Archive - Dec 2015 - Story

Back in March 2014, the ECB predicted that inflation at the end of 2015 would be 1.3%. Moments ago, with less than a month left in the year, the ECB has trimmed its forecast to just 0.1%. Oops.  But what about next year? Well, see for yourselves...

Un-"Liquidity"...

And there goes hopes for a bigger bazooka...

Following the surprise plunge in job layoffs (to 14-month lows) according to Challenger, Grey, and a day after exuberant ADP jobs data, initial jobless claims spoiled the party a little and rose 9k to 269k (in line with expectations). However, for The Fed, this is awesome, as the trend remains near 42 year lows. The question is - as the chart below shows - what happens next?

Over-promise and under-deliver appeears to have been the Draghi meme as the ECB chief's loss of control of market front-running  has left traders rapidly reversing their buy-the-rumor positions. EURUSD is spiking higher, Bund yields - most focused at the short-end - are surging, DAX is dumping, and US equity and bond markets are being sold. USD weakness has sparked gold and crude strength. We are gonna need a lot more jawboning in the press conference to save this...

If you just lost a ton of money, here's why.

• Mario Draghi Is About to Become the World's Market Risk Manager (BBG)
• Five Things to Ask Mario Draghi From Negative Rates to QE (BBG)
• Leaving behind baby and bombs, couple sows panic in California (Reuters)
• Couple's motive in California rampage a mystery for police, family (Reuters)
• In Grim Ritual, Barack Obama Again Calls for Stricter Gun Control After Mass Shooting (WSJ)
• Islamic State Defeat Impossible Without Ground Force, Kerry Says (BBG)
• OPEC States Push for Output Cuts in Face of Saudi Opposition (BBG)

Mario Draghi is on deck Thursday morning and market expectations could scarcely be higher. In fact, Draghi is widely expected to execute the Keynesian trifecta, i) a rate cut, ii) expansion of QE, and iii) extension of QE duration. The ECB has indeed gained a reputation for over-delivering, but as SocGen puts it, "with high expectations comes a high risk of disappointment." 

Yesterday's market swoon which unwound all of Tuesday's gains on concerns about a hawkish Fed and fears about terrorism in the US, are now completely forgotten, and have been replaced with the latest daily round of pre-ECB euphoria, driven by hopes that Mario Draghi will announce even more dovish details to Europe's Q€ 2 than just a 10 bps rate cut and a boost to QE more than €10 billion, both of which have been already priced in.

There isn’t much as far as confirmation, but it increasingly appears as if “something” just hit the triple hooks (CCC) in the junk bond bubble. At least as far as one view of it, Bank of America ML’s CCC implied yield, there was a huge selloff that brought the yield to a new cycle high (low in price) above even the 2011 crisis peak.

"Where in such cases the overall functioning of the area without internal border control is put at risk, and insofar as the exceptional circumstances constitute a serious threat to public policy or internal security within the area without internal border control or within parts thereof, the period for the reintroduction of internal border control may be extended up to a total maximum of two years."

Again, the globalists at the BIS and the IMF require a diminished U.S. dollar, greatly reduced U.S. living standards and a much smaller U.S. geopolitical footprint before they can establish and finalize a single publicly accepted global elitist oligarchy. If you cannot understand why it seems that the Federal Reserve and U.S. government appear hell-bent on self-destruction, then perhaps you should consider the facts and motivations at hand. Then, you’ll realize it is THEIR JOB to destroy America, not save America. When you are finally willing to accept this reality, every disastrous development since the inception of the Fed a century ago, as well as all that is about to happen in the next few years, makes perfect sense. As the U.S. destabilizes, we are not escaping the clutches of the Federal Reserve system, only trading out one totalitarian management model for another.

A US citizen named Syed Farook is reported by NBC News to be involved in the shooting (along with his brother)... Police confirm an explosive device was found inside the building where the shooting took place. 2 suspects dead (1 male, 1 female), 3rd person detained after running from SUV shootout scene. 1 officer wounded. AP reports, a law enforcement official says a workplace dispute probed as possibility in California shooting. ... San Bernardino officials are reporting at least 14 dead and 17 more wounded following a mass shooting in the 1300 block of South Waterman the Inland Regional Center - a center serving people with developmental disabilities.

After days of hazardous pollution forced people to wear masks and huddle indoors, residents of Beijing turned their attention to the mayor, Wang Anshun, and his bold vow last year to clear the air. As JapanTimes reports, Wang said, if pollution wasn’t brought under control by 2017, he would cut off his own head and present it to the country’s leadership. So, imagine his relief, when after pollution levels hit 20x WHO's risk limit, a cold front - as caught on tape below -  swept away the choking smog (and saved his neck).

Yesterday, all the media hoopla over Mark Zuckerberg’s announcement to “give away” 99% of his Facebook shares to philanthropic causes, came and went in the expected torrent of internet commentary. However, what you might have missed are the specifics around how he decided to safeguard those shares, and how unusual the for-profit LLC structure is for a charity.