• Tim Knight from...
    09/19/2014 - 20:15
    I was originally going to title this post "Jackie DeAngelis Must Die", but I thought she might take it the wrong way.

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South African Rand Tumbles To 7-Month Lows As Central Bank Governor Steps Down

In a surprise for the market, South Africa's Reserve Bank chief Gill Marcus has announced she will not be available for another term when her contract is up in November. On the heels of an expected decision to leave rates unchanged, this has sent the Rand tumbling to its lowest since February. While Marcus exporessed every confidence in her successor, it appears the market is less confident (for now). Forget the economy, sell ZAR because the true leader of the nation's wealth is to step down...



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Which Global Hegemon Is On Shifting Sands?

Given that all the leading candidates for Global Hegemon are hastening down paths of self-destruction, perhaps there will be no global hegemon dominating the 21st century.



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Goldman's Q&A On What Yellen Really Said (Or Didn't)

Since it is the NY Fed, headed by an ex-Goldmanite, which will ultimately be tasked with exiting 6 years of "unconventional monetary policy" - at some point during this "recovery" if not now or any time soon for that matter - it is probably best to listen to Goldman for its post-mortem on what the chairwoman did or did not say. Which is why we present a "Q&A" with Goldman's head economist, Jan Hatzius, known to occasionally exchange a sandwich and the occasional policy guidelene, with NY Fed's Bill Dudley at the Pound and Pence, in which he explains how Yellen managed to be both more dovish and more hawkish than the "market" expected.



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The Trolling Continues: Fed Chairwoman Expresses Her Condolences To America's Poor

As we discussed earlier in the week, Janet Yellen has released a speech this morning explaining why the poor need to get rich. In the speech below, she stresses, "how important it is to promote asset-building, including saving for a rainy day, as protection from the ups and downs of the economy," despite falling incomes, rising costs, and extending credit, we assume she means. The Fed Chairman has some words of encouragement for the tens of millions of Americans who live at or below the poverty level, including that threatened with extinction class, affectionately known as "the middle." Her message? It is important to build assets, or said otherwise...  get rich and she promises to "continue to promote asset-building."



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Billionaires Brainstorming: Bloomberg, Buffett, And Blankfein, Live On BBG TV

For everyone whose bucket list included seeing a billionaire gathering which includes Warren Buffett, Mike Bloomberg and Lloyd Blankfein live at least one time, you can now cross that particular item off.



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Housing Starts, Permits Tumble Driven By Collapse In Multi-Family Units

One look at the August housing starts and permits data, and one will wonder just how is it possible that yesterday NAHB homebuilder confidence rose to a 9 year high, when according to the US Department of Commerce both Housing Start and Permits tumbled in the past month, with the housing "leading indicator" that is Permits sliding 5.6% from 1040K to 998K, and declining sequentially in every region of the US, with double digit drops in the Northeast and the Midwest, while Housing Starts tumbled by 14.4% from 1117K, to only 956K, wildly missing Wall Street expectations of "only" a 5.2% drop to 1037K.



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Initial Jobless Claims Plunge From 3-Month High To 14-Year Low

Last week's "blip" higher in initial claims to over 300k - its highest in almost 3-months - has been demolished by the always-reliable, never-noisy data this week. At 280k, dramatically better than expectations of 305k, initial claims has only been lower once in the last 14 years... just don't tell Janet. The prior week was upwardly revised leaving a 36k drop this week - the biggest percentage drop since 2005. The all-important 4-week average is back under 300k and the labor department reports nothing unusual about this week's data... apart from the fact that non-seasonally-adjusted claims rose 6k to 241k.



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Gold Tumbles To 2014 Lows As China Unveils Anti-Rigging Benchmark

With a Fed hinting at exit strategies, gold has tumbled to 2014 lows (and almost in the red year-to-date) as traders apparently forget Japan, China, and European central banks continue to (or are set to) print more money into the global reflation trade. It appears that as the West continues to sell 'paper' gold, the East remains enamnored as the PBOC announced this morning:

*CHINA TO FORM SHANGHAI GOLD BENCHMARK, PBOC GOVERNOR SAYS GOLD MARKET IMPORTANT PART OF FINANCIAL MARKET
*SHANGHAI GOLD MARKET HAS TO AVOID SYSTEMIC RISK: PBOC'S ZHOU

Furthermore, traders have noted physical buying interest continues in the Asian region as premiums rise in China and India.



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China's Housing Slump Accelerates, Worst In Over Three Years

While the rest of the world is focused on what any given "developed" (or Chinese) central bank will do to continue the relentless liquidity-driven rally to new record highs, China has bigger problems as it continues to scramble in its attempts to figure out how to halt the slow motion housing crash that has now firmly gripped the nation. So firmly, that according to overnight data from the National Bureau of Statistics, monthly house prices dropped in some 68 of 70 tracked cities, the most in over three years, since January 2011 when the government changed the way it compiles the data.



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Frontrunning: September 18

  • House votes to arm Syrian rebels (Reuters).... aka ISIS
  • Fed Plots Cautious Course on Rate Rises  (Hilsenrath)
  • Scots vote in independence referendum to seal the United Kingdom's fate (Reuters)
  • Yes or No, the Winner of the Referendum Is Brand Scotland (BBG)
  • Draghi Loan Plan Missing Estimates Hampers ECB Stimulus (BBG) - get with the spin, it simply means "Moar QE"
  • Obama Plans to Tightly Control Strikes on Syria (WSJ)
  • IMF warns of risks from 'excessive' financial market bets (Reuters)
  • Russia Praises Ukraine's Autonomy Law for Rebel Areas (WSJ)


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Dollar, Futures Resume Ramp On Both Hawkish And Dovish Yellen Announcement

Yesterday's market reaction to Yellen's commentary was curious: there was none, because when all was said and done the S&P and DJIA traded precisely where they traded just before the show began.  Which, of course, was unacceptable, because one way or another the hawkish for the USD - the USDJPY just traded at the highest since 2008 - statement and conference had to be promptly interpreted for the algos as dovish for stocks - Futures are again just why of record highs - if not so much for the Fed-hated bonds, and sure enough, European equities traded in the green from the get-go even as RanSquawk notes, "there has been no major fundamental catalyst behind the spike higher seen in the morning, although do note that the move comes in the backdrop of the positive close on Wall Street which saw the S&P 500 (+0.13%) touch record highs before paring a large portion of the gains." In other words, the upside volatility in the intraday move is now a bullish catalyst, closing print notwithstanding. And what did US equity futures do? Why they followed Europe higher, with the ES now +8, on what is "explained" as a European move to intraday US futures previously. That, ladies and gentlemen, means we may have finally achieved perpetual motion, because all that would take to send the market higher is... for the market to go higher, etc, ad inf.



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ECB's First TLTRO A "Failure": European Banks Take Less "Free" ECB Loans Than Worst Case Expectation

As part of Draghi's attempt to reflate the ECB's balance sheet by €1 trillion, a key variable was the extension of the LTRO (1&2) program, in the form of the Targeted LTRO, or TLTRO aka LTRO 3 & 4, whose initial take up results were announced earlier today. It was, in a world, a flop. Because while the consensus was for European banks to take anywhere between €100 and €300 billion in nearly zero-cost credit from the ECB (at 0.15%) to engage in carry trades in today's first round TLTRO operation (ahead of the second TLTRO in December), moments ago the ECB announced that banks, which head already been actively paying down the first two LTRO carry programs, of which only €385 billion had been left of over a €1 trillion total at inception, were allotted a tiny €82.6 billion across 255 counterparties.



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It’s Not Just The Police – The Feds Are Also Militarizing Public Schools With Grenade Launchers, M16s & Tanks

"A federal program that has drawn criticism in recent weeks for supplying surplus military gear to local police has also provided high-powered rifles, armored vehicles and other equipment to police at public schools, some of whom were unprepared for what they were getting... The Los Angeles Unified School District stocked up on grenade launchers, M16 rifles and even a multi-ton armored vehicle from the program...  Mr. Zipperman said his department thought it could be useful for evacuations and to save lives in a "sustained incident.""



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Scottish Independence: Politicians Love Democracy So Much They're Trying To Subvert It

The polls in Scotland will close this week on one of the more important elections in recent history... perhaps one of the only elections that actually matters. Every eligible voter has a say, and a simple majority decides the outcome for everyone else. By definition, this is the purest possible form of the democratic process. But that’s not what’s happening. British politicians are scared to death that Scotland will file for divorce; so they’re doing everything they can to influence the outcome of this supposedly impartial democratic process. They’ve spent an incalculable amount of money trying to influence the outcome, effectively subverting a democratic election.



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