Archive - Apr 2014 - Story

As we noted previously, the US remains convinced that "there is strong evidence suggesting some of [the pro-Russian] demonstrators were paid," and Russia, in the same vein, responded that they "are particularly concerned that the operation involves some 150 American mercenaries from a private company Greystone Ltd., dressed in the uniform of the [Ukrainian] special task police unit Sokol." So, this morning's 'claims', substantiated, we presume, by YouTube clips and CIA promises, that John Kerry blasted to his Twitter followers is remarkable: "it is clear that Russia special forces and agents have been the catalysts behind the chaos of the last 24 hours in Ukraine." Clear... proof?

Despite Russia's veiled threat that any ongoing action against pro-Russian demonstrators had the potential to instigate civil war and bring action by the Russian forces, Ukraine's interior minister Arsen Avakov has announced, Reuters reports, that Ukraine has launched an "anti-terrorist" operation in the eastern city of Kharkiv and about 70 "separatists" have been arrested for seizing the regional administration building. Is this the red-line that Putin laid down last night?

Presented with little comment aside to ask if 4th time is the charm for the 'hoped for' earnings recovery in Europe...

Another quarter, and another attempt at predicting the future by the people whose predictions have become the biggest butt of all economics jokes, even more so than Paul Krugman columns. We are talking, of course, about the IMF's World Economic Outlook update.

Overnight weakness on the back of disappointment in the BoJ and PBOC was ignored entirely in the few minutes into and past the US open this morning. Perhaps it was the IMF's outlook? Perhaps it was just algos desperate to get back to VWAP to enable institutional sellers out? Whatever it was, the insta-vert-ramp in stocks at the open - entirely disconnecting from bonds, FX carry, and credit - has now reversed. Biotech's early 0.6% gain, gone. S&P's early 5 point rally, gone... and JPY crosses are no help at all as USDJPY tests 102 lows...

If the Fed is so powerful, why is it so cowardly and fearful that it has to cloak its theft of our money and its transfer of the wealth to the banks? What's it so afraid of? That we might wake up to the fact that we're being Fed to the sharks, every day, one morsel at a time?

Having hit their most hopeful levels in seven years in January, small business hiring plans have collapsed at the fastest rate since Lehman in the ensuring 2 months. Despite the headlines proclaiming the modest rise and beat in the headline NFIB data, capex spending plans dropped and hiring expectations dropped to lows seen 11 months ago. We can only assume the small businesses are expecting more winter storms through the spring...

Are you saying it took the highbrow economist cadre five years to figure out and agree with what we first said in 2009, and for which we received endless ridicule, abuse and accusations of fringe insanity? Yes. We are saying that.

Update: As CNBC just reported moments ago, tech fund Coatue is returning $2 billion of $7 billion to investors, citing "difficult market conditions." Just wait until the "difficult market" drops more than just 3% from all time highs...

As a reminder, for those with Bloomberg (and the proper permissions) the easiest way to track the performance of the most popular hedge fund names is using the BBG ticker GSTHHVIP, and especially its performance against the S&P. But for those who don't have access, or are too lazy or depressed to type anything into their terminal today, here it is, straight from Goldman's sales and trading mouth, summarizing yesterday's market poundage:

Our HF VIP basket underperforms the SPX by over 100bps, 3 standard dev move and the worst since June 2012.

Oops.

• Russia's Gazprom says Ukraine did not pay for gas on time (Reuters)
• Ukraine Moves to Keep Control in East (BBG)
• Banks Set to Report Lower Earnings as Debt Trading Slumps (BBG)
• More DeGeners and Obama selfies needed: Samsung's lower first-quarter estimate highlights smartphone challenges (Reuters)
• Citi Is Bracing to Miss a Profit Target (WSJ)
• Another slam from GM? Safety group calls for U.S. probe of Chevy Impala air bags (Reuters)
• Japan drugmaker Takeda to fight $6 billion damages imposed by U.S. jury (Reuters)
• EU court rules against requirement to keep data of telecom users (Reuters)
• White House may ban selfies with president after Ortiz-Obama photo promotes Samsung (Syracuse)

It took Virtu's idiot algos some time to process that the lack of BOJ stimulus is not bullish for more BOJ stimulus - something that has been priced in since October and which sent the USDJPY up from 97.000 to 105.000 in a few months, but it finally sank in when BOJ head Kuroda explicitly stated overnight that there is "no need to add stimulus now." That, and the disappointing news from China that the middle kingdom too has no plans for a major stimulus, as we reported last night, were the final straws that forced the USDJPY to lose the tractor-beamed 103.000 "fundamental level", tripping the countless sell stops just below it,  and slid 50 pips lower as of this moment to overnight lows at the 102.500 level, in turn dragging US but mostly European equity futures with it, and the Dax was last seen tripping stops below 9400.

The last time global equity markets were falling at this pace (on a growth scare) was the fall of 2011. That time, after a big push lower, November saw a mass co-ordinated easing by central banks to save the world... stock jumped, the global economy spurted into action briefly, and all was well. This time, it's different. The Fed is tapering (and the hurdle to change course is high), the ECB balance sheet is shrinking (and there's nothing but promises), the PBOC tonight said "anyone anticipating additional stimulus would be disappointed," and then the BoJ failed to increase their already-ridiculous QE (ETF purchase) programs. The JPY is strengthening, Asian and US stocks are dropping, CNY is weakening, and gold rising.

In response to claims by the Ukraine government (and the west) that Russia provoking trouble in Eastern Europe - with The White House's Jary Carney even suggesting that pro-Russia demonstrators were paid - Russia's foreign ministry has responded. Posting via their Facebook page, Russia urged Ukraine to halt any interior military preparations which could instigate a civil war. But the kicker, for which we anxiously await a rebuttal, is Russia's comment that they "are particularly concerned that the operation involves some 150 American mercenaries."

Increasing domestic conflicts are an unintended consequence of the rapid globalization behind China’s rise. China’s embrace of globalization has aligned once fractious elites behind a banner of shared economic interest. Neither China nor the rest of the world can ignore this dilemma and paradox; with every “made in China” product we buy we are contributing to this rise in wealth, and the rise in frustration, social tension and air pollution. They are unfortunately coupled together.

Sadly, as suspected - and in line with his CFO in 2009 - the reported death of Jan Peter Schmittmann was indeed suicide. The ex-CEO of ABN Amro hanged himself, but only after murdering his wife, Nally, and 22 year-ol daughter Babette. As Bloomberg reports, a farewell letter was found in the house, but authorities declined further comment on its contents. Schmittmann’s family was cited as saying in the statement that “we knew Jan Peter struggled with severe depression," and added that their "first concern now is supporting the remaining daughter in coping with this indescribable grief." Aweful...