover the cost. As Bloomberg reports, opponents say the extended benefits discourage the unemployed from accepting jobs and that the program should be curtailed, given the recovery in the nation’s labor market.This has profound implications for the oh-so-important unemployment rate that  the Fed is so dependent upon...

 

Tyler Durden's picture

Pending Home Sales Plunge At Fastest Pace Since April 2011





For the 5th month in a row, pending home sales missed expectations (though a silver lining is a positive print MoM - breaking a 5-month streak). Year-over-year, home sales collapsed at 4% - its worst drop since April 2011, and that even after prior data was revised lower. Still, despite this ongoing plunge, there is always hope - as engendered by NAR's chief economist who states (somewhat unconfidently), "we may have reached a cyclical low." Cylical low indeed - just don't look at the chart.

 
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