Archive - Apr 2015 - Story

Saudi Arabia said its campaign of airstrikes in Yemen have succeeded in removing threats to the kingdom and other regional countries, bringing to an end Operation "Decisive Storm." As Bloomberg reports, the Saudi Defense Ministry said a coalition of mostly Sunni Muslim nations has “successfully eliminated the threat to the security of Saudi Arabia and neighboring countries,” by destroying the heavy weaponry and ballistic missiles held by the Shiite Houthi rebels. This comes one day after Gulf envoys told The United Nations that Yemen strikes won't end soon. Saudi Arabia hopes to restart a Yemeni political process and will begin "Operation New Hope," which appears to mean Saudi National Guard ground troops.

That Europe let almost 1000 people die in the Mediterranean in one night shouldn’t be a surprise to anyone, at least not to those who are still occasionally awake. The Club Med migrant crisis has been going on for a long time, and the EU’s only reaction to it has been to slash its budget and operations in the area, not to expand them. So when the New York Times opens with “European leaders were confronted on Monday with a humanitarian crisis in the Mediterranean..”, they’re a mile and a half less than honest. Brussels has known what was going on for years, and decided to do less than nothing.

Just days after Russia lifts sanctions on Iran and prepares to send its S-300 missile defense system, it appears Washington has retaliated. As TASS reports, Poland - on Russia's doorstep - has decided to buy the US Patriot air-defense system (made by Raytheon) for a total cost of around $9bn: "The US proposal has been found to be more profitable from the viewpoint of Poland’s security and implementation of commitments within NATO framework." Washington, keen to ensure Warsaw signed up with Raytheon, has decided to loan Poland a battery of Patriots until the deal is signed.

Idiocracy is upon us...

• FUTURES TRADER ARRESTED FOR ALLEGED ROLE IN 2010 FLASH CRASH
• FUTURES TRADER CHARGED WITH ILLEGALLY MANIPULATING STOCK MKT
• SARAO HAS BEEN CHARGED WITH COMMODITIES, WIRE FRAUD: GOELMAN
• SARAO WAS ARRESTED AT HIS HOME IN LONDON TODAY, GOELMAN SAYS
• CFTC FILES CIVIL CASE AGAINST NAVINDER SINGH SARAO

Baker Hughes has increased the number of jobs it plans to cut from 7,000 to 10,500 and will close 140 facilities worldwide citing a need to "reduce the cost base and resize [the company's] footprint" in the face of challenging market conditions. Meanwhile, JPM reminds Richard Fisher that "the only thing dropping in the Texas economy is the number of jobs."

Over the past couple of years, there has been a growing chorus of individuals claiming that the financial markets have finally shaken the shackles of the secular bear market that began at the turn of the century. Bank of America is the latest to jump onto the "new secular bull market" bandwagon; but what they miss is that secular bull markets are not born of price, but rather of a set of fundamental metrics that foster sustained economic growth over long periods of time.

It appears that Herr Schaeuble will be left in the cold disappointed as following comments from the Greek energy minister that a deal is coming "soon,"  it is being reported that:

*RUSSIA MAY SIGN GAS LINK ACCORD W/ GREECE TODAY: ROSSIYA 24
*GREECE MAY GET LOANS USING RUSSIA GAS TRANSIT GUARANTEE: MILLER

According to Gazprom's CEO comments on Greek TV, following his meeting with Greek PM Tsipras, Russia will guarantee 47BCM/YR of gas via Greece with the link to be built by a Russian-European group at a cost of around €2 billion.

Over the better part of the past month, the only entities actively involved in the proxy war in Yemen against the local Houthi rebel force have been air force units, mostly under Saudi command as part of Operation "Decisive Storm." Which probably explains why there has been little if any progress to note in pushing back said rebellion which, armed heavily thanks to the US government, has successfully managed to push the current president into an indefinite exile. That changed hours ago, when Saudi Arabia's King Salman ordered the Saudi Arabian National Guard, widely regarded as the kingdom's best equipped military ground force, to take part in Riyadh's campaign against Iran-allied Houthi rebels in Yemen.

Despite US business media's propagandic imploring that Europe is recovering, is in a Goldilocks scenario, and is the best place to invest - all thanks to the magic of Q€ - it appears they forgot to tell the Germans. The ZEW Investor Expectations index fell for the first time in 6 months, without making a higher high, as Germany's DAX index rose to record-er higher highs. We've seen this pattern of momentum exuberance before...

What do retail investors do on volatile days like Friday’s jolt lower on the S&P 500? Thanks to one very large online broker’s publicly available order flow, we now know...

On one hand, Bill Gross says that "German 10yr Bunds = The short of a lifetime." On the other, the ECB is about to run out of bonds to monetize at current prices as the Bund yield slides every lower to the ECB's hard floor of -0.20%. End result: someone will be very hurt...

Despite our exposure of the contagious risk increases in peripheral bond spreads, "many European officials believe a Greek exit would be manageable, and in contrast to 2010-2011, we wouldn’t see the same cascading effect on countries like Spain or Ireland,” according to the European Centre for International Political Economy in Brussels and EU Chair Jeroen Djisselbloem even noted that "the Greek situation can be isolated." It appears America is getting nervous at Europe's apparent complacency... White House economic adviser Jason Furman says a Greek exit from the euro zone would present "VERY LARGE AND UNNECESSARY RISK FOR GLOBAL ECONOMY."

From 8x over-subscribed to 60c on the dollar in one year: (almost) well played "yield chasers" with other people's money!

Deposed former Egyptian President Mohammed Morsi was sentenced to 20 years in prison today in connection with a crackdown on protesters during demonstrations against his rule in late 2012. Morsi assumed the Presidency in 2012 after Hosni Mubarak was toppled a year earlier during the Arab Spring. Morsi's "democracy" lasted all of 4 months before he granted himself special autocratic powers triggering unrest that would eventually lead the military to assume power.