Nobel Peace Prize-winner Barack Obama became president on a platform of pacifism, and withdrawal from America's numerous conflicts. 6 years later, he is where Dubya was a decade ago, only on the other side, according to the latest Economist cover (and story).
- ISLAMIC STATE CELLS PLOTTING US, FRANCE ATTACKS, ABADI SAYS
- TARGETS VIEWED MAY INCLUDE SUBWAYS, ABADI SAYS
- IRAQI PRIME MINISTER ABADI SAYS HE GOT INFORMATION THIS MORNING
- ABADI SAYS INFO FROM CAPTURED FIGHTERS IN IRAQ SEEMS CREDIBLE
- U.S., FRANCE INFORMED BY IRAQ, ABADI SAYS
And now, for the best news of the day, we go to NPR which reports that Eric "Too Big To Prosecute" Holder is resigning. From NPR: "Eric Holder Jr., the nation's first black U.S. attorney general, is preparing to announce his resignation Thursday after a tumultuous tenure marked by civil rights advances, national security threats, reforms to the criminal justice system and five and a half years of fights with Republicans in Congress."
A "huge" institutional sell order, covering almost 200 individual stocks, is rumored to have been responsible for getting this morning's weakness across stocks going as equity indices catch down to bonds and credit. The S&P 500 broke key support at its 50-day moving-average (for first time in 2 months) and is back at 6 week lows. The Russell 2000 is now down 4.25% from the FOMC meeting last week...
As we have reported since May 2013, when we explained the role of Commodity Funding Deals in Chinese "trade" and especially in the laundering of hot money flows, and most recently when we followed up on the first revelations that unknown amounts of physical commodities had been corizined in China's port of Qingdao, one of the key uses of monetary commodities in China is for purposes of "trade" in the form of FX loans, and especially to artificially boost exports by way of fake trade invoicing. Well, like a recovering junkie addicted to fabricated data, China finally admitted it has a problem when overnight it "uncovered almost $10 billion in fraudulent trade nationwide as part of an investigation begun in April last year, including many irregularities in the port of Qingdao, the country’s currency regulator said today." “Some companies used the trade channel to bring in hot money,” said Zhou Hao, a Shanghai-based economist at Australia & New Zealand Banking Group Ltd. SAFE’s investigation “will likely further cool down hot money inflows and commodity imports could slow as banks will likely conduct more careful checks on documentation.”
For those to whom the recent US campaign against Syria seems a deja vu of last summer's "near-war" attempt to ouster its president Bashar al-Assad, which was stopped in the last minute due to some very forceful Russian intervention and the near breakout of war in the Mediterranean between US and Russian navies, it is because they are. And as a reminder, just like last year, the biggest wildcard in this, and that, direct intervention into sovereign Syrian territory, or as some would call it invasion or even war, was not the US but Saudi Arabia - recall from August of 2013 - "Meet Saudi Arabia's Bandar bin Sultan: The Puppetmaster Behind The Syrian War." Bin Sultan was officially let go shortly after the 2013 campaign to replace Syria's leadership with a more "amenable" regime failed if not unofficially (see below), but Saudi ambitions over Syria remained. That much is revealed by the WSJ today in a piece exposing the backdoor dealings that the US conducted with Saudi Arabia to get the "green light" to launch its airstrikes against ISIS, or rather, parts of Iraq and Syria."The process gave the Saudis leverage to extract a fresh U.S. commitment to beef up training for rebels fighting Mr. Assad, whose demise the Saudis still see as a top priority."
Because nothing says efficient market and fiduciary duty like waiting for the US equity market to open to send a huge sell order through the silver futures market... Running the entire stack (and this all resting stops), however, silver has immediately bounced back... Gold was relatively unaffected. Copper had also got plugged early on and is now ripping higher.
As the price of precious metals that is eschewed daily by status-quo-hugging talking-heads on business media as indicative of the days of hard money being over continues to come under 'pressure', demand for physical gold remains extremely high. With India's festive season about to begin, The Hindustan Times reports a massive surge in gold smuggling in the last 10 days as heavy demand for gold during Dussehra (for which booking and supply starts today when Navratri begins) has dragged 50 tonnes of gold across the borders to avoid the government's capital controls.
What goes up must come down. The saying applies not only to aircraft, but aircraft orders. As a reminder, last month the volatile nondefense aircraft order category soared by 318%, leading to a 22.6% increase in headline Durable Goods, a record monthly swing courtesy of Boeing conducting its own "subprime for flying clunkers" program which sent airplane orders to an all time high. And now that the bumper airplane order month is over, with all orders purchased on credit gobbled up by yield-starved investors of course, the anticipated drop took place, with durable goods sliding by a record 18.2%, a fraction worse than the -18.0% expected.
After last week's tumble to 280k, initial jobless claims rose modestly this week to 293k (slightly better than expected) but remain near a dovish-Yellen-crushing 14-year low. Continuing claims also remain at cycle lows around 2.4 million (rising modestly - by 7k - this week). The labor department cites no unusual or estimated claims this week. It appears this is as good as it gets and the Fed has reached its 'job-creating' mirage peak...
- Apple CEO Cook Goes From Record Sales to IPhone Stumbles (BBG)
- Deal With Saudis Paved Way for Syrian Airstrikes (WSJ)
- Drone delivery: DHL 'parcelcopter' flies to German isle (Reuters)
- Tory Burch Hires Ralph Lauren Veteran as Co-CEO (WSJ)
- Apple releases iOS 8 workaround to fix dropped cell service (Reuters)
- Ukraine Probes Ex-Minister Over $3 Billion Russian Bond (BBG)
- Goldman Sachs-Led Group Near Deal to Buy Messaging Startup Perzo (WSJ)
- U.K. Seeks to Criminalize Manipulation of 7 Benchmarks (BBG)
It has been a relatively subdued session, with not much action in either stocks or bonds - European stocks rise for the second day on US market momentum from yesterday; Asian stocks are mixed advance while metals decline with Brent, WTI crude, U.S. equity index futures. The biggest highlight in overnight action, however, was once again the Dollar whick climbed to a fresh 4-year high, on pace to strengthen for 2 straight months for first time since March. The reason: ongoing sentiment that there will be a major dispersion between central banks, with the USD tightening just as other central banks join the liquidity fray. To wit, ECB data showed that lending decline in Europe slowed to -1.5% y/y in Aug. vs -1.6% in July and the latest statement from Draghi who said in Lithuania that economic reform possible without devaluing currency.