• Pivotfarm
    04/18/2014 - 12:44
    Peering in from the outside or through the looking glass at what’s going down on the other side is always a distortion of reality. We sit here in the west looking at the development, the changes and...

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The Futures Of Countries: A Look At The Secession Movements Around The World

In much of the world, small countries are hoping to retain their independence, whilst portions of larger countries are trying to establish their independence. Understandably, they're meeting with resistance, as it's usually the areas that are the net-contributors to the larger economy that seek independence, whilst the areas that are the net-recipients wish to take the conglomerate approach (and to continue to eat their neighbour's lunch). This is evident even in the US, where those states that are net-contributors are experiencing the same frustration as Venetians and are making noises about secession. And, although no major changes have taken place recently, early rumblings can be heard all over the world.



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Ukraine Reality Ignored As Stocks Close At Highs On Hopes of More Japan Easing

Another day, another epic ramp. Any "investor" watching the last two days of totally manic market behavior must be open-mouthed at the total lack of fundamental sanity behind any of the moves. Even the mainstream media is stunned by the moves embarrased into mere commentary and afraid to opine on any reason. The reason for today's rip - an economic assessment downgrade for Japan which smahed USDJPY higher and through magic of carry, lifted US equities. There was no let-up in Ukraine, no data to confirm growth hype, no US news... but the Russell and Nasdaq managed a 2.5% bounce in a stright line after the Japan headline. Away from the idiocy in stocks, precious metals were rammed lower early on but leaked back higher all day. The USD pushed higher but FX was relatively quiet aside from the idiotic moves in JPY. Treasuries rallied at the long-end on the day (despite the surge in stocks). "unrigged"



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Ukraine To Issue "Military" Bonds To "Increase Combat Readiness Of Armed Forces"

When it comes to funding itself, US guarantee or no US guarantee, troubled Ukraine, which by most accounts is on the verge if not already embroiled in a civil war, appears unable to gain much traction. Some headlines from today confirming this:

UKRAINE FAILS TO SELL 3-MONTH USD NOTES AT AUCTION
UKRAINE FAILS TO SELL 9-MONTH UAH NOTES AT AUCTION: MINISTRY

So what is the desperate for cash nation to do? Why pull a page straight out of Uncle Sam's war playbook: play to people's patriotism and issue "military" bonds, of course.  Interfax reports that the Ukrainian Finance Ministry is to make issues of two-year government "military" bonds with worth 1.1 billion hryvni at an annual interest rate of 7%.



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This Is Your Market; This Is Your Market Without Tuesdays - Redux

The more things change, the more things stay the same. Almost exactly a year ago, we remarked on the massive bifurcation that was occurring in US equity markets based on the crucial fundamental factor known as "day of week." The Dow Jones Industrials average is down 2% in 2014... but absent the crucial day we call "Tuesday", the Dow would be down almost 8%. On average, the Dow is up 0.4% each and every Tuesday this year (and every other day of the week is red on average)... lots of unriggedness here we are sure...



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Trading Made Simple

As stocks once again flip-flop from manic depressive to manic impressive; heading into the last few hours of the day, we thought we would simplify the art of trading a little with the following flowchart...



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"It's The Weather, Duh"

Earlier today, the NAHB released its latest builder confidence report. Something stood out to us, namely the following data, which shows that while confidence picked up modestly in the Northeast in April, it tumbled in the West and Midwest. What's the explanation for this ongoing deterioration in housing market sentiment in states that had, not only were not impact by the "vortex" but if anything, were "crushed" by the balmy March atmospheric conditions? Why, "it's the weather, duh."



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New York: From "Disneyland For Wall Street" To "Coffin-Sized" Living Spaces

There is no question about it, NYC feels more like “Disneyland for Wall Street” than ever before. The very rich are doing very well, everyone else, not so much. We are often told by charlatans and mainstream media propagandists that this mythical rising tide of wealth lifts all boats. If that’s the case, we find it quite perplexing that the homeless population in America’s financial center is exploding five years into the so-called recovery (homeless people are living in coffin-sized spaces inside the frame of the Manhattan Bridge). Meanwhile, let’s not forget that 22% of the city is on food stamps. How is this possible? Because we have witnessed five years of egregious corruption and crony capitalist theft, not a genuine recovery. That’s how.



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This Is The Headline That Broke Today's Downward Momentum

You know it's bad when... the red flashing headline that sparked the accelerating downward momentum in US equity markets to stop and reverse on a dime is...

*JAPAN TO DOWNGRADE ECONOMIC ASSESSMENT IN APRIL REPORT: NIKKEI

Proving once again how insanely non-sensical this bad-news-is-good-news market has become. Fundamentals, schmundamentals. However, as we noted here, this bad news is not going to lead to the good news that stocks are hoping for...



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Direct Edge Breaks

It is oddly ironic to see BATS declare self help against EDGX (since the two are owned by the same company), and yet: here it is.



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The US Economy In Pictures

With the economy now more than 5 years into an expansion, which is long by historical standards, the question for you to answer by looking at the charts below is: "Are we closer to an economic recession or a continued expansion?" How you answer that question should have a significant impact on your investment outlook as financial markets tend to lose roughly 30% on average during recessionary periods. However, with margin debt at record levels, earnings deteriorating and junk bond yields near all-time lows, this is hardly a normal market environment within which we are currently invested. Therefore, we present a series of charts which view the overall economy from the same perspective utilizing an annualized rate of change. For the Federal Reserve, these charts make the case that continued monetary interventions are not healing the economy, but rather just keeping it afloat by dragging forward future consumption.  The problem is that it leaves a void in the future that must be continually filled.



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Japan To Downgrade Economic Assessment In April, So More BOJ QE Right? (Spoiler Alert: No)

Moments ago the Nikkei strategically leaked a report that the Japanese cabinet office, quite expectedly, will downgrade its economic assessment in its April report. "Expected" because as we reported, discretionary spending following the  sales tax hike, has gotten crushed. Also not unexpected, the USDJPY took the news in stride and posted a modestly bounce in the face of today's relentless selling of the pair. Why? Because to algos and many asset managers desperate for more training wheels from central banks (now that everyone has forgotten how to trade based soely on fundamentals), this means more QE from the BOJ right - after all horrible news for everyone is great news for the 1%.

Not so fast.



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"Growth" Stocks Tumble To 7-Month Lows To "Value" As Bond Yields Collapse

It is perhaps worth reflecting on the smorgasbord of free advice given out by the talking-heads after last night's closing ramp proclaiming the dip to be bought and that everything was fixed once again. It was not. Stocks are making fresh cycle lows and the Nasdaq and Russell 2000 are both now below the 200-day moving-average and appraoching the 10% (correction) from their highs. 10Y is back under 2.6% and the 30Y yield is back at 10-month lows... which perhaps explains why "growth" stocks are back at 7-month lows versus "value" stocks...



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"Ukraine In Very Dangerous Situation", No Lethal Assistance Coming Says White House

First it was the Russians who repeated they are "deeply concerned by the deaths in the Ukraine," and now it is the turn of the White House, through its  speaker, Jay Carney, to chime in as well:

  • RUSSIA DIRECTLY, INDIRECTLY SUPPORTING PROVOCATIONS: CARNEY
  • UKRAINE HAS TO RESPOND TO PROVOCATIONS IN UKRAINE, CARNEY SAYS
  • UKRAINE IN VERY `DANGEROUS' SITUATION, CARNEY SAYS

And yet, despite all the priase, Ukraine is on its own.

  • U.S. NOT CONSIDERING LETHAL ASSISTANCE TO UKRAINE, CARNEY SAYS

In other words, as we said last week, if it is Ukraine's gambit, that its allies will come to its rescue upon a lethal escalation and provocation, "it will be sorely disappointed." It seems Ukraine is about to figure this our first hand.



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The Alienation of Work

Rather than rely on centralized states and corporations to organize labor and capital, collaborative networks can do so without alienating workers from their work and disrupting the sources of meaning. The emerging economy is opening up new ways to reconnect workers to their work and the profits from their work. These include traditional models such as self-employment and worker-owned cooperatives and new models of collaborative project-based work.



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Two Very Different Views On Soaring Food Inflation

Two rather amusing, and quite opposing views on surging food inflation (recall that as we first reported beef prices are at record high), which was confirmed by this week's PPI and CPI reports: one from Goldman, the other from IHS Global. We let readers decide which one is right... and which one will determine the Fed's "thinking" about soaring good inflation.



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