Archive - Apr 2015

Finance Minister Hans Joerg Schelling has said repeatedly that the Austrian government isn’t liable to cover Carinthia’s guarantees." Herr Schelling's warning is about to be tested. Yesterday, Carinthia officially asked Vienna for financial support. The spokeswoman said Carinthia would run out of money in June without help, confirming local media reports. No Austrian province has ever gone bankrupt and there is no legislation on how to handle such an event.

 I would like to make my own modest effort to put to rest a trite little phrase that gets trotted out every time silver and gold are getting trashed.

With only six weeks (or one Graccident) to go until Bund purchases are forced out to 7-year maturities, and with traders warning that nearly every piece of PSPP-eligible German government paper will eventually trade special in repo despite the ECB’s feeble attempt to remedy the situation via its Securities Lending Program, the world wants to know: “when do I sell Bunds?”

The Statue of Liberty was evacuated Friday afternoon after someone called in a bomb threat and parks police reported a suspicious package, law enforcement sources tell NBC4 New York. The NYPD's bomb squad was called to the scene, along with EMS workers. A security sweep of the island is also being conducted. As yet, no devices have been found.

A gentle reminder that next week sees the beginning of the market's seven-and-a-half year itch...

Today, China remains central to the notion that the world is in recovery.  It is believed to be growing at 7%: not as rapid as the 9% growth we’re used to seeing, but still dramatically higher than any of large country... Only the whole thing is bogus.

Greece, which owes €324 billion to the International Monetary Fund, the European Central Bank, and euro zone governments, faces a relentless debt payment schedule over the next few months.

For a record-breaking 20th week, US rig counts declined. Total rigs dropped 22 to 932 (the 4th smallest drop since Nov 2014) while oil rigs fell 31 to 703 (down over 56% from the highs). With the very modest production drop (all due to Alaska with the Lower 48 flat) it appears any slowdown in drilling rigs has not dampened enthusiasm to pump, baby, pump. WTI initially popped but is fading now...

But low oil prices are supposed to be unequivocally good? On the day when Ford lays off 700 Michigan plant workers in small cars and hybrids manufacturing, The Detroit News reports that, according to Edmunds.com, sales of electric cars and hybrids are at the lowest level since 2011. What is even more worrisome, motorists who leased those first-generation cars, and have decided not to buy them, are turning them in, leaving dealer lots full of low mileage cars at huge discounts to new ones. As Edmunds concludes, while "the government's going to keep pushing it, there is time to pause right now."

Surprise!!

"A government shutdown is very probable in the next three months due to the absence of liquidity to operate," Puerto Rico's finance officials warn, in an effort to shock lawmakers into action and avoid a potential "PRimbo".

There was once a time, perhaps, when unprecedented things happened only occasionally. In today’s financial markets, unprecedented things are commonplace. The Queen in Lewis Carroll’s ‘[Alice] Through the Looking-Glass’ would sometimes believe as many as six impossible things before breakfast. She is probably working in the bond markets now, where believing anything less than twelve impossible things before breakfast is for wimps.

Having prpmised silver-linings after each and every disappointing data item of the last two months, it appears even the sell-side's most ardent optimist has thrown in the towel (along with Goldman) as Deutsche's Jo Lavorgna stokes the "no rate hike please" meme after today's dismal durable goods data...

A woman who was arrested for allegedly plotting to break her husband out of jail pens an expletive-ridden tirade against a judge who dismissed her $10 billion lawsuit against the state. She also included an eloquent tax manifesto for good measure.