Archive - Jun 12, 2013
Snowden: Patriot Or Traitor? America Responds
Submitted by Tyler Durden on 06/12/2013 23:07 -0500
"I'm neither traitor nor hero. I'm an American," is how Snowden describes himself to the South China Morning Post, but, according to a Reuters/Ipsos poll released today the American people are quite clear...
Chinese Dissident Ai Weiwei: "The U.S. Is Behaving Like China"
Submitted by Tyler Durden on 06/12/2013 22:33 -0500
Ai Weiwei is a Chinese artist and political dissident. Although he collaborated on the construction of Beijing National Stadium for the 2008 Olympics, his criticism of the government later led to his arrest without charges and imprisonment for several months. There are two main takeaways from the following article he wrote for The Guardian. First, he knows what it is like to live in an authoritarian regime with very little freedom or civil liberties. Thus it would be wise to take his warning to heart. Second, he illustrates a key point we have been trying to make for years. All citizens of the world must refuse to allow their respective governments to drag us into a war started by various oligarchs located in distinct geographic locations.
IBM Or Amazon: Whom Will The CIA Choose?
Submitted by Tyler Durden on 06/12/2013 21:54 -0500
Over the weekend we pointed out one of the more disturbing facets of the Snowden espionage affair: the covert, if massive (and very lucrative) symbiosis between private companies, who have explicitly opened up all private client data contrary to privacy disclosures, and a secretly uber-inquisitive government. We asked: "The reality is that while the NSA, which is a public entity through and through, is allowed and expected to do whatever its superiors tell it (i.e., the White House), how does one justify the complete betrayal of their customers by private corporations such as Verizon and AT&T? This may be the most insidious and toxic symbiosis between the public and private sector in the recent past." But while the quid was finally made public (if known by many long ago), the quo wasn't quite clear. It now is - the answer, as as always, is money. And not just any money, but in this specific case taxpayer money paid to either Google or Amazon by none other than the Central Intelligence Agency, or CIA for short. Lots of it.
Guest Post: Why Things Will Get Worse - Much Worse
Submitted by Tyler Durden on 06/12/2013 21:31 -0500
It is easy to be upset about what is happening all around. The economy is being destroyed, deliberately, by insane economic policies. Incentives to work are being eliminated by punishing work. At the same time rewards are increasing for not working. Not surprisingly we get less of what we penalize (work) and more of what we subsidize (non-work). But, as pained as the economic retrogression is, the loss of freedom is even more disturbing. Economic decline is difficult to convey, although data are useful.The decline of liberty, however, is not easily quantifiable and even more difficult to communicate. Unless government oppression is beaten back, there is no hope for the future. For those who focus on the foolish economic policies, they miss the root cause of all of our problems — oversized, overactive, interventionist, overcontrolling and oppressive government. America will continue to exist and it will eventually be free and prosperous again. But there will be a long period, call it the modern-day Dark Ages, before freedom and prosperity return.
Monkeyhammered Nikkei Plummets 6% On Risk Exodus
Submitted by Tyler Durden on 06/12/2013 21:10 -0500
There's blood in the streets - Where's Warren? Levered carry traders are rapidly realizing large crowds and small doors don't mix, even though if they liked the Nikkei at 16,000 they should love it at 12,700. It appears only physical gold traders are those who actually dollar cost average lower, when assets are more affordable. Either way, in Japan:
JAPAN'S NIKKEI 225 FALLS 20% FROM MAY 22 HIGH
JAPAN'S TOPIX INDEX FALLS AS MUCH AS 5.1%
NIKKEI 225 FALLS 6%, EXTENDING LOSSES
S&P Futures are below 1,600
Buy (Bonds) In June, After The Swoon?
Submitted by Tyler Durden on 06/12/2013 20:35 -0500
In 2006, 2007, 2008 and 2009 we saw 10Y bond yields surge into June only to peak and turn lower aggressively; and in 2010, 2011 and 2012 we saw a 'mini rally' in yields into June that was not sustained, so, as Citi FX's Tom Fitzpatrick notes, while we regularly hear the mantra for the Equity market of "Sell in May and go away" maybe we should have one for the Bond market - "Buy in June after the swoon."
Goldman Harakiris Muppets On Long Nikkei Reco Stop Loss
Submitted by Tyler Durden on 06/12/2013 20:06 -0500This evening's price action seems to be reflecting major unwinds occurring. Gappy strength in EUR suggests more repatriation (following the sell US stocks and bonds action we saw in the day-session) and even as JGBs rally modestly, Japanese stocks are getting monkey-hammered. Goldman's always-aware-of-the-risks client base just got 'muppeted' as the Long Sept Nikkei trade was stopped out at 12,700. JPY is bid on the carry unwind and is trading at the day-session lows around 95.00. This is TOPIX's biggest down day in over a week as Tech, Telecoms, and Consumer Goods are all down over 3.5%.
Foreign Investors are Not Behind the Nikkei's Swoon
Submitted by Marc To Market on 06/12/2013 20:02 -0500Foreigners are net buyers of Japanese stocks in the most recent week. When they have bene sellers it has been very small amounts. Japanese investors for their part continue to sell foreign assets and at arond the average pace seen over the last several months.
Bank Of England's Haldane: "We've Intentionally Blown The Biggest Bond Bubble In History"
Submitted by Tyler Durden on 06/12/2013 19:40 -0500
The Bank of England's Andrew Haldane is not a man to mince his words (see here and here) but perhaps the excess truthiness in his latest testimony to British MPs may have many questioning his ability as a central-banker (unable to lie when it is required). "Let's be clear. We've intentionally blown the biggest government bond bubble in history," Haldane said. "We need to be vigilant to the consequences of that bubble deflating more quickly than [we] might otherwise have wanted." As Canadian Carney steps into the BoE head shoes, it seems Haldane has some (indirect) advice there also, as The Guardian reports his comments that the committee had not been "entirely free" of political interference during the crisis; and that he hoped to "improve decision-making," in a less hierarchical, more diverse, somewhat humbler organization." The "biggest risk to global financial stability... would be a disorderly reversion in the yields of government bonds globally." he said, adding that there had been "shades of that" in recent weeks.
"Tapering" From Currency-Wars To Interest-Rate-Wars
Submitted by Tyler Durden on 06/12/2013 19:08 -0500
"The opposite of currency wars is not necessarily currency peace; it can easily be interest rate wars," is the warning Citi's Steve Englander sends in a note toda, as EM and DM bond yields have relatively exploded in recent weeks. The backing up of yields represents an increase in risk premium, so this will likely have negative effects on asset markets and the wealth effect abroad as well. It is difficult to explain the magnitude of the yield backup in terms of normal substitution effects, and broadly speaking, if you were to compare the backing up of bond yields with the beta of the underlying economy and asset markets there would be a good correspondence. So, Englander adds, it is fear, not optimism that is driving bond markets.
Edward Snowden: "The US Government Has Been Hacking China For Years", Meet TAO
Submitted by Tyler Durden on 06/12/2013 18:40 -0500
It's a good thing Obama and Xi met last week, because following the latest revelations by Edward Snowden, just released as part of an ongoing series of interviews posted by Hong Kong's South China Morning Post, there may have been some very awkward silence between the leaders of the world's superpowers. Especially since what he revealed once again exposes the US as nothing but a schoolyard hypocrite bully, which has been spinning a PR campaign "exposing" Chinese hackers as the biggest threat to internet security and privacy, when in reality it was the US that has done the bulk of snooping on Chinese soil.
Santelli Schools Cramer & Co. On The High Freaks
Submitted by Tyler Durden on 06/12/2013 18:12 -0500
It started as your everyday hexagonal discussion on CNBC with the anchors up-in-arms over the fact that (shocker) some firms can pay for early access to critical economic data items. The disdain for the 'rich' was palpable as Bernstein, Sullivan, and then Cramer all exclaimed both their amazement and surprise that this was even possible. That was when Santelli stepped into the ring and explained - in what was a relatively well-behaved exclamation - that not only was the fact that early data releases were well-known to every real trader (as opposed to those who pretend for TV) but that the issue was absolutely not about 'early access' but about HFT. When we first brought the perils of HFT to the attention of the broader trading community in 2009, it was the stuff of conspiracy theory - but now (as with many other things) it is conspiracy fact and in a few short minutes, Rick Santelli showed off his co-hosts ignorance of the real market and opened many new eyes to the damage that HFT can do in a market that is, well, anything but Reg-FD fair and balanced to all.
Guest Post: This Is What Crisis Feels Like
Submitted by Tyler Durden on 06/12/2013 17:34 -0500
On December 1, 2001, Argentina’s economy was in trouble. Unemployment was high, debt was high, and recession had taken hold. But life was somewhat ‘normal’. Basic services still functioned. And no one had to really worry about... food. Or water. Then it all changed. Literally within a day...
Wednesday Humor (And Hubris): Who Said It?
Submitted by Tyler Durden on 06/12/2013 17:01 -0500"I'm terrified about what will happen to interest rates once financial markets wake up to the implications of skyrocketing budget deficits.... The accident -- the fiscal train wreck -- is already under way.... How will the train wreck play itself out? Maybe a future administration will use butterfly ballots to disenfranchise retirees, making it possible to slash Social Security and Medicare. Or maybe a repentant Rush Limbaugh will lead the drive to raise taxes on the rich. But my prediction is that politicians will eventually be tempted to resolve the crisis the way irresponsible governments usually do: by printing money, both to pay current bills and to inflate away debt.... And as that temptation becomes obvious, interest rates will soar. It won't happen right away. With the economy stalling and the stock market plunging, short-term rates are probably headed down, not up, in the next few months, and mortgage rates may not have hit bottom yet. But unless we slide into Japanese-style deflation, there are much higher interest rates in our future.... I think that the main thing keeping long-term interest rates low right now is cognitive dissonance."
David Rosenberg: "From What I Hear..."
Submitted by Tyler Durden on 06/12/2013 16:27 -0500If what Rosie is "hearing" is accurate, then the bulls better pray that David Tepper's view of the taper as being bullish is correct, or else Bernanke may go ahead and shock the market as soon as next week's FOMC press conference (the last until September) with a very disturbing gravitational reality check.




