Archive - Dec 11, 2014

Golf-clap, Janet... you really screwed this one up...

CIA Director John Brennan is due to make a rare public statement and answer press questions with regard the Senate Intelligence Committee's report on the CIA's use of torture.

Once again, following a strong 10 Year auction, today's 30 Year reopening of CUSIP RJ9 was an absolute stunner, and with the When Issued trading at 2.875%, the high yield was a very much scorching 2.848%, stopping through nearly 3 bps through the WI, and the lowest 30 Year auction yield since November 2012. The reason for this impressive surge in last minute interest: a record low takedown by Dealers who got just 25.9% of the auction as they were pushed out by the other two bidding groups. Sure enough, there was an absolute scramble by Indirects (49.8%) and Directs (24.3%) both of which received, logically, a record high takedown for a 30 Year.  And finally with the Bid to Cover soaring to 2.762, this was the highest since January of 2013.

While Kyle Bass once remarked that "the brevity of financial memory is about two years," it appears for today's energy stock traders the period of goldfish-like memory is a mere two days... As the following chart suggests, the 'bounce' in XLE - the S&P Energy Sector ETF - is entirely decoupled from credit's uglier-and-uglier reality (just as it did on Tuesday, only to crash again yesterday). Trade accordingly...

US Household net worth dropped $141 billion in Q3 2014 after rising non-stop on the heels of various QE-inflated stock and real-estate prices for 11 quarters in a row. Mrs. Chairman, get back to work...

The 2% target is low enough that the household frogs in the kettle of hot water never realize they're being boiled alive because the increase is so gradual. The central banks assume their 2% plan to impoverish us all escaped our notice. Apparently it has.

So… the prices of assets are fraudulent, the value of balance sheets is fraudulent, and earnings are fraudulent. This means that stock market caps, balance sheets, and income statements are all inaccurate representations of reality.

For many, if not most, companies and especially retailers, the great wildcard that is the "massive" Chinese market with the potential of hundreds of millions of buyers in the country's nascent middle class, has been a slam dunk when it comes to boosting stock prices. After all, what can go wrong? America's largest retailer was one of those hoping to capitalize on just this shareholder euphoria for Chinese exposure, and just like everyone else, it milked its Chinese exposure for many years. And then, unexpected everything did go wrong: as Bloomberg explains, "After years of heralding China as one of its best markets, Wal-Mart in August said its performance there was among the worst in its major countries." How is that possible? Read on to find out how Wal-Mart fabricated, lied and misled investors for years using every single trick in the book and then some.

Presented with little comment aside to ask... why? (or perhaps, why not...)

While we are sure this will be quietly revised away through the magic of the labor department's statistical shenanigans (even though they note no "unusual" factors, this week saw the biggest WoW rise in continuing jobless claims since Nov 2008. While drawing any linkages to the collapse in the oil-well-permits is premature, the coincidence of the last 2 weeks seing a dramatic trend change in continuing claims is noteworthy.

Two months ago, when looking at the US Import Price Index (by origin), we showed Where The US Is Importing All The "Evil" Deflation From. The answer, courtesy of Abenomics, was simple: Japan. Earlier today we got further evidence that while the Fed is banging its head over how to halt America's deflationary spiral further away from the Fed's 2% target (at least as measured by the BLS), what it should do - if it really cares - is get on the phone with Abe and tell him to end Abenomics and Japan's unprecedented exporting of deflation (and importing of inflation).

A recent interview with a precious metals commentator in the Alternative Media raised several interesting points. While a number of the points raised are/were worthy of discussion; the topic which will be the focus of this commentary are the remarks (and conclusions) which were presented there concerning China’s “role” (if any) in the utterly fraudulent, global paper-silver market.

It's all about the fun-durr-mentals... A 20 point almost vertical buying panic rip off the lows on a 0.1ppt beat in retail sales? Hhhmm..

One of the unspoken complaints about Obamacare (in addition to it soaking up all and then some of the $380/year in low gas price "savings" as a result of the oil plunge) is that if it was so good for the general population, then why are most Congressional staffers exempt from its provisions? That is about to change after Senate Republican staffers will be required to obtain health insurance through ObamaCare's exchanges under a rule passed Wednesday by the GOP Conference. "Washington should have to live under ObamaCare just like everybody else until we repeal it. And we won't be complicit in Obama's illegal rule designed to protect Washington insiders."

New oil projects are being scrapped in Norway amid falling production and low oil prices. The governor of Norway’s central bank says western Europe’s biggest oil producer is facing a major economic slowdown as crude prices continue to plunge. As Bloomberg reports, Oeystein Olsen said today after unexpectedly cutting rates and shocking markets to a new 5 year low in NOKEUR, "our job now is that we need to prevent a severe downturn in the economy... that is presently the major concern of the board."