Why "Competitive Devaluation" Doesn't Work

"Competitive devaluation” doesn’t actually work, as it is not a zero sum game (one country gaining at the expense of another) but rather currency “wars” subtract from the whole altogether (both countries lose). The entire point of currency destabilization is exactly that, and business transpires less and less under more extreme versions of instability – intentional or not. And to top it all off - No matter how you want to view all this, January was perhaps the worst month for US trade since the Great Recession.

The Nasdaq Has Become The Biggest Circle-Jerk In History

When the same management teams that sell record amounts of their own company stock to the companies they control - companies which are now buying back record amounts of stock, this is not only the worst possible conflict of interest, it means, for lack of a better word, that the Nasdaq, bubble or not, has become the biggest circle jerk in history!

E&P Writedowns Loom As Reserves Overvalued By 60%

When Q1 results start to roll in for E&P companies, expect to see massive writedowns across the board as industry balance sheets will no longer benefit from calculating PV-10 based on inadequate SEC accounting rules.

Markets Are Now Beyond The Control Of The Fed

During the last several years of uber-accommodation by the Fed, both stock and bond prices rose. It would not be surprising if both fell in price as the Fed proceeds with a June “lift-off”.   However, stocks might be the worse of the two performers. In a sense, markets are now beyond the control of the Fed.  They were able to change investor behavior for a few years, but the herd mentality is now becoming dislodged: “lift-off” could possibly cause a steep reversal. We expect SPX to dip below 2000 by the time of the March 18th Fed Meeting.

Ukraine, Neocons And Neonazis

There’s simply a very strong feeling, if not conviction, in the western media, that they’ve won the propaganda battle. But two portraits of US girl power in Ukraine from the Guardian and Bloomberg that appeared over the past two days are just unbelievbable. Victoria Nuland and Natalie Jaresko should not be praised by the western media, they should be taken apart bone by bone, because the roles they play are far too shady to stand up to our alleged democratic principles.

5 Things To Ponder: Spring Break Reading List

On a daily basis individuals jump into the financial markets with their "savings" in the hope of a thrilling ride. However, very much like skiing, inevitably you are going to take a tumble. Importantly, that "tumble" generally occurs when one becomes overly confident in their abilities and pushes the "risk" just beyond their inherent capabilities to react quickly enough. The result has tended to not be a pretty one. As we discussed earlier this week, there are many signs that suggest the current market environment has begun to push the outer boundaries of the "risk" curve. While this doesn't mean that the markets are about to "crash," it does suggest that individuals with a lesser skill set may want to be a bit more cautious.

Consumer Credit Rises At Slowest Pace Since 2013 (But Still Exponential), Revolving Credit Tumbles

Last month we observed that in the aftermath of the worst print in non-revolving (i.e., student and auto loans) debt since November 2013, that the subprime-credit driven, pardon the pun, feeding frenzy for cars is now over. And sure enough, following this month's disappointing auto sales which missed virtually for every single producer, we were again correct. This month, however, things are even worse, because while last month it was the collapse in the non-revolving debt that was the highlight, at least it was modestly offset by a surge in revolving credit as consumer loaded up the credit cards. No such luck this month.

World's Largest Stock Index Gives Up Post-QE3 Gains

It has been over 4 months since The Fed ended QE3, and something odd has happened... Stocks have stopped going up. The world's largest stock index by market capitalization has, thanks to today's weakness, given up all of the gains since Janet wrenched the punch-bowl away...

The One Chart You Need To Predict The Future

After 30 years of success, the endgame is finally here. We are witnessing a profound secular sea-change: the failure of expanding debt and leverage to lift the real economy of wages and household income. When push comes to shove therefore, you only need one chart to predict the future...

JPM Cuts Q1 GDP: Warns "Here We Go Again" As "It Is Feeling Eerily Like Q1 Of Last Year"

"In light of the data we've received this week – January reports for real consumer spending, construction spending, and net exports that varied from disappointing to downright weak, as well as a softer February print for car sales –-- we are marking down our tracking for annualized real GDP growth in Q1 from 2.5% to 2.0%. Even after this revision risks are more skewed to the downside than upside. By way of comparison, the Atlanta Fed's tracking estimate of Q1 recently came down to 1.2%. It's still relatively early in the quarterly data flow, even so, it is feeling eerily like Q1 of last year. In both cases the quarter began with high expectations, estimates were brought down as the quarter progressed, weather was blamed, but most forecasts remained upbeat on the medium-term outlook."

- JPM

Greece Proposes To Become A Tax-Collecting Police State: Will "Wire" Tourists And Unleash Them As "Tax Inspectors"

"We propose the following: that large numbers of non-professional inspectors are hired on a strictly short-term, casual basis (no longer than two months, and without any prospect of being rehired) to pose, after some basic The very 'news' that thousands of casual "onlookers" are everywhere, bearing audio and video recording equipment on behalf of the tax authorities, has the capacity to shift attitudes very quickly, spreading a sense of justice across society and engendering a new tax compliance culture - especially if combined with the appropriate communication of the simple message that the time has come for everyone to share the burden of public services and goods."

- Yanis Varoufakis

Alan Greenspan Warns Stocks Are "Without Doubt Extremely Overvalued"

While America 'believes' it is highly productive, former Fed Chair Alan Greenspan instantly dispels that myth in another ominous appearance on CNBC this morning, "American productivity has gone nowhere in the last few years," and that is what is holding back wage growth. Furthermore, reiterating his concerns about the inverse relationship between surging entitlements and weak savings rates, Greenspan noted, "the annual rate of increase in entitlements of 9% per year...and the people that receive it believe they are getting their money back and have a right to it." There simply is no long-term investment as businesses favor short-term actions as the Maestro explains Fed QE lowering the real rate of interest "has been responsible for the rise in P/E multiples... and when rates normalize, that will reverse," adding that "we can't argue that we are extremely overvalued in the marketplace."

Lumber Is Liquidating

The most economically-sensitive commodity is plunging once again. Lumber prices have cratered today to their lowest since June 2013, seemingly tracking the collapse in US Macro data over the last 2 months. First it was Lumber Liquidators, and now the underlying is seeing the biggest weekly drop in six months (and down 5 weeks in a row). As a reminder, the last time lumber and stocks diverged like this... it did not end well...

Every German Bund Will Soon Trade At -0.20%, Citigroup Predicts

The ECB’s move to restrict PSPP purchases to sovereign bonds with yields at or above the deposit facility rate (-20bps) has far reaching implications for the German bund curve. Citi's prediction: bunds will be bought until yields converge on -0.20bps.

Rig Count Decline Re-Accelerates To 2nd Biggest Drop In 22 Years

Following last week's slowing in the pace of rig count, crude prices dropped and then spiked, and it makes today's data under more scrutiny. At around $49.50, WTI prices have round-tripped back almost perfectly to the scene of the crime before today's rig count data hit. The total oil rig count dropped almost 6%, down 75 to 1,192 meaning a re-acceleration of the rig count decline and the 2nd biggest drop since 1993. WTI prices popped on the news and are fading back now...