Archive - Apr 2015 - Story

Update: Because the report from AP does not play well with "Everyday Americans", US CentCom is denying: U.S. DENIES REPORT SHIP SENT TO INTERCEPT IRAN VESSEL, SAYS SHIP SENT TO KEEP SHIPPING LANES IN REGION OPEN

The 'proxy' war is escalating very rapidly. As AP reports, Navy officials confirm that the aircraft carrier USS Theodore Roosevelt is headed to Yemeni waters to intercept an Iranian weapons shipments. Just as we warned 10 days ago, the probability of a major escalation over the latest proxy Middle Eastern civil war escalated substantially when Iran parked two warships off the Yemeni coast.

A Cabarrus County, North Carolina man died last week, but Larry Upright, 81, made one final request in his obituary - written by his family.

"Also, the family respectfully asks that you do not vote for Hillary Clinton in 2016. R.I.P. Grandaddy."

Judging by the condolences, he is not alone in his request. It seems "everyday Americans" does not include North Carolinans...

With lumber prices plunging to fresh 3 year lows, the divergence between homebuilders and the most economically-sensitive commodity is starting to suggest a rather scary case of deja vu all over again.

If you thought currency-wars were a problem, just wait until crony-wars begin. In a stunning show of disagreement among the omnipotent, The FT reports that a Freedom of Information Act request has confirmed The Bank of England wrote to US authorities seeking clarity about Berkshire’s absence from a provisional list of "systemically import" (Too Big To Fail) financial institutions (SIFIs). The US Treasury declined to comment...

"At the bottom of the cycle, firms cut labor faster than output. The higher productivity led to improving margins, earnings and stock prices. Now labor is being added faster than output, and with large companies like McDonalds, Walmart and Target announcing pay increases, unit labor costs are likely to increase further. All told, there is a good chance earnings will actually shrink this year. We think the market is too high if earnings have, in fact, peaked for the cycle, and we have reduced our net exposure by adding more shorts."

- David Einhorn

Last week, we documented the mysterious case of WalMart’s move to shutter multiple geographically distinct locations across the US for “plumbing issues.” Once we dug a bit deeper into the history of the affected stores we noticed that one store in particular — the Pico Rivera, CA location — has been at the forefront of wage and working condition protests for the better part of three years. Now, as NY Times reports, "a claim set to be filed on Monday by the United Food and Commercial Workers International Union with the National Labor Relations Board says that the closings were in retaliation for a history of labor activism at one of the shuttered stores, in Pico Rivera, Calif."

Listen to the following 15 second clip of Bob Pisani explaining what the important thing is... and decide which centrally-planned, micro-managed economy's omnipotence he is questioning...

IBM numbers in a nutshell: Revenue dropped by 11.9% to $19.6 billion; Net Income dropped by 2.4% to $2.3 billion...

And yet... GAAP EPS rose by 2.6% to $2.36!

Here's the accounting magic behind this "beat"

"An alternate, more sophisticated approach to explaining why QE may not work to stimulate aggregate consumption is, perhaps, because the demographic mix of the U.S. (and most parts of the developed world) has shifted toward older people. Unlike 30 or 40 years ago, the enormous baby boomer generation, and even retirees, are much wealthier (including human capital) than in the past, and they are wealthier than current generations earlier in their life cycle.  So the wealth effect does not lead to an increase in consumption and, potentially, has the opposite outcome."

- Robert Merton

Just who are all of these newly minted Chinese “investors” whose ranks are now so large that their trades literally broke the software that tracks volume on the Shanghai Exchange today?

"Whenever total federal tax receipts have exceeded 18% of GDP, the result has always been a recession for the U.S. economy."

Following Monsanto lobbyist comments recently that he's "not stupid" enough to drink the weedkiller that he also proclaimed was safe enough that "you can drink a whole quart of it and it won’t hurt you;" Reuters reports that the maker of the world's most widely used herbicide, Roundup, wants an international health organization to retract a report linking the chief ingredient in the weedkiller to cancer. The company said on Tuesday that a report, issued on Friday by the WHO, was biased: "The WHO has something to explain." However, as one scientist noted, "there are a number of independent, published manuscripts that clearly indicate that glyphosate...can promote cancer and tumor growth."

While it is 'possible' that The Fed's net worth could become negative, such a phenomenon would be "temporary and would not create serious problems."

China is looking to succeed where the United States has failed. Beijing — which, as a reminder, claims it will not use its regional infrastructure development initiatives as a tool of foreign policy — is now set to facilitate the construction of nearly $50 billion in power plants, roads, and railways in neighboring Pakistan. The proposal, which will give China access to the Indian Ocean via the Gwadar port on the Arabian Sea, is part of President Xi Jinping’s ambitious “Silk Road” Economic Belt, and importantly, will likely include financing for the completion of the "Peace Pipeline," which will carry natural gas from Iranian gas fields across Pakistan.