Archive - Mar 17, 2015

For what appears to be the 10th week in a row, API reports a massive 10.5 million barrels (far bigger than the 3.1 million barrel expectation) and a 3 million barrel build at Cushing. If this holds for DOE data tomorrow (and worryingly API has tended to underestimate the build in recent weeks) it will be the biggest weekly build since 2001. WTI has plunged on this news hitting $42.60 on the April contract.

"The boom years of the past decade and a half were the exception and not the rule. Australia and Canada will have a bit of rough patch in the years to come, but will manage through as they always do. The much touted growth prospects of many of the BRICs will prove to be nothing more than a commodity-boom-fuelled mirage."

Just blame it on the weather, because everyone knows no self-respecting 1%-er would be caught dead driving (or being driven) to their nearest Maserati dealership in their snow-ploughing $100K Range Rover, when it is snowing outside. In the middle of winter.

While investors have grown to used to knife-catching heroics in equity markets, the Energy credit markets have been a poster child of yield-reaching, bottom-guessing, dip-buying exuberance in the past six months. As every leg lower in oil was met with more Oil ETF buyers and bond buyers (or loan financers) as "the bottom is in," so each low has failed and new lows are made. The last few days have seen credit risk soar the most in 2015 in the energy sector as numerous firms enter bankruptcy or approach it with huge looming coupon and principal due. What is even more telling is the news of a huge liquidation sale of energy heavy equipment which will be the 'tell' for the entire industry if it is weak...

"Old News"? Not When They've Repeated the Same Playbook in Libya, Ukraine, Syria, and ...

When we first exposed the world to The Atlanta Fed's GDPNow forecasting model (just 2 weeks ago), expectations were for 1.2% growth in GDP in Q1. A week later it was cut in half to 0.6% as dismal data just poured on. And today, The Fed model now predicts another 50% cut in growth to just 0.3% in Q1, led by a near 20% collapse in non-residential investment.

In the past month, a group of radical Islamic extremists based in the Middle East beheaded at least 23 people and enforced a ban on Christianity by arresting a group of people for practicing the faith in a private home.

No, we're not talking about ISIS. The real culprit is the Kingdom of Saudi Arabia, one of the America’s closest global allies. It would appear, some human rights are more equal than others.

While Bridgewater's Ray Dalio "hopes that The Fed will be very cautious about tightening," Saxobank CIO Steen Jakobsen explains in this brief clip that The Fed "is wrong, always wrong," and will likely raise rates in June no matter what. The Fed is boxed in, Jakobsen notes, and despite the weak macro data, changing direction now is unlikely - leaving the market surprised as it recognizes that "this is a margin call on assets," seemingly confirming Dalio's conclusion that, "inadequate attention is being paid to the risks of a downturn in which central bankers' abilities to ease are significantly impaired."

Those who refuse debt, regardless of the sacrifice, are starving the parasitic, exploitive machine; those with debt are feeding it.

Happy St Puttnik Day!!!

While the west huffs and puffs, and threatens to unleash even more "costs" on Russia in the form of additional sanctions which will assure that Europe's latest deflationary recession is even more acute, an "isolated" Russia is looking to outside, and to the east, and as part of its most recent de-dollarization initiative, the Moscow Exchange announced it has started trading Chinese Renminbi-Russian Ruble currency futures.