Archive - Oct 8, 2014

Following the sad death of Thomas Duncan this morning, CBS is now reporting that a possible second case of Ebola has been discovered in a suburb of Dallas:

*DALLAS AREA PATIENT SHOWS EBOLA SYMPTOMS: CBS

The patient claims to have had contact with Thomas Eric Duncan, referred to as Dallas ‘patient zero', and also confirmed travel to West Africa.

"Don’t let the occasional 50-60% crashes disturb your peace of mind! You will always win in the long run! Long term bear markets don’t exist... well, maybe except in Japan. And much of the 18th century. But other than that, nothing can go wrong..."

If you liked King Dollar, you'll love Dumping Dollar... Gold, Treasuries, and Stocks are surging after the release of the FOMC minutes suggested The Fed will keep rates lower longer. The USDollar is dumping - just as The Fed suggested it was worried about a strong dollar. Stocks remain negative on the week and below the levels of the last FOMC...

Federal Reserve officials have become more concerned about weak growth overseas and the impact of a strengthening U.S. dollar on the domestic economy, warns WSJ Fed-whisperer Jon Hilsenrath, adding that, the stronger currency, by reducing the cost of imported goods and services, could hold U.S. inflation below the Fed’s 2% objective. Fed staff also reduced its projection for medium-run growth in part because of these concerns. The minutes showed more clearly than before that concerns about global growth and the disinflationary impact of a strong currency are giving officials additional pause about moving quickly on rates.

With the S&P down over 3% from September's FOMC statement, the market needed some 'good' news from the Fed minutes to save the 'wealth' that has been created...

• *FED OFFICIALS SAW GLOBAL SLOWDOWN AMONG RISKS TO U.S. OUTLOOK (growth)
  
• *FOMC SAID SOME DEVELOPMENTS COULD UNDERMINE FINANCIAL STABILITY (bubbles)
  
• *FED SAW RISING DOLLAR AS RISK TO EXPORTS, GROWTH, MINUTES SHOW (jawbone USD)
  

So The Fed fears bubbles, fears growth slowing down, and appears to be talking down the dollar. In other word, dovish minutes confirming the dovish statement was indeed dovish.

The U.S. Backed the Dictators Whose Rampant War Crimes Destroyed their Healthcare System

If you like your 'disappointing' government-sponsored wage growth data, you can keep it... but if you are an ambitious talking-head economist looking to boost confidence in the economy in the hopes of a career in the administration, then ADP has just the 'tool' for you. Behold, the "ADP Workforce Vitality Index" - which measures the total real wages paid to the US private sector workforce, implying that the BLS is not measuring wage growth correctly as it is actually notably higher. In Q3, the ADP data grew 0.77% which they argue "is a good sign that may lead to increased consumer spending and a boost for the economy," and implicitly means The Fed should be hiking rates sooner as ADP warns "real wages are accelerating." Zandi the optimistic hawk?

The most surprising data point in today's 10 Year auction was the plunge in Directs, which tumbled from 13.5% to only 6.6%, which was the lowest since August of 2012 when they ended up with 5.2%. Just how much of this lack of Direct interest is due to Bill Gross no longer being on the bid? And what happens to future auctions in a world without the Old "New Normal" Pimco?

The “Doomsday Book” is essentially a private compilation of emergency measures that the Federal Reserve could take in the event of a financial crisis or other market-destabilizing event. The book has never been made public. But Fed officials have refused to release it, and Justice Department officials at a court hearing on Tuesday said the Federal Reserve Bank of New York wanted to keep the book under seal.

Two bond "markets", one yield...

Global economic growth remains weak and vulnerable and the global financial system remains very fragile. The ebola virus has the potential to be the straw that breaks the proverbial camel’s back. 

Stocks and commodities fell globally today due to concerns about the spread of Ebola and declining economic growth. Precious metals bounced from near multi month lows.

Prepare yourselves, it is only going to get worse...

If the top 1/100th of 1% crowding airports with their private jets isn't afraid of impoverished, disenchanted debt-serfs with pitchforks, they should be.

The first US Ebola patient, Thomas Eric Duncan, who was treated in Texas, has just died:

TEXAS HEALTH REPORTS DEATH OF EBOLA PATIENT THOMAS ERIC DUNCAN

And while we await the inevitable CDC press conference to follow, the stock of CMRX, whose medicine was being used to treat him, is plunging.

BTFD'ers are absent as markets everywhere are in turmoil. Commodities are sliding with WTI plunging (almost a bear market from June highs) and copper crumbling. The USD is slightly lower (3rd day in a row). Treasury yields are slightly lower. But it is stocks that are turmoiling most as the Dow nears unchanged year-to-date. After the dramatic ramp off the lows last week, stocks have entirely roundtripped and then some to fresh cycle lows, led by Trannies and Small caps. VIX is back over 18. In Europe, stocks tanked once again with DAX closing below 9,000 for the first time this year.