Archive - Dec 8, 2014

The crude carnage continued overnight with oil prices across the entire complex crashing through support to new cycle lows. Despite recent strategic reservce demand in China, the world's oil glut continues as global growth expectations plunge leaving WTI trading as low as $64.10, Brent $66.77 (narrowing the Brent-WTI spread to $2.68 from $3.23 on Friday), and most stunning of all, Canada Heavy as low as $49.24. Speculators and money managers appear to be BTFD as they increased net long positions last week (amid the price slump) but comments from Kuwait Petroleum's CEO and Iran officials suggest 'lower for longer' on prices will be the norm. As Morgan Stanley notes, "with OPEC on the sidelines, oil prices face their greatest threat since 2009 and appear on track for an extremely volatile 2015"

Fraud generates risk, and risk eventually breaks out in the "safest" parts of the financial plumbing, the ones nobody gives a second thought to because they're "low risk." Using unspeakable powers to generate global fraud is not as sustainable as punters imagine. Those who don't believe in risk can alternatively ponder karma as a guide to the future.

"The highly abnormal is becoming uncomfortably normal... There is something vaguely troubling when the unthinkable becomes routine."

• Welcome to the recovery:
  • Euro zone warning hits stocks, currency as oil plumbs depths (Reuters)
  • Japan GDP Worse Than Initially Reported (WSJ)
  • China trade data well below expectations (BBC)
  • German industrial production frustrates forecasts (FT)
• Oil Extends Retreat With European Stocks as Dollar Gains (BBG)
• California police, protesters clash again after 'chokehold' death (Reuters)
• Ruble’s Rout Is Tale of Failed Threats, Missteps (BBG), not to be confused with "Yen's Rout Is Tale Of Keynesian Success, Prosperity"
• Uber banned from operating in Indian capital after driver rape (Reuters)

Without doubt, the most memorable line from the latest quarterly report by the BIS, one which shows how shocked even the central banks' central bank is with how perverted and broken the "market" has become is the following: "The highly abnormal is becoming uncomfortably normal.... There is something vaguely troubling when the unthinkable becomes routine." Overnight, "markets" did all in their (central banks') power to justify the BIS' amazement, when first the Nikkei closed green following another shocker of Japanese econ data, when it was revealed that the quadruple-dip recession was even worse than expected, and then the Shanghai composite soaring over 3000 or up 2.8% for the session, following news of the worst trade data - whether completely fabricated or not - out of China in over half a year.

"My Helicopters Are Ready. You Will All Be Trillionaires." Must see chart of gold in German marks from 1918 to 1923. The Fed - "Silently robbing your purchasing power since 1913 ... "