The Interview Is "Desperately Unfunny", "Will Flop" If Not Cancelled According To Leaked Sony EmailsSubmitted by Tyler Durden on 12/19/2014 - 10:47
The conspiracy theories surrounding the story of The Interview's cancelation in the aftermath of the North Korean "hacking" just keep getting stranger by the day (and will, in 6-9, months lead to the blockbuster drama: "How 'The Interview' Got Cancelled"). Because where it gets downright bizarre, however, is that as Reuters also reported earlier citing leaked emails of international Sony Pictures executive, the infamous movie in question "is "desperately unfunny" and would have flopped overseas if it had not been canceled." Wait a minute, it sounds almost as if the evil North Korean "hackers" did Sony... a favor?
In October it was Jim Bullard's "QE4" hint that sent the stock market on an all-time record-breaking run of gains, which no lesser institution than the central banker's central bank - The BIS - lamented "the markets' buoyancy hinges on central banks' every word and deed." And then just two days ago, The Fed did it again: by the mere appearance of grandma Yellen (and the words "patient" and "considerable"), US stocks explode to their greatest back-to-back gains in almost six years. So it is perhaps ironic that no more mainstream media publication than USA Today has finally realised, there are no fundamentals anymore...
Never in the history of the S&P 500 e-mini futures contract has so many contracts been traded at the market open... Thank you Johnny-5...
As we have noted in the last two days, on the heels of Janet Yellen's mutterings, US equity markets have exploded higher even as the highly correlated and causative oil prices have done anything but rise. This 'fact' has not escaped BofA's Hans Mikkelsen's attention as he warns, "While stocks currently are getting a break from oil, it appears most likely that they reconnect when the decline in oil prices accelerates – especially if we see associated weakness in credit and EM." And sure enough, modestly at first, the two are starting to converge this morning...
Russia Busts "Gold-Selling" Rumors, Reports It Bought Another 600,000 Ounces Taking Gold Holdings To New Record HighSubmitted by Tyler Durden on 12/19/2014 - 09:40
Moments ago, as if to sway further speculation that Russia is indeed converting hard money earned from real resources for fiat paper, the Russian monetary authority made it quite clear, that at least in November, Russia not only did not sell any gold, but in fact bought another 600K ounces in the month of November.
Just because Russia has managed to stabilize its currency, that certainly does not mean the soaring dollar tantrum-cum-crude crash episode is anywhere near over, nor that stability has returned to the rest of the oil-exporting countries. Case in point, crude-exporting powerhouse Nigeria, where things are going from worse to #REF! Bid and ask prices for the naira were quoted from 162 to 190 per dollar with only 16 trades by 1 p.m. in Lagos [yesterday], compared with more than 170 by the same time yesterday, according to data compiled by Bloomberg. The naira fell 12 percent against the dollar this quarter, the worst among 24 African currencies tracked by Bloomberg after Malawi’s kwacha. Investors dropped Nigerian assets as the outlook for Africa’s biggest oil producer worsened with Brent crude prices almost halving since late June. “The banks can’t stop trading because of the circular,” the Deputy Central Bank of Nigeria Governor Sarah Alade said. “It is not supposed to close the market. We have told them we’ll continue intervening in the market, so there is no need to panic.”
While no one will be entirely surprised in today's consequence-less world, the "bombshell" news that Greek Independent MP Pavlos Haikalis claims he was offered EUR 2-3 million in order to vote for Greece's next President is no less shocking in its exposure. As AP reports, it is the second such claim from the Independent Greeks. Another of the party's lawmakers claimed last month that someone had approached her with the intention of bribing her. The government immediately jumped into defense mode and dismissed the claims as "badly acted theater" and called for any evidence to be made public. However, as KeepTalkingGreece reports, "sources" from the prosecutor’s office told media that Haikalis did indeed submitfootage, and according to latest information, told the briber’s name to the Greek Police. This can only bring Goldman's worst-case scenario - a Cyprus-style collapse - even closer for Greece.
"It’s hard to say what the right price is for a commodity like oil . . . and thus when the price is too high or too low. Was it too high at $100-plus, an unsustainable blip? History says no: it was there for 43 consecutive months through this past August. And if it wasn’t too high then, isn’t it laughably low today? The answer is that you just can’t say. Ditto for whether the response of the price of oil to the changes in fundamentals has been appropriate, excessive or insufficient. And if you can’t be confident about what the right price is, then you can’t be definite about financial decisions regarding oil." - Howard Marks
- Icahn, Paulson Suffer Large Losses as Energy-Related Bets Sour (WSJ)
- Oil Investors Keep Betting Wrong on When Market Will Bottom (BBG)
- U.S. to sell final $1.25 billion shares of Ally Financial from bailout (Reuters)
- Ally Financial Gets Subpoena Related to Subprime Automotive Finance (WSJ)
- Russia's parliament rushes through bill boosting banking capital (Reuters)
- How a Memo Cost Big Banks $37 Billion (WSJ)
- ECB considers making weaker euro zone states bear more quantitative easing risk (Reuters)
- How the U.S. Could Retaliate Against North Korea (BBG)
Yesterday's epic market surge, the biggest Dow surge since December 2011 on the back of the most violent short squeeze in three years, highlighted just why being caught wrong side in an illiquid market can be terminal to one's asset management career (especially if on margin), and thus why hedge funds are so leery of dipping more than their toe in especially on the short side, resulting in a 6th consecutive year of underperformance relative to the confidence-boosting policy tool that is the S&P. And with today's session the last Friday before Christmas week, compounded by a quadruple witching option expiration, expect even less liquidity and even more violent moves as a few E-mini oddlots take out the entire stack on either the bid or ask side. Keep an eye on the USDJPY which, now that equities have decided to ignore both HY and energy prices, is the only driver for risk left: this means the usual pre-US open upward momentum ignition rigging will be rife to set a positive tone ahead of today's session.
With great delight we present the latest blowback from Obama's "brilliant" strategy to cripple Putin: in addition to the default wave about to crush America's own shale industry, America's biggest foreign ally and military partner when it comes to "ideologically pure missions of liberation" - the UK, and specifically its North Sea oil industry which according to the BBC is in a "crisis" and according to Robin Allan, chairman of the independent explorers' association Brindex, the industry was "close to collapse". "It's almost impossible to make money at these oil prices", said a director of Premier Oil. "It's a huge crisis. It's close to collapse. In terms of new investments - there will be none, everyone is retreating, people are being laid off at most companies this week and in the coming weeks. Budgets for 2015 are being cut by everyone."
United States Of Newspeak – Obama Spins Executive Orders As "Presidential Memoranda" To Avoid ScrutinySubmitted by Tyler Durden on 12/18/2014 - 22:50
If there’s one thing we have learned about Barack Obama, it’s that he is a master of deception and absolutely loves to lie to the public. He seems to enjoy conning the plebs to such a degree, I think he actually receives blasts of dopamine every time he does it. The bigger the lie, the better the rush: "President Obama has issued a form of executive action known as the presidential memorandum more often than any other president in history — using it to take unilateral action even as he has signed fewer executive orders. Like executive orders, presidential memoranda don’t require action by Congress. They have the same force of law as executive orders and often have consequences just as far-reaching. And some of the most significant actions of the Obama presidency have come not by executive order but by presidential memoranda."
Frenzied Chinese Stock Buyers Soak Up So Much Liquidity, Central Bank Forced To Intervene, Prevent SeizureSubmitted by Tyler Durden on 12/18/2014 - 22:18
China's seven-day repurchase rate, a gauge of interbank funding availability in the banking system, surged 139 basis points, to a 10-month high of 5.28% in Shanghai, the biggest since Jan. 20. The reason for the sudden cash crunch, according to Bloomberg, is that subscriptions for the biggest new share sales of the year lock up funds. Twelve initial public offerings from today through Dec. 25 will draw orders of as much as 3 trillion yuan ($483 billion), Shenyin & Wanguo Securities Co. estimated. In other words, the scramble to allocate capital into China's surest way of making money, IPOs, has led to a drying out of general liquidity in the entire market. This in turn forced the PBOC to intervene and inject short-term money loans to commercial lenders in order to prevent the kind of interbank liquidity lock up that emerged in China in June 2013 in the aftermath of the first Taper Tantrum (and which before all is said and done, will likely take place again) and which sent global capital markets around the globe reeling before China resumed its massive liquidity injections which are at the heart of China's debt-fuelled bubble in the first place.