Archive - May 26, 2015

The nation is wallowing self-piteously in a fetid trough of denial and adolescent rage/magical thinking now that the nation's bogus, debt-based "prosperity" has crashed and cannot be restored.

WTI is having its worst day in over 2 months as the front-mointh tumbles back below $57.50 to one-month lows... Perhaps fundamentals do matter after all - or is this pre-OPEC dump to force non-Saudi cartel members to revolt?

Seems like now would be a good time to reinstate the NSA's bulk data collection (for our own security) to find out who is at the center of this...

*CAPITOL VISITORS CENTER HAS BEEN EVACUATED;CAPITOL NOT AFFECTED
*CAPITOL POLICE DON'T IMMEDIATELY HAVE STATEMENT ON EVACUATION

“Evacuate, evacuate, evacuate the U.S. Capitol building,” a loudspeaker blared.

As noted Tuesday morning, China’s margin-fueled equity mania reached new heights overnight with the Shanghai Composite wrapping up its best six-day run in seven and a half years, but the real story was the tech-heavy Shenzhen Comp which, after a brief hiccup precipitated by the Hanergy ponzi debacle, has now firmly regained its momentum jumping nearly 4% with at least 250 listed companies trading limit up on the session.

American consumers may have pocketed most of their gas savings thus far, but there are two discretionary items where they aren’t holding back spending: bourbon and Tennessee whiskey.

"...it is imperative that the data does turnaround during 2015h2 for the recent rise in yields to be sustained. It is quite surprising to us that there is so much focus on US employment data and Fed Funds normalization to the exclusion of global trade data or US demand let alone productivity. A case perhaps of the lunatics trying to run the asylum."

A rooftop solar system may make overall sense if the cost of grid electricity is high enough, but batteries and backup generators still aren’t remotely competitive with grid electricity when it comes to load-following.

"We shall do our best then to remain as we have been: pleasantly long of equities on balance. There really is no other course of actions we can take.... Long of One Unit of Ten Year Notes/short of One Unit of the Long bond future: Friday, May 22nd we wished to sell into the strength of the bond market"

Bond yields are collapsing and US equity markets are not happy this morning. The Dow Industrials are now up only 1.2% year-to-date, and over 350 points from last week's record highs (as Trannies are down over 8% YTD).

If there were any remaining questions about China’s maritime resolve, they were answered unequivocally on Tuesday with the release of the country’s 2015 defense white paper which indicates that Beijing is set to increase its “open seas protection” after countries with “ulterior motives” have busied themselves “meddling in South China Sea affairs.” Adding insult to injury for the US, China went on to broadcast a groundbreaking ceremony for two lighthouses Beijing is building on its new islands

Having missed for a record 5 months in a row, Dallas Fed Manufacturing Outlook collapsed further in May to -20.8 (against expectations of -12.4). Thisis the 5th drop in a row (only ever seen in a recession) and 6th monthly miss in a row (never seen before) as it appears Former Dallas Fed Fisher was talking crap once again when he said "net, low oil prices were good for Texas." Despite Consumer Confidence indicating, somehow, that Texans are the most confident in a year (up from 121 to 130 in May), business survey continues to point to notable weakness with employment collapsing, hours worked crashing, and production plunged. However, on a bright note, expectations for the future jumped from -5.9 to +4.9 - hope springs etermal eh?

"The real disconnect lies in the failure of the economy to grow, as most people assumed that it would, after the Fed's quantitative easing and zero interest rates had supposedly worked their magic. But as I have said many times before, these policies act more as economic depressants than they do as stimulants. As long as these monetary policies persist, our economy will never return to the growth rates that would be considered healthy.... We prefer the ability to manipulate figures rather than allowing the figures to tell us things that we don't want to hear."

Will Greece default or is this a bluff? The larger implication is that Greece may be the straw that breaks the proverbial camel’s back: a Greek default or breakup from the Euro would, trigger considerable US Dollar strength.

Following last month's disappointing slump to only 481K new home sales in March (now revised to 484K) which was the biggest drop in nearly 2 years driven by a collapse in Northeast transactions, according to the latest new home sales data by the Census Bureau housing rebounded back over 500K, printing at 517K thanks to a 37% sequential jump in Midwest new home sales, which rebounded from 57K to 78K, even as sales in the Northeast continued to decline and even the West saw a modest drop.

Against expectations of a '0' print, Richmond Fed Manufacturing rose from -3 to +1 in May - the first positive print since January. Despite expectations for future shipments sliding to 4-month lows and a decline in number of employees, the index itself was driven higher mainly by a huge spike in the wages subcomponent - from 9 to 20.