Archive - Jan 2015

If the shockingly large victory of left-wing Syriza was not enough for the Brussels' bureaucrats, the party's rebellious leader Alexis Tsipras dared to go tie-less during this morning's swearing-in as Greece's new Prime Minister... As we noted earlier, 'non-conformity is part of the package'

Surprise! The weakness overnight in US equity futures has been eradicated in its best USDJPY-driven fashion. S&P, Dow, and Nasdaq futures have all managed to float higher on a sea of Crude and JPY carry exuberance to fill the overnight gap perfectly... except now that they have, USDJPY and Crude have turned down... We suspect the word "contained" will win CNBC-Bingo today...

There was some excitement in the capital markets overnight, when what was initially seen as an outright victory for Syriza, giving it an absolute, 151-seat majority in parliament - a fear that briefly pushed the EURUSD under 1.11 when the Euro PPT stepped in - ended up being a placing just shy of a majority with 149 seats. However, that same excitement fizzled several hours ago when the "radical left" party agreed to form a government with the "rightwing" group of the Independent Greeks in the aftermath of Syriza's historic win which harnessed the public backlash against years of belt-tightening, job losses and hardship.

The policy of safeguarding Boomer benefits with asset bubbles will lead to the destruction of the unprepared, the unwary and those who foolishly trusted our "leadership" and central bank to tell them the truth.

Making New Year “predictions” used to be an automatic, beginning-of-the-year exercise, to the point where readers generally expected such pieces from the pundits they follow. However, it is an activity which has died-out somewhat, a casualty of our propaganda-saturated Wonderland Matrix.

When all that we can see around us is nothing but fiction and illusion, all events appear to be arbitrary – since we are unable to observe cause-and-effect. By definition; arbitrary events cannot be predicted. Thus these New Year’s “predictions” have become a Fool’s Game, and having been burned once (several times?), most commentators have reached the similar conclusion that this is an exercise in futility.

The post-QECB euphoria in Greek asset markets was prognosticated by those who prefer to do such things as indicative that "the markets know something," positive about Sunday's (yesterday's) election... because markets are efficient and always 'price in' events (just like 1987, 2000, 2008 etc...). However, this morning ugliness in both Greek stock (especially banks) and bond markets suggests it was nothing more than algo-driven carry-inspired short-squeezes as both stocks and bonds plunged at the open. Stocks received the ubiquitous - well it's down so we better buy 'em treatment - but even that is fading as stocks catch back down to bonds' weakness, having unwound most of QECB's goodness...

The headline-reading algos were at the top of their game this morning when milliseconds after OPEC's general secretary Abdalla El-Badri said oil prices could reach $200 a barrel if there's a lack of investment following this price slump... though failed to provide any timeline for his forecast. WTI prices jumped $1 from $45 to $46 even as El-Badri noted the market was still over-supplied by 1.5 million barrels per day.

We've heard it all: snow, cold weather, hot weather, non one-time recurring, "one-time, non-recurring" charges, and even Bush. But when it comes to "excuses" for why one is wrong, this morning Goldman's note "Central banks stall a more bearish gold outlook" absolutely takes the cake.

• Alexis Tsipras: the Syriza leader about to take charge in Greece (Guardian)
• Tsipras to form anti-bailout Greek government after big victory (Reuters)
• Tsipras Forges Anti-Austerity Coalition in EU Challenge (BBG)
• East Coast braces, flights canceled as 'historic' blizzard bears down (Reuters)
• Rebels press Ukraine offensive, Obama promises steps against Russian-backed 'aggression (Reuters)
• Syriza Victory Brings Hope for Immigrants of EU Access (BBG)
• For Saudis, Falling Demand for Oil Is the Biggest Concern (BBG)
• Oil prices fall on market relief over Saudi policy (Reuters)

This morning both the SNB stunner from two weeks ago, and the less than stunning ECB QE announcement from last Thursday are long forgotten, and the only topic on markets' minds is the startling surge of Syriza and its formation of a coalition government with another anti-bailout party - a development that many in Europe never expected could happen, and which has pushed Europe to the bring of the unexpected yet again. And while there is much speculation that this time Europe is much better positioned to "handle a Grexit", the reality is that European bank balance sheets are as bad if not worse than in 2014, 2013, 2012 or any other year for that matter, because none of ther €1+ trillion in NPLs have been addressed and the only thing that has happened is funding bank capital deficiencies with newly printed money. You know what they say about solvency and liquidity.

Amid the devastation of yesterday's Mariupol artillery strikes which killed or wounded dozens, an 'odd' clip has emerged that appears to provide all the 'proof' a US intelligence officer would need to surmise that US military boots are on the ground in Ukraine. As the following clip shows, a Ukrainian journalist approaches what she thinks is a Ukrainian soldier (since he is wearing a Ukrainian military uniform and is carrying an AK) and asked him as they run through the battlezone, "tell me, what happened here?" His response, which requires no translation, speaks for itself.

Israel indicated earlier today that it has finally had it with Obama, with the above sequence of events culminated in what Haaretz described was a reciprocal snub of the "leader of the free world" by Israel's president Reuven Rivlin, who declined a White House invitation to meet with Obama during his upcoming US trip: After consultations, Rivlin finally declined the American suggestion. His advisers explained to the Americans that the two leaders’ schedules do not overlap, because Rivlin is expected to return to Israel before Obama gets back to Washington.  “At this stage, it has been agreed not to hold a meeting during his visit, due to the schedule constraints of both leaders, and that a meeting would be scheduled at a later date,” the statement said.

China has some stunningly beautiful natural landscapes, but, as boredpanda.com explains, they may not count for much when, in other parts of the country, pollution runs totally unchecked. China is very close in size to the USA.  Yet, as The Burning Platform notes, their population is the size of the entire Western Hemisphere, plus Japan, Germany, and France. The land can not support this mass of humanity without very dire consequences, and these shocking photos show what severe pollution people have to deal with in some parts of China...

The drop in the Yuan over the past 2 days is the largest against the USDollar since Nov 2008 as USDCNY nears its highest (CNY weakest) since mid-2012. What is more critical is that for the first time since the new 2% CNY peg bands, USDCNY is trading at the extremes - 11.5 handles cheap to the fix. At the opposite end of the spectrum, the EURCNY just dropped below 7.00 for the first time since June 2001 with the biggest 2-day strengthening of the Chinese currency against the Euro in almost 4 years. It appears the consequences of ECB QE, SNB volatility, and now Greek concerns continue to ripple through the rest of the world.. and at a time when China faces its ubiquitous new year liquidity squeeze, that is not a good sign.