Archive - Dec 7, 2015 - Story

While we were the first to mock co-workers' contention that Farook's radicalization could be confirmed by the size of his beard, we would note that although you cannot judge a book by its cover, it does indeed appear as though some manner of transformation might have taken place in or around Farook's two visits to Saudi Arabia.

"Where is the bubble today? Perhaps central banks are the bubble."

Paul Volcker and Alan Greenspan were the Elvis and Beatles of this movement – the first to see widespread fame for their efforts. Then came Ben Bernanke, perhaps the Jimi Hendrix or Led Zeppelin of his day, taking existing tools and pushing them in new, previously unconsidered, directions.  Now, we have Janet Yellen and Mario Draghi, whose legacies are as yet undefined. They may end up like the next generation of rock stars from the 1970s – something like Bruce Springsteen, with a deep focus on common people in his music. Or, they could be the Bee Gees, who focused simply on commercial success. Only time will tell.

· Central bank rate decisions take focus this week, with the Bank of England, Swiss National Bank, Reserve Bank of New Zealand Central Bank of Russia all set to announce their latest decision on interest rates

China burned through some $40 billion in FX reserves in November in support of the yuan while the headline drawdown came in at a whopping $87 billion inclusive of valuation effects. It was the third largest decline in history and suggests that despite a misleading $11 billion increase in October, capital flight continues unabated.

This won't end well...

Just as happened last week in Europe when stocks crashed on Draghi's disappointment, so amid today's carnage, there was only one thing left to stop the tumble... BREAK THE MARKET AGAIN!!

One month ago, Credit Suisse confirmed what we had reported in the previous several weeks, namely that according to channel checks, iPhone supply chain orders had weakened recently adding that "in our view, the continued weak supply chain news could weigh on Apple shares for the next few weeks/quarters." The market did not like the news and sold AAPL stock only to promptly BTFD as it always has in the past 7 years: after all any transitory weakness is merely an opportunity to buy, right? Only this time the weakness may not be transitory, because as of this morning we now have not one but three updated channel checks all pointing to a substantial slowdown in AAPL's flagship product and core revenue generator, the iPhone.

Pierens had been expecting, after more than two decades of service, to be promoted from Deputy Head of Unit to Head of Unit. Instead, Pierens was demoted to Desk Officer. His assistant began to understand that Pierens had opened the window and started to climb on the ledge and started to scream, “no, Gauthier, don’t do it...”. A few moments later, Pierens jumped, ending his life.

With Keurig Green Mountain trading around $51 late on Friday, one "hopeful" options trader decided it was an opportune time to buy 99 $60 call options (controlling 9,900 shares or around $594,000 worth at the strike) which unless something miraculous happened would expire entirely worthless within a week. Well... a miracle happened over the weekend, CMGR was bought at a 78% premium and that "lucky" options trader cashed in his lottery ticket with a 60,000% return.

Overnight Hillary Clinton, in her latest populist push to present herself as "one of the people" wrote a NYT op-ed explaining "How I'd Rein In Wall Street", we were wondering if it would include draining Wall Street balance sheets with mandatory and far greater donations to her campaign by Wall Street firms - a strategy that may actually work as it hits banks where it hurts the most: their money. To our disappointment, this was not included.

US equity markets opened and stunned onlookers by not going instantly vertical on a morning bid-fest. Instead, everything is falling. The Dow is back in the red for 2015 but it is Small Caps that are worst hit as they give up all of Friday's God- Draghi-given gains...

77% of CNBC viewers believed "the bottom was in" on June 4th 2015 (with crude having rallied in the few days up to the survey to over $63). It appears things did not work out as the 'smart money' expected. The current front-month (Jan 2016) WTI is now tradingh at $38.25... well below the August cycle lows and back to the lowest since 2009...

Just an innocent typo by CNN, or an advance look at president Obama's next job who after having "fixed" the U.S., now sets his sights on doing the same to this erstwile socialist paradise?