Archive - Oct 20, 2015

"We wish that Iran would change its policies and stop meddling in the affairs of other countries in the region, in Lebanon, Syria, Iraq and Yemen. We will make sure that we confront Iran's actions and shall use all our political, economic and military powers to defend our territory and people."

The US has seen that movie before, it's not a happy ending. Oh, and enjoy that AAA credit rating while it lasts.

Many of the systems we take for granted are historical accidents. Either based on legacy systems hundreds of years old (higher education) or assembled in a short-term, ad hoc fashion (post-1940 national defense/ national security), these systems have expanded into vast patronage systems that are completely out of touch with 21st century needs, costs or realities. The U.S. healthcare system was not planned; it is largely accidental.

He's right ...

"It was like ‘Hey,…. its Crackas With Attitude.’ He was like ‘What do you want?’ We said ‘2 trillion dollars hahhaa, just joking. 'How much do you really want?' 'We just want Palestine to be free and for you to stop killing innocent people.'"

While stocks surge ingloriously on the back of a credibility-less Fed (and hope that PBOC, ECB, BoJ will unleash QE-moar), S&P 500 forward earnings expectations are down 15 days in a row - that is the longest losing streak since the financial crisis. In fact, S&P 500 earnings expectations are down over 2% year-over-year. The last time earnings growth expectation swung from positive to this negative was August 2008.

Anecdotal evidence from press reports, survey data and positioning data all agree on one point: very few people believe that the recent rally could actually be for real. With a pullback underway, we now have a chance to judge its nature – this should soon tell us if the recent rally was just another fluke or if it retains the potential to become a more sustained advance.

Stocks of “vice” industries like alcohol and tobacco are showing leadership – that hasn’t always been good news for the market.

While this morning's dead cat bounce pressed WTI Crude up to almost $47 (Dec contract), it has been an almost non-stop downswing since China reported GDP. This morning's chaos in the T-Bills market appears to have spooked algos out of risk-on positions and broken WTI Crude back to a $45 handle...

Less than two weeks ago, when previewing the upcoming debt ceiling battle which is shaping up to be far more contentiously than most expected, we said to "keep an eye on T-Bill yields for the turning point when the market decides this situation is becoming serious." And while things turned "serious" yesterday, moments ago the bond market officially entered into "panic" territory.

For the biggest, and most criminal, cover up by a Japanese government in recent history, the irradiated chickens are coming home to roost and earlier today Japan finally acknowledged the first "possible casualty" from radiation at the wrecked Fukushima nuclear power plant, a worker who was diagnosed with cancer after the crisis broke out in 2011.

“In an as-yet unreleased statement circulated to the BBC, myself and others, the UN Office on Drugs and Crime (UNODC), which has shaped much of global drug policy for decades, call on governments around the world to decriminalise drug use and possession for personal consumption for all drugs.”

Just as we noted last night, when IBM's dismal earnings were unleashed upon a frantic market, there was only one thing that could save stocks.. USDJPY 120!!

But it seems the "juice" has run out...

Presented with no comment...

With less than 2 weeks left until the "debt ceiling accident" that Jack lew has warned about, T-Bills (maturing beyond Nov 3rd) are being dumped wholesale. Oct 29th Bills are trading -1bps but Nov 12th Bills are up 6bps at 12bps, the 1-month WI is at 16bps. Of course, equity markets will be the last to notice and algos appear to be seeing this as a panic-buying-opportunity.