Archive - Dec 30, 2014 - Story

"If you repeat a falsehood long enough, it will eventually be accepted as fact."

Should I buy a house in 2015? No one can answer that question for anyone else, but it seems prudent to ask the question in the context of an Echo Bubble in valuations that appears to be deflating and household income that is potentially at risk of declining further in a global recession that eventually impacts the U.S. economy.

Two days ago we reported of the odd coincidence of a 2nd emergency shutdown at Ukraine's Zaporozhye Nuclear reactor - Europe's largest nuclear power plant - following our earlier fears of disinformation. Today, we get information of a leaked report sourced from three different place - unconfirmed for now (but RT is trying to verify) - that Ukrainian nuclear scioentists misled the public and a radioactive leak has been detected - citing the country’s emergency services claiming that levels of radiation are 16.3 times the legally permitted norm.

As the crowd in Moscow grows to an estimated 10-15,000 protesters chanting "No Putin, No War", Russia has unleashed police in riot gear, apparently fearful of the consequences of this 'unlawful' assembly. The massive crowd of protesters gathered in Moscow's Manezhka Square on Tuesday, following the guilty verdict of anti-corruption crusader Alexei Navalny, remain peaceful for now; but scuffles are breaking out and tensions are rising.

America has managed to construct an entirely one-dimensional political system. There’s no discernible difference left between left and right, other than in spin language pre-cooked for the sole purpose of faking the concept of elections. America is living proof that once money is allowed into politics, the accumulation of it, and of the power it can buy, will and eventually must fully control a democratic system, which in the process, of necessity, suffocates and dies a painful death. What once was a proud American democracy has been turned into a circus that rolls into town every four years, filled with clowns that pretend to fight each other with over the top grotesque contraptions, but sleep in the same bed once the show is over and the audience has gone home.

With the S&P 500 having now tripled-and-then-some off the March 2009 lows, we thought it noteworthy to note that today, Bloomberg's Commodity Index dropped below those financial crisis lows for the first time. As is evident from the chart, throughout history, the raw materials of 'business' and the stock of 'business' had high and positive correlations but since the Fed ended QE2, suffered equity weakness and then folded and re-engaged money-printing largesse with Operation Shift, the relationship between commodities and stocks has been utterly negative. Different this time? Or all smoke and mirrors? time will tell...

The nearly 50 percent plunge in the price of oil during the past six months is expected to leave oil-rich Saudi Arabia with its first budget deficit since 2011 and the largest in its history. Oil is the principal, if not the only, resource in Saudi Arabia, so it’s clear that the price of oil has a strong influence on how the country’s annual budget is drawn up. Different analyses, however, provide different answers to how Riyadh has forecast the commodity’s value. Four of these reports say the Saudi budget is predicated on oil averaging $55 to $63 per barrel in 2015.

In a few brief minutes, Professor Bob Shiller calmly and eloquently crushed the hopes and dreams of CNBC's cheerleading muppetry as they desperately tried to spin today's house price data as great news.. when Simon Hobbs says "my reading of this is actually very optimistic," and begs Shiller to look at the glass-half-full side of the argument, the "anxious" Professor retorts, that home sales rates "trouble him" and warns the real estate market is "fragile." Shiller then concludes that not only are stocks extremely expensive but that housing is not a good investment... the anchor fades to black...

2014 saw the extension of a historic drought across the US West. Croplands withered or were fully abandoned. Water rationing was enforced. Well tables dropped. The price of many vegetables and meats have skyrocketed. But the past month has seen a welcome set of rain systems arrive along the Pacific coast. So is an end to the drought in sight? The short answer is 'no'. And were not close to it (yet).

Q: Are orders entered for the purpose of igniting momentum in the market prohibited by The Rules?

This conduct may be deemed to violate the Rules if it is determined the intent was to disrupt the orderly conduct of trading or the fair execution of transactions, if the conduct was reckless, or if the conduct distorted the integrity of the determination of settlement prices. Further, this activity may violate the Rules. if the momentum igniting orders were intended to be canceled before execution, or if the orders were intended to mislead others. If the conduct was intended to create artificially high or low prices, this may also constitute a violation of the Rules

The Santa Claus rally, coined by The Stock Trader’s Almanac, is the performance of the S&P500 in the “last 5 trading days of the year AND the first two of the New Year." That means this year it is the performance from the close on 12/23. This morning's USDJPY-driven (home-prices helped) weakness has sent the Dow and S&P 500 into the red - extinguishing (for now) the gift that Santa left...

Having missed expectations by the most since June 2010 in November, The Conference Board's measure of Consumer Confidence missed once again. The previous dip was revised higher (because 'revisions' is exactly what makes sense in a confidence survey) from 88.7 to 91.0 but the current level printed 92.6 against expectations of 93.9. This is the 3rd miss of the last 4 months (as stocks hit record highs and gas prices collapse?). Employment "not so plentiful" rose to its worst level in a year, employment expectations going forward dropped as did income growth expectations.

Narrative, we have a problem. What is billed day after day as 'unequivocally good' is entirely not good for Alaska (oh and Texas and Pennsylvania and...) as with oil prices dropping, AP reports Alaska Gov. Bill Walker has halted new spending on six high-profile projects, pending further review. With oil taxes and royalties expected to represent nearly 90% of Alaska's unrestricted general fund revenue this year, officials warned, "the state's fiscal situation demands a critical look."

Case-Shiller's 20-city home price index dropped 0.1% MoM in October (on an unadjusted basis) - the second monthly drop in a row and biggest drop since the Polar Vortex. Year-over-year, home prices rose 4.5% - the weakest growth since October 2012. While this modestly beat expectations (+4.5% vs +4.4% exp.), it is the 11th month in a row of growth deceleration. Also of note: the Top 20 Composite index is now down for the second month in a row, dropping to 173.36. The question now is whether the downside momentum will pick up.