To be sure, we’ve written quite a bit lately about the ECB’s upcoming plunge into the world of 13-figure debt monetization (or as we call it, Draghi’s Waterloo), and while we hate to beat a dead horse, the sheer lunacy of a bond buying program that is only constrained by the fact that there simply aren’t enough bonds to buy, cannot possibly be overstated. Here is everything you need to know about Q€ ahead of the ECB's Thursday meeting.
"What’s Going On" - Traders Stumped As HFTs Frontrun Last Night's Australia "Surprise" Rate DecisionSubmitted by Tyler Durden on 03/03/2015 - 08:46
Yesterday at 10:30pm eastern, or alternatively today at 2:30pm local time, Australia's central bank unexpectedly did not cut its key interest rate, keeping it at 2.25% even as the majority of economists had predicted a rate cut. However, not everyone was surprised. Just a minute before the official announcement at bottom of the hour sharp, the AUD surged by 0.6%, rising from 0.7774 to 0.7822, suggesting that at least one algo and likely more, had advance knowledge of the unchanged decision, as shown in the chart below.
Ukraine's infamous pink Porsche-driving central bank governor, Valeriya Gontareva, raised the nation's refinancing rate from 19.5% to a stunning 30% (effective Wednesday) in order to "stabilize the situation in the money and lending markets," and imposed some 'capital controls' on exporters holding foreign cash. For now, the hink to the highest rate since 2000 is having a positive effect as UAH has rallied 2-3 handles back to one-month highs against the USD - having lost over 60% of its value in the last year (though we note these are the 'official' rates and may not represent actual UAH transactions in the real world). "The central bank is trying to send a strong signal that it is in charge," noted on analyst as the country desperately waits for its $17.5bn bailout from US taxpayers The IMF.
- 3 days after Zero Hedge, here's Bloomberg: Company Cash Bathes Stocks as Monthly Buybacks Set Record (BBG)
- Israel's Netanyahu to address Congress in speech that has strained ties with Obama (Reuters), Risks Diplomatic, Political Pain If Speech Falls Flat (BBG)
- Before Key Speech, Netanyahu Hails U.S. Ties (WSJ)
- $1.92 bilion FX rigging charge: Barclays Posts Loss as Foreign-Exchange Provisions Rise (WSJ)
- Barclays Awards Jenkins First Bonus as CEO, Cuts Pay Pool (BBG)
- Exxon’s Russia Exposure Surges as Long View Outweighs Sanctions (BBG)
- Obama says Iran must halt key nuclear work for at least a decade (Reuters)
- Yellen Turning from Friend to Foe for Dollar Bulls (BBG)
Hillary Clinton's Latest Scandal: Former SecState Exclusively Used Undocumented, Personal Email AccountSubmitted by Tyler Durden on 03/03/2015 - 07:32
While the Hillary Clinton campaign seems unperturbed by recent problematic disclosures by Politico into the Hillary Clinton Foundation, the former first lady and current democrat presidential hopeful will have a field day explaining why, as the NYT reported overnight, Hillary - in her role as Secretary of State - "exclusively used a personal email account to conduct government business" according to State Department officials in violation of "federal requirements that officials’ correspondence be retained as part of the agency’s record." Mrs. Clinton did not have a government email address during her four-year tenure at the State Department. Her aides took no actions to have her personal emails preserved on department servers at the time, as required by the Federal Records Act.
With little newsflow out of Europe, and just as little on deck out of the US (just NY ISM and auto sales later today), the main overnight events were out of Asia where first the RBA decided to leave rates unchanged but not before the announcement was leaked up to a minute early. In China, the rate-cut euphoria lasted just one day, and after a feeble 0.8% bounce on Monday, the SHCOMP was down 2.2% this morning over fears the PBOC is doing too little, too late to halt what is now perceived by many as a massive "tightening" capital flight out of China. Finally, Japan made the newsflow, after it JGBs continued to slide following a weak auction, fears that the BOJ is done easing after Abe advisor Etsuro Honda warned against overheating, and after the biggest jump in base pay in over a decade led some to think the BOJ may soon have to halt easing altogether, especially if real wages proceed to rise
"Before this week is up, we’ll be deploying a battalion... to the Ukraine to train Ukrainian forces for the fight that's taking place," stated US 173rd Airborne Brigade Commander Colonel Michael Foster said at the Center for Strategic and International Studies in Washington, DC on Monday. Despite earlier warnings from Russia (and claims that NATO had not agreed to any such foreign 'boots on the ground' action'), Sputnik News reports, Foster added, "what we’ve got laid out is six United States companies that will be training six Ukrainian companies throughout the summer."
Less than 24 hours ago, an estimated 4 million in gold bars were commandeered on the side of Interstate 95 in what was the 11th largest gold bullion heist in history.
Goldman's Global Leading Indicator (GLI) final print for February affirms the global economy has entered a contraction with accelerating negative growth. Just six months after "expansion", the Goldman Swirlogram has collapsed into "contraction" with monthly revisions notably ugly and 9 out of 10 components declining in February. Some have suggested, given US equity's strong February (buyback-driven) performance, that the US economy will decouple from the world... or even drive it.. but that is 100% incorrect. US Macro data has fallen at its fastest pace in 3 years and is at its weakest level since July 2011 as 42 of 48 data items have missed since the start of February.
The 2008 worldwide financial crisis was produced due to excessively easy monetary policy, which caused the largest debt driven mal-investment in housing, automobiles, and Chinese produced crap in world history. The consequences of this debt bacchanalia should have been the orderly liquidation of the Wall Street entities that created the crisis, the writing off of trillions in bad debt, corporate and personal bankruptcies of businesses and people who borrowed recklessly, a sharp steep economic decline to cleanse the excesses, and politicians who immediately began the process of reducing budgets and addressing long term unfunded unpayable liability promises. Instead, the psychotic oligarchs did not want to lose any of their power, wealth or control over the proletariat. They have done the exact opposite of what needed to be done.
When do you know that Wall Street has officially succeeded in turning back the clock 5 years? When the market’s collective mind state has been reconditioned to the point where analysts feel comfortable creating research notes with titles like this one: “Keep Calm and Lever Up.”
Throughout history, political, financial, and military leaders have sought to create empires. Great Britain owned the 19th century but lost its empire due largely to costly wars. The US took over in the 20th century and, like Rome, rose as a republic, with minimal central control, but is now crumbling under its own governmental weight. Invariably, the last people to understand the collapse of an empire are those who live within it. Americans remain hopeful that the dramatic decline is a temporary setback from which they will rebound...Not likely.
Presenting the Florida jobless claims website. According to the Miami Herald reports, on Friday, the state’s auditor general issued a scathing 45-page audit that joins mounting evidence that CONNECT - aka Florida's Online Reemployment Assistance System or said simpler, jobless claims website - is a system in disarray.
Exactly 15 years ago today, who said it?
"You want winners? [This] is what my fund is buying today to try to make money tomorrow and the next day and the next? You want my top 10 stocks for who is going to make it in the New World? You know what? I am going to give them to you. Right here. Right now. OK. Here goes. Write them down..."
Fifteen months later, Money magazine reported that [his] list had cratered 82%... Accountability ruins the game.