• GoldCore
    04/24/2014 - 11:48
    Silver coins with the face of Russian President Vladimir Putin are being minted in Russia. The coins weigh one kilogram (1kg - 2.2lb) and are being launched by the Art Grani foundry to mark Crimea’s...

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Explaining The Horrendous Home Sales Report: It Snowed Everywhere But In The Northeast

This is our best attempt at playing clueless propaganda cheerleaders also known as economists:

Q. Why did new home sales crash in all regions except the traditionally coldest, wettest, and snowiest Northeast, where sales rose?

A. Uhm, because it obviously snowed everywhere except in the Northeast.

And there you have it: spin 101 for braindead zombies and vacuum tubes.



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New Home Sales Collapse To 8 Month Lows

New Home Sales collapsed 14.5% month-over-month to its lowest since July 2013. A mere 384k versus 450k expectations is the biggest miss since July. So much for the Spring buying season... This is a 7 standard deviation miss against the smart economists' estimates! Whocouldanode that when the free-money sponsored fast money leaves the game that real people with real debt and real wages are simply priced out of buying a new home? Supply of unsold new homes jumps to 6 months, its highest since Oct 2011 (as once again the visible hand's interference has produced yet another mal-investment boom as the 'if we build it, they will come' builders face an ugly reality).



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US PMI Drops, Misses By Most In 8 Months

That February spike that was the catalyst for oh so much aggressive JPY selling and US equity buying and "see, we told you so, here comes the post-weather pent-up-demand exuberance" has been crushed by the sad and painful truth of reality. For the 2nd month in a row, Markit's US PMI dropped and missed expectations... despite weather being a thing of the past. Sadly the story gets worse, as Markit notes "on the inflation front, manufacturers experienced a further solid increase in average cost burdens in April," adding that pricing pressures, "will feed fears that the recovery remains on a weak foundation of intense price competition." Need moar snow...



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Not So Fast: Allergan Adopts Poison Pill, Valeant CEO "Disappointed" - What Happens Next

Allergan on Tuesday night said that its board of directors had adopted a one-year stockholder rights plan to give it more time to consider takeover proposals. The Valeant offer was made with Pershing Square Capital Management hedge fund, which built up a stake in the company. The chief executive officer of Valeant Pharmaceuticals, which made a $47 billion unsolicited offer for competitor Allergan Inc. on Tuesday, said during an interview on CNBC that he was "disappointed" with Allergan's so-called poison pill. "We are disappointed but on the other hand, I think this deal will get done," Valeant CEO Michael Pearson said on Wednesday.



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Ackman Promised Former Herbalife Employer $3.6 Million To Become Whistleblower

"I will pursue Herbalife to the end of the earth," is the threat Bill Ackman made and the hedge fund manager acknowledges spending more than $20 million in a lobbying and media campaign against the health product company. But on the heels of his non-front-running non-insider-trading transactions in the Allergan deal, details about the Herbalife whistleblower's "deal" raise more questions about ethics. Giovanni Bohorquez has now been named as Ackman's inside-man and the $3.6 million secret deal he will receive for spilling inside information about Herbalife's actions is raising significant questions about conflicts of interest. Having flatly denied being paid, "I'm not getting any benefit," during an on-camera ABC interview, ABC now reveals that Ackman agreed to the deal after Bohorquez balked at going public because he feared his disclosures could make it difficult for him to find work at an executive level. It seems $3.6 million promptly relieved any fears of not being able to get a job.



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The Fed's Farcical Forecast Fiasco

The chart below, which summarizes 5 years of Fed "forward guidance" on that most critical of variables - the Fed Funds rate - proves two things:i) there is nothing worse in this world than being a Fed Funds, or Eurodollar, trader, considering 5 years of forecasts have been systematically destroyed by a Fed which has failed time and time and time again to stimulate the economy enough to push it away from ZIRP (and why any hope for the first rate hike in mid-2015 are idiotic), and ii) when it comes to central planning, the economists that now openly control the bond and stock market and increasingly more of global capital flows, have absolutely no idea what tomorrow brings perversely, since it is their actions that have made the required outcome - a self-sustaining, economic recovery - impossible.



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Frontrunning: April 23

  • Ukraine's leaders say have U.S. backing to take on 'aggressors' (Reuters)
  • Goldman Sachs Stands Firm as Banks Exit Commodity Trading (BBG)
  • Obama reassures Japan, other allies on China as Asia trip begins (Reuters)
  • China Challenges Obama’s Asia Pivot With Rapid Military Buildup (BBG)
  • Google’s Stake in $2 Billion Apple-Samsung Trial Revealed (BBG)
  • No bubble here: Numericable Set to Issue Record Junk Bond (WSJ)
  • 'Bridgegate' scandal threatens next World Trade Center tower (Reuters)
  • Supreme Court Conflicted on Legality of Aereo Online Video Service (WSJ)
  • Barclays May Cut 7,500 at Investment Bank, Bernstein Says (BBG)


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Algos Getting Concerned Low Volume Levitation May Not Work Today

It has been exactly six days in which algos, reversing the most recent drop in the S&P with buying sparked by a casual Nikkei leak that the BOJ may, wink wink, boost its QE (subsequently denied until such time as that rumor has to be used again), have pushed the market higher in the longest buying streak since September, ignoring virtually every adverse macroeconomic news, and certainly ignoring an earnings season that is set to be the worst since 2012. Today, the buying streak may finally end on rumors even the vacuum tubes are scratching their glassy heads if more buying on bad or no news makes any sense now that even the likes of David Einhorn is openly saying the second tech bubble has arrived. Keep an eye on the USDJPY which has had seen some rather acute "trapdoor" action in early trading and is approaching 102 after breaching its 55-DMA technical support of 102.38. If the support is broken here we go again on the downside. Keep an eye on biotechs and GILD in particular - if the early strength reverts into more selling again (after the two best days for the biotech space in 30 months), the most recent euphoria phase is now over.



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Define Austerity: Spanish, Italian And Greek Debt/GDP Rise To Record Highs

Ask any European why their standard of living is so atrocious (after years of freeflowing debt-funded largesse) and the answer is well-known: austerity.Also ask any European if austerity means public debt should go up or down and the answer is also as clear: down. Which is why most Europeans will likely be confused to very confused when presented with the latest Eurostat data according to which not only did Eurozone debt rose remain just shy of all time record highs and certainly increasing from a year ago, but those PIIGS nations which are the first to blame austerity for everything, such as Greece (net of the debt wiped out as part of its 2012 bankruptcy of course), Portugal, Spain and Italy, all saw their public debt hit all time highs.



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Sergey Lavrov: "If Russian Troops Or People Attacked, We'll Retaliate"

It took Joe Biden just a day after his arrival in Kiev to kill and bury the last remaining hope that last week's latest attempt at diplomatic de-escalation in Geneva would actually be anything more than a joke. A few hours ago, in a statement posted on the parliament website, Ukraine acting President Oleksandr Turchynov said that pro-Russian separatists have "crossed line" adding that East Ukraine is currently controlled by “terrorists” supported by Russia. In other words, the same old song and dance. Which is why this time Russia made it quite clear to issue a warning that the next time there is a provocation against its soldiers or, more importantly, against its people, those in East Ukraine to be specific, it would retaliate. Once again, Obama's "costs" message is lost on Putin...



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Europe April Manufacturing Summary: France's Loss Is Germany's Gain

There is a reason why while Germany has been delighted to keep the Euro as its currency, in the process keeping a substantial discount to where the Deutsche Mark would be trading if it weren't for the implicit FX subsidies by ther Eurozone members, France has been increasingly more panicked and vocal about the soaring EUR. That reason became apparent this morning when Markit reported that France PMI for April both declined from the March print of 52.1, and missed expectations of 51.9, printing at 50.9. Same thing for the Services PMI which at 50.3, both missed expectations of 51.3, and dropped from 51.5. France's loss however was Germany's gain, which beat expetations across the board.



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Eyeing Pipeline, Russia Forgives North Korean Debt

On Friday Russia’s parliament voted to write off roughly 90 percent of North Korea’s debt as Moscow seeks to build a gas pipeline through the Hermit Kingdom. Moscow has been pushing for the Korean gas pipeline and railway for years as part of its strategy to diversify its energy markets away from Europe and toward Asia. This general goal has gained new urgency in the wake of Russia’s clash with the West over the Ukraine and Crimea.



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China's Largest Manager Of Bad Debt On The Economy: "Grim And Complicated"

"The business environment this year has been "grim and complicated"; that is the message from China's largest manager of bad debt. As Bloomberg reports, China’s bad-loan ratio rose "significantly" in the first quarter, increasing risks for the nation’s banking industry, driving up banks’ sour loans for a ninth straight quarter as of December to the highest level since 2008. Huarong expects pressures on asset-quality, liquidity, and lending margins to continue.



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David Stockman Blasts "America's Housing Fiasco Is On You, Alan Greenspan"

So far we have experienced 7 million foreclosures. Beyond that there are still 9 million homeowners seriously underwater on their mortgages and there are millions more who are stranded in place because they don’t have enough positive equity to cover transactions costs and more stringent down payment requirements. And that’s before the next down-turn in housing prices - a development which will show-up any day. In short, the socio-economic mayhem implicit in the graph below is not the end of the line or a one-time nightmare that has subsided and is now working its way out of the system as the Kool-Aid drinkers would have you believe based on the “incoming data” conveyed in the chart. Instead, the serial bubble makers in the Eccles Building have already laid the ground-work for the next up-welling of busted mortgages, home foreclosures and the related wave of disposed families and social distress.



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Flood Of Students Demanding Loan Forgiveness Forces Administration Scramble

"Loan forgiveness creates incentives for students to borrow too much to attend college, potentially contributing to rising college prices for everyone," is a study's warning over government plans that allow students to rack up big debts and then forgive the unpaid balance after a set period. As WSJ reports, enrollment in student debt forgiveness plans have surged nearly 40% in just six months, to include at least 1.3 million Americans owing around $72 billion. The administration is looking to cap debt eligible for forgiveness, as President Obama's revamped Pay As You Earn scheme has seen applications soar and is estimated to cost taxpayers $14bn a year. The 'popularity' of the student loan bailout plan surged after Obama promoted it in 2012, and now the administration must back-track as costs have massively outpaced government predictions.



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