Archive - Dec 12, 2014

After years of exposing, month after month, the truth about the US labor market - its conversion into a part-time (in 2010!), low-paying job market where Millennials refuse to work (as the job market reality is gruesome so instead they opt to load up on record amount of student loans) and where older Americans, instead of enjoying retirement are forced right back into the labor force leading to record numbers of workers over the age of 55 (thanks to ZIRP crushing the value of their savings and a refusing to participate in an HFT- and central-bank rigged stock market), the mainstream media, having tired of spinning the bullshit optimistic propaganda, has finally moved to the "tinfoil" side, and has done something it normally wouldn't touch with a ten foot pole. Tell the truth.

In a world in which neither the Fed, nor the sellside (Goldman was forecasting $100 oil for years to come as recently as October 29), and certainly not tenured economists have any idea what lies beyond the next corner, perhaps the best place to look for financial answers are Hollywood celebrities such as Jessica Alba. So, in our pursuit of truth, financial answers and the Hollywood way, we give you... Jessica Alba.

With all attention firmly focused on Draghi and Europe's deflationary pressures, it appears the mainstream media forgot to look domestically. With today's weaker than expected PPI, the 2Y Breakeven inflation rate continues to crash- from over 1.00% just a month ago to just 15.5bps this morning. 5Y5Y forwards continue to slide to near record lows across all the majors.

Dubai... is down 23% in the last 10 days. After soaring 64% in the first half of the year, Dubai's Financial Market General Index has collapsed 33.5%... but if it is due to correct to where oil trades, it has a long way to go still...

HELLO ... MAINSTREAM MEDIA ... ANYONE HOME?

We warned just a week ago that the lag between initial price declines in oil and the closure of rigs was between 4 and 6 months and just as we warned of the deja-vu all over again, Banker Hughes reports that the Rig Count this week dropped the most since March 2013 (oil rigs dropped 29 to 1546 - biggest weekly drop in 2 years). The biggest drop was seen in the Permian Basin (down 20 to 548). Of course, it's being ignored for now, just as it was in 2008...

And just like that, the list of countries who want to repatriate their gold just increased by one more, because after Venezuela, Germany, the Netherlands, Switzerland, and rumors of Belgium, we now can add Austria to those nations for whom the "6000 year old barbarous relic bubble" is more than just "tradition."

"If it was a free market and central banks were not allowed to intervene anymore then we would be very bearish as the global financial system is still extremely fragile and not sustainable."

Deutsche Bank

Houston, we have a serious problem... With only 20% of US Shale regions remaining economic at these oil price levels, it should not be surprising that the credit risk of the US Energy sector is exploding to near 1000bps... and contagiously infecting the broad HY market...

WTI Crude just burst below $58 and is now over 46% below the peak in June. Since the initial leaks of no production cuts at OPEC, WTI is down 25% (gold and silver are up 2-4%). At these levels only 4 of the US 18 Shale Oil regions remain economic...

Look away... NSFW!!

The entire bond complex has come under pressure here with 2Y through 30Y all seeing yields jerk lower. 10Y and 30Y yields are back at the flash-crash Bullard Lows of Oct 16th... as yet another squeeze of record Treasury Shorts blows the minds of every talking head on CNBC...

Since oil prices peaked in June this year, there is one clear loser (according to the narrative) - Russia. Russian stocks have dropped 41% during that time and the entire Russian market capitalization is now only 60% of Apple! And while Greece's recent demise has it close to being the worst performer of the year, it's not quite. However, since oil peaked in June, both Russia's and Greece's epic demise is trumped by another stock market index...