So much for new GM's transparency... After failing to respond to over a third of NHTSA's requests:
- *NHTSA: GM STILL HAS 'FAILED' TO PROVIDE SUBSTANTIVE RESPONSE
NHTSA has thrown the book at General Motors (kinda)..
- *NHTSA SAYS GM SUBJECT TO CIVIL PENALTY UP TO $7,000/DAY
That will teach them!! There are some teeth there, as NHTSA added that it may refer GM to the Justice department.
While the Nasdaq was unable to get back above its crucial 100DMA, it outperformed today (Biotechs went nowhere) as the S&P 500 dipped-and-ripped off its 50DMA (and the crucial 1840 level for bulls). The problem with all this "the correction is over" chatter... nothing else is buying it... Treasury bond yields slumped lower (7Y -15 bps from Friday highs and back to FOMC levels) with 10Y < 2.70% again. Credit spreads on high-yield debt made new swing cycle wides (did not hold teh dead cat bounce gains). Gold jumped back above $1310 (and on a separate note oil prices surged as "tanks" hit the headlines once again in Ukraine). But perhaps the most notable 'negative' for this being anything but a dead-cat-bounce was the collapse in JPY carry - USDJPY's biggest drop in 8 months. VIX was pegged to the S&P 500 all day - but even there we saw notable steepening (as hedgers termed out protection). S&P 500 futures close perfectly at yesterday's closing VWAP.
The 1900 target for the S&P 500 that Credit Suisse since the start of the year but are seeing increasing signs of a market top with a meaningful correction lower likely to emerge. Volume divergences, DeMark clusters, and reversal days all point to weakness and, as CS concludes, a break of 1844/34 (for the S&P) could lead to a decline to 1800 and then to 1768.
Corporations continue to push the boundaries of wage and employment suppression, productivity increases and accounting gimmickry to support elevated profit margins. All of these functions are finite in nature, and despite much hope to the contrary, the current set of fundamental variables are more usually witnessed at the end of cyclical expansions rather than the beginning. With corporate profits being driven primarily by "accounting magic" rather than strongly rising revenue, the sustainability of the current level of corporate profits is in question. Fed actions leave a void in the future that must eventually be filled by organic economic growth. The problem comes when such growth doesn't appear.
USDJPY has fallen over 250 pips in the last few days and today is its biggest daily drop in 8 months as stimulus-hope premia is removed from the FX carry trade juicer. USDJPY has retraced all its post-FOMC gains in the last 2 days as the euphoria-to-disaster crowd continues to flood in and out. This dive has driven Nikkei 225 futures down almost 1000 points from Friday's highs, pressuring the Japanese stock market to near its cheapest to the Dow in 15 months.
At the start of 2013, we went 20 weeks in a row without a drop in the Dow on a Tuesday. While that trend broke, the chart below shows that Tuesdays are still a banner day for the bulls (with only 4 down Tuesdays this year)... If it's Tuesday, it must be dead-cat bounce day...
Retiring SEC Lawyer Crucifies His Employer: "It's A Cancer" Working On Behalf Of The "Bankster Turnpike"Submitted by Tyler Durden on 04/08/2014 - 13:33
We wonder: why does the truth about the broken system, as witnessed and experienced by individual employees, always wait until said employee is about to depart their employer or just after? Obviously that is rhetorical. However, it is worth mentioning, because in the latest such revelation, a retiring SEC trail attorney veteran, James Kidney, who had been with the agency since 1986 and retired this month, just crucified his now former employer for doing precisely all those thing that outside critics - notably Zero Hedge - have accused the most coopted, clueless, corrupt and criminal regulators of doing. Only he said it in a way that not even we could have phrased. The SEC has become “an agency that polices the broken windows on the street level and rarely goes to the penthouse floors,” Kidney said, according to a copy of his remarks obtained by Bloomberg News. “On the rare occasions when enforcement does go to the penthouse, good manners are paramount. Tough enforcement, risky enforcement, is subject to extensive negotiation and weakening.”
While the world is watching US stocks and breathing a sigh of relief that they are not crashing (yet) today, there are some significant moves afoot in other critical markets. USDJPY has broken below 102 continuing its slide (JPY strength) on the heels of the BoJ's disappointing lack of additional money-printing. Perhaps even more critically is the surge in prices of oil (Brent and WTI) as news break of tanks rolling once again in Eastern Ukraine. A glance at the charts below and one can't help but wonder how long stocks can hold these gains today...
Today's 3 Year $30 billion auction, if not remarkable, was memorable for two things: the high yield, coming at 0.895% precisely on top of the When Issued, was materially above the March 0.802% which is to be expected courtesy of the Fed's "dots", as the short end keeps rising, and in fact was the highest pricing yield since the 0.913% seen last in September. And not surprisingly, the Bid To Cover picked up to 3.361, above the TTM average of 3.286, to celebrate the higher yield offered on "near money good" collateral, if hardly surging to all time BTC high recorded long ago in October 2012.
We live in a pretend economy. It is important to recognize this condition, especially if you are an investor. Current market behavior is concerning. Bonds and stocks remain volatile and near record levels. Markets ignore the continuing stagnation in the pretend economy, buoyed apparently by government liquidity injections. To justify investing today in these markets, one must anticipate one or both of the following: economic growth is about to surge; and/or market values can continue to rise from here, potentially further widening the already large gap between valuations and fundamental economics. No reading of the economic tea leaves suggests a surge in economic growth is coming. Indeed, a critical analysis of the data makes one question whether there has been a recovery at all. Certainly any recovery has to be labeled as abnormal. Playing these markets in any conventional manner is akin to writing insurance policies for suicide bombers.
Update: as expected the denial of the propaganda didn't take long: PROTESTERS IN LUHANSK, UKRAINE, DENY HAVING EXPLOSIVES AND HOLDING HOSTAGES IN STATE SECURITY BUILDING
While the source of the most recent developments in the Ukraine is the country's state security services and should thus be taken with the usual mine of salt, Reuters is reporting that pro-Russian separatists have placed explosives in a building they seized in the eastern city of Luhansk and are using weapons to hold around 60 people against their will.
While we are sure the men of the world are applauding quietly from the background, President Obama's plan for equal pay is likely to appeal to the females in his audience - especially those who might vote... it is perhaps ironic that the President brings this up once again - and for good reason is the gender pay inequality gap is indeed worsening - when it is the women of America that have regained all their jobs (and then some) since the recession while men have not...