Archive - Mar 2014 - Story

Yesterday it was two Russian and one Ukrainian warships which had crossed the Bosphorus in direction Crimea, today it is the Americans. As Hurriyet reports, Turkish authorities have given permission to a U.S. Navy warship to pass through the Bosphorus within the next two days as fears grow that the standoff between Russia and Ukraine and the West over Crimea could soon become militarized. Turkish sources, speaking with the Hürriyet Daily News on March 5, declined to elaborate on the name of the U.S. warship. The same officials, speaking on condition of anonymity, however, noted that it was not the USS George H.W. Bush nuclear aircraft carrier as suggested in some news reports, as it did not meet the standards specified by the 1936 Montreux Convention in terms of weight.

Shortly after 3pmET, the S&P 500 was starting to test the day's lows with a heavy volume down-spike around 1508ET. That, as we know, will never do to maintain the illusion of vigor and excitement over the new Utopia we are living through and so, as if by magic, VIX was slammed a rather surprising 0.25 vols out of nowhere, dragging S&P back to VWAP and beyond... But the magic didn't work, the S&P 500 cash index closed infinitesimally red on the day despite this WTF chart...

Stocks saw their lowest range day of the year so far today - and one of the lowest volume days - with today's laggard yesterday's big winner Russell 2000. Financiasls surged today and Energy dropped to worst performer on the year. Treasuries drifted sideways to very modestly lower in yield even as the USD weakened (led by AUD, CAD, and GDP strength). USDJPY and stocks were generally well coupled once again. Gold and silver leaked higher but today's biggest mover was WTI crude which tumbled back to around $101 (-1.4% on the week). High yield credit spreads flatlined with late weakness but HYG (the HY bond ETF) was notably weak all day. A late-day VIX smackdown tried to take the S&P cash into the green (mission accomplished) and new record highs - but it failed. Not exactly the high conviction, break to new highs push so many had hoped for as everyone eyes Friday's NFP (and ignores today's weak ADP and ISM Services - and weak China's Composite PMI).

The best they can say about today's meetings in Paris is that all the leaders agree to disagree - both over possible sanctions and over whether Russia is doing anything illegal. Confused yet? US Secretary of State John Kerry will explain it all in his press conference due up soon...

The Fed’s serial bubble machine has not only bestowed massive speculative windfalls on the 1%, but it has also fostered a noxious culture of plunder and entitlement in the gambling casinos of Wall Street. After each thundering sell-off during the bust phase, crony capitalist gamblers have been gifted with ill-gotten windfalls during the Fed’s subsequent maniacal money printing spree.  In this context comes Bruce Berkowitz “scolding” and firing “salvos” at Washington from the front page of the Wall Street Journal.

The UAE, Saudi Arabia and Bahrain said on Wednesday they were withdrawing their ambassadors from Qatar after it had not implemented an agreement among Gulf Arab countries not to interfere in each others' internal affairs. The move, unprecedented in the 30-year history of the Gulf Cooperation Council (GCC), follows the Bahrain state minister for information Samira Rajab saying she has evidence of Qatari media provocation against her country. As Gulf News reports, Qatar has been a maverick in the region, backing Islamist groups in Egypt, Syria and elsewhere in the Middle East that are viewed with suspicion or outright hostility by some fellow GCC members. Not a good sign for the oil-generating center of the world.

With even Warren Buffett saying it's a bad idea, we can't wait to hear how President Obama will explain how his move to raise the minimum wage will create jobs and save the middle class....

“Maybe the American people or the government or whoever raises their eyebrows can say how could the Europeans be so moderate on the debate over sanctions.

Guess what? You don’t want to sanction anyone you depend on,”

The soon-to-be-renamed-Boring-Book, for its constant uniformity of mediocre Goldilocks data offered little to strengthen bulls or bears (as usual) but it seems weather was the key once again. With 119 references to "weather" (6 times more than the January report), they remind us that:

• *FED SAW ECONOMY GROW EVEN AS HARSH WEATHER SLOWED HIRING, SALES
• *FED SAYS OUTLOOK 'AMONG MOST DISTRICTS REMAINED OPTIMISTIC'

But - the "m" words continue to dominate:

• *FED SAYS MOST REPORTS OF IMPROVEMENT WERE 'MODEST TO MODERATE'

As 8 of the 12 districts "reported improved levels of activity"... but but but the weather. Healthcare concerns were cited 16 times.

Assuming that the dismal non-farm-payrolls print in January was "due to the weather," we suspect economists, strategists, and weather-forecasters everywhere are holding their breaths over the February print given the following 2 charts...

Many observers have focused on the relative paucity of the West's diplomatic and military options in Ukraine. Others focus on Russia's sources of leverage: cutting off natural gas to western Ukraine and Europe and/or dumping its reserves of U.S. dollars. All those focusing on the West's lack of leverage are forgetting that the Empire retains multiple way of striking back. For example, bringing the costs of misadventure home to Russia's politically influential 1/10th of 1%.

Moments ago, the Senate was supposed to vote through Debo Adegbile, Obama's nominee for the civil rights division at the Department of Justice and who represented cop killer Mumia Abu-Jamal. It failed, when the Democrats in the Senate couldn't get enough votes to pass a simple majority with 8 Democrats voted against Adegbile: Casey, Coons, Donnelly, Manchin, Walsh, Heitkamp, Pryor. Reid voted no in order to reconsider nom later.

When Canadian authorities scrapped their 'investor visa' scheme a month ago, we warned that the nation was removing a critical pillar of support for its real-estate bubble market. However, with an estimated 45,000 Chinese millionaires still in the queue, the wealthy hoping to get their cash out of China are not happy. As The South China Morning Post reports, a group of wealthy mainlanders has criticized the Canadian government for scrapping its investor visa scheme and are threatening legal action if the decision is not overturned - arguing "we had set aside a lot of money to meet the investment requirements and over the years passed up on many opportunities... A refund of our application fees will not make up for all the preparation put in."

Robert Serry has now agreed to go straight to the airport and end his mission in #Crimea

— James Mates (@jamesmatesitv) March 5, 2014

Just Bloomberg headlines for now which don't mesh well with the whole "detente" narrative, supposedly unleashed by Putin's conference yesterday in which he was said to "blink", which he didn't but algo-driven stocks are convinced he did and algos are always right: UN ENVOY KIDNAPPED IN SIMFEROPOL, IFX CITES UKRAINE FOREIGN MIN - It is certainly not clear who the kidnappers were. So just another provocation, simple lie, or for once, the truth?  We hope to find out soon. Update: and now we know the answer - lie and borderline provocation, once again by the Ukraine foreign ministry: DEPUTY U.N. SECRETARY-GENERAL ELIASSON DENIES REPORTS U.N.  REPRESENTATIVE SERRY WAS KIDNAPPED, SAYS SERRY WAS THREATENED.