Archive - Jun 6, 2013

• Global Stocks Tumble as Treasuries Rally, Yen Strengthens (BBG)
• China Export Gains Seen Halved With Fake-Data Crackdown (BBG) - so a crash in the GDP to follow?
• FBI and Microsoft take down botnet group  (FT)
• Quant hedge funds hit by bonds sell-off  (FT)
• Russia's Syria diplomacy, a game of smoke and mirrors (Reuters)
• Obama Confidantes Get Key Security Jobs (WSJ)
• BMW to Mercedes Skip Summer Breaks to Keep Plants Rolling even as European auto demand slides to a 20-year low (BBG) - thank you cheap credit
• Paris threat to block EU-US trade talks  (FT)

Another day, another sell off in Japan. The Nikkei index closed down 0.9%, just off its lows and less than 1% away from officially entering a bear market, but not before another vomit-inducing volatile session, which saw the high to low swing at nearly 400 points. Hopes that a USDJPY short-covering squeeze would push the Nikkei, and thus the S&P futures higher did not materialize. And while the weakness in Japan is well-known and tracked by all, what may come as a surprise is that the Chinese equities are down for the 6th consecutive session marking the longest declining run in a year. Elsewhere in macro land, the Aussie Dollar continues to get pounded on China derivative weakness, tumbling to multi-year lows of just above 94 as Druckenmiller, who called the AUDUSD short nearly a month ago at parity shows he still has it.

It never ceases to amaze that we vote people into positions. Those people that we have voted in elect in turn (or just go ahead and appoint without an election, making it all look very transparent) other people who are not as important but who will have the possibility of choosing (apparently in an “open, merit-based, and transparent manner”) someone who will be more important than they are, but less important than the first person that is in the voting/appointment chain. 

Joining its partner in economic destruction and currency devaluation (Argentina), Japanese stocks have just crossed over to the dark-side. After a glorious "well, the market is up, so everything must be great" rally of 85% in six months, the Nikkei 225 is now down over 20% from its highs - signifying a 'bear market'. This is the largest 10-day plunge in 27 months as volume has exploded on the downside. We wonder how the herds representing these five charts are feeling now? At the same time, JPY has broken back below 99 against the USD (and AUDJPY is at 5 month lows) as the entire JPY-funded rampage comes undone - seems like the message from the FX option market was spot on again. This is the lowest level in two months since Kuroda first spoke at the BoJ. Get that porta-potty ready, Abe... What next? Blame speculators? Short-sale ban? Shorting ban?