Archive - Nov 2015

Overnight, the SNB which unlike the Fed and the other "serious" central bank hedge funds, released a 13-F updating on its latest stock portfolio. We learned that in the quarter in which AAPL stock tumbled to $92 during the August 24 ETFlash crash, the Swiss money printing authority which reported a record $20 billion loss in the second quarter, and a record $52 billion in the first half, added another 909,000 AAPL shares, bringing its new grand total to 10.3 million shares,

US equities are surging, talking heads are exuberant, and China's fixed - so why are Americans so miserable? Bloomberg's Consumer Comfort index plunged the most since February in the last week, near 2015 lows as it appears The Fed is rapidly realizing "you can fool all the people some of the time, but you cannot fool all the people all the time." It appears the cohort that 'gave up' the most in the past week was 'black' Americans, whose comfort plunged below 'white' Americans for the first time in over a month.

Another anecdote of the bursting ebulience for Biotechs. As Valeant collapses further, Kura Oncology - which IPO'd yesterday at $8 - has today crashed back below its IPO price (down over 56% from yesterday's opening highs).

Having pushed up towards $49 in its exuberant "a hawkish fed must mean everything in the world is awesome" way, yesterday's reality check on inventories (rising), production (rising), and The Fed (we are going to hike no matter what) which means the dollar too is surging and is pushing down on commodity prices, has dumped WTI Crude back below $46 and erased all of the gains post-FOMC.

Greece’s Public Power Company is angry. The amount of unpaid bills by its customers has reached the astronomic EUR 2.5 billion. The PPC is so angry that it plans to cut the power to those without outstanding debts as soon as possible - a whopping 2.1 million Greeks face darkness.

"Real Output" is perhaps an even more accurate indication of the true state of the US domestic economy considering all the complaints by the Fed over the state of the global economy and eliminate the "noise" from trade which has been depressing GDP for quarters. Unfortunately, what the real output data reveals is not pretty. Rising by 2.3% Y/Y in Q3, this was not only down substantially from 3.4% in Q3 and 3.5% in Q1, but this was the weakest increase since Q1 2014! And then there are jobs...

Zero Hedge first revealed the contingency plans that libertarian online retailer Overstock has implemented "in preparation for the next collapse" ten days ago. Today, the strategy outlined by Overstock Chairman Jonathan Johnson has resonated across the Atlantic and this morning as the Financial Times catches up to the story of an "online retailer hoarding gold as crisis defense" in which it calls the retailer a "redoubt of doomsday conservatism" adding its policy to prepare for the loss of central-planning control is "redolent of the small band of US survivalists preparing for the end of civilisation."

A modest 1.4% rise in unit labor costs in Q3 was dramatically below the expected (and hope-strewn) 2.5% growth and means unit labor costs have missed expectations for the 3rd quarter in a row for the first time since 2003. Perhaps just as bad, historical (weak) data was revised notably lower but of course, as Yellen and Fisher have made clear - none of this matters for the data-un-dependent Fed's December decision.

Just when you thought (for the 10th time this year) that the worst was over in the US energy space, Challenger Grey reports a massive spike in Energy sector layoffs - to six-month highs. For context, energy sector layoffs are 9 times higher in 2015 than 2014 and Texas - with 103,422 layoffs - is the worst state for job cuts (despite Dallas Fed Fisher's previous insistence that the state is 'diversified'). Despite the ongoing side in initial jobless claims, employers have announced 543,935 job cuts in 2015 so far, 31% higher than 2014.

Other asset-classes are screaming that deflationary headwinds are very much still in play...

• BOE Stays Cautious on Rate-Hike Timing as Inflation Outlook Cut (BBG)
• China Enters Bull Market (WSJ)
• Britain says Islamic State likely brought down Russian plane (Reuters)
• Dollar jumps as markets fix on December rate expectations (Reuters)
• Activist Investor Bill Ackman Plays Defense (WSJ)
• BOJ Survey Data Reveals Signs of Growing Inequality in Japan (BBG)
• UAW Warns of General Motors Strike If Workers Fail to Approve Contract (WSJ)

For those eager to cut to the chase and curious if overnight we have had another standard USDJPY ramp levitating US equity futures on low volume, the answer is yes. And since the USDJPY carry was patient enough, it managed to trigger the 2100 ES stops and as of this moment the futures were comfortably on the politically-correct side of 2100.

Collectivism requires the homogenization of society, to the point that individualism is frowned upon and success is treated as negligible. The nightmare of collectivism is the defining battle of our age. It is in this era that we will decide whether or not individual liberty and freedom of thought are more important than the illusory security and “harmony” of the collective. Collectivism and individualism cannot coexist; confrontation is inevitable. Recognizing this, and preparing for it, is our duty as free human beings.

A week ago, we showed a video of what we hoped was not representative of the general sentiment among Germans towards the refugee crisis  as two ladies suggested, "Every year 2-3 million arrive...it’s generally about foreign infiltration." Now we have the other side as the following video shows a muslim man threatening a German that "his daughter will wear a headscarf and marry a Muslim and that Germans stand no chance with their low birth rate," adding that muslims will will "conquer Europe not with weapons, but with birth rates."

It appears a double in a week has prompted - just as we saw yesterday - some more profit-taking in Bitcoin as after topping $500 earlier today, the virtual currency has plunged (considerably more than yesterday) to $368 in late US trading as a high volume selling program was unleashed on the virtual currency.