Archive - Aug 2015

Housing is a very important component of any economy, and often an indicator of the well-being of a society.  In the US, housing has been deteriorating since the sub-prime crisis.  The changes are not only cyclical but structural.  Past experiences need to yield to an objective analysis of where we are heading.  Here is the way we see it...

"These savings exceed the costs of the crisis - even if Greece were to default on its entire debt. [That is] even if Greece doesn't pay back a single cent, the public purse has benefited financially from the crisis."

The US bull market is the most ‘neutral’ bull market on record. Past examples say this could be bullish, but the absence of bearishness is a complicating factor.

In 2012 we asked whether the fact that stigmatized LIBOR traders were accepted with open arms at various hedge funds after being "fired" from the bulge bracket meant that there may, just may have been, some quid pro quo in the past. Now we know the answer.

Too much of the commentary about the Greek crisis has focused on whether or not Greece should drop the euro and not enough on the structural problems arising out of decades of socialism. Meanwhile, the Greek government has borrowed more money than the Greek people can possibly repay, and debased money will not make this fact disappear. On the contrary, more easy money will cause even more harm. The best thing that Europe and Greece can do for itself right now is to confront some of the economic fallacies that have long driven the debate over Greece, the euro, austerity, and debt.

The US equity market struggled last week but the S&P 500 held the rising 200-day MA once again, but as BofAML notes, the much broader-based NYSE stalled at 200-day MA resistance last week. The NYSE has a potential head and shoulders top as well as a breakdown for the NYSE stocks only advance-decline line through the March low. Similar to the NYSE Comp, the Russell 2000 also shows a potential head and shoulders top with a breadth breakdown a big risk to 1200 support...

The presumed Democratic nominee is set to roll out her plan to confront the $1.2 trillion student loan bubble. As Bloomberg reports, the pitch is expected to be one of the "biggest-ticket policy proposals of her presidential campaign," totaling some $350 billion and will include $200 billion for states who will be encouraged to do more to facilitate loan-free college educations and a $150 billion refi effort for the country’s heavily indebted students.

The supposedly independent, apolitical Federal Reserve - facing serious pressures from Republicans over leaks and transparency - may have just accidentally admitted it will not be raising rates any time soon (if ever):

• *LOCKHART: ECONOMIC OUTLOOK TO INFLUENCE HOW U.S. VOTES IN 2016

One can only wonder how this will factor into The Fed's "make it up as we go along" strategy as credibility dwindles but survival trumps any populist backlash.

A scan through Fed's Lockhart's speech and it is quite apparent that he said absolutely nothing new whatsover. But, seemingly because he failed to mention the word "September," frantic FX algos have sold Dollars and bought everything else as hype hope shifts to December... Just a reminder, this is the same Fed that says a 25bps rate hike is irrelevant and priced in...

Today's panic-buying ramp in AAPL stock - its best since January - got us thinking. We previously noted the odd after-hours spikes (and troughs) in AAPL that appeared to act as strange attractors for the market during the day and sure enough, today's high (for now) appears to correspond almost perfectly with last Monday's after-hours spike highs... Signals? or just pure coincidence  (5 times in 5 days)....

Today we got the first answer to our question from July 28 whether TWTR's management team is trying to pull a "Hudsucker Proxy", and it was affirmative. In a Form 4 filed earlier today, we found out that a crash in the stock is just what founder and interim CEO Jack Dorsey was waiting for before buying another 31,627 shares on Friday for a price of just $27.67.

Human rights issue still not solved in the country claiming liberty& human rights. Still people are insecure for being black! 8/97 #Ferguson

— Khamenei.ir (@khamenei_ir) August 10, 2015

When China's tinderbox economy implodes, who will be left to bid up the world's surplus commodities and real estate?

Internet goes batshit...

Hedgies are the most short ever... and Commercials are the least hedged in 14 years... and it appears rumors of PBOC buying along with dismal data from around the world has sparked a renewed awareness of another looming QE sending gold well north of $1100 and silver back above $15.