Archive - Apr 15, 2015 - Story

Because all that matters is what some elite says, we are sure the following propaganda from German FinMin Schaeuble will be regurgitated by the mainstream media:

*SCHAEUBLE SAYS "YOU CAN’T SEE ANY CONTAGION"

However, if one actually looks at the data - European peripheral bond risk premia have soared in the last week as Grexit fears resurge.

But it's April... the weather-bounce is supposed to be here. Empire Fed Manufacturing tumbled to -1.2 in April (missing expectations of a post-weather-bounce to 7.17) from 6.9 in March. Across the board the report was painful as Prices Paid surged, employment plunged, and work hours tumbled. Hope rermains as the business outlook improved (but even there capex and new orders were weak) New Orders stood out as it crashed to its lowest since Jan 2013. It appears there is more afoot than just weather...

Having been unleashed for just a few weeks now, German bond yields have collapsed since Q€ began and peripheral bond risk premia have risen dramatically... but still - economic data has coincidentally improved (despite tumbling earnings expectations still) and so we are sure Mario will take a moment to reflect on the success (stocks up, yields down, Macro up) as being due to his hard work... but do not fear, there is no taper coming soon. And as far as that whole shortage thing, we are sure he will calm market fears by explaining The ECB is working on a solution...

Berlin is drawing up contingency plans as Germany prepares for an increasingly likely Greek default, Zeit reports. The new plan purportedly is designed to prop up the Greek banking sector in the event Athens misses a payment, but it's contingent upon the Syriza government acting less "taxi-driver-ish" at the reform negotiating table. In the event Greece will not cooperate, Germany is prepared to let them go but Brussels will help "facilitate" the transition to the drachma (that currency Goldman recently said the country "can't just print"). 

"Mr Draghi during the press conference to stress the need for the full implementation of the expanded asset purchase programme as an important condition for the positive growth and inflation outlook to materalise," Goldman says, previewing the Draghi presser where the ECB chief will likely get more than a few questions about the possibility that the central bank will run out of bonds to purchase in the course of monetizing the entirety of euro net issuance.

One look at BofA's earnings report shows why contrary to popular opinion, the bank that bailed out insolvent Merrill Lynch is far better off to be pnealized with tens of billions in legal fees than running its business unbothered by the racketeering government. The reason: a year after BofA reported $6 billion in litigation charges, moments ago Bank of America announced only $0.4 billion in legal fees, which meant it barely had any credible addbacks. So when looking at its numbers on a realistic, GAAP basis, BofA once again missed EPS, with the bottom line printing at $0.27, or below the $0.29 estimate.

Nobody was expecting any actual rate change announcements by the ECB today, and none were made, with the ECB announcing moments ago that it kept all three rates unchanged, with depositors still expected to pony up %0.20 to keep their funds at a financial institution, while those who take out a mortgage can expect the bank to pay them a likewise amount.

• China growth slowest in six years, more stimulus expected soon (Reuters)
• EU charges Google over shopping searches, to probe Android (Reuters)
• A Chinese Paradox: Slow Growth Is Good, Stock Bubbles Welcome (BBG)
• Draghi Seen Dispelling Duration Doubts About QE Program (BBG)
• IEA Sees OPEC Supply Jumping Most in Four Years on Saudi Surge (BBG)
• SEC Reaches Settlement with Former Freddie Mac  (WSJ)
• Kerry says confident Obama can get final deal on Iran (Reuters)
• Regulators Call for Short-Term Loan Changes to Handle ‘Too-Big-to-Fail’ (WSJ)
• Florida Doctor Linked to Sen. Robert Menendez Indicted for Medicare Fraud (WSJ)

If yesterday stocks surged on the worst 4-month stretch of missing retail sales since Lehman, one which BofA with all seriousness spun by saying "it seems not unreasonable to suspect that the March 2015 reading on retail sales gets revised up next month", then the reason why futures are now solidly in the green across the board even as German Bunds have just 14 bps to go until they hit negative yields and before the ECB is fresh out of luck on future debt monetization, is that overnight China reported its worst GDP since 2009 together with economic data misses across the board confirming China's economy continues its hard landing approach despite a stock market that has doubled in the past year.