Archive - Jul 24, 2014

There are consequences to speaking publicly about the real state of the economy. After 8 years of service, Walmart CEO Bill Simon has been replaced by Greg Foran as President and CEO of the behemoth retailer. This comes just 2 week after Simon questioned the validity of the government's "rosy jobs numbers" on CNBC and several quarters of weak performance at the company (due to a weak economy). Walmart's press release explains that the new CEO has "a passion for fresh food" and is "one of the most talented retailers ever met." We are sure these are crucial factors to overcome the stagnating incomes of America for the largest retailer...

Curious why Portugal's second largest bank is in dire straits on the verge of default and as we reported yesterday, is threatening to impact - adversely - Portugal economy should the bankruptcy chain that has already claimed two of its HoldCos continue further? Then perhaps ask the following man: Richard Salgado, who until last month was CEO of Banco Espirito Santo and as of moments ago has been detained in a money laundering investigation.

So much for the idea of 'slack' in the economy, initial jobless claims just plunged 19k week-over-week to 284k (vs 307k expected) - the lowest since Jan 2006 (which was the lowest print since May 2000). This is the biggest beat of expectations in over 2 years. Continuing claims fell modestly. Let's not go popping the champagne corks of full recovery quite yet as non-seaonally-adjusted claims collapsed by their most in 6 months as the government saw fit to warn data-consumers that "claims are often very volatile this time of year," as auto shutdowns can cause claims to fluctuate. In other words, ignore this noise.

We warned 4 months ago that the UK especially should be fearful of sanctioning Russia and biting the hand that feeds its real estate recovery. However, it appears Cameron's ire has got the better of him, as The Telegraph reports, allies of Vladimir Putin are understood to be moving assets after British demands to punish the Russian president’s 'cronies' in the wake of the Malaysia Airlines disaster in Ukraine. The EU said Tuesday (albeit somewhat confusingly) that it had agreed to draw up a list of Russians who will face sanctions but the UK government refused to say which 'oligarchs' were being targeted as it was fearful of the risk of 'asset flight'. It appears that backfired...

• EU to weigh extensive sanctions on Russia (FT)
• U.S. lifts flight ban to Israel (Reuters)
• Russia says will cooperate with MH17 probe led by Netherlands (Reuters)
• Norway faces ‘concrete and credible’ terrorist threat (FT)
• Don’t Tell Anybody About This Story on HFT Power Jump Trading (BBG)
• But... but... PMI: Unilever Sales Growth Misses Estimates on Asian Slowdown (BBG)
• World’s Biggest Wealth Fund Reviews $8 Billion Russian Stake (BBG)
• Qualcomm latest US tech company to reverse in China (FT)
• Hamptons Home Sales Rise as Buyers Find More Inventory (BBG)

Update: According to AP, the  missing Algerian plane went down in central Mali, citing a U.N. representative,  contradicting earlier reports that it crashed in Niger.

Not a day seems to pass in the past week without some airplane catastrophe: first over Ukriane, next over the South China Sea, now in western Africa over Mali where moments ago Air Algerie reported said that it had lost contact with one of its passenger aircraft carrying 116 people on board, nearly an hour after takeoff from Burkina Faso bound for Algiers. And what is most stunning is that just like in the MH17 case, the flight lost radio transmission shortly after it was ordered to change its course due to "poor weather." According to an Air Algerie source "the plane was not far from the Algerian frontier when the crew was asked to make a detour because of poor visibility and to prevent the risk of collision with another aircraft on the Algiers-Bamako route. Contact was lost after the change of course."

This post is Fic-Dep Approved...

Ever since going public, it appears that Markit's giddyness about life has spilled over into its manufacturing surveys: after a surge in recent Markit mfg exuberance in recent months in the US, it was first China's turn overnight to hit an 18 month high, slamming expectations and fixing the bitter taste in the mouth left by another month of atrocious Japan trade data (where even Goldman has thrown in the towel on Abenomics now) following which the euphoria spilled over to Europe just as the triple-dip recession warnings had started to grow ever louder and most economists have been making a strong case for ECB QE. Instead, German July mfg PMI printed at 52.9, above the 52.0 in June and above the 51.9 expected while the Composite blasted higher to 55.9, from 54.0, and above the 53.8 expected thanks to the strongest Service PMI in 37 months! End result: a blended Eurozone manufacturing PMI rising from 51.8 to 51.9, despite expectations of a modest decline while the Composite rose from 52.8 to 54.0, on expectations of an unchanged print. Curiously the soft survey data took place as Retail Sales declined both in Italy (-0.7%, Exp. +0.2%), and the UK (-0.1%, Exp. 0.3%), which incidentally was blamed on "hot weather." Perhaps Markit, now that it has IPOed successfully, can step off the gas or at least lobby to have surveys become part of GDP.

When it comes to the apocalypse, Krugman likes to have his apocalyptic cake and eat it too. Krugman says that the recent concern about “debts and deficits” was a “false alarm.” He attempts to paint those who were concerned about the debt crisis as scare mongers. He sarcastically says that “the debt apocalypse has been called off.”

There is confusion over what legal tender law does. It doesn't force merchants to accept dollars under threat of imprisonment. It attacks lender, by granting debtors a right to repay in dollars.