Archive - Apr 2015 - Story

"While Dudley clearly does not want stocks to decline a lot, he also wants to avoid meaningful increases... Also very apparent is that Dudley wants bond prices to go down – not a lot but clearly down." - Bank of America

• Greece pleads cash running out, told to hasten reforms (Reuters)
• ECB Cash Said Likely to Fall Short of Greek Request This Week (BBG)
• Chinese Stock Buying Frenzy Sweeps Into Hong  (WSJ)
• Shell’s $70 Billion BG Deal Meets Shareholder Skepticism (BBG)
• Yemen's Houthis seize provincial capital despite Saudi-led raids (Reuters)
• Iran Nuclear Deal Gives Syria’s Bashar al-Assad Reason to Worry (WSJ)
• Slow apps, low battery life limit appeal of Apple Watch (Reuters)
• Gilead’s $1,000 Pill Is Hard for States to Swallow (WSJ)
• The Oil Industry's $26 Billion Life Raft (BBG)

As noted several hours ago, the main story overnight is not that Greece once again narrowly averted a Grexit when it was reported it would make its scheduled payment to the IMF today (adding that next month is a "different story") a development that was met with yet another ultimatum by its "partner", the Eurozone, but the dot com bubble deja vu-esque move in Hong Kong stocks, where the Chinese, seemingly tired of pushing up their local market into the stratosphere have turned their attention southward and are desperate to buy up every single Hong Kong stock.

A central bank official, according to The FT, said that Greece has repaid the €450m it owed the International Monetary Fund today. Bond yields have fallen across the Greek curve with 10Y GGBs now at 11.1% (down 70bps from Tuesday's highs). Greek stocks are not as impressed and are giving back their gains. Tsipras, on return from Moscow, explained Greece "was not a beggar...asking other countries to solve its problem," but as a senior Greek official earlier this week said that while it would be able to make Thursday’s IMF repayment, it will still exhaust its cash reserves very soon and "next month is a different matter." HSBC points out that the real crisis point looms on the 12th May and FinMin Varoufakis warns the "asymmetric union" that they "have learned nothing from economic history."

For an hour or so, terrible news was great news as the DAX dipped and ripped after February Industrial Production fell 0.3% (against expectations of a 0.6% rise) and even worserer, January's 'everything is awesome' +0.9% rise was revised massively lower to 0.0%... February was the biggest drop in German Industrial production since August (but of course now that Q€ is here, we are sure everything will be great going forward).

Sit back, grab some popcorn and just watch as the exponential gets exponentialer... and then it all goes splat.

Activists plan to protest in South Carolina today, according to Reuters, after a white police officer was caught on video fatally shooting a 50-year-old black man in the back as he ran away following a traffic stop. The officer has been charged with murder and the FBI and U.S. Justice Department are investigating the shooting, the latest in a series of incidents that have raised questions about U.S. policing and race relations.

The 34th fleet of the Iranian Navy has left for the Gulf of Aden and Bab al-Mandab Strait in line with the country’s policy of safeguarding naval routes for vessels in the region. The flotilla, which comprises the Bushehr logistic vessel and Alborz destroyer, left Iran’s southern port city of Bandar Abbas on Wednesday, Navy Commander Rear Admiral Habibollah Sayyari said on the sidelines of a ceremony to deploy the fleet.  And now the punchline: the two Iran warships will now be located in the immediate vicinity of not only two US aircraft carriers, CVN-71 Teddy Roosevelt and CVN-70 Vinson, but well as the big-deck amphibious warship Iwo Jima which as reported before is providing marine support should the situation demand it.

Everything this nation once stood for is being turned on its head. Free speech, religious expression, privacy, due process, bodily integrity, the sanctity of human life, the sovereignty of the family, individuality, the right to self-defense, protection against police abuses, representative government, private property, human rights - the very ideals that once made this nation great - have become casualties of a politically correct, misguided, materialistic, amoral, militaristic culture.

As auto-loan volumes explode (and terms are extended), many of the post-cash-for-clunkers herd are rapidly coming to the realization that the loan they are carrying (and increasingly not paying) is on a wasting asset. As Goldman Sachs notes, The Manheim Index measured 124.5 in March, essentially used-car prices flat yoy after four consecutive months of solid increases. On a sequential basis, the index posted a 0.5% decline in March, following a 0.2% decline in February, confirming Goldman's expectations for a correction in residual values going forward, driven by rising inventory in the off-lease channel... and this pricing pressure is likely to spill over into new car prices.

It was back in June 2011 when we first hinted that the time of Odious Debt is rapidly approaching. Today, nearly four years later, Odious Debt is now a reality in Greece, where Zoi Konstantopoulou, the head of the Greek parliament and a SYRIZA member, released two videos which have promptly gone viral, designed to promote the investigative parliamentary committee to look into the circumstances surrounding the signing of the country’s two bailout agreements that led Greece to implement its austerity measures. According to Greek Reporter, Konstantopoulou has said that the newly established “Debt Truth Committee,” will investigate how much of the debt is “illegal” with a view to writing it off.

To the 99%: Choose your poison: death or unemployment.

The following statistics seem impossible to believe. While I wonder how accurately the UK has been tracking these numbers historically, the enormous spread seems much too large to ignore, and is a national embarrassment that should be dealt with immediately.

"The world-beating surge in Chinese technology stocks is making the heady days of the dot-com bubble look tame by comparison...the industry is leading gains in China’s $6.9 trillion stock market, sending valuations to an average 220 times reported profits," Bloomberg reports, in yet another example of how stretched the margin-driven rally in Chinese stocks has become. We present the only chart you need to understand how this will end.

The future is upon us. JP Morgan, in an effort to stop its employees from rigging markets, aiding criminals, and generally doing all of the things that appear on the unofficial global investment bank perks of employment list, is going into full-on Minority Report mode by deploying algorithms designed to predict which employees will go rogue before it actually happens.