Archive - Apr 2015

There appears to have been a shocking lapse in security surrounding the Easter weekend heist. The security lapse reflects badly both on the company and on the police. Holding tangible assets outside of the fragile banking system is a risky exercise, if the manner in which those assets are stored is not thoroughly secure and fully insured.

USDJPY tumbles and US equity futures are red... that wil not do for a Monday morning... Time to break an exchange!

While today's macro calendar is empty with no central bank speakers or economic news (just the monthly budget (deficit) statement this afternoon), it’s a fairly busy calendar for us to look forward to this week as earnings season kicks up a gear in the US as mentioned while Greece headlines and the G20 finance ministers meeting on Thursday mark the non-data related highlights.

Did the Japanese just get the tap on the shoulder from The Fed? Cabinet Office member and Special Advisor to Abe Koichi Hamada just jawboned the JPY higher (and USDJPY lower) with the following statement:

HAMADA: YEN AT 105/USD APPROPRIATE; WEAK AT 120 CONSIDERING PURCHASING PARITY

The reaction - an 80 pip plunge in USDJPY.

Everyone was shocked by yesterday's Chinese March trade update which showed that while imports slid largely as expected, it was the 15% drop in exports, the largest in over a year, that prompted many to wonder just how big the global trade slump really is, masked by what has now become pervasive, global QE. This was the worst performance, exports and imports combined, since late 2009.  Below is a selection of responses by Wall Street analysts trying to justify how - with global equities, if only in local currency terms, at all time highs - China can be doing so badly.

• As reported here first a month ago: The $9 Trillion Short That May Send the Dollar Even Higher (BBG)
• As an instant target for foes, Clinton may struggle to get message heard (Reuters)
• Emerging Stocks Rally 11th Day as Aussie Weakens on China (BBG)
• Puerto Rico, Investors Enlist Ex-IMF Officials (WSJ)
• Dollar’s Rise Reshuffles Global Economy (BBG)
• Indonesia eyes regular navy exercises with U.S. in South China Sea (Reuters)
• Banca Monte dei Paschi Breaches Exposure Limits to Nomura (WSJ)
• European Bond Buyers Find Negative Doesn’t Necessarily Mean Bad (BBG)

If there was any doubt that global trade is stalling, it was promptly wiped out following the latest abysmal Chinese trade data which saw exports tumble by 15% - the most in over a year - on expectations of a 8% rebound, with the trade surplus coming in at CNY18.2 billion, far below the lowest estimate. While unnecessary, with the Chinese GDP growth rate this Wednesday already expect to print at a record low, this was further evidence of weak demand both at home and abroad. Weakness was seen in most key markets, and the strength of China's currency was partly to blame, which again brings up China's CNY devaluation and ultimately QE, which as we wrote some time ago, is the ultimate endgame in the global reflation trade which, at least for now until the CBs begin active money paradropping to everyone not just the 0.01%, is only leading to inflation in stocks and deflation in everything else.v

This isn’t yet another in a long series of articles lamenting the Federal Reserve... this article is about something else: you.

BANZAI7 FOOD AND BEVERAGE WARNING

The now-discontinued operation, carried out by the DEA’s intelligence arm, was the government’s first known effort to gather data on Americans in bulk, sweeping up records of telephone calls made by millions of U.S. citizens regardless of whether they were suspected of a crime. It was a model for the massive phone surveillance system the NSA launched...

Forget the weather, it must be the smog. China just announced total carnage in its trade data for March:

CHINA'S MARCH IMPORTS FALL 12.3% Y/Y IN YUAN TERMS; EST. -11.3%
CHINA'S MARCH EXPORTS FALL 14.6% Y/Y IN YUAN TERMS; EST. +8.2%
CHINA'S MARCH TRADE SURPLUS 18.16 BILLION YUAN; EST 250B YUAN

So what exactly was the Chinese stock market 'discounting'?

China (and Hong Kong) stock markets opened gap higher and kept going (China Merchants Bank up over 20%) as The China Securities Depositary and Clearing Co. (CSDC) announced that investors will no longer be restricted to only one stock account in China's A-share market and each can have up to 20 accounts from Monday. Which makes perfect sense because what every elementary-school-educated housewife speculator needs is 19 more places to speculate in.