Here's A Startling Fact About President Obama's New Budget

As politicians know, dead people don’t vote. In fact, politicians today routinely steal from the dead... specifically the unborn. Children that won’t even be born for decades will inherit enormous debts that have been racked up today on drones, bombs, and wars that were waged in our era. President Obama’s most recent budget makes this abundantly clear...

Turkish Lira Plunges To Record Low After Erdogan Lambasts Central Bank "Independence"

"The honeymoon is over," warned SocGen overnight as "the trade of the year" turned into carnage after, essentially, a big policy error on the part of the central bank in the context of serious political pressures. Just today President Erdogan explained to whoever would listen that "interest rates are the cause of inflation," and "some are trying to hold Turkey back with interest rates," adding that "you can't decide interest rates based on inflation." However, his conclusion was what really sent the Turkish Lira spiralling... "unfortunately, this is the result of an independent central bank."

Chocolate Is The New Gold: Corporate Bonds Have First Ever Negative Yield Thanks To Nestle

You know the world has gone truly mad when... For what we believe is the first time, a Euro-denominated corporate bond yield has gone negative. Aa2-rated Swiss chocolate-maker Nestle saw its 2016 bonds close at -0.2bps yield follows the swing to negative yields among covered bonds (bank debt backed by loans) that started in September. As Deutsche Bank opines, maybe chocolate is the new Gold!!

"Dear 1%"

Dear 1%,

You are receiving this invitation because you live in the most expensive postal routes of Los Angeles...

Terrorism Works? UAE Suspends ISIS Attacks, Threatens To Pull Out Of Coalition

Following the disgusting images of a Jordanian pilot being burned (allegedly) burned alive by ISIS yesterday, the US coalition against the terrorists appears to be faltering. As The NY Times reports, The United Arab Emirates, a crucial Arab ally in the American-led coalition against the Islamic State, suspended airstrikes against the Sunni extremist group in December, citing fears for its pilots’ safety. The UAE made it clear its pilots will not return to the fight until the Pentagon improve its search-and-rescue efforts, shifting the base of support from Kuwait to Iraq, after foreign minister, Sheikh Abdullah bin Zayed bin Sultan Al Nahyan, "let [Barabara Leaf] have it over this," the new American ambassador, why Central Command, in his country’s view, had not put proper assets in northern Iraq for rescuing downed pilots.

Bulls Beware: Dennis Gartman Just Flip-Flopped To Bullish... Again

"... we would, under most circumstances, “see” this unanimous direction of all ten markets to the upside to be a harbinger of a bearish move… the harbinger of the end of the current bull market; but… and this is perhaps the very biggest of “buts”…this time may be different… maybe. This time the markets seem to want to levitate skyward and thus far any attempts to “call” the top and positions ourselves in anticipation of a downward price correction have proven futile and badly wrong."

How The ISM Beat Expectations: It Assumed January Weather Was Worse Than The Polar Vortex

Earlier today, when the Markit PMI and the ISM non-manufacturing data disagreed violently over a key aspect of the economy, namely that according to the first, the all important, forward-looking New Orders had dropped to the lowest since the great financial crisis, while according to the latter, they rebounded modestly in January, we decided to go straight to the source: the unadjusted data which does not incorporate any gratuitous seasonal adjustments (which for the ISM, were just adjusted as part of its annual revision spectacle).  This is what we found.

There Are No "Tailwinds"

The economy being talked about in the media just doesn’t exist, no matter how you view the unemployment rate. There is no spending because there is no income(marginally deficient). Instead, what we see is instability where these low levels of activity and true wealth creation persist. There are no “tailwinds” to be found here, only confusion about the relative state of progress. Going from really bad to less bad is not recovery, just another fact of an unstable economy plodding its way toward the next, and eventual, dislocation.

Something Has To Give

First, from Bloomberg:

  • GREEK GOVT WON'T ACCEPT TROIKA REMAINING IN COUNTRY: OFFICIAL

And from Reuters:

  • EU'S SCHULZ SAYS GREEK GOV'T HAS NO CHOICE BUT TO KEEP ITS OBLIGATIONS TO EUROPEAN PARTNERS

2008 Deja Vu: GMAC Confirms SEC Probe Of Subprime Loans, Will "Investigate Itself"

While not entirely surprising, the fact that GM Financial has admitted that:

*GM FINANCIAL: SEC PROBING SUB-PRIME LOAN SECURITIZATION

Of course, we should not worry about this... we are sure it is "contained" as GM reports it is "investigating matters internally" - just like it did with the ignition switch year ago?

9/11 Conspirator Admits Saudi Royal Family Funded Al-Qaeda Attacks

"Keep your friends close and your enemies closer," appears to be the 'do-nothing-stupid' strategy that Washington continues to play in The Middle East. How else to explain the continuing 'close-ally' relationship with Saudi Arabia given that, as Reuters reports, Zacarias Moussaoui - a former al Qaeda operative imprisoned for life for his role in the Sept. 11, 2001 attacks - has told lawyers for victims of the attacks that members of the Saudi royal family supported the Islamic militant group. Saudi officials were quick to denounce these statements as those of "a deranged criminal whose own lawyers presented evidence that he was mentally incompetent," as he included some "extremely famous" Saudi officials as 'donors' during Osama bin Laden's tenure.

Massive Crude Inventory Build Sends WTI Crude Plunging Back Towards $50

Against Reuters expectations of a 3.25 million barrel build, DOE reports a 6.3 million barrel build... Just 24 hours after Jim Cramer proclaimed, "this smells like a bottom" in crude oil, the crucial commodity (though it is unclear whether lower oil is good or bad today for now) appears to have flushed a few weak hands in a 3-day squeeze and 1430ET ramp-fest as price reasserts to the 'fundamentals' of over-supply and under-demand. WTI has plunged from over $54 at the NYMEX close yesterday to around $50 this morning...

Services PMI Worst New Order Growth Since Financial Crisis, ISM Weakest Employment Since Feb 2014

Markit Services PMI rose modestly but hovered at one-year lows at 54.2 in January suggesting, as Markit notes, "the near-halving in the pace of economic growth in the fourth quarter of 2014," as companies struggle with new orders seeing the smallest increase since the financial crisis over six years ago. This comes on the heels of Decembers big miss in ISM Services, which rose - like PMI - very modestly to 56.7 (from a revised 56.5) with prices-paid tumbling to its lowest sinceJuly 2009 and employment lowest since Feb 2014. That said, it wouldn't be a Baffle with BS economy if the two releases, which are supposed to at least agree on the direction of the move, did not report two diametrically opposite trends, with the ISM reporting that while Employment tumbled from 55.7 to 51.6, New Orders actually rose from 56.5 to 56.7. Markit? The other way around, with New Orders dropping from 53.4 to 52.3 as Employment rose from 51.5 to 52.3!