Archive - Jun 11, 2015 - Story

Moments ago the Fed's latest Flow of Funds report confirmed what the Philly Fed noted recently (and what blogger and Citadel trader Ben Bernanke vehemently denies): that the Fed keeps making America's uber rich ever richer, when in the first quarter thanks mostly to yet another $1.1 trilion increase in the value of financial assets (read stock market), the asset holdings of US households (or at least a very small subsection of them) rose by $1.6 trillion to a record $99 trillion.

Flash Crash? AAPL shares cracked lower on a huge sell order (of over $100 million) then rapidly recovered on de minimus volume... did Carl Icahn start dumping?

One of the recurring explanations given why the Fed is eager to hike rates is so it has some dry powder ahead of the next recession which, some 6 years after the last one ended is overdue (especially with a negative GDP Q1).  Which, incidentally, is just the topic of the next Economist cover titled simply "Watch out" adding that the world is not ready for the next recession...

It's over! Starting June 15th and ending September 30th, the Zimbabwe Central bank will begin its process of "demonetization" of the old Zimbabwe Dollar. The Zimbabwe dollar will be removed as legal tender after the currency’s use was abandoned in 2009 following a surge in inflation to 500 billion percent. For bank accounts containing up to 175 quadrillion Zimbabwe dollars they will be paid $5, the country’s central bank said. The people remain angry slamming this as "abusing one's rights in the banking system," and claiming this is being done to enrich a chosen few.

It seems like there's an ETF for everything nowadays. From global warming ETFs to fertilizer ETFs, Wall Street has neatly packaged nearly every type of investment to attract your cash. One thing they forgot to package was corruption. Considering how they are already overflowing in it, perhaps they just took it for granted. However, for many investors, corruption is worth taking a second look.

Welcome to the new normal... The "if we build it (and offer credit to anyone who can fog a mirror), they will come" economy. While LeBeau and his cronies are cock-a-hoop over auto sales (no matter how those sales are achieved), it seems the carmakers are way ahead as the value of cars on the sidelines (inventories) has never, ever, been greater than now.

And just like that we are back to the rumor drawing board.

IMF'S RICE SAYS NO PROGRESS MADE TOWARD DEAL WITH GREECE, IMF HAS MAJOR DIFFERENCES WITH GREECE IN KEY AREAS: SPOKESMAN
IMF'S TECHNICAL TEAM ON GREECE HAS LEFT BRUSSELS, RICE SAYS

But "two Bloomberg sources" said yesterday a deal was almost assured. What gives? 

Elizabeth Warren may or may not understand the "global banking system" as Jamie Dimon alleges, but the JPM CEO certainly does as the following 14 "reasons" clearly confirm...

Business inventories-to-sales ratios remain in the flahing red recessionary environment as inventories surge more than expected in April. The biggest "field of dreams" appears to be Clothing and Building Materials. The 0.4% rise (against 0.2% expectations) of business inventories is the highest since May 2014. Motor Vehicles saw a 1.2% rise MoM in inventories (and 5.9% YoY) leading the surge in the "if we build it, credit will enable everyone to buy it" economy.

Bloomberg's Consumer Comfort Index dropped to its lowest since November having fallen 9 straight weeks (despite all that exuberant equity market hope). Under the covers the situation is even more worrisome as the US consumer propensity to 'buy' has crashed by the most since Lehman. The drop in high income earners' comfort continues to diverge from the new highs in stocks...

Saying there were no other options remaining and that continued intervention would only prolong the nation’s suffering, experts concluded Tuesday that the best course of action is to keep the United States as comfortable as possible until the end. “At a time like this, it’s completely understandable to wish for some kind of 11th-hour miracle, but expecting the U.S. to somehow magically return to the way it was in its prime isn’t healthy or realistic.”

Amid slumping export growth and the second-largest MERS outbreak on record, the Bank of Korea overnight cut its benchmark policy rate by 25bps to 1.5%, a record low.

Following last week's dip back towards record lows, initial jobless claims rose very modestly this week to 297k (slightly worse than expected). This leaves initial jobless claims practically unchanged for the last 6 months, despite the surge in JOLTS that we saw in recent months. Rather oddly, continuing claims rose by their most in 6 months last week to 2.265mm.

Retail sales bounced back once again from the April dip after March's miracle recovery. Up 1.2% (against 1.2% expectations) this is the highest MoM gain since March 2014. Ex-Autos rose more than expected (as did the control group) but the biggest drivers of the gains MoM was gas prices rising - so that's a positive? YoY the biggest drivers of retail sales gains were Autos (+8.2% thanks to shoddy credit) and Food Servce (+8.2%). Crucially this 'good' news brings forward the chances of a September (or even July) rate hike.