• bmoreland
    07/10/2014 - 08:29
    The Fed spends an inordinate amount of time focusing on increasing Lending with the idea that loan growth increases economic activity. Is it possible that it is Interest Income derived from Savings...
  • bmoreland
    07/10/2014 - 08:29
    The Fed spends an inordinate amount of time focusing on increasing Lending with the idea that loan growth increases economic activity. Is it possible that it is Interest Income derived from Savings...

Archive

July 8th, 2014

Tyler Durden's picture

Will Fundamentals Ever Matter Again?





Will investing based on fundamentals eventually find favor once again with investors? The problem is that market participants no longer view the financial markets as a place to invest savings over the "long term" to ensure future purchasing power parity. Today, they view the markets as a place to "create" wealth to offset the lack of savings. This mentality has changed the market dynamic from investing to gambling. As Seth Klarman warned, "There is a growing gap between the financial markets and the real economy. Not surprisingly, lessons learned in 2008 were only learned temporarily. These are the inevitable cycles of greed and fear, of peaks and troughs." Simply put, fundamentals will matter, but only after the fact.

 

Tyler Durden's picture

Strong 3 Year Auction Stopped Through Even As Direct Takedown Tumbles





If there was any doubt which way the market was leaning if not in stocks, then definitely in bonds, it was promptly crushed moments ago when the US sold $27 billion in 3 Year paper. The When Issued, which was trading at just shy of 1%, or 0.998% to be precise, suggested we could have our first 1% bond auction pricing since May of 2011. That however was not meant to be the case today when as a result of surprising demand for the short end, the Treasury sold TSYs at a high yield of 0.992%, stopping through the when issued by 6 bps, even if the final yield was still the highest in over three years.

 

Tyler Durden's picture

How Recession-Proof Is Your Job Sector?





History suggests that previously sound assumptions about financial security and recession-proof sectors may not apply in the next recession.

 

Tyler Durden's picture

CEO Of Jefferies: "These Are The Cancers That Will Cause The Next Crisis"





"People who take short cuts, are political, prioritize themselves above others, take excessive risks for personal gain, don’t value capital, or are unethical are outright cancers. These types of people will not only flourish in the next crisis, but most probably they will cause it."

 

Tyler Durden's picture

Israel Escalates Gaza Assault By Air, Sea; Threatens "Lengthy" Ground Operation





Following the catalysts of broken down US-sponsored peace-talks and the teenager deaths on both sides Hamas (admitting its responsibility for the first time) unleashed more than 240 rockets into Israel in the past four weeks (including 100 since yesterday), Israel has drawn the line. As Bloomberg reports, Israel struck more than 90 targets in the Hamas-controlled Gaza strip from air and sea and PM Netanyahu suggested the option of a ground incursion was on the table. This is heaviest barrage since November 2012 and is set to worsen as Defense minister Ya'alon warned, this "will not end in just a few days," adding that Israel "is prepared to expand the campaign by every means at our disposal." In preparation for escalation, Israel has called up 40,000 reservists today as news hits that Tel Aviv airport has been closed due to shelling as "Operation Protective Edge" expands.

 

Tyler Durden's picture

European Stocks Plunge Most In 6 Months; Banks Battered





European bank stocks are down over 6% in the last 3 days to 5 month lows - the biggest such drop in 13 months. The combination of Draghi's "no QE", Austrian bank contagion concerns, and rumors of German banks about to be 'BNP'd by US regulators has removed all the exuberant recovery chatter (confirmed by economic data itself collapsing too). Remember all those oh-so-positive PMIs? European peripheral bond spreads surged around 10bps and individual stock markets plunged (Portugal -3% today, Italy -2.5%, Spain -1.8%)

 

Tyler Durden's picture

China's Colonization Of America's Luxury Real Estate Market In One Chart





For all those upwardly mobile middle class Americans (amazing they still exist under the current central planning regime which takes from the middle class and gives to the ultra rich and uber poor) who are eager to buy a better house, and suddenly find themselves priced out due to an ongoing surge in the prices of ultra-luxury segment, here is what you need to know: blame China.

 

Tyler Durden's picture

White House Dictates: $3.8 Billion Needed To Stem The Surge Of Immigrants





At almost double the $2 billion that many had expected, The Washington Post reports that The White House will request $3.8 billion from Congress in emergency funding to deal with an influx of unaccompanied minors from Central America. Funds would be allocated to send more immigration judges to the southern border, build additional detention facilities and add border patrol agents, to help stem the recent surge of women and children from El Salvador, Guatemala and Honduras.

 

Tyler Durden's picture

Momo Massacre 2.0 - The Post-Jobs-Report Crash





What did investors in the growth-leveraged momo-darling stocks, that have raced back to record highs and "proved" that all is well in the world again, see in the Non-farm payrolls report that scared them short? From the peak last week, momo growth names have been monkey-hammered and even M&A-driven Biotech exuberance has given up over 7%...

 

Tyler Durden's picture

Job Hiring Far Below Pre-Lehman Levels As Yellen's Favorite Labor Metric Redlining





There was some good news in the JOLTS report released earlier today, mostly in the form of the Job Openings category which surged from 4,464K in April to 4.635K in May, well above the 4350K expected and the highest print since 2007 (granted the unadjusted data showed something completely different but that's a different story). And since this is one of Yellen's favorite labor market indicators, it means that the Fed is that much closer to finally turning the liquidity tap off (at least until the market crashes and the market is promptly forced to rush back in and bail everyone out all over again).  Alas, there was also bad news. As the following chart shows, the trend that we have pounded the table on for the past year, namely the lack of actual hiring continues to persist. In fact, while job openings may have soared by nearly 300K in May, the actual number of Hired declined by 52K to 4,718K.

 

Tyler Durden's picture

As The US Is To "Belgium" Treasury Buying, So France Is To ...





As is now well-known, following the news broken first by Zero Hedge in May, Belgium, or rather "Belgium" (because clearly someone is using Belgian-based Euroclear as a front to cover their insatiable appetite for US paper) has emerged as the biggest buyer of US Treasurys in 2014, close to surpassing even the Federal Reserve as the biggest monetizer of the US deficit. But what about other countries in the world, such as for example France: a country whose economy virtually everyone admits is in shambles and yet whose bond yields have followed the rest of the world to slide to near record lows of 1.70% most recently. Here is the answer.

 

Tyler Durden's picture

Stocks, Bond Yields, & USDJPY Are Tumbling





Every US equity index is now in the red post-"great" jobs report on Thursday. Bond yields have plunged and stocks have caught down to that weakness. USDJPY appears the main culprit for now as chatter of JPY repatriation over Super-Typhoon concerns sends USDJPY back to 101.50 and below all key technical levels. Whocouldanode that stock exuberance last week was over-done? On a side note, it's small caps that are getting slammed from yesterday's opening... and it's Tuesday!!

 

Tyler Durden's picture

NFIB Small Business Optimism Fades; Outlook For Economy Plunges





For a brief month of "we've been down so long, everything looks up", the NFIB Small Business survey suggested the 'recovery' was real and so serial extrapolators (throwing out the 'and small business is the engine of job growth' meme) jumped on it as 'proof' that stocks are cheap and bonds should be sold... then comes June data today (and it's a disaster). 6 of the NFIB's 10 indicators decreased, with about half of the decline in the overall index due to less confidence in future business conditions, the report said, with only 2 indicators improving. CapEx dropped, Sales expectations dropped, 'good time to expand' dropped, actual sales dropped with only hiring plans rising (which seems odd in the face of all the negativity in the rest of the survey) - we will see.

 

Tyler Durden's picture

China Prepares To "Boost" Economy By Also Revising Its GDP Definition





Now that even that bedrock of the Keynesian voodoo religion, the Gross Domestic Product calculation, has become a ridiculous farce, with everyone in Europe suddenly adding the uncalculable "contribution" from drug dealers and hookers all in a mad dash to make debt/GDP ratios appear better than they are, it is truly time to unleash the clowns as none other than the country which has taken fabricating economic data to an artform, no not the US for those confused but China, is preparing to change the way its calculates its GDP, with the biggest contribution coming from, hold on to your hats, R&D. One wonders if "reverse engineering" of pirated products and services is covered in this "non-GAAP GDP" category. The end result? GDP for the country which cumulatively will be several percentage points higher once the entire fudging/recasting exercise is completed. Here are the details.

 
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