Archive - Feb 2015 - Story

And just like that, instead of praising the January jobs report, Goldman's Jan Hatzius is far more interested in pounding the table on its one scariest chart...

Following the arrest of 3 Russians on Wall Street for alleged spying, the message from John Carlin, assistant US attorney general for National Security, is clear, "they want what you have." The "they" are multiple foreign nations spying on the US financial markets and the "what you have" is, according to Carlin, financial markets that are "the envy of the world." As we explained recently, it appears the pretext for the scapegoat of the next possible (June rate hike-inspired?) market crash is being prepared, as Carlin confirms, "it's not just the Russians, there are multiple foreign nations that want to gather as much information about" the stock market as possible. When asked why, his response, "they are doing this for a number of reasons."

As the jobs' "good news" sinks in and the realization that this is "bad news" for free-money-a-holics hits, US equity markets have stumbled off the exuberant knee-jerk highs and given up the jobs bounce (for now)... as they are reminded that GREXIT is a real risk and oil's price collapse has yet to play out in the real economy...

And the hits keep coming. On the heels of a demand for repayment of ECB's profits from GGB bond gains and to extend the T-Bill limit to give the nation time to negotiate with EU leaders (i.e. a Bridge Loan) which Jeroen Dijsselbloem already dismissed earlier in the day, S&P just piled on...

GREECE RATINGS CUT TO B- FROM B BY S&P; MAY BE CUT FURTHER

This downgrade comes just 5 months after upgrading Greece because "risks to fiscal consolidation in Greece have abated." EURUSD is not moving much (having already cratered after US payrolls) but Greek stock ETFs are sliding once again.

The worldwide rig count ended January at 3,309, down 261 from December but it is the US and Canada that is dominating that collapse. Following last week's all-time record absolute drop of 94 rigs (over 7%, most since APR09), the oil rig count dropped for the 9th week in a row (down another 83 to 1140 rigs - down 27% in last 9 weeks) as it tracks the 4-mo lagged oil price perfectly. The Permian basin saw the biggest cut in rig count. This is the lowest oil rig count since Dec 2011 (down 19.5% YoY) and lowest total rig count in the US since March 2010 - down 25% in the last 9 weeks). Hopes of production cuts are simply wrong as the last 4 times that rig counts have dropped, no production cuts have occurred.

There’s a fairly easy way to tell if a firm is a marketing firm or an investment firm. Do you see its advertising on buses, cabs and posters? Do they have a practically limitless range of funds? This is not to denigrate marketing firms entirely. But as the financial markets lurch between unprecedented bouts of bad policy, and achieve valuations that we strongly suspect are unlikely to persist, it may be worthwhile to consider the motives of the people charged with managing your money. Are they asset managers, or asset gatherers?

Almost the entire Treasury complex is now up aropund 30bps on the week. In percentage terms, this is the biggest yield spike for 30Y bonds since January 2009. 30Y is back above 2.50%, 10Y above 1.9%, and 7Y above 1.75% as 2Y yields have exploded 10bps to 62bps (and 39% this week - the most on record).

The difference between America's manufacturing workers and waiters has dropped to a record low of just 1.387 million. The same difference was 11.3 million on January 31, 1990.

According to corporations themselves, there were at least 18,000 terminations in the high-paying energy sector. According to the January payrolls report, the number of Oil and Gas Extraction workers declined to 199.5K in January from 201.4K in December, a virtually non-exstant drop of 1,900 workers (and even the not seasonally adjusted, raw data shows a tiny drop of just 3.1K workers). So did the BLS choose to ignore for these thousands of jobs losses, or did it simply forget?

The era of living off borrowed money is over in Greece, and the Greek people now have a choice: they can continue down the path of poverty by leaving their culture of corruption unchanged, or they can grasp the nettle and support a new culture based on transparency, fiscal prudence and strict adherence to the basic rules of monetary management.

As already observed, when it comes to tracking the job losses in the energy space, the BLS had some rather significant "seasonally-adjusted" or otherwise issues in January, reporting just 1.9K job losses in the oil and energy exploration space, when the reality was orders of magnitude higher. But while the Bureau of Labor Services may have failed to notice the collapse of the highest-paying US jobs (after Wall Street of course), it determined that over 250K jobs were created in other sectors. Where were they?

Happily ignoring the 'fact' that the unemployment rate rose in the US today, talking-heads continue to proclaim the US economy will be the economic engine of the world going forward... cleanest dirty shirt... where else are you going to invest. Of course this ignores the fact that US Macro data has been a disaster over the last 2-3 months. But there is one dissident voice who dares to speak up... Canadian Finance Minister Joe Oliver said on Friday, although the United States is carrying the world economy at the moment, "that is simply not sustainable." Blasphemy!!

As UBS' Maury Harris proclaims in the headline, "don't be out of the office on June 17th" - the mid-year FOMC meeting. Today's jobs data will only serve to boost the Fed's confidence that they are reading the labor market correctly, and that is being rapidly 'priced-in' to the short-end of the yield curve as implied rates surge...

Following his outburst at the "independence" of the Turkish Central Bank earlier this week (which crashed the Lira), President Erdogan has opened his mouth again this morning...

*ERDOGAN: TURKEY NEEDS NEW CONSTITUTION AND PRESIDENTIAL SYSTEM, and
*ERDOGAN SAYS PEOPLE SHOULD RESEARCH NEW YORK TIMES OWNERS

So the blame for his nation's weakness is an independent central bank and the NY Times... The Lira just passed 2.47 to the USDollar - a record low.