Archive - Mar 12, 2015

"For the time being, the problem is one of a scarcity of bonds – where it is difficult to find all the bonds across the curve that need to be bought – but, if yields keep falling further; eventually it will become a problem of shortage of bonds due to the 25% threshold in terms of ECB ownership – where there is not enough bonds for the ECB to buy the required amounts," BNP warns. At that point, there will be an effective Q€ taper — and the tantrum that comes with it.

There was a point in 2010 when American capitalism might have had an opportunity to heal itself and commence on a long march toward sustainable growth and real wealth gains. But the monetary politburo would have none of it - keeping the pedal to the metal until this very moment... and the rest is history. The Fed and the other central banks around the world have fomented a new and even more virulent and dangerous financial bubble.

It appears Washington is losing some control among its allies. Amid a flurry of high-level visits to Vietnam last year, the US has been pouring in aid and assistance in health, education, landmines clearance, scholarships and nuclear energy. The reason is now becoming clear. As Reuters reports, Vietnam has been allowing Russia to use a former US military base to refuel nuclear-capable bombers as it rattles its sabre over the Asia-Pac region.. and America would like that to stop: "we have urged Vietnamese officials to ensure that Russia is not able to use its access to Cam Ranh Bay to conduct activities that could raise tensions in the region." All that was missing was the "or else."

Dear Federal Reserve, we have just solved the biggest riddle that your "smartest economist PhDs in the room" have been unable to figure out for the past year...

The reason I don't want an Apple Watch has nothing to do with its look, functionality, price or battery life. Stated very simply: the Apple Watch, like every other enslaving you to the network device, is a productivity destroyer.

Must Have Been Wearing Tinfoil Hats ... And Living In Their Mom's Basement

Traders are citing Genscape data on Cushing crude storage builds and the re-opening of the Houston Ship Channel (enabling more crude imports into PADD 3) for taking away the overnight hope/hype in WTI and dragging it back to a $47 handle. It appears the June deadline continues to loom large.

Based on the current pace of earnings growth, we should see a VERY serious collapse in the next few months:

Warren Buffett's “financial weapons of mass destruction” - how are you?

And to complete this morning's trifecta of disappointment, Business Inventories miss (for the 8th of the last 9 months) and show no change MoM - the weakest since May 2013. Building Materials, Furniture, and Autos saw inventories fall as Department Store inventories rose. Coupled with sales weakness (retail sales -0.9%), this is the highest inventory-to-sales ratio since Lehman... just as with Wholesale inventories...

Despite no help from USDJPY, credit, or bonds; US equity markets have algo-ised vertically since the US Open as investors machines BTFWRSSL (Buy The F###ing Worst Retail Sales Since Lehman). It appears investors are once again listening to a certain "world-renowned" talking head on CNBC. But we have seen this divergence before...

With German media asking "who is more dangerous for us? Greece or Russia," recent actions by both 'antagonists' in that question suggest they may become one and the same sooner than many expected. With tensions rising between Greece and the Eurogroup, recent and future visits to Russia have gained in importance since Russian FinMin confirmed that Moscow "could consider financial help to Greece." While this Russian pivot meme was the stuff of conspiracy theorists just weeks ago, The BBC is now asking directly, "could Europe lose Greece to Russia?" and with more Greeks positive on Russia (61%) than Europe (23%), it should not shock anyone.

Unpossible? Chipmaker Intel just took an ax to its Q1 global revenue expectations:

*INTC SEES 1Q REV. $12.5B-$13.1B, SAW $13.2B-$14.2B, EST.$13.72B
*INTEL CITES 'WEAKER THAN EXPECTED` BUSINESS DESKTOP PC DEMAND

Of course, we will be told this is one-off and that Intel is now no longer a belwether but "weaker than expected conditions in Europe," is not what the talking heads have been telling us.