Tyler Durden's picture

The Market Is A Red Herring... Distracting Us From The Reality Of The Economy

Janet Yellen once again repeats that the economy is “looking stronger” although still it has yet to manifest into actual strength.  In fact, it is still so weak that the Fed cannot even suggest that rates will raise anytime over the next several FOMC meetings.  In short, the economy is still very sick. The Pundits (Liesman) are suggesting Janet feels the economy is strong but that the “data just isn’t cooperating”.  What does that even mean?? The market is a red herring of sorts keeping our attention away from the reality of the economy.  And so, to give up the market strength would be synonymous to removing the one remaining support holding up that 100 storey building that is otherwise completely rotted.  Only when the economy is able to withstand a market repricing will the Fed allow the market to reprice.



Tyler Durden's picture

Frontrunning: February 25

  • Invade Syria already, we know you will: Islamic State in Syria abducts at least 150 Christians (Reuters)
  • Greece Struggles to Get Citizens to Pay Their Taxes (WSJ)
  • Doubts Shadow Deal to Extend Greek Bailout (WSJ)
  • In surprise result, Chicago's Mayor Emanuel faces election run-off (Reuters)
  • Obama vetoes Keystone pipeline bill (Reuters)
  • Another sign of the top: Cushman & Wakefield Going Up for Sale (WSJ)
  • Lure of Wall Street Cash Said to Skew Credit Ratings (BBG) ... and threat of DOJ lawsuits also
  • Oil rises to $59 as Saudis say demand growing (Reuters)


Tyler Durden's picture

Schauble: "Germans Doubt Greek Promises", No More Money For Athens Until All Commitments Met

Reuters quotes Schauble who said that: "It wasn't easy an easy decision for us but neither was it easy for the Greek government because (they) had told the people something completely different in the campaign and afterwards."   "The question now is whether one can believe the Greek government's assurances or not. There's a lot of doubt in Germany, that has to be understood," said Schaeuble who despite his misgivings, he has urged German lawmakers to approve the Greek extension in a vote in parliament expected on Friday. The finance minister made one thing very clear: No payments will be made to Athens unless Greek govt meets its commitments in full.



Tyler Durden's picture

Stocks In Holding Pattern Following Blow-Off Top, Oblivious Of Fed's Warning Of "Stretched" Valuations

Following the first of two Janet Yellen testimonies to Congress, the market read between the lines of what the Fed Chairman said when she hinted that "the Fed needs confidence on recovery and inflation before beginning to raise rates" and realized that the case of a June rate hike is suddenly far less realistic than previously expected, as a result not only did we see another blowoff top in stocks to fresh all time highs, a move which sent the USD lower, has pushed the median EV/EBITDA multiple to the mid 11x (!) range and the forward PE to just shy of 18x ironically coming on a day when the Fed itself warned about "stretched" equity valuations, and led to brisk buying of global Treasurys across the board, pushing the 10 Year in the US back under 2%, and due to the global convergence trade (because if the Fed returns to QE, it will be forced to buy up Treasuries not just in the US but around the globe, since net issuance including CBs globally is now negative) and leading to today's German 5 Year bond auction pricing at a negative yield for the first time ever.



Tyler Durden's picture

A Secret "Black Site" Revealed In Chicago: "When You Go In, You Just Disappear"

Located in a nondescript warehouse on Chicago’s west side is where, according to the Guardian, one can find the domestic equivalent of a CIA "black site" - an illegal, off-the-books interrogation compound used by Chicago special police units, one which renders "Americans unable to be found by family or attorneys while locked inside"; a place whose former occupants say is where you end up when you are "disappeared"; a place which confirms that when it comes to the eternal "who is better - us or them" debate, there really is no difference: "It brings to mind the interrogation facilities they use in the Middle East. The CIA calls them black sites. It’s a domestic black site. When you go in, no one knows what’s happened to you.” It's a Guantánamo and Abu Ghraib rolled into one. In short: it is a place where the US constitution and basic human rights have absolutely no access.



Tyler Durden's picture

This Is Why Hewlett-Packard Is Firing 58,000

The rich get richer and stock buybacks; the poor get poorer and pink slips. Rinse. Repeat.



Tyler Durden's picture

Edward Snowden's Libertarian Moment: We "Will Remove From Governments The Ability To Interfere With [Our] Rights"

"If people lose their willingness to recognize that there are times in our history when legality becomes distinct from morality, we aren't just ceding control of our rights to government, but our agency in determing our futures... I suspect that governments today are more concerned with the loss of their ability to control and regulate the behavior of their citizens than they are with their citizens' discontent."



Tyler Durden's picture

Gold & Silver Bid In Asia Session As China Returns From Holiday

With China's return from the Lunar New Year celebrations, it appears precious metals are benefitting from some pent-up demand. Gold, and its high-beta cousin Silver have jumped in the Asia session and are now the best performing asset post-Yellen testimony. US equity futures have drifted lower from the cash close and copper has given back most of its gains...



Tyler Durden's picture

Another U.S. Veteran Passionately Pleads: "Please Don't Thank Me For My Service"

"...when he gets thanked it can feel self-serving for the thankers, suggesting that he did it for them, and that they somehow understand the sacrifice, night terrors, feelings of loss and bewilderment. Or don’t think about it at all." Rather than saying “thank your for your service,” it appears increasingly clear the appropriate sentiment should be something like, “I’m really sorry American leadership carelessly sacrificed your life for no good reason.”



Tyler Durden's picture

If The Fed Continues This, "There Won't Be Any Active Managers Left In 5 Years"

As the dash-for-trash continues in US equities, Neuberger Berman sums up the state of investing currently, "there has certainly been little reward for owning high-return, superior business models that are conservatively financed," as Bloomberg notes, Fed policy has had the “unintended consequence” of boosting the stocks of companies with heavy debt and little or no earnings. Typically after a recession, such companies lose out to firms that generate more cash and have better balance sheets; this time, no “Darwinian” shakeout happened and low-quality stocks ruled. Managers say they haven’t changed, the market has.



Tyler Durden's picture

The Post-1945 Geopolitical Settlement Is Now Crumbling

The post-1945 European settlement had many successes. But it is now crumbling. It needs drastic modification. That requires statesmen of the calibre of the men of 1945. It is time for politicians who wish to earn a place in history and upgrade themselves to statesmanhood to step up to the challenge.



Tyler Durden's picture

China Manufacturing PMI Suggests "Sluggish Domestic Activity & Uncertain Export Demand"

Modestly higher than the 'contractionary' 49.7 print in Janauary, February's Markit (flash) China Manufacturing PMI printed at 50.1 (beating expectations of a drop to 49.5). However, before global investors pop the proverbial champagne corks of global recovery, we note that employment's drop accelerated, New Export Orders contracted the most since June 2013, and prices continued to fall. Of course, HSBC is careful to note that "more policy easing is still warranted" because they believe, "domestic economic activity is likely to remain sluggish and external demand looks uncertain." For now Chinese stocks are holding losses after the lunar new year and the Yuan has weakened further near 30 month lows - once again testing the upper 2% fix band.



Tyler Durden's picture

The War On Success: Why America Is Doomed

This is the war on success that our government is waging...



Tyler Durden's picture

The Last 3 Times This Happened, Stocks Rolled Over

Before the world morphed into what it has become, the relationship between stock prices and intraday ranges was somewhat positively correlated (as one would imagine) - higher prices and a steady vol means absolute ranges will trend higher. However, the last few years - and most especially the last few months - as equity index prices soared, so intraday ranges collapsed. In fact, the last 3 times a new low range was made, that marked a local high in stock prices. Along with the fact that the VIX term structure is the steepest since the pre-Bullard collapse,  hedging - as opposed to BTFTAH - seems more appropriate in the short-term at least.



Tyler Durden's picture

14 Signs That Most Americans Are Flat Broke And Totally Unprepared For The Coming Economic Crisis

With more than 60 percent of all Americans are living paycheck to paycheck, and a whopping 24 percent of the country has more credit card debt than emergency savings, when the coming economic crisis strikes, more than half the country is going to be financially wiped out within weeks. If you are trusting in the government to save you when things fall apart, you will be severely disappointed.



Do NOT follow this link or you will be banned from the site!