• GoldCore
    01/31/2015 - 05:00
    We are witnesses to an epic failure of planning, statecraft and social justice. Regardless of where your politics be, these elements are critical for a modern globally connected economy to function....

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All Major US Equity Indices Are In The Red Post-QE3

It appears the Central Bank control is failing...



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BABA Bye Bye: Chinese MegaCap Plunges Below Post-IPO First Print

Alibaba is down over 10% this morning following a disappointing earnings release. This comes on the heels of selling pressure after the Chinese government released its report claiming significant "issues" at China's richest man's company. A combination of weak revenues, a 28% plunge in net income, slower than expected growth on its Tmall platform (and disappointment at the progress into mobile advertising) have sent the stock tumbling back near Facebook's market cap.



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Early Warning Signs

If, as Kyle Bass so eloquently noted previously, "buying gold is just buying a put against the idiocy of the political cycle. It's That Simple," then recent (post-QE3) activity suggests the narrative is changing fast... Perhaps Larry Summers was right last week in Davos, "we have to recognize that the era when central bank improvisation can be the world’s growth strategy is coming to an end."



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Initial Jobless Claims Collapse To 15 Year Lows But Shale States Job Losses Explode

After 4 weeks missing expectations (and 3 above the crucial 300k mark), initial jobless claims totally and iutterly collapsed last week. Printing 265k (beating the 300k expectation by the most in years), the 13.9% drop WoW was the biggest since September 2005!!! This is the lowest initial claims data since the financial crisis and in fact the lowest since April 2000. But it is the story from the Shale states that is most troubling as initial claims through the 2nd week of January (data is lagged by state) show a massive surge in initial claims as unambiguously good news is very much not for many thousands across these regions.



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Bill Gross Slams Broken Capitalism: "Policymakers Must Promote A Future Which Offers Hope As Opposed To Despair"

"Officials at the Federal Reserve – the most powerful and strongest of Parker Brothers – seem to now appreciate the hole that they have dug by allowing interest rates to go too low for too long.... While there is no better system than capitalism, it is incumbent upon it and its policymakers to promote a future condition which offers hope as opposed to despair. Capitalism depends on hope – rational hope that an investor gets his or her money back with an attractive return. Without it, capitalism morphs and breaks down at the margin. The global economy in January of 2015 is at just that point with its zero percent interest rates."



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Germany Is Officially Back In Deflation: Stocks Slide

For the first time since October 2009, Germany saw Consumer Price Inflation fall in January. Missing expectations for the 2nd month, Germany's deflationary 0.5% drop in CPI is the worst deflation since July 2009 and comes just 3 weeks after Europe broadly entered the dreaded deflation spiral of doom so many status quo economists are terrified of. Just a good job Draghi unleashed Q€ ... oh wait inflation expectations have tumbled since then too...



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2015 Currency Wars Year-To-Date Summary: 13 Rate Cuts, 5 Rate Hikes

For those keeping track of currency wars around the globe, 2015 - a year in which two central banks, those of Switzerland and Singapore have already admitted defeat, is shaping up as nothing short of historic. As DB's summarizes: just about 31 countries have, in less than a month, eased in the form of 13 mostly "surprise" rate cuts, while just 5 have tightened monetary policy.



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Frontrunning: January 29

  • Who Doubts Yellen's Policies? Summers for One (BBG)
  • Samsung, Apple Back in Dead Heat for Global Smartphone Dominance (WSJ)
  • Islamic State purportedly sets new deadline for hostage swap (Reuters)
  • Turkey's $7.9 Billion Mystery Money That's Simply Vanished (BBG)
  • How a Two-Tier Economy Is Reshaping the U.S. Marketplace (WSJ)
  • U.S. Prisons Grapple With Aging Population (WSJ)
  • Hasenstab Sees $3 Billion Vanish in Ukraine as One Big Bet Sours (BBG) - maybe he should BTFD, pardon, "invest" in Belarus next?
  • Belarus May Seek Debt Restructuring in 2015, President Says (BBG)


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Markets Drift Without Direction As Zombified BTFDers Unable To Frontrun Hawkish Fed

The bottom line is that unfortunately for the BTFDers, with the Fed no longer giving explicit buy signals with the "considerable time" language struck, and with an implicit economic upgrade suggesting a rate hike is still on the table, it is becoming increasingly more difficult to frontrun the Fed's "wealth creation" intentions.

 



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The New Greek Government Arrives In Its Residence: Finds No Power, No Wifi Password And No Toilet Soap

Things in Greece are bad. So bad, that the outgoing government of Antonis Samaras decided to not only leave the new inhabitants of the official residence of the Greek prime minister, the Maximos Mansion, without power, and without the WiFi password, but they decided to "borrow" all the soap in the toilet as well.



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Ron Paul On Gold & The Fed's Failed 'Utopian Dream'

Over the last 100 years the Fed has had many mandates and policy changes in its pursuit of becoming the chief central economic planner for the US. Not only has it pursued this utopian dream of planning the US economy and financing every boondoggle conceivable in the welfare/warfare state, it has become the manipulator of the premier world reserve currency. All this effort by thousands of planners in the Federal Reserve, Congress, and the bureaucracy to achieve a stable financial system and healthy economic growth has failed. It must be the case that it has all been misdirected. And just maybe a free market and a limited government philosophy are the answers for sorting it all out without the economic planners setting interest and CPI rate increases. A simpler solution to achieving a healthy economy would be to concentrate on providing a “SOUND DOLLAR” as the Founders of the country suggested.



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Teachers' Retirement Funds Are Piling Into Manhattan Real Estate At Record High Prices

Wondering who the greater fool is, wonder no longer. TIAA-CREF (Teachers Insurance and Annuity Association – College Retirement Equities Fund) essentially manages the investments of people who know the least about investing, i.e., muppets. As such, it came as no surprise that TIAA-CREF might serve as an important bag-holding vehicle for bubble assets just before a fall (when the latest Central Bank bubble pops), tempted by juicy 4% yields... in other words, teachers and nurses are shattering property records to fund their retirement.



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Norway Regulator Fears Housing Bubble "Isn't Sustainable"

Amid the collapse in crude oil prices, the Norwegian central bank cut rates in December (after 1000 days on hold) and is likely to cut again as economic growth stalls. However, the country's financial regulator is warning falling interest rates risk pushing the Norwegian housing market beyond its breaking point into a "self-augmenting spiral." With prices up 8.1% YoY, and up 85% nationwide in the last decade, even Robert Shiller warned of Norway's housing bubble in 2012 - and since then household debt (and home prices) have surged. As Bloomberg reports, Morten Baltzersen, head of Norway’s Financial Supervisory Authority stressed "continued rapid growth in debt and house prices isn’t sustainable." Unintended consequences?



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Jeff Gundlach Warns "The Fed Is About To Make A Big Mistake" (& That's Why Bond Yields Are Crashing)

Since The FOMC's "hawkish" statement, bond yields have utterly cratered as near-record speculative short positioning in bonds unwind the long-end (and worries about international problems - "and readings on financial and international developments"). However, fundamentally speaking, DoubleLine's Jeff Gundlach explains, the Federal Reserve is on the brink of making a big mistake simply put, "if Fed Chair Janet Yellen goes ahead with this plan (to raise rates for 'philosophical reasons'), she runs the risk of having to quickly reverse course and cut interest rates."



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Lies And Deception In Ukraine’s Energy Sector

The Ukrainian government has repeatedly claimed it is doing its best to improve the oil and gas investment climate, but official statements are the opposite of the reality, as Prime Minister Arseniy Yatsenyuk is leading the great deception.



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