What On Earth Is Going On With Caterpillar Sales?

Below we show the latest monthly data from CAT which is once again in negative territory across the board, but more importantly, the global headline retail drop (down another 11% in August) has been contracting for 33 consecutive months! This is not a recession; in fact the nearly 3 year constant contraction - the longest negative stretch in company history - is beyond what most economists would deem a depression.

Fed Cred Dead!

Last week was the watershed for central banking and for the illusion that the current disposition of things has a future

Stocks Are Tanking - Nasdaq Gives Up All "Bullard" Gains

For a brief shining moment this morning, the lack of a total bloodbath in Asia, some desperate spin about how China is not collapsing, and a hawkish Bullard provided just what the market wanted - higher USDJPY and thus soaring stocks. Once Europe closed, the mysterious bid for the dollar (EUR offered) disappeared... and so did Nasdaq gains...

Bailout World: Volkswagen "Cheating" Fine Is 20 Times Higher Than GM's For 'Killing 174 People'

When bailout-darling GM 'fessed up to an intentional ignition-switch defect, tied to at least 174 deaths, The Justice Department fined them $900 million (and no employees faced criminal charges). So, in this consequence-less world in which we live, when Volkswagen admits to literally cheating emissions-standards tests, it faces up to $18 billion in fines from The EPA, one has to wonder whether "we" have our priorities right?

'Not' Monday Humor: Saudi Arabia Chosen To Head UN Human Rights Panel

If you were trying to put together a global all-star team of the most authoritarian, human rights abusing nations on earth, not only would Saudi Arabia be at the top of the list, it would be captain of the squad. In a move as embarrassing, laughable and tragic as Barack Obama receiving the Nobel Peace Prize just as he was about to embark upon several overseas wars and drone countless civilians to death without due process, the United Nations has, remarkably, named Saudi Arabia head of it’s human rights panel.

Bullard Slams "Unsavory" Jim Cramer's "Permanent Cheerleading," Admits "Fed Can't Support Stocks Forever"

When The Fed's own cheerleader-in-chief (see October 2014) slams you for cheerleading, you know it's gone too far. In a stunning 30 second clip on CNBC this morning, St.Louis Fed head Jim Bullard sent a message to "your friend Cramer", saying "The Fed cannot permanently raise stock prices," adding, rather astonishingly to the anchors, "to have [Cramer] cheerleading for lower rates 24 hours a day is unsavory."

EURUSD Dumps To 1.1200 After Bullard's Hawkishness

It appears Jim Bullard's words (since his deeds are of no use as he is not a voter) were just enough to reassure the world that Yellen was "just kidding" about the whole global growth worries and market turmoil and is quiote ready to raise rates as soon as possible (even if FF futures say "nein"). EURUSD is now down over 250 pips since Friday highs, battered back near a 1.1100 handle...

Pandoramonium

Update: Rumor confirmed- *PANDORA WINS PRELIMINARY CRB DECISION, SUSQUEHANNA’S CLAPS SAYS (market disappointed)

Pandora is now up 11% on the day after twice being halted (on absolutely no news)...

Why Has Labor's Share Of GDP Declined For 40 Years?

This long-term erosion of earned income and household finances does not enable "growth" that is based on rising spending and borrowing. If these are no longer possible, the status quo has no Plan B.

Housing "Brightspot" Burns Out - Existing Home Sales Plunge Most In 7 Months

After an almost incessant rise since January, Existing Home Sales in August plunged 4.8% (the most since January and dramatically worse than the -1.65 drop expected). This is the 3rd biggest monthly collapse since the financial crisis. While the Northeast saw no change, The West (down 7.8% MoM) and South (down 6.6% MoM) saw the biggest plunges in sales as median home prices fell for the 2nd month in a row. It appears the one brightspot in the economy (according to mainstream media) has burned out as affordability and excitability come to a turning point.

Can The Saudi Economy Resist "Much Lower For Much Longer"?

The Saudis must alter course, seek a consensus on prices and volumes with their fellow OPEC members, coordinate with Russia, and reduce output from 2015’s average (approx. 10.5 mmbbl/d) to signal their commitment. Why? Crude prices staying lower for longer will rapidly devastate the Saudi economy.

"US Profit Growth Has Never Been This Weak Outside Of A Recession"

The chart below shows the annual change in 12-month forward S&P 500 EPS expectations. This series is based on forward consensus expectations and therefore excludes many of the write-downs and exceptional items that are currently pushing down actual reported profits. It is more akin to operational profits and has never been this negative outside of a recession!

Financial Anarchy

Having no cost to money is the economic equivalent of no intelligent laws in society. The equivalent of using our money but having a baseline of zero for the benefit produced with that money. The results are what you would expect, the wild west, One might say, Financial Anarchy.

Key Events In The Coming Post-FOMC Week

In the week following the Fed's admission it is not only market-driven but now has a 4th mandate, which is to respond to China's hard landing on a day-to-day basis, US macro events mecrifully slow down to give everyone a chance to digest what the Fed just did. Here are the highlights.

China's "Reverse QE" Could Top $1.2 Trillion, Barclays Says

"In such a downside scenario there could be pressure on the central bank to provide about 10-12% of GDP in reserves to the market to offset outflows as well as hedging demand (which could be met by intervening in forward markets). This is roughly USD1.0-1.2trn – that would be about 30% of its current reserve portfolio."

Frontrunning: September 21

  • Fed is out so...BOJ brainstorms stimulus overhaul as options dwindle (Reuters)
  • And... Yellen Pause Ups Pressure on Draghi as Global Pessimism Mounts (BBG)
  • But... Eurozone Nears Limits of What Monetary Policy Can Do (WSJ)
  • Global shares struggle on global growth concerns (Reuters)
  • VW's Emissions Cheating Found by Curious Clean-Air Group (BBG)
  • David Cameron allegedly fucked a dead pig's head (Mirror)