Archive - Sep 2015

When is a 'date' not a 'date'? When a Fed member says so. The Fed speaker confusion-carpet-bombing contonues this morning with Bill Dudley who offered the following "insight":

*DUDLEY: HE EXPECTS FED PROBABLY WILL RAISE RATES LATER THIS YR (so a date?)
*DUDLEY: THAT'S NOT CALENDAR GUIDANCE, THAT'S DATA-DEPENDENT (not a date?)

His double-speak has sent stocks and bonds lower and USD higher for now...

Personal income rose at 0.3% MoM in August, the weakest growth and biggest miss since March's tumble. At the same time spending rose 0.4% MoM, slightly more than expected. Of course this relative shift means the savings rate declined from 4.7% to 4.6%, which is to be cheered by economic models the emphasize spending over saving.

Despite a relatively unchanged US Dollar, commodities across the board are under significant (and seemingly coordinated) pressure this morning. It appears that the key selling began as Europe opened and the carnage in massive commodity group Glencore began to materialize. Glencore CDS is now above 700bps (up 154bps today) and stocks down almost 30% today...

"It was our Black Monday. The big question is when will they come back, because managers have been really quite reliant on Sama for business in recent years."

There’s an enormous and growing disconnect between the cash and physical markets for gold. This is exactly what we would expect to precede a major market-shaking event based on a physical gold shortage.

• Headline winner: "Read Beyond Massive Job-Cuts Headlines: Labor Market Is Fine" (BBG)
• And speaking of lies: The More Yellen Talks Up Inflation, the Less Traders Believe Her (BBG)
• How Some Investors Get Special Access to Companies (WSJ)
• Victorious Catalan separatists claim mandate to break with Spain (Reuters)
• Russia seizes initiative in Syria (Reuters)
• Former VW boss Winterkorn investigated for fraud (Reuters)
• Investors Pull Back From Junk Bonds (WSJ)

It was all about China once again, where following a report of a historic layoff in which China's second biggest coal producer Longmay Group fired an unprecedented 100,000 or 40% of its workforce, overnight we got the latest industrial profits figure which plunging -8.8% Y/Y was the biggest drop since at least 2011, and which the National Bureau of Statistics attributed to "exchange rate losses, weak stock markets, falling industrial goods prices as well as a bigger rise in costs than increases in revenue." In not so many words: a "hard-landing."

If you borrow cash then it’s not income. No one in his right mind borrows to buy consumer goods... But what if someone else borrows, is that your income?

With liquidity in the markets drying up, it's important not only to understand the opportunity but also to understand how to execute on an opportunity!

In a move that would make even Hewlett-Packard's Meg Whitman blush, Harbin-based Heilongjiang Longmay Mining Holding Group, or Longmay Group, the biggest met coal miner in northeast China which has been struggling to reduce massive losses in recent months as a result of the commodity collapse, just confirmed China's "hard-landing" has arrived when it announced on its website it would cut 100,000 jobs or 40% of its entire 240,000-strong labor force.

Whether it’s the economy, climate, the planet, warfare, your future obligations, your pensions, the future of your children, nobody in power tells you the truth. Human life is fast losing the value we would like to tell ourselves we assign to it. We don’t, do we? Our technological advances haven’t come with moral advances, quite the contrary, our morals turn out to be a thin layer of mere cheap veneer. What advances we’re making are the last death rattle of a society in decline, and a dying civilization.

The farce that keeps on farcing...

Despite the Fed continuing to kick this down the road, they continue to claim that we are in the middle of an ongoing recovery. There’s just one problem with that: things are getting worse than pre-crisis levels for millions of the poorest Americans. Possibly even more concerning is the fact that the amount of Americans living below the poverty line has soared since 2007.

"He’s butchered his own people, he’s helped create this conflict and this migration crisis, he’s one of the great recruiting sergeants for ISIL."