Archive - Jun 11, 2015

Given this morning's jubilant celebrations over the surge in household net worth - which as we noted earlier reflects the riuch getting richer (and implicitly the poor getting poorer) - we thought a quick look at who (or what) is responsible for this. It turns out that the correlation between AAPL and the stock market has never - ever - been higher. In other words, as goes AAPL, so goes the wealth of America's 0.1%...

“There’s no more space for gambling, there’s no more time for gambling. The day is coming, I’m afraid, where someone says the game is over."

“I’ve never seen a customer base or an economy like this..."

Sure enough, with the repo rate quite negative all day, moments ago the 30Y priced in what was likely the strongest auction of 2015 based on the the Bid to Cover, which soared from 2.2 to 2.54, the highest since December. The yield priced at 3.138%, 0.9 bps through the When Issued as a result of a jump in Indirect, who took down 52.0%, the most since last July's 53.2%, leaving 14.4% to Directs and just 33.6% to Dealers, the least since December.

Moments ago the Fed's latest Flow of Funds report confirmed what the Philly Fed noted recently (and what blogger and Citadel trader Ben Bernanke vehemently denies): that the Fed keeps making America's uber rich ever richer, when in the first quarter thanks mostly to yet another $1.1 trilion increase in the value of financial assets (read stock market), the asset holdings of US households (or at least a very small subsection of them) rose by $1.6 trillion to a record $99 trillion.

Flash Crash? AAPL shares cracked lower on a huge sell order (of over $100 million) then rapidly recovered on de minimus volume... did Carl Icahn start dumping?

One of the recurring explanations given why the Fed is eager to hike rates is so it has some dry powder ahead of the next recession which, some 6 years after the last one ended is overdue (especially with a negative GDP Q1).  Which, incidentally, is just the topic of the next Economist cover titled simply "Watch out" adding that the world is not ready for the next recession...

It's over! Starting June 15th and ending September 30th, the Zimbabwe Central bank will begin its process of "demonetization" of the old Zimbabwe Dollar. The Zimbabwe dollar will be removed as legal tender after the currency’s use was abandoned in 2009 following a surge in inflation to 500 billion percent. For bank accounts containing up to 175 quadrillion Zimbabwe dollars they will be paid $5, the country’s central bank said. The people remain angry slamming this as "abusing one's rights in the banking system," and claiming this is being done to enrich a chosen few.

It seems like there's an ETF for everything nowadays. From global warming ETFs to fertilizer ETFs, Wall Street has neatly packaged nearly every type of investment to attract your cash. One thing they forgot to package was corruption. Considering how they are already overflowing in it, perhaps they just took it for granted. However, for many investors, corruption is worth taking a second look.

The first four months of 2015 saw India import possibly as much as 3,000 tonnes of silver bullion. If the momentum is maintained India is on track to import a staggering 9,000 tonnes over the course of 2015. According to srsroccoreport.com, who compiled the data, it is Indian citizens who are the driving force behind the record demand for silver in India. We would speculate that India’s commitment to solar power may also be a factor.

Does anyone remember the National Debt anymore?

Welcome to the new normal... The "if we build it (and offer credit to anyone who can fog a mirror), they will come" economy. While LeBeau and his cronies are cock-a-hoop over auto sales (no matter how those sales are achieved), it seems the carmakers are way ahead as the value of cars on the sidelines (inventories) has never, ever, been greater than now.

This has infuriated the Fed and is forcing it to take more and more aggressive measures to trash cash.

And just like that we are back to the rumor drawing board.

IMF'S RICE SAYS NO PROGRESS MADE TOWARD DEAL WITH GREECE, IMF HAS MAJOR DIFFERENCES WITH GREECE IN KEY AREAS: SPOKESMAN
IMF'S TECHNICAL TEAM ON GREECE HAS LEFT BRUSSELS, RICE SAYS

But "two Bloomberg sources" said yesterday a deal was almost assured. What gives?