Archive - Apr 2014

The USDRUB rate is back above 36.00 - nearing its record lows - despite a surprise Russian rate hike this morning aimed at stalling the capital outflows. It seems Lavrov's comments that Kiev will face "bloody justice" geopolitical angst is trumping any arbitrage or macro data flows for now. Russian stocks are also fading.

Bonds, Gold, and JPY are bid this morning as US equity futures are fading fast. The Dow and S&P futures are now back below pre-AAPL/FB levels and Nasdaq futures falling fast. Gold is back above $1300 (up over $30 from yesterday's pre-Putin lows). Treasuries, led by the long-end, are rallying as safe-haven bids appear across the whole complex. 30Y yields are down to 3.53 - the lowest since July. JPY is bid once again as USDJPY tests back to the crucial 102 level.

Claiming $100 million in North American weather-related costs, and $310 million losses due to the devaluation of the Venezuelan currency, Ford Motor Company missed revenues and earnings quite significantly:

*FORD 1Q AUTOMOTIVE REV. $33.9B, EST. $34.2B
*FORD 1Q ADJ. EPS 25C, EST. 31C

Furthermore, Ford lost market share (for 0.6 percentage points to 15.3%) and expected operating cash flow in 2014 to be substantially lower than 2013. Ford is trading down 3% in the pre-market.

• Russia raises interest rates to 7.5% (FT)
• Shanghai to Allow Raw Material Exchanges in Trade Zone (BBG)
• US, Japan Fail to Clinch Trade Deal (WSJ)
• 'We don't have a magic wand', says ECB's Constancio (Reuters)
• Tokyo Inflation Quickens to Fastest Since 1992 (BBG)
• Demand for Home Loans Plunges (WSJ)
• EU banks urged to grasp chance to raise capital (FT)

• Russia has done nothing to implement Geneva accord
• Ukraine will continue to comply with Geneva accord
• Ukraine urges Russia to keep promises, condemn extremists
• Ukraine calls on international community to unite against Russia,
• Russian invasion will turn into Europe-wide conflict, and the punchline:
• Russia Wants to Start Third World War

There have been 13 senior financial services executives deaths around the world this year, but the most notable thing about the sad suicide of the 14th, a 52-year-old banker at France's Bred-Banque-Populaire, is she is the first female. As Le Parisien reports, Lydia (no surname given) jumped from the bank's Paris headquarter's 14th floor shortly before 10am. FranceTV added that sources said "she questioned her superiors before jumping out the window," but the bank denies it noting that she had been in therpapy for several years.

If you thought that CCTV cameras tracking your every move in public was bad enough, you’re going to just love AISight (pronounced “eyesight” of course). The invention of a Houston, Texas based company called BRS Labs (which stands for Behavioral Recognition Systems) is headed by former secret service special agent John Frazzini, and this Orwellian surveillance platform brings artificial intelligence to all of those creepy cameras that have been installed everywhere around you. Apparently, this system is currently being installed in Boston, and has already been implemented in Chicago and Washington. The most disturbing part about this platform is that this artificial intelligence defines what is “normal” behavior and anything that falls outside of that narrow band can be flagged for “pre crime” potential.

Some worry about the quality of the drinking water in China, others fear the choking smog of the cities, still more are concerned about the inevitable collapse of their real-estate bubble; but none of these compare to the Gansu Province (in the Northwest of China) strongest sandstorm since at least 1996 that turned day into night Wednesday afternoon.

With President Obama in the middle of the pissing match between Japan and China's nationalist provocations, we thought it perfectly appropriate that none other than Justin Bieber would visit the Class-A war criminal housing Yasukuni shrine. As might be expected, his actions stirred up controversy... We are sure Obama was quick to point out that Bieber is Canadian...

On the subject of High Frequency Trading, our respondents are thus far unimpressed with the argument that HFT helps U.S. equity market participants.  Fully half answered that it is “Harmful” or “Very Harmful”.  Only 19% said it was “Helpful” or “Very Helpful” to participants. ... In short, the survey seems to tell a very clear story. Most professional investors and institutional brokers do not feel that markets treat all participants fairly. They worry about how fragile markets might become during periods of abnormally high volume. At the same time, they are cautiously picking their way through the minefield in which they find themselves and are unsure what role regulators should play. How the landscape will change as a result of their unease is still unclear. What is certain is that change is coming.

A ‘Perfect Storm’ of demography and debt will economically and financially doom almost every country on earth. It will be TEOTWAWKI – ‘The End Of The World As We Know It’. No, it’s not the end of life or even the end of civilization. However, when it’s all over, nothing will ever be the same and that includes the disappearance of much of the middle class.  The good news - The storm won’t last forever. The bad news is there will be much more pain before it ends unless you make an effort to understand what’s happening and why.

Since the centrally-planned market is so broken it no longer has the capacity to evaluate and respond to any geopolitical threats and shocks, here - lest anyone think that with the S&P a hair away from all time highs there is nothing to worry about - is a summary of all the simmering, and in some cases, searing and/or scorching geopolitical conflicts and other tensions around the world including Ukraine, Hamas, the US-Japan defense treaty, Syria, South Sudan, Catalonia, Scotland, Thailand, Nigeria, Turkey, Venezuela, Ivory Coast, Bolivia, South Africa, Argentina, Brazil, Tunisia, Yemen, Libya, Iraq, Lebanon, Bahrain, Algeria, Pakistan, Moldova, Cyprus, Bosnia and Herzegovina, Greece and more.

The figures are out and it looks like the United States exported a record amount of gold to Hong Kong in January.  Not only is this 3 times more gold exported than January 2013 (17 mt), it was 84% more gold than the record month set in August (31 mt).  As we can see, gold bullion is fleeing the U.S. and heading to the East.  Again... that 57 mt figure is just gold bullion. As the West continues to play games with Monopoly money and Derivatives manufacturing, the East accumulates as much gold as it possibly can.  While Main Stream Media and its Banker cohorts release bearish $1,050 price targets for gold, the Asians and Indians smile as they build the largest amount of gold stocks in the world.

If this evening's data from Tokyo on April's Consumer Price Inflation is any guage on the national inflation picture, those hoping for moar stimulus had better start praying for war. Thanks to favorable comps and the April 1st tax rise, Tokyo CPI jumped to 2.9% YoY - its highest since 1992 - and well above the BoJ's 2% inflation goal. Mission accomplished (almost)... except that the economy just won't play ball and now stocks are fading too (along with Abe's approval ratings).

A picture paints a thousand words - though perhaps only one is necessary to describe NATO...(for now)...