Archive - Mar 28, 2014

"Tanaka Kikinzoku Jewelry, a precious metals specialist, reported that sales of gold ingots across seven of its shops are up more than 500% this month. At the company’s flagship store in Ginza on Thursday, people queued for up to three hours to buy 500g bars worth about Y2.3m ($22,500). March has been the busiest month in Tanaka’s 120-year history."... "Investors are being drawn to the metal not just because of higher taxes, said Itsuo Toshima, an adviser to pension funds.“Slowly and steadily, people are preparing for the worst, which is the failure of Abenomics." “To protect the value of wealth, gold comes into play as an inflation hedge, and if the economy goes back to deflationary circumstances then, again, money seeking safe havens would flow into gold."

The sanctioned Russian bank - Bank Rossiya - is "taking measures to protect its Russian clients" from potentially unfair actions by US banks by shutting correspondence accounts in the US. Furthermore, the bank, which is oh so grateful for the support of Vladimir Putin (who opened a personal account with the bank soon after the sanctions), added it will meet all obligations and will not need additional support as will concentrate only on its Russian clients and work only in Rubles.

While the government's survey of consumer confidence saw new cycle highs - progressing the multiple expansion dream - the University of Michigan (private) survey has been falling for 3 months and is now at its lowest since November. Both current conditions (reality) and expectations (hope) missed expectations (overall index missed by the most in 5 months) but "hope" did rise modestly from 69.4 to 70.0. Must have been a 'winter stormy' week when UMich surveyed consumers...

Presented with little comment aside to ask... sustainable? Every string will be pulled today to ensure that the S&P 500 closes in the green for Q1, this is just the beginning salvo...

Two weeks ago, when Bank of America found that its weekly retail spending data has continued coming in far weaker than expected compared to 2013, it did the laughable: it blamed not the weather in general, but one storm in particular, to wit: "once again adverse weather potentially impacted spending last week, as the storm “Titan” moved across the US over the weekend of March 1st and 2nd and was followed by yet another cold spell." Two weeks later, after shockingly BofA finds precisely the same weakness continuing into the end of a balmy March, it no longer even bothers looking for excuses. The sad reality: there are none.

As if you didn’t already recognize the serious threat to press freedom in the UK following authorities holding Glenn Greenwald’s partner David Miranda for eight hours under “terrorism” laws as he transferred through London’s Heathrow airport. It’s not just the traditional press at risk in the UK either, the government is hard at work censoring the internet itself via ridiculous filters. Now we find out from the Irish Times that..."...Britain’s intelligence agencies visited [The Guardian] and told them they would be closed if they persisted in printing Snowden’s revelations of mass surveillance

Moments ago the BEA reported February personal income and spending which were expected to show a modest pick up following what all economists have classified as the "polar vortex" winter doldrums. While it remains to be seen whether and if spending, and income, will indeed pick up considering the deplorable state of the US household's earnings prospects, both metrics came precisely in line with consensus estimates at 0.3% (if not those of DB's always amusing permabull Joe LaVorgna who expected a 0.6% increase in spending).

SSDD... the overnight ramps are getting weaker and the morning monkey-hammerings of precious metals are not as aggressive but once again, for the benefit of those playing at home, USDJPY is surging in an attempt to drag stocks healthily green and prove that everything is fixed and gold is being dumped to also prove that the status quo rules and barbarous relics are a thing of the risk-strewn past.

While the US and its allies are locked in a war of words which Russia has so far been completely ignoring, things continue to move both literally (along the Russian side of Ukraine's eastern border) and metaphorically. Overnight, ousted President Viktor Yanukovych has called for a national referendum to determine each region's "status within Ukraine". As a reminder, the Kremlin still refuses to accept the current Ukraine government, claiming it got there only after an illegitimate, violent overthrow of Yanukovich. "As a president who is with you with all my thoughts and soul, I urge every sensible citizen of Ukraine: Don't give in to impostors! Demand a referendum on the status of each region within Ukraine." Meanwhile Kiev took a little too much to heart the statement by Schauble that Ukraine has Greece as a role model to look up to, because while it has skipped the entire economic collapse phase (for now), it has jumped straight to the infighting with its ultra-nationalist, far-right "Right Sector" elements, which were certainly one of the main factors for the ascent of the current acting government and the overthrow of the last one.

• Crimea Resolution Backed by U.S. Barely Gets UN Majority (BBG)
• Russian Buildup Stokes Worries (WSJ)
• As reported here first: China’s Developers Face Shakeout as Easy Money Ends (BBG)
• U.S. House Poised to Clear Sanctions Called Putin Warning (BBG)
• Bitcoin Prices Plunge on Report PBOC Orders Accounts Shut (BBG)
• Search for lost Malaysian jet shifts significantly after new lead (Reuters)
• Russian fund taps China and Middle East (FT)
• Long battle looms between U.S. college, athletes seeking to unionize (Reuters)
• Official warns EU-US trade deal at risk over investor cases (FT)
• New iPhone likely out in September, Nikkei daily says (AFP)

By this point, one has to be impressed at the resilience with which algos repeat the same pattern over and over again, hoping for a different outcome. It is now the 6th day in a row that the JPY-carry trade (be it USDJPY, EURJPY or AUDJPY) driven levitation has pushed equity futures smartly up in overnight trading. And by all accounts - in the absence of ugly macro news which in today's sparse data line up (just Personal Income and Spending and UMich consumer condfidence) - the same post early highs fade we have seen every day in the past week will repeat again. The overnight euphoria was driven primarily by Europe where Bloomberg reported 2 Year Spanish yields have traded below those of the UK for the first time since 2009. And since it is obviously not the strong fundamentals, what is continuing to happen, as has been the case since October 2013, is everyone is pricing in the ECB's QE, which even Weidmann is openly talkin about  now, which simply means it will most likely never actually happen, certainly not until it is too late.