For the fourth month in a row, the shale-revolution crushing plunge in crude prices managed to push energy costs down, with the BLS reporting that "the gasoline index fell for the fourth month in a row, declining 3.0 percent, and the indexes for natural gas and fuel oil also decreased." As a result, October CPI was unchanged from a month earlier, and up 1.7% from a year ago, below the Fed's 2.0% target. However, stripping away plunging energy prices, things were a little different, with CPI ex food and energy up 0.2%, slightly above the 0.1% expected, and up from 0.1% before. But before everyone screams deflation, here is what also happened: the shelter index, airline fares, household furnishings and operations, medical care, recreation, personal care, tobacco, and new vehicles were among the indexes that increased. And for those few who have to eat, "The index for food at home has risen 3.3 percent over the last 12 months, the largest 12-month increase since April 2012." and "The index for nonalcoholic beverages rose 0.6 percent, its largest increase since September 2012."
It is still far too early to call a turn in the long-term trend of initial jobless claims but this is the 5th week that new lows have not been made, 4th miss in a row, and (despite last week's upward revision) claims sit at 2-month highs. Initial claims printed 291k (against 284k expectations) down very slightly from an upwardly revised 293k last week. However, continuing claims continue to tumble to fresh cycle lows at 2.33 million (below expectations and well down from last week's jump).
For the first time since it began collecting data in 1994, Kantar Worldpanel, the market researcher, reported a decline in UK grocery sales by value, as The FT reports the biggest UK grocers were "losing market share hand over fist," as analysts warn "there are phoney price wars, and there are real price wars. This is a real price war." This comes on the heels of Goldman report claiming 20% of British grocers are surplus to requirements. But it's not just Britain... in the the cleanest dirty shirt world-economic-growth supporting decoupled economy of the USA, Reuters reports Dollar General may need to divest more than 4,000 stores to win approval from the U.S. Federal Trade Commission for its acquisition of Family Dollar.
- Top Trade #1: EUR/$ downside via a one-year EUR/$ put spread.
- Top Trade #2: 10-year US Treasuries above 3% but not below 2% in mid-2015, through cap and floor spreads at zero cost.
- Top Trade #3: Long a Dec-2015 Eurostoxx 50 ‘bull’ call spread.
- Top Trade #4: Long US High Yield credit risk via 5-year CDX HY junior mezzanine tranches.
- Top Trade #5: Long an equity basket of EM crude oil importers (Taiwan, Turkey and India).
- Top Trade #6: Short CHF/SEK.
- Top Trade #7: Bearish Copper relative to Nickel, on supply divergence.
- Top Trade #8: Long US Dollar against a basket of ZAR and HUF.
- Banks Had Unfair Advantage From Commodity Units (Bloomberg)
- Report Notes Deals Between Goldman, Deutsche and Others Drove Up Aluminum Prices (WSJ)
- Goldman, Morgan Stanley Commodity Heyday Gone as Units Faulted (BBG) - because when you can no longer manipulate, you move on...
- Lenders Shift to Help Struggling Student Borrowers (WSJ)
- Immigrants face major hurdles in signing up to new Obama plan (Reuters)
- Distressed Debt in China? Ain’t Seen Nothing Yet, Buyers Say (BBG)
- Banking culture breeds dishonesty, scientific study finds (Reuters)
- Amazon Robots Get Ready for Christmas (WSJ)
Global Slowdown Confirmed By PMIs Missing From Japan To China To Europe; USDJPY Nears 119 Then SlidesSubmitted by Tyler Durden on 11/20/2014 - 07:00
The continuation of the two major themes witnessed over the past month continued overnight: i) the USDJPY rout accelerated, with the Yen running to within 2 pips of 119 against the dollar as Albert Edwards' revised USDJPY target of 145 now appears just a matter of weeks not months (even though subsequent newsflow halted today's currency decimation and the Yen has since risen 100 pips , and ii) the global economic slowdown was once again validated by global PMIs missing expectations from Japan to China (as noted earlier) and as of this morning, to Europe, where the Manufacturing, Services and Composite PMI all missed across the board, driven by a particular weakness in France (Mfg PMI down from 48.5 to 47.6, below the 48.8 expected), but mostly Germany, after Europe's growth dynamo, which disappointed everyone after yesterday's rebound in the Zew sentiment print, printed a PMI of only 50.0, down from 51.4 a month ago, down from 52.7 a year ago, and below the 51.5 expected. And just as bad, Europe's composite PMI just tumbled to 51.4, the lowest print in 16 months!
It appears John Kerry is at it again. Russian Foreign Minister Sergei Lavrov says the US Secretary of State called on him to "pay no mind" to a statement by President Obama, in which Russia was included to a list of top global threats. Seeking Russia's cooperation in Iran and on the Korean Peninsula, Kerry told Lavrov to "forget about" what Obama said. As US foreign policy credibility dissolves, we leave it to Lavrov to conclude, "it is flippant," he jabs, "it’s not appropriate for a powerful country to have such a consumer attitude to its partners - where you’re needed, help us; where you’re not, obey us."
The dust has barely settled on the latest high profile banker suicide in which Deutsche Bank's associate general counsel, and former SEC regulator, Charlie Gambino was found dead, having hung himself by the neck from a stairway banister, and here comes the latest sad entrant in the dead banker chronicles of 2014 when earlier today, the Post reports, a Citigroup banker was found dead with his throat slashed in the bathtub "of his swanky downtown apartment, authorities said Wednesday."
From its very inception, the Leninist/Marxist ideology of the Soviet Union made it a central priority to dispel and subjugate religious and spiritual expression. The state was “god.” No other god could be allowed to flourish, for if the people were given license and freedom of belief in something beyond themselves and beyond the establishment, they would retain a sense of rebellion. The collectivist philosophy requires the utter destruction of all competitors; otherwise, it can never truly prevail. The New World Order, an ideal often touted by globalists and defined by their own rhetoric as a scientific dictatorship in which collectivism is valued and individualism is criminalized, seems to me to be — in its ultimate form and intention — a battle for the human soul.
If you could stay home and watch television, play video games and hang out with your friends all day at government expense, would you do it? Of course most Americans that collect money from the government each month are not abusing the system. Many truly are incapable of taking care of themselves, and others are just receiving government benefits (such as Social Security) that they feel that they have earned by a lifetime of hard work. But with each passing year the number of Americans jumping on board “the safety net” continues to grow rapidly, and a lot of these people should be able to take care of themselves. What would our forefathers say about us today? The following are 21 facts that prove that dependence on the government is out of control in America…
With Japan planning a few trillion Yen stimulus plan of airdropping "gift cards" directly to the poor to spur spending (and the virtuous awesomeness of economic utopia), it appears Switzerland is about to go one step further. As Motherboard reports, Switzerland could soon be the world’s first national case study in basic income. Instead of providing a traditional social net - unemployment payments, food stamps, or housing credits - the government would pay every citizen a fixed stipend. The proposed plan would guarantee a monthly income of CHF 2,500, or about $2,600 as of November 2014; meaning every Swiss family can expect an unconditional yearly income of $62,400 without having to work, with no strings attached. What could go wrong?
For the 13th month in a row, according to Bloomberg data, China Manufacturing PMI missed expectations. Printing at a 6-month low of 50.0 (against expectations of 50.2), the most notable individual component was the slump in output to a contractionary 49.5 reading for the first time since May. New export orders (umm US decoupling?) also dropped. It seems after last month's idiocy (take a look at these charts for a good laugh), that Japan's Manufacturing PMI is also catching down to reality having missed expectations and dropped to 52.1. Chinese and Japanese stocks are tumbling after this data (with Nikkei 225 200 points off US day session closing levels).
The average person assumes the powers-that-be actually know what they are doing and would never lead us into disaster, but quoting my breakfast companion, that would be a very poor assumption. Simply, while mass war on the level of the wholesale slaughter commonplace in the last century is unimaginable to most in the modern context, it is never more than the equivalent of a faulty alarm system away from occurring. Those history buffs among you will confirm that up until about a week before World War I began, virtually no one in the public, the press, the political class, or even the military had any idea the shooting was about to start. And 99.9% of the people then living had no idea the war was about to begin until after the first shot was fired.
The consensus - perhaps until today, judging by the performance of Japanese stocks relative to the Yen - is that Abe calling a snap election is bullish, enabling him to re-confirm his mandate to push ahead with uber-dovish devastation of the Japanese economy. However, what few are willing to consider is... what happens if the world's greatest policy madman does not get elected? As the following chart shows, with only 4.4% of Japanese households believing they are better off in the past year, perhaps an unelected Abe is the black swan no one is considering currently...