Archive - Mar 2015 - Story

It appears the new normal has reached peak 'consequence-free'-ness. As South African reporter Vuyo Mvoko prepared for his live TV report - standing in front of a camera, bright lights, and various cameramen and crew - two armed men decided it was an opportune time for a mugging... and the whole farcical and dangerous scene was caught on tape...

Whether this is just a function of recent/upcoming 3/10/30 bond auctions, or if Europe's central banks are quietly loading up on paper thus forcing another collateral squeeze is currently unknown.

"The ECB could move to cutting the depo rate further to maintain loose financial conditions and especially to prevent a taper tantram forcing EURUSD higher," Citi says, commenting on steps the central bank may be forced to take in the event some core countries (i.e. Germany) are unable to source enough eligible assets to meet purchase targets under PSPP. Just two days in, speculation is growing about the viability of the program. 

• Fed Likely to Remove ‘Patient’ Barrier for Rate Increase as Soon as June (Hilsenrath) - which year?
• Clinton says used personal email account for convenience (Reuters)
• Euro sinks to 12-year lows as yield gap grows (Reuters)
• Get Ready for Oil Deals: Shale Is Going on Sale (BBG)
• EIA raises 2015 US oil production forecast, cuts 2016 outlook (Reuters)
• How Falling Oil Prices Are Hindering Iraq’s Ability to Fight Islamic State (WSJ)
• China economic data weaker than expected, fuels policy easing bets (Reuters)
• ECB ‘Chasing Own Tail’ as Bond Rates Turn Negative, SocGen Says (BBG)
• Swiss makers quietly gear up with smartwatches of their own (Reuters)

Activity data for the combined January-February period (the NBS releases these two months together given the difficulty of adjusting for Chinese New Year effects) was significantly weaker than expected across IP, FAI, and retail sales. For overall industrial production, this was the weakest year-over-year reading ever (China’s IP data starts from 1995) outside the global financial crisis.

While the dollar strength this morning, which has pushed it to a fresh 13 year high and has accelerated the EURUSD plunge to under 1.06 - a drop of over 300 pips since the start of the week - has been a recap of yesterday's trading action, the main difference is that unlike yesterday, the USDJPY has managed to find a strong bid in the overnight session, pushing not only the Nikkei up by 0.4%, but also lifting US equity futures as the entire global marketplace is now merely a sandbox in which the central banks try to crush their currencies as fast as possible.

It appears that just as the administration is finally figuring out what HFT is, it also decided to take a look at the charts above and has made a decision: the next bailout is about to be unveiled, and it will involve a "streamlined" bankruptcy law allowing students to discharge their student debt.

"The current market ecosystem is not sustainable, and significant changes are coming one way or another... conflicts of interest among brokers, a two-tier system favoring the speediest and a general sense that today’s rules have been crafted to the benefit of insiders."

Every dystopian sci-fi film we’ve ever seen is suddenly converging into this present moment in a dangerous trifecta between science, technology and a government that wants to be all-seeing, all-knowing and all-powerful. Having already used surveillance technology to render the entire American populace potential suspects, DNA technology in the hands of government will complete our transition to a suspect society in which we are all merely waiting to be matched up with a crime. No longer can we consider ourselves innocent until proven guilty.

First she tried to take over the credit derivatives world which she first had to create, and succeeded. Then, after Enron failed, she tried to take over the California electricity market and also failed. And all through this time she made sure the prices of the world's precious metals were right where she wanted them. Now, a year after an embarrassing attempt to become head of her former regulator ended in humiliation, she is back and has her sights set on the final financial frontier: Bitcoin.

"If inflation expectations remain muted, then the amount available for purchase by the BoJ is liable to be largely exhausted during the next 1.5 to 2 years, at which point supply/demand may tighten to unprecedented proportions," Morgan Stanley writes. Meanwhile, a BoJ "liquidity auction" intended to allay concerns around JGB availability attracts tepid demand a day after a dealer survey revealed concerns about the health of the market.

Russians view the United States much more unfavorably today than they did during the end of the Cold War era.  As you will read about below, an astounding 81 percent of all Russians now view the United States negatively, and only 13 percent have a positive opinion of this country.  In all of the years when Russians have been surveyed on their attitudes toward the U.S., they have never been this negative.  But of course Americans generally do not view the Russian people unfavorably.  Even while most Americans are extremely apathetic about what is going on over in Russia, an increasingly large chunk of the Russian population is angry enough to go to war.

In what some note could be a pre-emptive strike against rising social tensions in The Kingdom, new (and potentially crazy) King Salman bin Abdulaziz vowed to limit the impact of lower oil prices on economic growth, demanding that his regional governors "listen to their citizens." King Salman then specifically noted, he would work to "achieve justice for all citizens with no difference between one citizen and another, one region or another," adding that he will "confront the reasons behind schisms in society." Concluding with a warning that "we will never allow for tampering with our security," the King vowed to "boost security forces’ capabilities to defend the nation."

"...as with the car on a slush-covered highway, any fool can get it to spin out, but that same fool is then unlikely to have the presence of mind, the skill and the steel nerves to keep it from hitting one of the barriers. Same goes for the would-be builders of an “empire of controlled chaos”: sure, they can generate chaos, but controlling it in a manner that allows them to derive some benefit from it is rather out of the question, and even their ability to stabilize it, so that they are not themselves hurt by it, is in grave doubt."