Archive - 2014 - Story

Presented with little comment, as the chart speaks for itself, but for those greatly rotating their 'cash on the sidelines' into stocks; JPMorgan points out that US equities are 2 standard deviations rich to their average valuation and are in fact the most expensive in the developed world...

What if our commoditized, financialized definition of wealth reflects a staggering poverty of culture, spirit, wisdom, practicality and common sense?

As we reported earlier, 1.5 billion adults around the world, or a whopping one in three, are obese or overweight. But, as any marketer will tell you, this is merely an untapped opportunity: it simply means that two out of three are still "unobese". And doing its best to hit the goal of 100% obesity, is IHOP which, for the first time in more than two years, has just unleashed Pancake Pandemonium: "You can choose a stack of five Buttermilk pancakes as a main course or you can opt to add them to a combo which features eggs any style, hash browns, and a choice of pork sausage links, bacon, or ham." Remember: "With authentic country flavor, our fluffy buttermilk pancakes are the signature favorite we’re famous for. Order early and often—All-You-Can-Eat Pancakes are unlimited!"

As the New Year brings the actual implementation of Obamacare, it appears in reality things are not as great as many were promised. A recent Gallup survey found that only 7% called their Obamacare experience "very positive" with a stunning 29% seeing it "very negative." But as The Daily Mail found, from Northern Virginia hospitals turning away sick people because they can't determine whether their Obamacare insurance plans are in effect to high deductibles and long waits for authorizations; as many as one-third of the administration's claimed 2.1 million enrollees remain unsure of their coverage. The 'lie of the year' in 2013 may be even bigger in 2014.

The start of 2014 was less than exuberant as the markets turned in the steepest loss for the first trading day of a new year since 2008.  What does this mean for the rest of 2014?  Likely not much.  The old Wall Street axioms of "the first 5 trading days" and "so goes January, so goes the year" tend to be statistically more important.  However, it did get me thinking about the new year from a more macro perspective.  This weekend's "Things To Ponder" is a collection of ideas to get you to do the same.

The weakness in stocks accelerated after Europe's close, was briefly stalled by algo wildness and VWAP buys on Bernanke's completely non-news speech this afternoon, then dropped into the close, but was far outweighed by the moves in commodities. WTI Crude has dropped over 6% in the last 4 days - its biggest such drop in almost 8 months. The last 2 days have seen gold rise at its fastest pace in almost 3 months. Treasuries ended the week practically unchanged with a modest selloff on Bernanke leading to a 2-3bps drop in yield sin 2014 so far. The USD kept soaring on the back of EUR weakness (as the liquidity flows came back out) but JPY was in charge of ferrying stocks once again (until the last few minutes). The Bernanke VIX slam failed to ignite any real momentum and stocks slipped into the close - with the NASDAQ ands SPX red (but Dow green). Of course, POMO restarts next week so shorting will be banned...

From ironic to ironic-er... the Chinese icebreaker ship that helped rescue the 52 Australian global warming researchers from being trapped in Antarctic ice has found itself stuck in heavy ice. As Reuters reports, The Snow Dragon had ferried the passengers from the stranded Russian ship to an Australian icebreaker late on Thursday. It now had concerns about its own ability to move through heavy ice, the Australian Maritime Safety Authority (AMSA) said.

Oops. While Phil LeBeau was proudly crowing about how great the auto industry 'was' doing, the actual data of how it 'is' doing printed with a dismal drop from Novermber's exuberance. Domestic Sales dropped to their lowest annualized level in 14 months with the biggest miss since Oct 2008! The story was very widespread, as SMRA notes, nearly ever automaker reported lower than expected sales... apart from: *MASERATI N.A. DEC. SALES UP 210%

Looks like he's still got it... (or the NY Fed Trading desk wanted to send him off with a smile on his face...)

Ben Bernanke will momentarily speak at the American Economic Association symposium in Philadelphia. His speech is titled "Looking Back, Looking Forward" and can be found at the end of this post.  Watch what may be his last speech live.

Real estate bubble, sub-prime mortgages, securitized products and their derivatives were largely responsible for the ultimate collapse, leading us to the economic conditions of today. Policy makers and investors alike were, and still are, basing their actions on a false set of commonly accepted myths.

If what happened in the last days of 2013 was indeed merely reverse repo-assisted window dressing, then we would expect the that first days of 2014 should see a comparable collapse in the magnitude of the Fed's reverse repo operations. Sure enough, as the chart below shows, this is precisely what has happened following today's far more modest $56.7 billion reverse repo operation conducted among 50 bidding counterparties and the Fed, of course.

Sales of gold coins are booming even as the precious metal's price is falling (and it's not just central banks). Despite gold futures 28% drop in 2013 (its worst since 1981), the WSJ reports that demand for gold coins shot up 63% to 241.6 metric tons in the first three quarters of 2013.

While the non-luxury auto-manufacturers suffered from a case of cannel-stuffed constipation in December, Luxury brands appeared to do very well thank you Mr. Bernanke:

• *PORSCHE REPORTS RECORD SALES IN '13 21% RISE OVER '12
• *PORSCHE CARS NORTH AMERICA DEC. SALES UP 10%

As the company notes, it "exceeded 40,000 sales for the first time in the history of Porsche in the US," as the 911 sold 10,442 units and Cayenne 18,507 units.