Archive - Jan 2015

In a day of furious disappointments, the Case-Shiller housing report, albeit looking at the ancient economic picture as of November, confirmed what most had known: that the growth in housing prices slowed down yet again on not only a Year over Year basis, which rose just 4.31%, the lowest annual increase since October 2012 but also dropped by -0.22% decline on a monthly basis, which may not sound like much, but was the worst monthly drop since February 2012!

"Extreme" market volatility conditions... as NYSE explained it.

Straight forward look at the Federal Reserve and what to expect.  

Overnight, there was much commotion in the precious metal space when, out of the blue, the IMF reported that months after announcing it had unexpectedly repatriated over 120 tons of gold from the NY Fed, the Netherlands had also purchased some 10 tons of gold in the open market, taking its total to 622 metric tons, the highest since 2007, a period in which it had been unchanged for 8 years. Except... Moments ago Bloomberg blasted something even more unexpected. Namely that the "Dutch Central Bank Says It Did Not Increase Gold Holdings"!

Continued conversations on OIL...how does a trader approach such a trade?

Following November's across the board ugliness in Durable Goods data, the hockey-stick extrapolators all positioned for the bounce back... Only 1 of 57 economists expected a negative print! But the actual data was a total disaster. Against expectations of a 0.3% rise (following last month's 0.7% drop), December printed down 3.4% and November was revised drasticaly lower to down 2.1%. This is the lowest durable goods ex-transports since March.

The U.S. government is already bankrupt. This is old news to anyone who has been following the number-crunching of individuals such as former Reagan economic advisor, Professor Lawrence Kotlikoff. The U.S. government, the greatest debtor in the history of the world, claims that it is about to (finally) raise interest rates, which have been permanently/fraudulently frozen at 0% for now over 6 years.

Well that escalated quickly. While this morning's weakness in stocks is being pegged to earnings misses (and rightly so), the selling pressure started as Europe opened and Greek stocks and bonds accelerated their freefall. Greek stocks and bonds are now below ECB QE levels and WTI Crude back at a $44 handle as CAT CEO demands Fed does not raise rates due to the "fragile" US economy... The Dow is now 425 points off Friday's highs...

Well, pretty much anyone who had read any of our CAT monthly sales reports over the past 2 years.

Following yesterday's earnings disappointments, most notably from Microsoft which is down 7% this morning following the usual after-the-fact downgrades from JPM, Citi and Nomura, futures were already on a the back foot heading into this morning - no doubt impacted by the deja vu ridiculous move in the EURCHF noted earlier - when the latest batch of earnings just hit, of which Dow component Procter and Gamble stood out and which missed the top and bottom line.  But the punchline, and in direct refutation of what Jack Lew said previously about a strong dollar being good for the US economy, was this:"The outlook for the year will remain challenging. Foreign exchange will reduce fiscal 2015 sales by 5% and net earnings by 12%, or at least $1.4 billion after tax." In other words, P&G will "offset" the surge in the USD with more layoffs. So when Jack Lew said "good" he really meant "bad."

For those who slept through the recently-downgraded to junk "Snow Tempest In A Teapot Of 2005", you may want to check the stops of any open EURCHF trades, because, two weeks after the SNB shocked the world and blew up countless retail and institutional FX trading desks, as well as numerous macro hedge funds, the SNB - allegedly - tried to for round two earlier today, when just hours after SNB's Danthine - the same guy who said the EURCHF floor is the bedrock of SNB policy two days before the SNB eliminated it - said that "the SNB remains ready to intervene on foreign exchange markets" that this happened: a dramatic, 250 pips surge in the EURCHF starting at 3 am Eastern.

While the #Blizarrdof2015 may have been a dud, it is the skies above New York, some 10,000 feet and above, that is where the real action lies. Or rather doesn't. As this real time snapshot of airplane traffic over New York, not a plan is to be found.

Nearly two weeks ago, we were surprised to read on the Navy's website that one of America's prize aircraft carriers, CVN-74, John C. Stennis (whose crew is perhaps best known for the following awkward incident), as part of an operational training period in preparation for future deployments, just underwent not only its first ordnance onload since 2010, but, according to Senior Chief Aviation Ordnanceman Jason Engleman, G-5 division's leading chief petty officer, "the biggest ordnance onload we've seen."