Austrian "Freedom" Party Demands Bailout For Swiss Franc Speculators (From "Monstrous Monetary Policy")Submitted by Tyler Durden on 01/26/2015 - 22:10
The phrases "it's just not fair" and "waa waa waa" were not seen in Austria's Freedom Party's statement demanding a bailout for Swiss-Franc-denominated borrowers (i.e. people who were willing to speculate on FX rates with their house as collateral in order to get a lower interest rate in order to afford a bigger home that they really couldn't afford in real risk-adjusted terms). What Austria needs, general secretary Franz Kickl exclaimed is "a general regulation and an offer to all Franc borrowers," adding that "it cannot be that Austrian borrowers are the only ones who keep their losses even they are indemnified in Hungary, Croatia and perhaps even in Poland, the Czech Republic and Slovakia." Which does sound oddly like 'waa waa waa'?
2015 looks set to be the 'superbowl-est' Super Bowl of all time as far as ticket prices are concerned. With it’s almost vertical climb in the last two days, this year’s game is literally off the chart – or at least redefining the upper limits of the chart - the most expensive NFL championship ever based on ticket resale price.
After 2 days of dramatic weakness in the Chinese currency, the Yuan is strengthening modestly at the open following the 8% plunge year-over-year in Chinese Industrial Profits. This is the biggest drop n profits since Bloomberg data began and points to accelerating weakness in China's economy - in the face of the very modest rise in GDP recently. Chinese stocks slipped from a small positive to a smal lnegative in the pre-open, down around 0.1%.
UPDATE: Argentine President Fernandez claims "unprecedented" media attacks, plans to dissolve Intelligence Service, announces new Agency.
Writing for Haaretz.com, Jewish journalist Damian Pachter – who first reported on the death of the special prosecutor – recounts the intimidation, the sleepless nights, the agent who stalked him and his ultimate decision to head for Israel... "So here they are, the craziest 48 hours of my life..."
Today's Russian downgrade pulled yet another raft of "smartest people in the room" to tell investors how screwed Russia is by low oil prices (and yet the US Shale industry is fine and will manage through this). However, Goldman Sachs prefers facts in its analysis of the Russian oil sector and concludes, investor concerns about the health of Russia's oil industry should remain more myth than reality.
Today what we’ve come to know as “mainstream financial media” has provided nothing more than a vehicle for the exponential rise of group-think. All at the suffering of critical thought. In what seems like the blink of an eye most anything to do with financial insight whether it be the reporting of, as well as investigative analysis; has morphed into some version of a stylized regurgitation of Central banking dogma. (this also includes many of the so-called “experts” brought on to fortify the sermons).
Three weeks ago, when reporting on Obama's close personal friend and Bank of Hawaii "community banker" appointee to the Fed board, Allan Landon, we emphasized an apparently trivial data point that had somehow managed to slip through the background due diligence process. Namely, that about a decade ago, the same Landon stepped down as board member from the Seattle Federal Home Loan Bank after he was found to have "failed to comply with a rule requiring the disclosure of conflicts of interest by a director by failing to make disclosure to the Seattle Bank board of their institutions' planned redemptions." The full story can be read here, but in a nutshell a banker that the president himself has appointed to join the US money printing authority was on the cusp of being investigated for embezzlement, and was forced to quietly disappear into the night despite denying "any wrongdoing." Today we learn just how much assets the banker who at least once was caught with "borderlineembezzlement " made during his humble tenure as a "community banker." The number: somewhere between $10 and $40 million.
While central banks’ grip on the economy seems to be waning, notes Citi's Matt King, additional liquidity still seems as potent as ever when it comes to propping up global markets. The question in our minds revolves around whether central banks remain willing to keep pumping when the economic benefits are so questionable. Equally, though, valuations are already so elevated that we doubt they can afford to stop. One way or another, this feels like a recipe for increased volatility.
In a fundamentals-driven market you need to look at fund flows; in a Narrative-driven market you need to look at Narrative flows. With Draghi’s announcement last Thursday, there is no longer a marginal provider of market-supportive monetary policy Narrative. Or to put this in game theoretic terms, the 2nd derivative of the Narrative of Central Bank Omnipotence just flipped negative. We’ve shifted from an accelerating Narrative flow to a decelerating Narrative flow, and that inflection point in profoundly important in game-playing. The long grey slide of the Entropic Ending begins.
Chairman of the Joint Chiefs, General Martin Dempsey has, according to Politico, asked The National Defense University to establish an essay and research competition focused on the Middle East in honor of Saudi Arabia’s late King Abdullah. How very generous for America's top uniformed military leader to recognize such a leader of another nation... Though no details of the prize are available, we thought we would take a stab (figuratively) at an essay...
With earnings tumbling and outlooks collapsing for energy sector names in the US (and worldwide for that matter) there is only one way to keep the "wealth creating" dream alive in stocks... the magic of multiple expansion (or hope over reality). As Factset points out in its latest report, this week marked the first time the forward 12-month P/E for the Energy sector has been equal to (or above) 22.4 since April 8, 2002. What is perhaps even more compellingly mind-numbing is, if analysts were not still projecting record-level earnings over three of the next four quarters (including the downward estimate revisions in the Energy sector), the forward 12-month P/E ratio would be even higher.
It's a common story throughout human history. There’s almost always an elite, or government, with a ‘scarcity’ mentality that believes in the zero sum game, i.e. for anyone to be a winner, someone else has to be a loser. When they’re short of cash, governments almost invariably raise taxes. Of course, the numbers show that raising taxes rarely affects total tax revenue. There’s a very looooong history which clearly establishes this point. And you’d think that a government would look at the data and recognize the obvious truth: their scarcity mentality doesn’t work. But no. Sadly, in the face of such overwhelming data, the Obama administration is now pushing to raise tax rates once again...
Moments ago yet another industrial bellwether company, United Technologies, which is at the nexus of the building and aerospace industries, reported Q4 EPS and revenues, which missed, but worse, cut 2015 EPS guidance from $7.00 - $7.25 to $6.85-$7.05, blaming FX headwinds. Well, yeah, it's always something. And that something is why 2015 EPS on not only a GAAP but increasingly non-GAAP basis will be lower in 2015 than in 2014. However, while the guide-down means that UTC will soon join the seemingly endless parade of (mostly energy) companies that have laid off employees, there is great news for shareholders. Because even as the company see less growth opportunities and can barely keep up with Wall Street expectations, it has found a great way to reward those who buy its stock: by buying it right back from them.