Archive - Feb 10, 2015

The Jefferson Airplane sang about truth and lies nearly 50 years ago.

“When the truth is found to be lies

And all the joy within you dies…”

Restating their insight to make it relevant to our global delusions about real money – gold and silver – and the much less real money we call dollars, euros, pounds, yen and so forth:

When the truths we want to believe are clearly lies,

Then CONFIDENCE in our currency dies…

WTF!!!

Once again we found ourselves bewildered while watching financial discussions on television. All one needs to do to follow along is forget your rational objective analysis at the door, have another glass of the proverbial “Kool-Aid™, and chant with the congregation panel “everything is just awesome!” Why? Because it’s in the “numbers!” When you listen to most of these debates by economists using today’s “numbers” one can’t help but think any release of data must be taken as holy writ. For our money, when it comes to this new theology of economics, we’d rather be with the heretics. Maybe we don’t understand how they can believe the numbers they recite. But we do no one thing above all else. We won’t partake in the Kool-Aid.

"Serf" or "Pawn"?

The politicians of Europe are plunging into a form of ideological fratricide as they battle over Greece. Accordingly, all the combatants - the German, Greek and other national politicians and the apparatchiks of Brussels and Frankfurt - are fundamentally on the wrong path, albeit for different reasons. Yet by collectively indulging in the sum of all statist errors they may ultimately do a service. Namely, discredit and destroy the whole bailout state and central bank driven financialization model that threatens political democracy and capitalist prosperity in Europe - and the rest of the world, too.

But everything was supposed to be fixed?

*HALLIBURTON WILL CUT 5,000-6,500 JOBS: HOUSTON BUSINESS JOURNAL

WTI is tumbling down 5%, nearing the crucial $50 level...

“The Greeks are digging their own graves,” warns one EU official, according to MNI, with another exclaiming the Greek plan as “hopeless” and added “how can you have a plan when you make no payment obligation till the autumn and then you probably scrap that.” Simply put, speaking on condition of anonymity, an EU official described the situation as “berserk” adding “there is no plan.”

That high-yield credit, crude oil, Treasuries, and USDJPY do not...

While not quite as brisk as last month's 3 Year auction, today's just concluded sale of $24 billion in 3 Year paper was very solid for one more month, with the High Yield pricing at 1.05%, an impressive 1.1 bps through the When Issued, even as the yield jumped from January's 0.926%. The Bid to Cover, perhaps reflecting the extra pick of 12 bps in yield, rose ever so little, increasing from 3.330 to 3.345. But it was the internals where as usual the action was, with the recent trend of collapsing Direct demand not disappointing, and in January only 7.2% of the final takedown when to Directs: the lowest since April 2012. The offset: a surge in the Indirects, typically foreign central banks, which ended up with 48.9% of the paper - the most since May of 2010!

Feel like trading FX has become next to impossible, with massive, gaping bid-ask spreads, strange "tractor beams", completely unexpected stop loss runs, and - of course - central banks behind every corner? Don't worry you are not alone. According to Bloomberg, that's precisely the case as "it hasn’t been this difficult to trade currencies since the collapse of Lehman Brothers Holdings Inc. shook markets worldwide."As for the reason why, well: take a guess.

Germany's Steinmeier reiterated that "Greece needs to respect its bailout pledges," but Greek Finance Minister Varoufakis told lawmakers that "the post-bailout period for Greece begins today," warning that...

*GREECE WON'T ACCEPT BAILOUT TERMS DEEPENING CRISIS: VAROUFAKIS
*VAROUFAKIS: WE DON'T SEEK A CLASH, WE ARE AWARE OF PROSPECT

Demanding a new loan contract with partners, Varoufakis concluded that Greece "seeks an honest anti-bailout agreement." Not what the EU wants to hear...

When Ukrainian army officers came to the Ukrainian village of Velikaya Znamenka to tell the men to prepare to be drafted, they weren’t prepared for what happened next. As the commanding officer was speaking, a woman seized the microphone and proceeded to tell him off: “We’re sick of this war! Our husbands and sons aren’t going anywhere!” She then launched into a passionate speech, denouncing the war, and the coup leaders in Kiev, to the cheers of the crowd. What she did is now a crime in Ukraine: the only reason she wasn’t arrested on the spot is that the villagers wouldn’t have permitted it.

"According to the University of Michigan survey, consumers have not been this upbeat since January 2004, when the economy was booming. The natural outcome should be for consumers to splurge, hitting the malls and going out to restaurants. But much to our surprise, the data suggest otherwise." - BofA

With 4-way 'peace' talks set to re-commence in Minsk today with the Germans stating "difficult issues" remain following yesterday's confirmation that a "military solution is not possible," we thought the following image summed up life (as it is) in Eastern Ukraine currently...