Archive - Jan 9, 2015 - Story

In Harrison County, Ohio, drilling company worker Rick Lucente sums up all that is wrong with the mainstream media's narrative (puppeting even The Fed's great thinkers) about what great news low oil prices are... while his monthly gas bill for his Chevy pickup truck has dropped, he admonishes, "That’s not going to replace a paycheck... and I don’t know why this is happening." As the local mayor adds, the impact of the energy industry is widespread, oil prices affect almost every facet of their lives, from home values to roads to jobs.

Venezuela has a massive population and tremendous natural resources... and yet, the place is a real mess. Years of mismanagement and utopian socialist policies mean that the country is facing shortages of basic necessities such as food and toilet paper. You have to imagine that when a place is in such turmoil, significant regime change isn’t far off. In fact, this year’s parliamentary elections will be an important indicator of what will happen in Venezuela. Peacefully or not, things in Venezuela simply have to change. The country is reaching its day of reckoning.

Since regulators are so busy focused on the interest rate, FX, credit derivative, and commodity market manipulations and rigging, we suspect they missed the oh so visible hand of "spoofing" that is occurring today in Crude Oil. As Nanex so brilliantly exposes (once again), large orders 'spoof' the depth of the market before disappearing entirely as liquidity approaches and demands a trade...

Just as T.Boone Pickens warned, US Rig Counts are plunging. Down by 61 this week alone - the biggest weekly drop in over 5 years - at 1,750, this is now the lowest since November 2013 (and very close the lowest since 2010). The 10% or so plunge in the last 7 weeks is following the same trajectory as the 2008 collapse - which led to - just as Pickens suggested - a 50% crash in rig counts...

Having tested-the-waters with his "2 years of free community college for all" plan last night, President Obama will this afternoon explain how it's all going to work, how it will be paid for (and by whom), how it will not raise education costs, how it will ensure Americans become more productive and encouraged to seek and take work, and how it will wean people from suckling at the teat of the welfare state... Oh and how he will define 'responsible' students? (rather like moderate terrorists we suspect?). Or is this all a 'delaying tactic' as America's aging workforce crowds out the younger generation from all but burger-flipping?

...over time, grand coalition governments may only serve to ossify the re-orientation of political allegiances along the mainstream vs. populist dimension. If economic malaise persists to the next election, support for populist parties is likely to build, as scepticism about the adjustments required to sustain Euro area membership rises. The Greek experience points in this direction. Were this experience to extend to larger and more systemically relevant countries (such as Italy or Germany), the implications for markets would be profound.

The oil industry is facing rising debt from collapsing oil prices, but there could be another sector that becomes a casualty of the low oil price environment: liquefied natural gas (LNG).

We have great news for America's increasingly aging work force: the number of workers 55 and over just hit 32.9 million, up 1.3 million from a year ago, and an all time high.  For those who happen to be young and, inexplicably, also want a job, we have good news too...

This is not what was supposed to happen... Brent Crude broke to a $48 handle and WTI nears a $46 handle as yet another dead-cat-bounce dies...

But, but, but it was a great jobs report... (apart from record numbers not working and dream-dissolving earnings drops). The exuberant surge in stocks post-payrolls has left the building. The Dow is now down over 200 points from the post-payrolls peak as stocks are broadly -0.5% from payrolls print and losing over half of yesterday's Evans gains. Gold and bonds are rallying and crude is not rallying or stabilizing... and has broken back down to a $47 handle.

The situation in France is going from bad to worse. First there is the two Paris terror-attack suspects hostage crisis in an industrial estate north of Paris. Secondly, an apparently linked (according to police) hostage crisis is also under way in an East Paris kosher grocery, where a suspect in the Thursday fatal shooting of a police officer in Paris' Monrouge area, identified as Amedi Coulibaly, 32, has now issued a warning that he will kill hostages if police storm the terror-attack brothers. What is even more curious is that Coulibaly met with French President Sarkozy in 2009, hoping to find a job.

Just 2 days after President Obama reflected on his glorious 'save' of the US auto industry - forgetting to explain how so much of this 'buying frenzy' has been predicated on massive low-quality-borrower-based credit extensions - The Wall Street Journal bursts the bubble of 'contained-ness'. Auto loan delinquency rates are surging to levels not seen since 2008 and stunningly, more than 8.4% of borrowers with weak credit scores who took out loans in the first quarter of 2014 had missed payments by November. As even glass-half-full-status-quo-hugger Mark Zandi is forced to admit, "It’s clear that credit quality is eroding now, and pretty quickly."

After evading the French police for nearly three days, a few hours ago the Charlie Hebdo murder suspects were cornered in an industrial building near Charles de Gaulle airport in the town of Dammarin-en-Goelle, 26 miles northeast of paris and 8 miles away from the airport, where they are said to have taken a hostage. Heavily armed police blocked approaches to the town and helicopters hovered in the fog overhead. Agence France-Presse said the men have taken a hostage. According to reports, the suspects have established police contact with the police and have said they are ready to "die as martyrs."