Obama Dictates National "Cyber Security" Emergency

It's business as usual in Washington. President Obama has just signed another Executive Order declaring a National Emergency to deal with cyber threats:

*OBAMA ORDER CREATES NEW AUTHORITY TO RESPOND TO CYBER THREATS TO BE USED IN 'TARGETED MANNER'
*OBAMA ORDER ALLOWS SANCTIONS FOR CYBER THREATS

This new authority, yet another layer of government oversight, we are sure is for your own protection and in Obama's words will "augment work to fight cyber threats." All your internet is belong to us...

ADP Employment Misses By Most In 4 Years, Lowest In 14 Months

After missing expectations in a dismally weak February print, March turned out even worse. Despite Mark Zandi's reassurances that Feb was a weather-related blip, March ADP employment change was a mere 189k (against expectations of 225k) dropping to its lowest since January 2014. Large business hiring was the worst, adding a mere 19k. Zandi said in Feb that "jobs growth is strong but slowing," but now it appears weak and accelerating lower. And the now recurring punchline: manufacturing jobs -1,000.

Frontrunning: April 1

  • Oil holds around $55 as Iran nuclear talks drag on (Reuters)
  • Bob Diamond’s African Banking Venture Runs Into Problems (WSJ)
  • Iran Nuclear Talks Resume With Lavrov Saying Deal at Hand (BBG)
  • Wal-Mart Ratchets Up Pressure on Suppliers to Cut Prices (WSJ)
  • Renegades of Junk: The Rise and Fall of the Drexel Empire (BBG)
  • Explosion at Yemen factory kills at least 25: residents, medics (Reuters)
  • Macerich Rejects Simon Property’s $16.8 Billion Takeover Bid (WSJ)
  • Reckoning Arrives for Cash-Strapped Oil Firms Amid Bank Squeeze (BBG)

Whiplash Session Sees Furious Buying Of Futures To Defend 50-DMA As New Quarter Begins

It has been another whiplash, rollercoaster, illiquid session which saw US equity futures tumble early overnight driven by a bout of USDJPY and Nikkei selling, only to regain all losses as European, and BIS, traders walked in, and promptly BTFD. In fact at last check, it was as if all the fireworks that took place just a few short hours ago and sent the ES as low as 2037, and below what has become the key support level, the 50-DMA never happened.

Dow Futures Down 400 From Monday Highs After Asian Open Flash-Crash

After Japan's Tankan disappointed greatly and various talking heads from Japan came out to deliver the credibility-destroying-phrase of the day: that "the economic recovery is progressing smoothly" despite all evidence to the contrary... USDJPY took a dive. And when USDJPY takes a dive, all its risk-on, carry-trade-imbibed friends take a dive. Dow futures cratered 230 points in minutes only to bounce back modestly when some enterprising sell-side analyst reminded the machines that "bad news is good news." But that didn't last and US equity futures are sliding rapidly in the overnight session...

A World Without The Welfare State

We live in an era in which few can even conceive of a world without the welfare state. Who would care for the old? How would people provide for their medical needs? What would happen to the disadvantaged and needy that fell upon hard times? In fact, there were free market solutions and non-government answers to these questions long before the modern Big Government Welfare State. Unfortunately, after nearly a century of increasing political and cultural collectivism, the historical memory of the pre-welfare state era has all but been lost. The Welfare State makes us all poorer in character and independence. Confiscation of freedom through abridgements of individuals’ rights to their life, liberty and honestly acquired property, also brings with it a less humane and civil society.

OECD Economic Review Chair Warns, Central Bankers "Are Doing More Harm Than Good, Policy Must Be Reversed"

"I fear that central bankers may have been inadvertently drawn into what they are currently doing... [QE] won't work and may have many undesired side effects that will build up over time. Many of the central bankers at Davos this year said explicitly that they were only buying time for governments to act but, seven years into the crisis, it already seems we have been waiting forever...  the effectiveness of monetary policy in terms of stimulating aggregate demand goes down with time, because you're constantly bringing spending forward from the future...  Logically, at this point, central bankers should say, "We are doing more harm than good. This policy must be reversed." But I don't see anybody actually doing it."

World Inflation Falls To A New 5-Year Low

It's become a running theme, at least since last September, but the latest release of CPI numbers from around the world has brought our simple average World CPI proxy to its lowest level since the financial crisis. For the period ending in February, our World CPI proxy hit just 1.01% year-over-year. This is the lowest rate of change since November 2009. The year-over-year rate in our World CPI proxy has been falling for six months straight.

Imperial Collapse And A License To Kill

The story is the same every time: some nation, due to a confluence of lucky circumstances, becomes powerful—much more powerful than the rest—and, for a time, is dominant. But the lucky circumstances, which often amount to no more than a few advantageous quirks of geology, be it Welsh coal or West Texas oil, in due course come to an end. In the meantime, the erstwhile superpower becomes corrupted by its own power. As the endgame approaches, those still nominally in charge of the collapsing empire resort to all sorts of desperate measures—all except one: they will refuse to ever consider the fact that their imperial superpower is at an end, and that they should change their ways accordingly.

Abewrongics: Nikkei/USDJPY Tankin' After Terrible Tankan

Bad news isn't even good news anymore in Japan. A sushi-boat-load of data this evening show once again that Abenomics is failing dismally. In no particular order... Large Manufacturing Index MISS (lowest in 9 months), Large Manufacturing Outlook BIG MISS, Large Services Outlook MISS, Small Manufacturing Index MISS, Small Manufacturing Outlook BIG MISS, and drum roll please... Tankan Large Industry Capex Outlook crashes to -1.2% (from +8.7%) - the lowest in 2 years (since Abewrongics was unleashed). The response... USDJPY and Nikkei are dumping...

Guest Post: Burning Down The House: Land, Water & Food

I’m sure when Talking Heads wrote "Burning Down The House" that they didn’t exactly have financial collapse and environmental degradation in mind. Although with a verse like “Hold tight wait till the party's over. Hold tight we're in for nasty weather. There has got to be a way. Burning down the house” it’s hard not to see that song as strangely prophetic.