Archive - Feb 4, 2015

Moments ago the latest attempt by the SNB to halt the surge of the CHF ended in flames, when following the ECB story, the EURCHF just tumbled well below 1.05, with barely a fight to keep it above the lower end of the corridor.

As politicians know, dead people don’t vote. In fact, politicians today routinely steal from the dead... specifically the unborn. Children that won’t even be born for decades will inherit enormous debts that have been racked up today on drones, bombs, and wars that were waged in our era. President Obama’s most recent budget makes this abundantly clear...

As Manhattan builds eight figure luxury apartment units merely to serve as bank accounts for international oligarchs, New York City’s homeless population soars to a new record high. It’s the ultimate manifestation of how criminal and crony this so-called “recovery” has been.

It becomes easier and easier to translate the propaganda of the One Bank (delivered by its messengers in the Corporate media) because the patterns of behavior of this crime syndicate continue to become more blatant/obvious.

The One Bank does not want to see any ‘defections’ amongst the member-states of the EU (i.e. any splintering of this totalitarian entity). The obvious reason for this is that the EU has morphed into a monetary straitjacket, as a single banking entity (the ECB) controls the printing presses of all EU states. To grasp the significance of this; we need merely refer back to the words of Mayer Amschel Rothschild (1744 – 1812), the original patriarch of the Rothschild clan, and architect of the One Bank.

"The honeymoon is over," warned SocGen overnight as "the trade of the year" turned into carnage after, essentially, a big policy error on the part of the central bank in the context of serious political pressures. Just today President Erdogan explained to whoever would listen that "interest rates are the cause of inflation," and "some are trying to hold Turkey back with interest rates," adding that "you can't decide interest rates based on inflation." However, his conclusion was what really sent the Turkish Lira spiralling... "unfortunately, this is the result of an independent central bank."

What are the other "highest conviction trades", i.e., most crowded trades, for the hedge fund community? SocGen has the answer.

You know the world has gone truly mad when... For what we believe is the first time, a Euro-denominated corporate bond yield has gone negative. Aa2-rated Swiss chocolate-maker Nestle saw its 2016 bonds close at -0.2bps yield follows the swing to negative yields among covered bonds (bank debt backed by loans) that started in September. As Deutsche Bank opines, maybe chocolate is the new Gold!!

Well that escalated quickly...

Dear 1%,

You are receiving this invitation because you live in the most expensive postal routes of Los Angeles...

Following the disgusting images of a Jordanian pilot being burned (allegedly) burned alive by ISIS yesterday, the US coalition against the terrorists appears to be faltering. As The NY Times reports, The United Arab Emirates, a crucial Arab ally in the American-led coalition against the Islamic State, suspended airstrikes against the Sunni extremist group in December, citing fears for its pilots’ safety. The UAE made it clear its pilots will not return to the fight until the Pentagon improve its search-and-rescue efforts, shifting the base of support from Kuwait to Iraq, after foreign minister, Sheikh Abdullah bin Zayed bin Sultan Al Nahyan, "let [Barabara Leaf] have it over this," the new American ambassador, why Central Command, in his country’s view, had not put proper assets in northern Iraq for rescuing downed pilots.

"... we would, under most circumstances, “see” this unanimous direction of all ten markets to the upside to be a harbinger of a bearish move… the harbinger of the end of the current bull market; but… and this is perhaps the very biggest of “buts”…this time may be different… maybe. This time the markets seem to want to levitate skyward and thus far any attempts to “call” the top and positions ourselves in anticipation of a downward price correction have proven futile and badly wrong."

Presented with no comment...

Earlier today, when the Markit PMI and the ISM non-manufacturing data disagreed violently over a key aspect of the economy, namely that according to the first, the all important, forward-looking New Orders had dropped to the lowest since the great financial crisis, while according to the latter, they rebounded modestly in January, we decided to go straight to the source: the unadjusted data which does not incorporate any gratuitous seasonal adjustments (which for the ISM, were just adjusted as part of its annual revision spectacle).  This is what we found.

The economy being talked about in the media just doesn’t exist, no matter how you view the unemployment rate. There is no spending because there is no income(marginally deficient). Instead, what we see is instability where these low levels of activity and true wealth creation persist. There are no “tailwinds” to be found here, only confusion about the relative state of progress. Going from really bad to less bad is not recovery, just another fact of an unstable economy plodding its way toward the next, and eventual, dislocation.