"Terminal State Of Broken"
Submitted by Tyler Durden on 05/23/2013 - 12:57
"The world has taken on a “virtual reality” with no reference to what really is. This is the biggest market power play of smoke and mirrors in history. It is happening because the financial system is in a terminal state of broken."
- Comments: 86
- Reads: 12,024
The Nikkei's Collapse: A 1987 Refresher
Submitted by Tyler Durden on 05/23/2013 - 12:29
Last night's awe-full plunge in the Nikkei 225 may have come as a shock to many but it was right on cue if one believes in the past as a guide to the future. As ForexLive notes, the striking correlation between the current rampage in the Japanese stock market and that of 1987 is stunning. In 1987, the index had a remarkably smooth 89% rally that began in early November, lasted 186 days, and was followed by a 9.1% correction. Currently, the Nikkei 225 has had a remarkably smooth 85% rally that began in late October and has lasted 191 days culminating with last night's 9% correction. If past continues to be prologue, last night's wipe out should be entirely forgiven within three days and promptly forgotten (as a transitory blip). If, however, this time really is different, well...
- Comments: 58
- Reads: 17,596
Anthony Weiner To Prop Up NYC Mayoral Campaign With Many More Naked Pictures Of Himself
Submitted by Tyler Durden on 05/23/2013 - 12:01
Anothny Weiner, NYC's muppet former congressman, and as we reported yesterday, the man who following his disgraceful fall from grace announced his mayoral campaign on YouTube, continues to be the gift that keeps on giving... if mostly naked pictures of his anatomy to various women. As the WaPo reports, "Former congressman and newly announced New York mayoral candidate Anthony Weiner (D) said in an interview Thursday morning with WNYC-FM that there could be women coming forward with more e-mails or photos from the inappropriate digital conversations that led to his resignation in 2011." In other words, where there was one naked photo, there will be many, many more.
- Comments: 151
- Reads: 9,136
European Stocks Dive Most In 10 Months
Submitted by Tyler Durden on 05/23/2013 - 11:40
There was quite a bit of dispersion among European equity indices today (with Italy worst and Spain actually holding up - albeit down 1.4%) but the European equivalent of the S&P 500 (the BE500) dropped 2% - its biggest single-day plunge in 10 months. Credit markets - just as in the US - have been warning of a disconnect for two weeks and today's equity dive has more than halved that divergence. European sovereigns are wider by 10-15bps. Europe's VIX is over 2 vols higher at 18.4% (its highest in a month). European financial stocks dropped by their most in 3 months and European high-yield credit worsened by its most in 3 months. A late-day ramp made things alook a little better than they had earlier with a 100 pip rally in EURUSD off earlier lows seemingly providing some help.
- Comments: 42
- Reads: 4,627
Delinquent Student Loans Hit Record, 30% Of 20-24 Year Olds Are Unemployed And Not In School
Submitted by Tyler Durden on 05/23/2013 - 11:37Almost a year ago we shared a calculation according to which "Over $120 Billion In Federal Student Loans In Default", suggesting that the next credit crisis has already arrived. Since then the topic of the student loan bubble has become a household topic. Sadly, that does not mean it has gotten any better. In fact, according to the latest Education Department data it has gotten as bad as it has ever been. As Bloomberg reports, not only have overdue student loans reached an all-time high but the number of young people aged 20-24 out of school and unemployed is at a record high: not quite astronomic by European standards, but hardly a ringing endorsement of an economy set to transition labor tasks to the next generation, especially with the employment of those 55 and older at all time highs.
- Comments: 58
- Reads: 10,418
Guest Post: Generation X: An Inconvenient Era
Submitted by Tyler Durden on 05/23/2013 - 11:09
A data-based look at the financial context of the past 30 years from the perspective of Gen X.
- Comments: 184
- Reads: 18,426
Spot The Bubble: Average New Home Price Soars By Most Ever In One Month To All Time High
Submitted by Tyler Durden on 05/23/2013 - 10:35
Curious why in yesterday's FOMC minutes the following line "a few participants expressed concern that conditions in certain U.S. financial markets were becoming too buoyant" received special attention? Here is the reason: as the chart below shows, according to the census bureau, the average new home sale price just hit a new all time high, rising by a record 15.4% to a record $330,800. In a country in which real disposable consumer income is flat at best and in reality declining, it only makes sense that the average new home price just hit a level not seen since the prior credit-bubble fueled housing peak.
- Comments: 130
- Reads: 13,990
The Bronze Swan Arrives: Is The End Of Copper Financing China's "Lehman Event"?
Submitted by Tyler Durden on 05/23/2013 - 10:06
In all the hoopla over Japan's stock market crash and China's PMI miss last night, the biggest news of the day was largely ignored: copper, and the fact that copper's ubiquitous arbitrage and rehypothecation role in China's economy through the use of Chinese Copper Financing Deals (CCFD) is coming to an end.
- Comments: 122
- Reads: 30,616
Pinpointing Europe's Social Unrest Hot-Spots
Submitted by Tyler Durden on 05/23/2013 - 09:41
Following the ongoing rioting in until-now-calm Sweden, we thought it interesting to revisit the increasing chance of more broad-based social unrest in Europe. With the summer rapidly approaching, austerity still heavy in the air (well fauxsterity at least), there is a massive and growing divide not only between core and peripheral nations' youth unemployment but also within a nation. For instance, while Greece tops the overall youth unemployment level in Europe, 4 of the Top 5 regions (some with youth unemployment levels of over 70%) are from Spain. As lip-service is paid to addressing this pressing issue by the French and Germans (who themselves are increasingly at loggerheads over policy), as Bloomberg's Niraj Shah notes, the chasm between the rich and poor in Europe continues to gap ever wider.
- Comments: 127
- Reads: 11,360
Did Corporate Buybacks Just Jump The Shark?
Submitted by Tyler Durden on 05/23/2013 - 09:23
While it should be no surprise to anyone that buybacks have been a major support of the market for the last few years (as we explicitly showed here and here in terms of earnings manipulation and here in terms of ill-timing), the following chart may give some pause for thought as to whether that is now a good thing or not. Not only is the credit market 'atlas' starting to shrug at its own 'frothiness', as it is used-and-abused by every poor-performing company to borrow-and-lever give-backs to shareholders, but the amount of 'outperformance' of the Buyback 'achievers' index (A gauge of companies that repurchased at least 5% of their shares in the previous 12 months) over the market is eerily similar now to the size of the outperformance at the top in 2007...
- Comments: 31
- Reads: 7,294
Europe's Quantitative Easing
Submitted by Tyler Durden on 05/23/2013 - 08:57
Most people do not think that Europe engages in Quantitative Easing. They know that the United States engages in it, that Britain engages in it and now that Japan engages in it but they think that Europe has so far refused to be involved. They think this because this is what they have been told. Unfortunately this is inaccurate. The European Quantitative Easing takes place every day just not in the manner utilized by America and others. However, it takes place all the same and it is done in a manner to circumvent the rules of the European Union. This is also why the ECB has such a massive balance sheet. What Europe has done is gotten around their own regulations which forbid the ECB from lending money directly to nations.
- Comments: 37
- Reads: 9,831
Initial Claims In Line With Expectations, Not Nearly As Bad As Needed To Send Stocks Higher
Submitted by Tyler Durden on 05/23/2013 - 08:40One of the consequences of yesterday's endless Fed PR campaign was making it very clear that any good news going forward will be bad news for the market as it brings the T-word that shall not be named (wink wink Hilsenrath) that much closer. Which is why today's initial claims print, which just came in line with expectations at 340K, on consensus was looking for 345K, will hardly be a good thing for the market which now needs horrible economic data to assume that the taper will be delayed indefinitely. The last month's data was as always revised higher from 360K to 363K just so the media can claim an improvement of 23K for the week. Sure enough, futures not only did not ramp on the news, but are continuing to trade at the weak levels seen before the print. Continuing claims also came in better than the expected 3 million at 2.912 million, the first sub-3MM print since 2008. Hardly the bad enough news the market was looking for. And while the report in general was a big snooze, of note was the surge in California initial claims last week when the headline number soared, jumping to 15,060 due to "layoffs in the service industry." Will the weakness persist?
- Comments: 30
- Reads: 3,316
SocGen: "Hedge Funds Have Already Started To Unload Nikkei"
Submitted by Tyler Durden on 05/23/2013 - 08:16
Was this it for the index that until last night was up a pennystockesque 85% in 6 months? According to the supposedly smartest money, hedge funds, who had already started offloading NKY225 exposure, the answer is yes.
- Comments: 26
- Reads: 10,713
Japan's Words Of Advice To Doomsayers: "Please Do Not Worry" And "Maintain Fiscal Discipline"
Submitted by Tyler Durden on 05/23/2013 - 07:56
Q. If Japan has a financial collapse, what will happen to its government bonds?
A. Please do not worry.
- Comments: 188
- Reads: 24,603
Frontrunning: May 23
Submitted by Tyler Durden on 05/23/2013 - 07:44- Global shares sink, following 7.3 percent drop in Japan's Nikkei (Reuters)
- When all fails, pull a Kevin Bacon: Japan Economy Chief Warns Against Panic Over Stock Sell-Off (BBG)
- White House Feeds IRS Frenzy by Revising Accounts (BBG)
- In any scandal, lying to Congress is tough to prove (Reuters)
- Debt limit resets at higher level, budget impasse grinds on (Reuters)
- China factory data to test political calculations (FT)
- European Leaders Saying No to Austerity (BBG)
- And yet, nobody wants in anymore: Iceland’s new coalition government suspends EU accession talks (FT)
- Oil Manipulation Inquiry Shows EU’s Hammer After Libor (BBG)
- The Fed Squeezes the Shadow-Banking System (WSJ)
- Diamond Said to Weigh Backing Barclays Alumni in Venture (BBG)
- Spain’s Private Jets Disappearing as Tycoons Cut Flights (BBG)
- Comments: 7
- Reads: 2,355
