Archive - Jun 8, 2013

williambanzai7's picture

MiSSioN IMPoSSiBLe 2013 [Open Caption]





Your Mission Mr Phelps: _____________________

 

Tyler Durden's picture

Richard Koo: "Honeymoon For Abenomics Is Over"





As we noted just two weeks ago - before the hope-and-change-driven exuberance in Japanese equities came crashing down - "those who believe in Abenomics are suffering from amnesia," and Nomura's Richard Koo clarifies just who is responsible for the exuberance and why things are about to shift dramatically. Reasons cited for the equity selloff include Fed Chairman Ben Bernanke’s remarks about ending QE and a weaker than expected (preliminary) Chinese PMI reading, but, simply put, Koo notes, more fundamental factor was also involved: stocks had risen far above the level justified by improvements in the real economy. It was overseas investors (particularly US hedge funds) that responded to Abe's comments late last year by closing out their positions in the euro (having been unable to profit from the Euro's collapse) and redeploying those funds in Japan, where they drove the yen lower and pushed stocks higher. Koo suspects that only a handful of the overseas investors who led this shift from the euro into the yen understood there was no reason why quantitative easing should work when private demand for funds was negligible... The recent upheaval in the JGB market signals an end to the virtuous cycle that pushed stock prices steadily higher.

 

Tyler Durden's picture

The NSA's "Boundless Informant" Collects 3 Billion Intelligence Pieces From US Computer Networks In One Month





There's one big reason why the administration, James Clapper and the NSA should probably just keep their mouths shut: with every incremental attempt to refute some previously unknown facet of the US Big Brother state, a new piece of previously unleaked information from the same intelligence organization now scrambling for damage control, emerges and exposes the brand new narrative as yet another lie, forcing even more lies, more retribution against sources, more journalist persecution and so on. The latest piece of news once again comes from the Guardian's Glenn Greenwald who this time exposes the NSA's datamining tool "Boundless Informant" which according to leaked documents collected 97 billion pieces of intelligence from computer networks worldwide in March 2013 alone, and "3 billion pieces of intelligence from US computer networks over a 30-day period."

 

Tyler Durden's picture

Gas Prices, Consumption, And Why The Average American Is Being Left Behind





The summer driving season is upon us. For many, that means vacations, barbeques, and of course, higher gas prices. For 23 out of the last 35 years, gas prices have risen an average of 14.7% from one summer to the next, while 12 decline years have only averaged -8.1%. Prices tend to be highest in June for any given year, with some years’ prices spiking in late May or early July. Retail gasoline prices are at their highest levels since 1980, in real dollars. But as we have uncomfortably noted previously, Americans have not returned to pre-crisis consumption patterns yet, despite all the chatter of recovery. So far in 2013, in fact, we have consumed 14 million fewer gallons of motor gasoline than in 2012, and nearly 55 million less than we did at the peak in 2007. But, as ConvergEx's Nick Colas notes, we aren’t necessarily "cutting back", as this data suggests: the Consumer Expenditure Survey shows that Americans spent nearly $700 more on gas in 2011 as compared to 2010, the two latest data sets available. What does appear to happening, though, is that Americans are restructuring their spending as healthcare, lodging, and overall taxes take a larger chunk out of every paycheck. Another explanation is fewer commuters to buy gasoline based on a still-high unemployment rate. Basically, we’re not necessarily consuming less 'on purpose': we’re just adjusting to a "New Normal" way of spending. What the data shows is a disconnect between the life of the average worker and the energy market: we assume that strength in the latter goes hand-in-hand with strength in the former. Unfortunately, the average American is being left behind: they’re still struggling.

 

Tyler Durden's picture

Sequestration - It's Just Beginning





Evidence of the sequester remains elusive. The warning signs that we track closely – initial jobless claims, Richmond Fed, personal income and payrolls – do not show any material deterioration that we can attribute to the sequester. One mystery is why personal income of government workers has not contracted, as fewer hours worked should equal less pay. The answer, BofAML notes, is simple - it's just beginning...

 

Tyler Durden's picture

On The Wisdom Of Crowds (And Madness Of Mobs)





Fear, like greed, makes people, and that would include investors, behave irrationally. Two major equity bear markets in the last 13 years have traumatized investors. The belief in Modern Portfolio Theory in general and the Efficient Markets Hypothesis (EMH) in particular has been shaken and finance theory will have to be re-written. So, Absolute Return Partners' Niels Jensen asks, what is it specifically that has changed? Human behavior certainly hasn’t. Greed and fear have been factors to be reckoned with since day nought. When faced with the unknown, people (in this case, fund managers) will use whatever information they can get hold of. Hence we shouldn’t really be surprised that fund managers extrapolate current earnings trends when forecasting future earnings, despite the evidence that it is a futile exercise. Occasionally, the Wisdom of Crowds turns into the Madness of Mobs and all rational behavior goes out the window. History provides many examples of that. EMH is entirely unsuited to deal with froth. What made economists love the EMH is that the maths behind it is so neat whereas the alternative truth is a little messy.

 

Tyler Durden's picture

Chart Of The Day: This Is What You 'Believe' If You Are Buying Stocks Now





Each and every day we are told by asset-gatherers everywhere that stocks are cheap, money-on-the-sidelines will 'greatly rotate', and now that any 'Taper' is good news as it signals the Fed 'believes'. However, it would appear that the market is either a 'hope-discounting mechanism' or a serial non-linear extrapolator; as, just for clarity, this is the 'hope' that equity bulls are buying currently about the next three years' earnings... what could possibly go wrong?

 

Tyler Durden's picture

Damage Control Time: National Intelligence Releases PRISM "Facts"





Confirming that the administration is in very hot water over this week's revelations of widespread domestic and global surveillance, moments ago this Saturday afternoon the head of National Intelligence James Clapper released "Facts on the Collection of Intelligence Pursuant to Section 702 of the Foreign Intelligence Surveillance Act" in which he says that PRISM is not an undisclosed collection or data mining program. It is an internal government computer system used to facilitate the government’s... collection of foreign intelligence information." In fact, the program is so legit, it doesn't even work to collect foreign data: "We cannot target even foreign persons overseas without a valid foreign intelligence purpose." Finally, any rumors that Google Glass will be reverting to its original codename "NSA SpyCam" are greatly exaggerated: "Service providers supply information to the Government when they are lawfully required to do so." In short - please believe him. He is from the government, he is telling the truth, and the government is here to help. As for all those Verizon (and other carrier) all too domestic phone intercepts: don't you worry about that.

 

 

Tyler Durden's picture

Saturday Humor: AbeGnomics





We’ll admit it. We just don’t understand Prime Minister Shinzo Abe’s much vaunted economic policy known as Abenomics.  Spend public funds that Japan doesn’t have, increase inflation, but not raise minimum wages?  How is this supposed to improve the economy? We know we’re missing something. Secretly, we feel like it only works because people believe it works. Sort of like fairies. If you believe in fairies, gnomes, and Abegnomics – than clap your hands! Follow the rainbow, kids! A pot of platinum yen coins is waiting for you.

 

Tyler Durden's picture

The Good, Bad, And Ugly "Taper" Scenarios





As important as when the Fed might taper its asset purchases is why it might do so. Uncertainty about the Fed’s QE reaction function, BofAML argues, is a significant contributor to recent market volatility. There are several scenarios that could explain why a number of Fed officials have started talking about tapering: they have become more optimistic on the outlook; they are more worried about potential QE costs; they have decided to taper earlier for largely technical reasons. The first of these likely would be the least disruptive for markets, and the last the most. Clear Fed communication could mitigate some of the volatility, but, as BofAML notes, the current lack of consensus on the FOMC likely means uncertainty will likely persist.

 

Tyler Durden's picture

Guest Post: Employment - The Macro Trends





One thing is for certain -- the job market is very tight as layoffs and discharges have reached the lowest levels since the turn of the century.  While this is leading to lower initial jobless claims it is not translating into higher levels of full-time employment relative to the population. It is not surprising that with an economy that is mired at a near 2% economic growth rate that employment is "muddling" right along with it.  While the economy is indeed creating jobs, it is a function of population growth rather than a sign that the economy is on the road to recovery. What is clear is that current detachment between the financial markets and the real economy continues.

 

Tyler Durden's picture

"You Should Use Both" - How America's Internet Companies Are Handing Over Your Data To Uncle Sam





In the aftermath of the PRISM spying scandal, the first and logical response was an expected one: lie. The president did it, and so did the various companies implicated in the biggest US surveillance scandal ever exposed. To wit:

  • Zuckerberg: "Facebook is not and has never been part of any program to give the US or any other government direct access to our servers."
  • Google CEO Larry Page: "We have not joined any program that would give the US government – or any other government – direct access to our servers."
  • Yahoo: "We do not provide the government with direct access to our servers, systems, or network."

One small problem: they are all lying.

 

Pivotfarm's picture

Chinese Export Fall and Strong Yuan: Bad Times Ahead





Looks like the sun has gone behind the clouds in China for a bit! Not only are the solar panels creating friction between China and the EU, but now it turns out that last month saw Chinese export growth unexpectedly decrease.

 

Tyler Durden's picture

American Households On Foodstamps Climb To New Record





Yesterday, briefly, we were confused by the eruption in the stock market following a not too bad sub-200K nonfarm payrolls number. Because we know that in the New Normal bad is always good, no matter what the well-coifed TV pundit du jour tells you. Then we remembered that yesterday is when the USDA releases its monthly Supplemental Nutrition Assistance Program data, i.e. Americans on Foodstamps. It was here that the ramp was perfectly explained, because while the bad (for stocks of course) data was that individual foodstamps recipients rose by 170K in March - if just a whisker below all time highs - it was the number of American households on foodstamps, which rose to a new all time high of 23,116,441 (each collecting an average of $274.30 per month) that perfectly explained the Dow Jones' 200 point surge higher: the transfer of wealth from the poor and middle-classes to the 1% continues without a hiccup.

 

Tyler Durden's picture

Greek GDP Plunges To Year 2000 Levels





That things in Greece are hopeless and getting worse is an understatement. With unemployment levels off the charts, the pension and retirement systems effectively gone and every able-bodied individual (what little remains of them) moving to the shadow economy which now accounts for 24% of GDP, there are few incentives for people to remain on payrolls, pay taxes and otherwise grow the economy via conventional channels. As a result, instead of an improvement in the economy despite all Greek foreign debt now having been forgiven courtesy of its recent conversion to perpetual Zero Coupons, not even during the depths of the recent economic collapse in late 2011 and early 2012 has the economic collapse been as bad. Kathimerini reports that figures released by ELSTAT on Friday showed GDP at 37.7 billion euros in the period from January to March 2013 – the lowest quarterly GDP since 2000.

 
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