Archive - Nov 2015

While so much hope is pinned on El Nino relieving California's drought in early 2016, climatologists suggest tempering that optimism a little as what is really needed is snow. "Since it has been dry for so long, people get excited,” says one hydrologist, but, as Bloomberg reports, without snow "the notion of fully recovering from the drought is extremely unlikely,” as if the storms come in as rain, or the mountain snow can’t pile up high enough, a lot of water will be lost.

Gobble, gobble, gobble...

The bull market in U.S. equities has narrowed over the past 6 months as strength has become concentrated in large cap stocks. Recently, strength has narrowed even among those large caps.

China's aluminum and nickel producers have asked Beijing to buy up surplus metal, sources said, the first coordinated effort since 2009 to revive prices suffering their worst rout since the global financial crisis. China Nonferrous Metals Industry Association had suggested that the state buys 900,000 tonnes of aluminum, 30,000 tonnes of refined nickel, 40 tonnes of indium, and 400,000 tonnes of zinc. Or, in other words, "QE for metals."

Is Apple going to produce more electric vehicles ten years from now than BMW?

On Monday, Mauricio Macri, the son of Italian-born construction tycoon Francesco Macri, beat out Cristina Kirchner’s handpicked successor Daniel Scioli for Argentina’s presidency in what amounted to a referendum on 12 years of Peronist rule. Now, Macri faces a trio of daunting tasks: i) restore central bank liquidity, ii) implement a new FX regime, and iii) tackle the ballooning budget deficit. The most most pressing concern: the central bank is literally out of dollars. 

"The dealer market has collapsed, and all that's left are investors trading the same few bonds back and forth, leaving pricing services guessing with bigger and bigger margins of error on the real value of illiquid debt. That's the real problem. And it's not one the SEC can fix by targeting 'transcendent liquidity' in ETFs."

U.S. drone operators are inflicting heavy civilian casualties and have developed an institutional culture callous to the death of children and other innocents, four former operators said at a press briefing today in New York. “We have seen the abuse firsthand... and we are horrified.”

“Unknown air traffic position onto Humeymim 020, redirect to 26 miles. This is Turkish Air Force speaking - en guard. You are approaching Turkish airspace. Change your heading south immediately."

So if Draghi pulls a "Draghi" on December 3, and stuns the market by admitting he merely jawboned the ECB's "assured" easing to death, with the EUR now pricing in both a 15 bps rate cut and more QE, and thus making any actual by the ECB meaningless (and why should the ECB actually launch a bazooka round when jawboning is enough) you have been warned.

Why Now?

What do you do when all of the low hanging fruit is gone? That question is one that oil producers are increasingly facing as they confront an oil price slump that is now more than a year old and shows no serious signs of abating.