Zombie Banks Finance Buybacks, Dividends With Preferreds They May Never Redeem

"Much of the money for buybacks and higher dividends is coming from the banks issuing preferred shares. To investors they look a lot like bonds that pay interest. But for regulators, preferred shares serve as a cushion against any future losses, in part because they never have to be repaid," Reuters notes, suggesting TBTFs are effectively robbing Peter to pay Paul.

3 "Odd" Charts

Stocks are deja-vu-ing once again - just like they did on Monday...

So Much For "Tail" Predictions: Foreign Central Banks Carry Strong 10 Year Auction

Perhaps inspired by our article that the 10 Year was trading very special in repo this morning, touching -1.79% as shorts had piled into the auction on hopes of covering ahead of what many had expected would be a weak auction, some "experts" predicted an imminent tail in today's auction. Well, moments ago the 10 year closed about as solid as they come, with the High Yield of 2.139% pricing 0.4 bps through the When Issued of 2.143%, dampening any hopes to cover profitable shorts into the auction, and ending any speculation about a tail.

Wall Street Bonuses Rose 2% in 2014 To $172,860: 427% Increase In 20 Years

Finally some good news for brokers of ultra-luxury Manhattan real estate. Following the recent freeze in the most expensive housing segment in NYC in which "deals slowed to a trickle" as a result of the soaring US Dollar, and the crack down on offshore illegal wealth, it appeared that the final housing bubble left in the US that has yet to pop, that which focuses on properties $5 million and higher, was on the edge. Its day or reckoning may be delayed, however, following news that the most traditional buyer of high-end Manhattan real estate, Wall Street bankers themselves, may be finally coming back following a 2% increase in Wall Street bonuses in 2014, which pushed the average bonus to $172,860.

Oil ETF Slides Hard On Contango Tangle

On Friday we warned that massive retail inflows into the largest crude oil ETF were about to collide head-on with the widest contango in four years leading, in all likelihood, to “carnage.” Here's what happened.

Thai Central Bank's Surprise Action Is 23rd Rate Cut Of The Year

Whether the world's central banks are 'co-operating' or competing is up for question but the tsunami of policy easings so far this year is making the 'surprise' rate cut, unsurprising. As Bloomberg reports, Thailand today became the latest to execute an unexpected interest-rate cut, bringing the total to 23 in 2015. While only 6 of 22 economists expected it, the Southeast Asian country -- a onetime export powerhouse that’s seen its manufacturing mojo dim somewhat in recent years amid historic flooding and political infighting -- lowered its main rate to 1.75%. "The surprise move suggests the economy is much weaker than expected," noted one analyst, adding that "it is negative for the baht and there’s concern that lower rates may lead to more outflows as the U.S. is expected to raise rates."

Bigger Than Expected Inventory Build & Record Production Sparks WTI Slump To 6-Week Low

An initial kneejerk higher after last night's surprise API inventory draw is long forgotten as USD strength (and no signs of global growth returning) has dragged WTI Crude back to $48.01 - its lowest in almost 5 weeks... As traders awaited today's DOE inventory/production report, it appears expectations were that there will be a 4.75 million barrel build, notably divergent from API's print... and sure enough DOE printed 4.512 million barrels - the ninth weekly build in a row. That immediately sent WTI tumbling beloiw $47.50 on heavy volume. Storage concerns grow as Cushing rose a greater-than-expected 2.32mm barrels and production hit a new record high at 9.366 mm b/d.

Venezuela Begins Liquidating Its Gold

In an attempt to secure some stability, i.e., funds, now that Venezuela is no longer able to tap Chinese bailout loans as last-recourse funding, Reuters reported that Venezuela's central bank is in talks with Wall Street banks to create a gold swap that would allow it to monetize some $1.5 billion of the metal held as international reserves, according to government sources familiar with the operation.  Under the swap, the central bank would provide 1.4 million troy ounces in exchange for cash.

Tsipras Slams “Crimes Of Third Reich And Hitler’s Hordes", Threatens Seizure Of German Assets

Earlier today, Greek Prime Minister Tsipras was busy not making German friends, following the latest Greek overture to confiscate German assets in response for allegedly unpaid German WWII reparations. “After the reunification of Germany in 1990, the legal and political conditions were created for this issue to be solved. But since then, German governments chose silence, legal tricks and delay. And I wonder, because there is a lot of talk at the European level these days about moral issues: is this stance moral?” Tsipras said and added that "despite the crimes of the Third Reich and Hitler’s hordes, the German debt was written off." As a result Greece is now seeking to recoup German WWII reparations which may amount to as much as 80% of Greek GDP!

Caught On Tape: South African Reporter Mugged Live On Air

It appears the new normal has reached peak 'consequence-free'-ness. As South African reporter Vuyo Mvoko prepared for his live TV report - standing in front of a camera, bright lights, and various cameramen and crew - two armed men decided it was an opportune time for a mugging... and the whole farcical and dangerous scene was caught on tape...

The Fed Blew It

The Fed had multiple opportunities to let the air out of unsustainable asset bubbles by notching interest rates higher and tapering its asset purchases (QE). Instead, it waited until the next global recession is already starting to consider what should have been done long ago.

"Taper Tantrum" Talk Starts In Europe Two Days Into Q€

"The ECB could move to cutting the depo rate further to maintain loose financial conditions and especially to prevent a taper tantram forcing EURUSD higher," Citi says, commenting on steps the central bank may be forced to take in the event some core countries (i.e. Germany) are unable to source enough eligible assets to meet purchase targets under PSPP. Just two days in, speculation is growing about the viability of the program. 

Frontrunning: March 11

  • Fed Likely to Remove ‘Patient’ Barrier for Rate Increase as Soon as June (Hilsenrath) - which year?
  • Clinton says used personal email account for convenience (Reuters)
  • Euro sinks to 12-year lows as yield gap grows (Reuters)
  • Get Ready for Oil Deals: Shale Is Going on Sale (BBG)
  • EIA raises 2015 US oil production forecast, cuts 2016 outlook (Reuters)
  • How Falling Oil Prices Are Hindering Iraq’s Ability to Fight Islamic State (WSJ)
  • China economic data weaker than expected, fuels policy easing bets (Reuters)
  • ECB ‘Chasing Own Tail’ as Bond Rates Turn Negative, SocGen Says (BBG)
  • Swiss makers quietly gear up with smartwatches of their own (Reuters)

China Reports Worst Industrial Production Data Ever Outside Of The Global Financial Crisis

Activity data for the combined January-February period (the NBS releases these two months together given the difficulty of adjusting for Chinese New Year effects) was significantly weaker than expected across IP, FAI, and retail sales. For overall industrial production, this was the weakest year-over-year reading ever (China’s IP data starts from 1995) outside the global financial crisis.

Euro In Freefall, Dollar Surge Accelerates; Futures Rebound On USDJPY Rise; Greece On The Ropes

While the dollar strength this morning, which has pushed it to a fresh 13 year high and has accelerated the EURUSD plunge to under 1.06 - a drop of over 300 pips since the start of the week - has been a recap of yesterday's trading action, the main difference is that unlike yesterday, the USDJPY has managed to find a strong bid in the overnight session, pushing not only the Nikkei up by 0.4%, but also lifting US equity futures as the entire global marketplace is now merely a sandbox in which the central banks try to crush their currencies as fast as possible.