Archive - Mar 9, 2015

"To make money in the markets, you have to think independently and be humble. You have to be an independent thinker because you can’t make money agreeing with the consensus view, which is already embedded in the price. Yet whenever you’re betting against the consensus, there’s a significant probability you’re going to be wrong, so you have to be humble."

Just when you thought it was getting better (or so you would believe if you listened to the mainstream media's punditry) Greece faces what ekathimerini reports is a "situation worse than in 2012." From well-known Belgian beer to electronics equipment, the first occurrences of shortages in imported goods and raw materials have arisen as a result of Greek enterprises’ inability to pay with cash in advance. But Greece is not Venezuela... yet.

"There are gaps of months and months and months," exclaims Rep. Trey Gowdy (who leads the committee investigating Hillary Clinton's handling of the Benghazi attack in September 2012) as the 'transparent' release of Clinton's email includes no emails at all from a seemingly critical Tripoli visit (where she has been photographed using her Blackberry). Gowdy ranted on CBS "Face The Nation" yesterday that "it strains credibility to believe if you’re on your way to Libya to discuss Libyan policy that there is not a single document to turn over to Congress." Clinton, for now, is staying very quiet on this matter...

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2015 was 1.2 percent on March 6, unchanged from its March 2 reading. The nowcast for the contribution of net exports to first-quarter real GDP growth fell from -0.5 percentage point to -0.8 percentage point following this morning's international trade report from the U.S. Census Bureau. This was offset by increases in the nowcasts of equipment investment and inventory investment.

The current set of dominant market narratives are so well known as to be cliché.  Invest where central banks are pumping liquidity, and short the currency of those countries or regions.  Look for growth, and pay any valuation multiple that seems half way reasonable in today’s market.  Expect any spike in volatility to wilt like cut flowers in the hot sun, and the Fed to care intensely about stock prices.  And maybe that will continue to work in this last month of the first quarter…  But it always pays to question the foundations of market assumptions...

The subprime auto loan market isn't the only place where delinquencies are rising. New data shows foreclosures hitting their highest level in a year while the number of borrowers who have been foreclosed on twice has tripled since the housing bust. 

It may come as a surprise to some that across from the stark Greek economic calamity is an industry that has swam, so to say, while everything else has sunk, because while virtually every other aspect of the Greek economy is in shambles, its shipping industry is not only the pride of the nation, but has created more Greek billionaires than any other aspect of the economy. As Bloomberg recounts, Greeks have long dominated the shipping business. The nation’s fleet, numbering 3,669 vessels in 2013, is the largest in the world, according to the annual report of the Union of Greek Shipowners, making up more than 7 percent of the Greek economy and providing 192,000 jobs in 2013. And, perhaps most relevant, Greek shipping has also made billionaires of the country’s four largest ship owners by tonnage: John Angelicoussis, George Prokopiou, Peter Livanos and George Economou. The quartet control a combined fortune of $7.6 billion. It is these billionaires that are now suddenly sweating...

While some may ISIS is 'deaf' to the new world as it spreads its message of Shariah Law across The Middle East, the terrorist organization appears to be trying to broaden the appeal of the militant group. As Newsweek reports, ISIS has released a video in which a pair of disabled sibling militants use sign language in an apparent bid to recruit fighters from the (apparently under-served) deaf and mute community. The video shows the brothers directing traffic in a busy road saying: “We will strike you soon, by Allah’s permission," and ends with a scene of the brothers setting up rockets.

The consequence will not be eternal virtual prosperity, but rather a wrecked accounting system for the operations of civilized human life. We’ve stepped across the event horizon of that consequence, but we just don’t know it yet. Our bet is that we start feeling the effects sooner rather than later; and when it is finally felt, all the Kardashian videos in this universe and a trillion universes like it will not avail to distract us...

Judging by the euphoric exaggeration and fanboyism on mainstream media this morning, today's Apple Watch (not iWatch, definitely not iWatch) unveiling promises to be "world-changing" for the 'wearables' industry (as well as numerous "first time ever..." comments). Of course, there are 'watches' on the market already, but as Reuters Jason Fields 'jokes', the Apple Watch, of course, does more. The face is high resolution and in color. It even has apps that allow you to do a few of the things you’d be able to do if only you could muster the strength to dig your hand into the front pocket of your jeans, or do a little digging in your handbag.

Single-name CDS performance suggests investors are buying the "opportunity" Citi and Goldman are selling, providing further proof that we truly will never learn.

Dear Mr. Market,

I’m writing to you about the sharp lift in equity valuations over the past month...

Despite all of the talk of cutting the deficit and the like, the political class continues to throw taxpayer money around at a pace that is bankrupting the nation.

Mario Draghi is forced to buy "small" amounts of EGBs on first day of QE, casting further doubt on the viability of PSPP. If the ECB is unable to meet its monthly asset purchase targets expect chaos, as the market has spent the last several months front running the program and would be absolutely horrified if DOMO has to be downsized.