Archive - Apr 2015

‘BREXIT’ would cause the “most intense period of instability” since WW2 ... Seeks to portray Tory policy as disingenuous and cynically putting economy at risk ... Uncertainty caused would have negative consequences for British economy and sterling

I love the smell of fresh ink in the morning...

"Normal..."

Unfortunately there is not enough macro data for the algos to consider bad enough to be good today...

Russia may offer Greece a discount on gas deliveries and new loans when Greek Prime Minister Alexis Tsipras visits Moscow this week, the Kommersant business daily reported on Tuesday, citing one source in the Russian government. A Kremlin spokesman said last week that Russian President Vladimir Putin and Tsipras planned to discuss economic ties and EU sanctions on Moscow when they meet for talks, which Kommersant said would take place on Thursday. "We are ready to consider the issue of a gas price discount for Greece," the newspaper said quoting an unnamed Russian government source.

Since Mario Draghi's "whatever it takes" threat, it has been a non-stop buying frenzy of Spanish debt by foreigners, and after bottoming in the low-30%'s in 2012 and early 2013, foreign holdings of Spanish debt have once again shot straight up until, moment ago, we learned courtesy of the latest Bank of Spain update that as of February, International investors once again hold a majority of Spanish debt, or 50.5% to be precise, in the form of €333.5 billion of the unstripped Spanish government bonds of the total €660.4 billion.

Corporate profits are back at the levels reached in 1990, 1999 and 2008 that presaged recessions and a sharp downturn in sales and employment.

When it comes down to it, all that matters is 'the market'. With European consumer confidence at its highest since 2007, and European unemployment barely off record highs, there is only one thing that European policymakers really care about... and it's not 'the people'.

• Israel, U.S. Lawmakers Press Case Against Iran Nuclear Deal  (WSJ)
• Rand Paul tries to broaden libertarian appeal (Reuters)
• Fewer Oil Trains Ply America’s Rails (WSJ)
• Chicago voters go to polls in first ever mayoral runoff (Reuters)
• FedEx to buy TNT to expand Europe deliveries (Reuters)
• Mohamed El-Erian Has Most of His Money in Cash (BBG)
• In Surprise Move, Australia Holds Rates (WSJ)
• Oil falls as Iran, China discuss more supply (Reuters)

For the third month in a row, FX 'traders' in AUD "guessed" the Reserve Bank of Australia's decision in the seconds before it was released to the public. Aussie regulators, seemingly furious at the blatant-ness of the front-running, confirmed they will be investigating the price spike overnight...

Yesterday it was only the US that got the full benefit of the market-wide stop hunt that sent the US market soaring on its biggest opening ramp in 2015 following the worst payroll data since 2013, because Europe was closed for Easter Monday. Which means today it was Europe's turn to celebrate atrocious US data (yes, yes, snow - because somehow tremendous January and February jobs data was not impacted by snow), and in the first European trading session of the week, equities have started off on the front-foot.

Many recent commentaries have noted a distinct devolution in the numerical lies which the U.S. government calls its “economic statistics”. Numbers which used to be mere exaggerations (i.e. used to somewhat mirror the real world) have now become literally perverse: opposite to reality.

Bernanke drove interest down to zero, where it has stayed for over 6 years. In his rationalization, he concedes an importantg point that undermines his argument (and the Fed).

According to hedge fund legend Julian Robertson, the Fed must act and hike rates soon because “the economy warrants it and I think [the Fed is] not crazy enough just to let this thing boil over into complete explosion. I am looking at a bubble that is almost sure to pop at some time and I don't know when it's going to happen, but I know it's going to happen. The bigger this bubble gets, the bigger the burst." What happens then: "I don't think it's at all ridiculous to think of a selloff like we saw in 2008."

Politicians who vote for warfare abroad and welfare at home yet claim they want to shut down the IRS should not be taken seriously. Freeing the people from the IRS’s tyranny is one of the best reasons to end the welfare-warfare state and return the federal government to its constitutional limitations.