Archive - Jun 11, 2015

Elizabeth Warren may or may not understand the "global banking system" as Jamie Dimon alleges, but the JPM CEO certainly does as the following 14 "reasons" clearly confirm...

The short time one is allowed to strut and fret upon the stage before the brief candle is extinguished by some sudden change of circumstances is perhaps not quick enough when looking at the leaders that rule our countries these days.

Business inventories-to-sales ratios remain in the flahing red recessionary environment as inventories surge more than expected in April. The biggest "field of dreams" appears to be Clothing and Building Materials. The 0.4% rise (against 0.2% expectations) of business inventories is the highest since May 2014. Motor Vehicles saw a 1.2% rise MoM in inventories (and 5.9% YoY) leading the surge in the "if we build it, credit will enable everyone to buy it" economy.

Bloomberg's Consumer Comfort Index dropped to its lowest since November having fallen 9 straight weeks (despite all that exuberant equity market hope). Under the covers the situation is even more worrisome as the US consumer propensity to 'buy' has crashed by the most since Lehman. The drop in high income earners' comfort continues to diverge from the new highs in stocks...

Saying there were no other options remaining and that continued intervention would only prolong the nation’s suffering, experts concluded Tuesday that the best course of action is to keep the United States as comfortable as possible until the end. “At a time like this, it’s completely understandable to wish for some kind of 11th-hour miracle, but expecting the U.S. to somehow magically return to the way it was in its prime isn’t healthy or realistic.”

Amid slumping export growth and the second-largest MERS outbreak on record, the Bank of Korea overnight cut its benchmark policy rate by 25bps to 1.5%, a record low.

Following last week's dip back towards record lows, initial jobless claims rose very modestly this week to 297k (slightly worse than expected). This leaves initial jobless claims practically unchanged for the last 6 months, despite the surge in JOLTS that we saw in recent months. Rather oddly, continuing claims rose by their most in 6 months last week to 2.265mm.

Retail sales bounced back once again from the April dip after March's miracle recovery. Up 1.2% (against 1.2% expectations) this is the highest MoM gain since March 2014. Ex-Autos rose more than expected (as did the control group) but the biggest drivers of the gains MoM was gas prices rising - so that's a positive? YoY the biggest drivers of retail sales gains were Autos (+8.2% thanks to shoddy credit) and Food Servce (+8.2%). Crucially this 'good' news brings forward the chances of a September (or even July) rate hike.

Greek Stocks are up over 7% this morning as yesterday's denied deal rumors have escalated into great deal hopes amid bank deposit runs and ELA increases. For context this brings the Athens index back to 3-day highs and is the biggest move since the optimistic surges we saw right after Tsipras was elected in late-January...

Citi has presented what may be the best summary of the bifurcation between the "old" normal-market, and "new" centrally-planned and increasingly illiquid "market" as follows: back then: regular, frequent corrections; now: fewer, bigger corrections

As unemployment rises to near 27%, a new poll shows more than half of Greeks support giving in to creditors "if they insist on it." Meanwhile, anti-austerity protests are back, with communist-affiliated union members demonstrating at the finance ministry in Athens. 

• Pope urges Putin to make 'sincere, great effort' for Ukraine peace (Reuters)
• Merkel Tells Tsipras It’s Time to Back Talk With Policy Action (BBG)
• 'Greek tragedy' needs happy ending now: EU's Moscovici (Reuters)
• Vulture Funds Circle Greece Targeting Europe’s Best Trading Bet (BBG)
• Germany against third aid program for Greece under any circumstances, says daily (Reuters)
• Biggest OPEC Members Pump Record Oil With Rally in Jeopardy (BBG)
• Greek ruling reversing pension cuts will cost state 1 to 1.5 bln euros (Kathimerini)
• China’s Former Security Chief Zhou Yongkang Sentenced to Life in Prison (WSJ)
• MSCI backs itself into corner on China share inclusion (Reuters)

It has been a mostly quiet overnight session with Europe solidly green on another bout of Greek hope even as Bundesbank's Weidmann warned that Greek insolvency risks are rising and Greece reporting that its unemployment rose once more from 26.1% to 26.6% in Q1, in which we got two more rate cuts by New Zealand (which sent the Kiwi crashing the most since 2011) and South Korea (the Won initially dipped only to rebound) but China stole the stage with its latest report on retail sales, industrial production, and fixed investment all of which showed a modest bounce from multi-year lows suggesting the PBOC's attempts to shock the economy into growth may be starting to work (which is bad news for the market).

In the last days of the Second World War American troops uncovered a large stash of gold, silver and paper currencies at the post office of a small town in eastern Germany called Plauen. Documents show that the stash was directly linked to SS chief Heinrich Himmler.

The tale of two markets is a story I’ve gone over time and time again. It is a story about lies and deception, truth and honesty.