Archive - Jun 2014

Moments ago Oracle reported that it missed on both the top line ($11.33 billion vs Exp. $11.48 billion), and the bottom line (EPS $0.92 billion, Exp. $0.95). The company didn't blame snow (blaming Snowden would be more appropriate), and yet despite the 6% tumble in the stock price, the miss in operating results was not the most surprising aspect of the company's Q4 earnings release. What was? The following chart breaking down Oracle's quarterly spending on stock buybacks versus capital expenditures.

US equity markets were unable to maintain any of the kneejerk, VIX-smashing jerk higher post-FOMC momentum from yesterday and closed unch to slightly red (after some US open exuberance ran all-time-high stops once again). Equities did catch some bid late on as rumors of AAPL iWatch spread. VIX hung very stable at around 10.6 providing some support for stocks. Away from stocks flatness, Treasuries had a violent day. Early strength following Yellen yesterday began to fade as US equity markets opened and yields pushed higher, then when the 30Y TIPS auction tailed, longer-dated bonds slammed higher in yield. There was a mild pullback rally into the close but 10Y ended +4.5bps (30Y +7bps, 3Y unch). The big news of the day - given how flat USD was - is the huge spike higher in gold (+3%) and silver (+4.4%) - the biggest jump in 9 months. Gold and Silver are back at 3-month highs (breaking back above $1300 and $20 respectively). Once again JPY carry entirely decoupled from stocks but a late-day modest melt-up dragged all the major indices (except Nasdaq) just into green for the day) but leaves the S&P lagging gold and silver year-to-date again. S&P 500 closes at another all-time high.

Saddam Hussein had Muhammad Saeed al-Shaaf, nicknamed "Baghdad Bob" or "Chemical Ali", to explain just how great things were in Iraq (as bombs were raining down around him). With the US 'demanding' the removal of Maliki, we present the Iraq's new military spokesperson, whose name we are sure will raise a few eyebrows - Saad Maan.

Moments ago Kevin McCarthy of California was elected majority leader by House Republicans, according to Riva Litman, spokeswoman for Republican Conference Chairman Cathy McMorris Rodgers. He fills the spot lost by Eric Cantor following his shocking loss to a tea-party activist two weeks ago. McCarthy win is not surprising: it was largely expected. What however, is notable is that with a self-declared net worth of between only $76K and $266K, albeit is substantial jump from the he $16K he revealed in 2008, he is by far the poorest member of the GOP leadership group.

Over 7 years ago, John Kerry had his last public encounter with the military forces in Iraq; and it didn't go down so well...

Larry Fink told the world this morning that central banks are holding a floor under stock prices (but wouldn't expect to see large price increases) - and judging by the gamma imbalances in volatility-land, they are using options markets to unriggedly manage that implicit put. However, given the utter dominance of the machines in the market and any reaction when real volume hits stocks (always down), we thought, courtesy of Nanex, a gentle reminder of just how quickly the Fed put disappears would be useful in this new "we can never get hurt, valuations are within norms, there is no complacency" normal.

what will make the Ukraine restructuring fascinating is if the "activist" bondholder investors, aka vultures, aka holdouts, are not your usual hedge funds, but none other than the Kremlin, which after accumulating a sufficient stake to scuttle any prenegotiated, voluntary transaction can demand virtually anything from Kiev in order to allow the country to make the required adjustments on its bonds to avoid an outright sovereign default. Because who else can't wait for Putin Capital Management LP?

UPDATE: Delayed Until 1315ET

"Boots on the ground" or no boots-on-the-ground? Airstrikes or no airstrikes? Maliki "in" or "out"? ISIS Sanctions? Red lines? YouTube clips? President Obama has his hands full dealing with this self-created SNAFU... but we are sure this press conference will clear it all up (likely as Yellen noted yesterday, it's just "noise")...

Gold has surged over $41 and silver over 70 cents to over $1,314 and $20.46 per ounce or 3% and 4.2% respectively as oil ticks higher on the tinder box that is Iraq ... Faber recently said how he will “never sell his gold”, he buys “more every month” and believes storing gold in Singapore is "safest”.

Gold has been flashing red this morning that something is happening. Bonds started to crack and then the 30Y TIPS auction tailed... and bond yields are smashing higher. And now stocks are being sold on heavy volume as VIX rolls over... what did Janet say to do now? We need another press conference...

An interesting chart to look at, is the CLMI vs the SPX.

Missing me now?

What’s a crony status quo to do when it is ultimately confronted with an unruly mob of plebs frustrated with the fact median wages haven’t increased in forty five years, while the 0.01% has stolen everything in sight with the help of the Federal Reserve and corrupt Washington D.C. politicians? Well, naturally you’d launch the South African made Skunk Riot Control Copter, fully equipped with a suite of high-definition and thermal imagine cameras, strobe lights, speakers and a pepper spray firing paint ball gun which can fire 80 shots per second!

Having a ball...

The damage done by Central Planning has yet to come home to roost. Six years into the Grand Experiment--that Central Planners can pick winners who just happen to be their cronies--the chickens of consequence are still making their way home. And when they finally come home to roost, we will all discover that the economy is much more fragile than advertised by the Central Planners and their media toadies.