Angst in Asia overnight sparked another round of demand for the precious metal pushing gold up over $10 as copper crumbles and Chinese corporate bond markets drop. At $1,363.97, gold is at its highest since September and breaking above its 1-year moving-average.
The Turkish yield curve has inverted once again as the 10Y bond yield in the troubled nation crosses 11% and hits record highs for that maturity. 2Y at 11.2% has broken to almost 5 year high yields as the Lira also presses back lower to six-week lows. This comes as the nation mourns the death of a teenager from last year's riots and Erdogan remains defiant ahead of March 30 elections in the face of rising calls from the EU to let the law run its course:
- *TURKEY 10-YR BOND YIELD RISES TO 11.34% RECORD ON CLOSING BASIS
- *ERDOGAN: MAR 30 VOTE MOST IMPORTANT IN TURKEY DEMOCRACY HISTORY
- *ERDOGAN SAYS VIOLENT PROTESTS WON'T BRING DEMOCRACY TO TURKEY
- *EU PARLIAMENT URGES TURKEY NOT TO INTERFERE WITH LEGAL PROBES
- *ERDOGAN RECITES ISLAMIC POEM FOR WHICH HE'D BEEN JAILED IN 1997
So once again political instability is soaring and with it capital outflows and bond yields. No, EM is not fixed!
Poor Obama - the president can't get anything right these days. Obama's job approval ticked down to 41% in March from 43% in January, marking a new low. Some 54% disapproved of the job he is doing, matching a previous high from December, when the botched rollout of his signature health law played prominently in the news. The latest survey also showed the lowest-ever approval in Journal/NBC polling for Mr. Obama's handling of foreign policy.
- China worries chill markets, copper slumps (Reuters)
- Peak dot com dot two idiocy: Candy Crush Saga maker King seeks $7.56 bln valuation from IPO (BBG)
- Obama Meeting With Yatsenyuk Raises Stakes in Ukraine (BBG)
- Federal prosecutors open criminal probe of GM recall (Reuters)
- Pimco Cuts Government Debt on Outlook for Fed Buying (BBG)
- Missing Malaysian Jetliner Confuses World That’s Online 24/7 (BBG)
- Mortgage Giants Face Endgame (WSJ)
- Russia Calls U.S. Aid to Ukraine Illegal Amid Standoff (BBG)
- U.S. judge freezes assets of Mt. Gox bitcoin exchange boss (Reuters)
- Ousted Libyan PM flees country after tanker escapes rebel-held port (Reuters)
- Senate-CIA Dispute Erupts Into a Public Brawl (WSJ)
Unlike most trading sessions in the past month, when the overnight session saw a convenient algo assisted USDJPY/AUDJPY levitation, tonight there has been no such luck for the permabullish E-Trade babies who are conditioned that no matter what the news, the next morning the S&P 500 will open green regardless. Whether this is due to ever louder fears that what is happening in China can not be swept under the rug this time will be revealed soon, but as of this moment both the USDJPY, and its derivative, US equity futures, are looking at a sharp lower open, as gold continues to press higher, while the traditional tension points such as Russia-Ukraine, and ongoing capital flight from some of the more "fringe" emerging markets, continues. Expect more of the same today as people finally peek below the Chinese surface to realize just how profoundly bad the situation on the mainland truly is. And while we realize macro news are meaningless, especially in Europe where the ECB is now the sole supervisor of all asset classes, the fact that Cyprus, Greece, Slovakia and Portugal, are all in deflation, and many more countries lining up to join the club, probably means that absent a massive global credit impulse, we have certainly reached the upward inflection point from the most recent $1+ trillion injection of liquidity by the Fed, not to mention the ongoing QE by the BOJ.
The bankruptcy of the once largest Bitcoin exchange may be history, but now the real drama begins.
It should now be evident that America's foreign policy is to an extent being driven by our banking mess. Again and again, we see Washington, including Wall Street's handmaiden, the Fed, exporting monetary chaos implicitely in order to weaken the status of potentially competing reserve currencies. Until democratic governments around the world become strong enough to counteract the power of the plutocrats by taxing them, both their income and their wealth (as Sweden does) the revolving looting of sovereign governments and demolition of middle classes by the plutocrats and their corporations will continue.
3,000 Americans around the world renounced their citizenship last year. CNN Money introduces us to five U.S. citizens who have given up their passports -- or are thinking about it...
Following a triumvirate of macro misses from AsiaPac (South Korea unemployment surged, Aussie confidence plunged, and Japanese inflation tumbled), the credit concerns running riot through the collateral underlying China's shadow banking system continue to crush Copper (and iron ore) prices. Copper is limit down in Shanghai at its lowest since July 2009 - these size moves have only occurred twice in history (Lehman and the US downgrade). Japanese stocks are ignoring any ramp efforts in USDJPY and US equity futures are fading qucikly with AUDJPY....
Heinz was bought by Warren Buffett's Berkshire Hathawy (and 3G Capital) in February 2013 for $28 billion. Since then the firm has cut 3,400 jobs and closed factories in an effort to boost profits as they pay current boss Bernardo Hees $9.2 million. However, as The BBC reports, the most stunning dichotomy in this tale is former Heinz CEO William Johnson's $110.5 million payday for the final eight months of 2013... Perhaps more worryingly, Buffett has proclaimed this a "model for future buys." When will the President replace Immelt with Buffett as his jobs advisors?
It May be time for Obama to explain to Putin the whole thing about "costs" and "red lines" one more time, maybe over a two hour phone call this time so the former KGB spy finally gets it, because while Russia has been seemingly confused for the past two weeks, Moscow just successfully annexed Crimea, without spilling a drop of blood. Which is what Ukraine essentially just confirmed after its acting president, who attained his position after a violent coup and remains unrecognized by Russia, told AFP in an exclusive interview saying Ukraine will not attempt a military move to prevent the southern Crimean peninsula's breakaway in order not to expose its eastern border.
Having been vociferous over her support for the NSA's domestic espionage programs, we couldn't help but see the ironic hypocrisy of Senator Diane Feinstein's accusations that the CIA secretly removed documents from computers used by her panel to investigate a controversial interrogation program. As WaPo reports, Feinstein "is not taking lightly" the fact that the CIA appears to have violated the Fourth Amendment, which bars unreasonable searches and seizures, as well as various federal laws and a presidential executive order that prevents the agency from conducting domestic searches and surveillance. President Obama has since expressed "great confidence" in CIA chief John Brennan (unless of course he crossed a red line).
With Venezuela declaring war on the black-market dollar (and any and all capitalist free-market activity that produces margins above government mandates) the stories of empty shelves of toilet paper and food continue - as do the bloody protests (despite President Maduro's proclamation that the 'terrorists' have been beaten). But to truly get a sense of life in Venezuela, the following image may bring back ugly memories for some...