Archive - Mar 10, 2015

With all the focus on Grexit in recent weeks, investors have not paid much attention to the risk posed by ‘Brexit’ or the possibility of the UK leaving the European Union.

The US economic recovery continues as the number of homeless in New York's shelters rises 50% in three years. De Blasio says New York needs to take "immediate and bold steps" to combat the worsening problem. 

From the meltup to Nasdaq 5,000 day to today... The Dow is down 600 points from its highs...

Arbitrary Price Weighting

When does the Euro become the Ruble?

The almost-$2 surge in WTI crude prices on Friday - proving recovery is here and stability is back - is gone... long gone. Following comments from Chevron of major cost cutting, slashing capex (down 13% YoY), but ramping production of shale and tight assets, WTI crude has tumbled back to a $48 handle.

The entire formerly rich world is addicted to debt, and it is not capable of shaking that addiction. Not until the whole facade that was built to hide this addiction must and will come crashing down along with the corpus itself. Central banks are a huge part of keeping the disease going, instead of helping the patient quit and regain health, which arguably should be their function. In other words, central banks are not doctors, they’re crack dealers and faith healers. Why anyone would ever agree to that role for some of the world’s economically most powerful entities is a question that surely deserves and demands an answer.

LEW SAYS GOVERNMENT TRYING TO UNDERSTAND HIGH-FREQUENCY TRADING

"The chart below illustrates our daily Adjusted Net Trading Income from January 1, 2009 through December 31, 2014. The overall breadth and diversity of our market making activities, together with our real-time risk management strategy and technology, have enabled us to have only one overall losing trading day during the period depicted, a total of 1,485 trading days..." - Virtu S-1

As Citi predicted last week, all German bunds look set to converge on -0.20% as the structure of ECB QE flattens the yield curve. 

Per capita energy consumption remains at recession levels. There are other factors at work here, of course, but if we combine these data series, we get a picture not of robust growth akin to previous post-recession periods, but a "recovery" that by previous standards remains recession-bound.

For all the talk of a recovery, the recession may have quietly arrived as confirmed first by factory orders and now wholesale trade sales...

Well that escalated quickly...

Stick a fork in the now proven wrong theory that plunging gas prices would boost consumer spending. Why? Because 4 months after the full impact of tumbling gas price was said to become apparent, consumer spending is not only not picking up, it is in fact slowing down more, especially in those places where there was snow in the winter, and gasp, where oil price actually fell the most!

The Apple Watch may be pretty... but you are going to need up to 8 of them to make it through a full day. While Tim Cook proclaimed 18 hours of "all-day battery-life" - itself not particularly impressive compared to competing products, hidden deep in Apple Watch's product page is a little admission that battery life (in use) could be as low as 3 hours...

Forget 2013's "taper tantrum", FX markets are roiling over a full-blown "rate-hike-rage" as the USD Index surges to a new 12 year high, rising 23% in the last 8 months - the fastest surge since 1981. Not only is this dramaticaly bad for the US equity earnings picture but the carnage being unleashed across developed and emerging market currencies is almost unprecedented. Despite reassurance from The Fed that a strengthening dollar is positive for US jobs, The White House has now issued a statement that a "strengthening USD is a headwind for US growth."