Archive - Feb 2014 - Story

By now the weather apologists will have let you know that the latest economic data disappointment - housing starts and permits - both of which crashed in January, is solely due to the weather (the same apologists who will tell you that any good news is due only to the "recovery"). Alas, this time even the most cursory glance beneath the headlines reveals just how sad the lies truly are.

With Putin hoping that they can just keep it from going full civil war for a few more days, Ukraine continues to slide towards a dismal result. This morning sees the next level of escalation in the break-away Western region:

• *UKRAINE'S SECURITY SERVICE SAYS WEAPONS CACHE STOLEN: INTERFAX
• *UKRAINE SECURITY SERVICE SAYS PROTESTERS SEIZED 1,500 GUNS
• *UKRAINE SERVICE SAYS PROTESTERS SEIZED 100,000 ROUNDS OF AMMO
• *UKRAINE SERVICE SAYS PROTESTERS GUILTY OF `TERRORIST ACTS'

And with that, the 'excuse' the military needed to get involved as Interfax reports the Ukraine's SBU starts "Anti-terrorist" operation in the Western region of Ivano-Frankvisk. With 25 dead and 241 injured, according to the AP, we suspect these numbers are sadly just the start.

Despite our insistence that their was nothing new in the BoJ's loan ceiling hike and lack of QE extension (and Goldman's 'this is already priced in' perspective), it still took the machines that are running USDJPY almost 36 hours to figure it out. USDJPY has retraced the entire 100 pip swing and has broken back below the crucial 102.00 level this morning. Time for some more jawboning about the potential for more QE - even as Kuroda insisted last night to the Diet that the government's tax hikes occur (if for no other reason to ensure this does not escalate into the 'monetization miasma' that they fear the market would believe). Of course, as we approach the US open, we would expect the usual ramp-job to lift stocks.

It seems once again that 'economists' and 'analysts' misunderstood the weather in winter is cold. Housing Starts dropped a stunning 16% MoM (from an upwardly revised December data) for the biggest miss since June 2013 (and 8 of last 10 months missed expectations). This is the biggest MoM drop in 3 years. Building Permits - more problematic for the weather blamers - also plunged (by 5.4%) missing expectations by the most since June. However, what is the biggest slap in the face for the 'weather-blamers' is the collapse in Permits for the West (-26%) while most other regions improved.

For years, the Netflix streaming business has been growing like a parasite, happy to piggyback on established broadband infrastructures, where the broadband companies themselves have becomes competitors to Netflix for both distribution and content. Until now. Emboldened by the recent Net Neutrality ruling, which has put bandwidth hogs like Netflix which at last check was responsible for over 30% of all downstream US internet traffic broadband providers are finally making their move, and in a preliminary salvo whose ultimate compromise will be NFLX paying lots of money, have started to throttle Netflix traffic. The WSJ reports that the war between the broadband-ers and the video streaming company has finally emerged from the "cold" phase and is fully hot.

The past 5 weeks have seen mortgage applications crumble a further 16% - their biggest such drop in 14 months as the index for home purchase applications hovers close to its lowest level since 1995. Non-seasonally-adjusted, this is the worst start to a year in over a decade. Must be the weather?

The events in the Ukraine continue to deteriorate. Moments ago Lawmakers in Ukraine’s Lviv region, declared independence after backers evicted appointed governor overnight. Lviv’s parliament formed executive committee with department heads in Governor Oleh Salo’s administration that will take over functions of regional government, Oksana Dmetryv, a spokeswoman for Speaker Petro Kolodiy, said today by phone from Lviv. Protesters also seized headquarters of security services in Lviv, a region of 2.5 million people bordering Poland. Elsewhere, there were reports of more military vehicles crossing through Kiev: if there are any more Molotov Cocktail video follow ups we will be sure to capture them.

• Ukraine leader denounces coup bid, West weighs sanctions (Reuters)
• Time to buy Imodium calls: Kuroda Easing Doomed as Yen Seen Missing 120 Level (BBG)
• Teens Disappear From U.S. Workforce (BBG)
• Fed Sets Rules for Foreign Banks (WSJ)
• Quant Funds Feel Investor Bite After Underperforming (BBG)
• China Probes Qualcomm, InterDigital Over Monopoly Concerns (WSJ)
• Capital One says it can show up at cardholders' homes, workplaces  (LATimes)
• SEC Gains Power to Take Profit Made From Insider Trading (BBG)

After surging yesterday for no reason whatsoever because as we explained on several occasions, there were no surprises in the Tuesday BOJ statement, and the doubling and extension of its loan facilities was implicit and factored into the doubling of its monetary policy (as goldman explained quite well), both the Nikkei and the USDJPY has been forced to revert, with the latter all important carry funding pair back to 102 and in danger of sliding lower, as a result ES is now below yesterday's lows. Which is why the 102 USDJPY "invisible hand" tractor beam will be all important today especially if the market finally starts paying attention to the proxy civil war that has gripped the Ukraine. Stocks traded lower, albeit in a relatively range-bound range this morning, with the Spanish IBEX-35 underperforming. Banking names remained under pressure, with focus still on yesterday’s reports that Spanish banks' bad loans marked a fresh record, together with comments by ECB's Weidmann, who said that sovereign debt purchases would constrain the central bank via political pressure. Similar view was also echoed by ECB’s Nowotny, who said that government bond buying US Fed-style would be difficult to do under ECB's mandate.

First Mercedes, then Porsche, and now Ferrari and Maserati post record US sales in January...

*FERRARI POSTS RECORD SALES IN U.S. AND U.K. IN 2013
*FERRARI AND MASERATI GLOBAL MORE THAN DOUBLE IN JAN TO 2,400

...a month where the non-1%-auto-makers struggled mightily. Of course, the latter missed expectations are blamed on weather (as opposed to dealer inventories stuffed at record levels, a replacement cycle that has run its course, or a consumer that is once again credit-tapped out). So, the clear findings from this is that the 1% - who are buying more luxury cars than ever before in January - clearly don't feel the weather...

Watch as sparks fly between a Ukrainian military APC, possibly the same one we revealed earlier, as it gets into some blazingly close encounters with the Kiev protesters. It is unclear who won however it is quite clear that at this point the proxy war in Ukraine between Russia/Gazprom and the European Union/US State Dept/Saudi/Qatar can be upgraded to "hot."

As we initially exposed over five years ago, with luminary frat brothers and sister such as Jimmy Cayne, Richard Fuld, Stan O'Neil, Martin Gruss, Michael Bloomberg, Jon Corzine, Mary Shapiro, Alan Schwartz, Larry Fink, Larry Fink, Wilbur Ross, James McDonald, this "secret" organization puts the Masons, Bilderbergs, Skull and Bones, Templars, Fight Club and all other secret societies to shame. Now, as New York Magazine infiltrates the inner workings of the "Kappa Beta Phi" society, Liberty Blitzkrieg's Mike Krieger notes the following will confirm what everyone already thought - that a great many of these oligarch financiers are complete and total sociopaths and a menace to society. 

The world has grown tired of the inexorable rise in radiation levels and propaganda-talk sourrounding nuclear issues in Japan from the government in the last few years since Fukushima changed the nation's future. However, there is another source of nuclear materials that is increasingly angering the Chinese. The tensions and rhetoric, from WWI analogs to Nazi comparisons, have risen recently; but this time, the Chinese are asking a legitimate question... "If a country claims that it sticks by the three non-nuclear principles but at same time hoards far more nuclear materials than it needs, including a massive amount of weapon-grade plutonium, the world has good reason to ask why.... After all, Abe and his cabinet have already caused too much trouble to regional peace and stability." Of course, this places "ally" President Obama in an awkward position given his anti-proliferation stance... though we suspect he will have an angle: "if you like your plutonium stockpile, you can keep it."

By early March "the US will be in the 2nd longest bull market of the last 80 years," and as Marc Faber warns, "usually, these long bull markets end badly." Simply put, The Gloom, Boom, & Doom Report publisher notes "it's too late to buy US stocks," warning of previous major declines like 1987, 2000, and 2007. "It's not an opportune time" to buy US stocks but while it might be too early to buy some of the beaten-down emerging markets at these levels, Faber believes investors can make money in the longer-term - "I think I can make the case that over the next five to 10 years, I will make more money by buying now in the emerging economies then in the U.S."