Archive - Mar 2015 - Story

Last December, traditionally permabullish energy trader Andy Hall shocked the world when he became the first casualty of the oil crash after Phibro, his 113 year old employer then owned by Occidental Petroleum after its sale by Citigroup, would liquidate in the US after it failed to buy a buyer. He wouldn't be the last. Overnight, Nexen Energy, a wholly owned subsidiary of China's CNOOC Ltd, reported it too would close its crude oil trading division following a round of job cuts announced last week, four market sources said on Monday.

Th German DAX stock market index has only been this extended relative to its 200-day moving-average once in history... March 2000 - and that did not end well...

• Germanwings Airbus crashes in France, 148 feared dead (Reuters)
• Greece promises list of reforms by Monday to unlock cash (Reuters)
• Merkel Points Tsipras Toward Deal With Greece’s Creditors (BBG)
• Banks Shift Bond Portfolios -Move to ‘held to maturity’ category aims to guard against rising rates, shield capital  (WSJ)
• Beijing to Shut All Major Coal Power Plants to Cut Pollution (BBG)
• As Silence Falls on Chicago Trading Pits, a Working-Class Portal Also Closes (NYT)
• Oil below $56 as Saudi output near record, China activity slows (Reuters)

It is a centrally-planned "market" and everyone is merely a bystander. Last night, following a dramatic China PMI miss, which as previously reported tumbled to the worst print since early 2014 and is flashing a "hard-landing" warning, the Shanghai Composite first dipped then spiked because all a "hard-landing" means is even more liquidity by the PBOC (which as we suggested a month ago will be the last entrant into the QE party before everyone falls apart). Then, this morning, a surprise beat by the German (and Eurozone) PMI was likewise interpreted by the algos as a catalyst to buy, and at this moment both European stock and US equity futures are their session highs. So, to summarize, for anyone confused: both good and bad data is a green light to buy stocks. In fact, all one needs is a flashing red headline to launch the momentum igniting algos into a buying spasm.

Chinese rail freight collapses 9.1% YoY; China Manufacturing PMI tumbled back to a contractionary 49.2 - lowest in 11 months; and the Employment sub-index plunged to its lowest since Lehman ... yeah but apart from that, everything is awesome. And for those excited about just how disastrous Chinese data is (and thus how huge the next stimulus unleashing will be), think again - China now sees exactly where the last trillion dollar QE went... a de minimus and unsustained blip in the economy and liquidity-fueled rampage in stocks (which is not what a corruption-crackdown politburo wants to encourage).

After almost two centuries of political and economic meddling in Latin America under the Monroe Doctrine (1823) banner, much of it involving regime change, the US is finally coming to terms with the reality that its influence has not just waned but disappeared. To Washington’s despair, similar results, if for other reasons, are happening throughout North Africa and the extended Middle East; certainly not the results the US had hoped for or anticipated from the revolutionary wave in the Arab Spring, now entering its fifth year. The era of using regime change as a weapon of mass deception may have already ended for the United States of America… and hopefully for the entire world.

With allies migrating en masse to China's new infrastructure bank (and even the US having to admit it will 'cooperate'), it appears America has fallen back on what has worked for it in the past to ensure the world's largest creditor remains the world's reserve currency ad inifinitum - rattle its nuclear missile sabre... As the following clip shows, The US Air Force just test-fired a Minuteman III intercontinental ballistic missile from California, providing a "visual to the world."

Just when we thought it was logistically impossible for US foreign policy to be any more incompetent and cluless, we read this...

Fortescue's refinancing effort, which many investors believe was hampered by collapsing commodity prices, wasn't actually a failure the company's CEO says. Besides, it was all Janet Yellen's fault.

“I am for doing good to the poor, but…I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. I observed…that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.” - Benjamin Franklin

Well that didn't last long. The utterly idiotic surge in Copper futures prices into the US cash equity close has been largely unwound with a small jerk higher on Japan's open and plunge as China joined the fray... retracing ~80% of the rampfest during the day on extremely heavy volume.

It appears Japanese policy-makers are getting inspiration from Hollywood for their latest economic 'fixes'. Having begun the building of a giant 'Game of Thrones'-esque ice-wall to hold back the radiation leaking from Fukushima (only to fail miserably); AP reports the latest cunning plan from the Japanese is to build a Pacific-Rim-esque "massive, costly sea wall to fend off tsunamis." The $6.8 billion, 250-mile-long, 41-foot-high concrete barrier public works project is seen by some as a necessary evil, and by others as a jail... Perhaps The UN's head of Disaster Risk Reduction summed it up best - "There's a bit of an over-belief in technology as a solution."

Just as the central bank runs out of viable options, the country's sovereign wealth fund (which once famously loaded up on Greek bonds) is set to buy "a lot" of Asian property with the country's oil riches.

Angus Macleod made a valiant effort to counter Russian nuclear aggression but in the end couldn't quite land Moby Dick...

The average American spends more than 10 hours a day using an electronic device... and most of that activity is not even interactive. The vast majority of the time we are just passively absorbing content that someone else has created. Instead of humans being forcefully connected to “the Matrix”, we are all willingly connecting ourselves to it, as the system that defines our reality for us gains greater and greater hold over everything.