Archive - Dec 12, 2013 - Story

Sometimes you just have to laugh...

Following what we can only imagine was uproar following our discussion of Fidelity "allowing self-directed IRA holders to 'invest' in Bitcoin," the company has very quickly reversed policy... As MarketWatch notes,

“On an individual basis, we allowed an investor to invest in that Bitcoin Investment Trust,” said Rob Beauregard, director of public relations at Fidelity, in a telephone interview Thursday morning. “We are no longer allowing that.”

The firm is not commenting on why that was allowed, and added "reviews are going on."

Since Dec. 9, the Pitchforks Movement has been staging rallies across Italy, blocking highways and rail and subway stations and protesting in front of public buildings. The protests are relatively small, comprising a few thousand people in each city, but they are widespread, stretching from Italy's poor south to its wealthy north. The Pitchforks Movement first gained notoriety in Sicily in January 2012 when a group of agricultural producers and trucking companies blocked highways on the island for nine days to protest rising fuel and fertilizer prices, a result of austerity measures instituted by the government of Prime Minister Mario Monti.

With home prices in the UK driving people to live in boxes and Bob Shiller worried about the US, Bloomberg's Niraj Shah notes that the Knight Frank global house price index has risen to a record. The index, now 4% above the previous high in Q3 2008 is led by China and Emerging Nations (with Europe weakest) as investor speculation amid central bank liquidity fuels yet another bubble (that no one could see coming again).

Despite misses on stocks and gold, Citi FX Technicals' excellent "12 Charts of Christmas" performed well in 2013 directionally across FX, bonds, and commodities. This year, Tom Fitzpatrick and his team unveil 2014's most important charts - establishing a starting point for their outlook in the year ahead. From a slowing housing market to expectations of a strong USD; and from a "roll-over" in Consumer Confidence to strength in gold, they see the "repair process" continuing albeit at a slow pace but worry that the stock markets are looking more and more like 2000.

Bloomberg has been kind enough to summarize the epic confusion gripping the sellside on the topic of the Taper, which once again everyone thought would not take place until 2014, and now there is palpable panic may hit as soon as next week. Kudos to the Fed on its "transparent" communication strategy.

If one was to believe the picture that most Western media outlets are painting, Ukraine has been lost to Russia. Though the country fought valiantly to sign an Association Agreement with the European Union in Vilnius, Lithuania last month, President Viktor Yanukovych suspended negotiations with the EU at the last possible moment, betraying Ukrainians everywhere. Two recent energy deals that Ukraine has reportedly made, one with Russia and the other with Slovakia, however, show that the reality of the situation is slightly more complex.

The 10 Year may so far be contained below its multi-year high of 3.00% hit in September just before Bernanke's "no taper" announcement, but the ultra long end, or the 30 Year, keeps dropping. Sure enough, moments ago the latest 30 Year reopening of 29 Year-11 Month CUSIP RD2 priced at a high yield of 3.900%. This may have been half a bp through the 3.905% When Issued, it still was the highest pricing yield on the 30 Year since July 2011, right before the US downgrade and the 20% S&P plunge resulting from the near debt ceiling breach. The Bid To Cover of 2.35 was modestly higher than last month's 2.16 but had a ways to go to catch up to the TTM average of 2.48. In terms of allotment, Indirects got the bulk of the auction, with 46% or the highest take down since April 2011. Directs were allotted 12.5%, or the lowest since June, which meant Dealers would have to "sell" back to the Fed 41.4% of the auction. So while not as immediately stirring as yesterday's very weak 10 Year, the sentiment toward the long end continues to deteriorate.

For the last year, every test below the 50DMA for the Russell 2000 has been met with a cavalcade of BTFD-ers (which then transformed into BTFATH-ers). However, we wonder, does the following longer-term chart suggest this time might just be different?

As more and more amateurs have piled into Twitter, the data stream has been subject to the "Yahoo Finance effect" - there is far too much noise, and not nearly enough actionable signal, especially when one tries to strip away the bias behind any given message (see "Trading Twitter: Where Noise Becomes Signal"). Yet one entity that appears to have found significant functionality in Twitter is none other than the world's biggest hedge fund: Bridgewater.

Despite the government's "adjustments" of the 'safe' pollution level, and reassurances that smog is good for you, the following awful clip of what real Shanghai residents think may change some perspectives... "I don't think it's fit for humans to live in this kind of environment... but I have no choice, I have to go to work."

Following last week's exuberance, this week has seen a notable change of trend... one asset class looks different to the others...

While we all know that the disaster that is Obamacare is extremely unpopular throughout the country, South Carolina is leading the charge to actually nullify the legislation. House Bill 3101 already passed the state House back in April by a wide margin, and is set to be voted on in the state Senate in January. It is widely expected to pass and then be signed into law by Governor Nikki Haley. If that happens, it would set up a huge states rights victory and likely encourage other states to follow suit. It will be extremely interesting to see how the feds respond to this…

"IMPORTANT: FOR ALL US DOLLAR PAYMENTS TO A COUNTRY SUBJECT TO US SANCTIONS, A PAYMENT MESSAGE CANNOT CONTAIN ANY OF THE FOLLOWING: 1. The sanctioned country name. 2. Any name designated on the Office of Foreign Asset Control (OFAC) restricted list, which can encompass a bank name, remitter or beneficiary."

Six years after Blackstone paid $26.7bn to LBO this hotel chain (and pretty much marked the top of the last cycle), Hilton is back with the largest ever lodging IPO. Pricing at $20 per share, the largest hotel oeprator in the world is not enjoying the kind of post-IPO euphoria that the likes of 'real' companies like Facebook and Twitter had... for now HLT is up a mere 7%... the question is will the largest hotel IPO also mark the top of this cycle? Finally, with the "dot com 2.0 mentality" raging, will the fact that HLT actually has PE multiple expansion-limiting earnings, be its biggest curse?