Q3 GDP Revised Above Highest Estimate, Prints 3.9%

Just as the OECD cut US GDP further, here comes the BEA with an impressive first revision to the Q3 GDP, which succeeded in fixing all those things that were lacking in the first report which said GDP had grown 3.5% in the quarter. Moments ago, the revised number slammed expectations of a modest decling to 3.3%, rising by3.9%, above the highest Wall Street estimate (range was 2.8% to 3.8%), with the boost coming from all those components that disappointed in the first go around, namely Personal Consumption (which rose from 1.8% to 2.2%), contributing 1.51% of the final GDP print, inventories subtracting far less, or just -0.12% compared to -0.57%, and fixed investment revised to 0.97% from 0.74%. Finally, while exports were revised modestly lower, a small decline in imports also offset the net decline in trade contribution.

Futures In Fresh Record Territory As OECD Cuts Global Growth Projections Again

Just two months after the OECD cut its global growth outlook, overnight the Organisation for Economic Co-operation and Development cut it again, taking down its US, Chinese, Japanese but mostly, Eurozone forecasts. In the report it said: "The Economic Outlook draws attention to a global economy stuck in low gear, with growth in trade and investment under-performing historic averages and diverging demand patterns across countries and regions, both in advanced and emerging economies.  “We are far from being on the road to a healthy recovery. There is a growing risk of stagnation in the euro zone that could have impacts worldwide, while Japan has fallen into a technical recession,” OECD Secretary-General Angel Gurria said.  “Furthermore, diverging monetary policies could lead to greater financial volatility for emerging economies, many of which have accumulated high levels of debt.” And sure enough, the OECD's prescription: more Eurozone QE. As a result, futures in the US are in fresh all time high territory ignoring any potential spillover from last night's Ferguson protests, just 30 points from Goldman's latest 2015 S&P target, Stoxx is up 0.5%, while bond yields are lower as frontrunning of central bank bond purchases resumes. Oil is a fraction higher due to a note suggesting the Saudi's are preparing for a bigger supply cut than expected, although as the note says "it is unclear if the cut sticks."

Veteran S&P Futures Trader: "I Am 100% Confident That Central Banks Are Buying S&P Futures"

"This last 1900 point Dow Jones push upwards - and the Ebola events leading into it - it was so orchestrated and heightened at critical points but the ascent and push straight up in price, and sideways nonreaction after was completely unlike anything I've seen before.   After going up for a record-breaking amount of time the last five or so years, in a nonlinear exponential mania type of ascent, there should normally be tremendous volatility that follows... After this year and especially this last 1900 point Dow run up in October, and post non-reaction, that I am 100 percent confident that that one buyer is our own Federal Reserve or other central banks with a goal to "stimulate" our economy by directly buying stock index futures."

HFT War Stories: The Algo That Couldn't Count

This is the first installment in a series of HFT War Stories, submitted anonymously by high frequency and algorithmic traders highlighting the perils of their profession. Today we look at a $2 Billion near miss that never made the news. The public only hears about these types of SNAFUs if they blow up a firm. Hundreds more go unnoticed by anyone but the traders who lived through them.

As The "Sanctions War" Heats Up, Will Putin Play His 'Gold Card'?

The topic of ‘currency war’ has been bantered about in financial circles since at least the term was first used by Brazilian Finance Minister Guido Mantega in September 2010. Recently, the currency war has escalated, and a ‘sanctions war’ against Russia has broken out. History suggests that financial assets are highly unlikely to preserve investors’ real purchasing power in this inhospitable international environment, due in part to the associated currency crises, which will catalyse at least a partial international remonetisation of gold. Vladimir Putin, under pressure from economic sanctions, may calculate that now is the time to play his ‘gold card’.

Global Slowdown Confirmed By PMIs Missing From Japan To China To Europe; USDJPY Nears 119 Then Slides

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!

The New World Order: Does It All Just Boil Down To A Battle For Your Soul?

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.

The Next QE? Switzerland Prepares A "Living Wage" Of $2,600 For Every Citizen

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?

All Eyes On The Freefalling Yen Which Just Plunged To Fresh 7 Year Lows

Once again all eyes are on the carry-trade driving Yen, whose avalance into oblivion is picking up speed, and where the formerly unimaginable USDJPY level of 120 as presented here in September, is now looking like this week's business, with the only question how long until Albert Edwards' next target of 145 is hit leading to nuclear currency warfare between Japan, Korea, China and ultimately, the US and Europe. Unfortunately, for Japan, at this point the terminal currency collapse will do nothing to incrementally boost exports or its economy, and the former Japan finmin was on the tape warning again that the Japanese recession will persist as USDJPY over 115 is now hurting Japan, something which should by now have been clear to most.

Goldman's "Best Ideas" Hedge Fund Is Down 2.6% In 2014

If only the $3.2 billion Goldman Sachs Global Opportunities hedge fund had listened to the firm's equity strategists, life would have been great. However, as Bloomberg reports, the so-called 'best-ideas' fund dropped 5.6% in October leaving it down 2.6% for 2014 as interest-rate bets went pear-shaped amid the crash-and-dash that was October's market manipulation. "We believe monetary policy needs to catch up with growth, and that interest rates in the US and UK are likely to rise by a significant amount," the fund wrote. It seems Goldman 'muppeted' itself. Things aren't working out... and as a gentle reminder, the fund lost 35% in 2008.

Guest Post: Civil Rights And Public Order In Hong Kong

The authorities in Hong Kong are once again threatening to clear the protest sites. They have a legal pretext, in the form of court orders issued in response to complaints from the owners of buildings, who are losing traffic. The powers that be are in no mood for compromise. “Police urge the illegal road occupiers to obey the court order, remove obstacles and personal belongings, and stop the illegal occupation soonest.”

Hugh Hendry: "I Believe Central Bankers Are Terrified"

"My premise hasn’t really changed since I published my paper explaining why I had become more constructive towards risk assets this time last year. That is to say, the structural deficiency of global demand continues to radicalise the central banking community. I believe they are terrified: the system is so leveraged and vulnerable to potentially systemic price reversals that the monetary authorities find themselves beholden to long only investors and obliged to support asset prices. However, I clearly confused everyone with my choice of language. What I should have said is that investors are perhaps misconstruing rising equity prices as a traditional bull market spurred on by revenue and earnings growth, and becoming fearful of a reversal, when instead the persistent upwards drift in stock markets is more a reflection of the steady erosion of the soundness of the global monetary system and therefore the rise in stock prices is something that is likely to prevail for some time."

Frontrunning: November 18

  • Japan Prime Minister Shinzo Abe Calls Snap Election (WSJ) - as repeatedly priced in...
  • Flash Boys Raising Volatility in Wild New Treasury Market (BBG)
  • Not Greece again: Greek Bailout Review Stalls as Troika Demands Final Steps (BBG)
  • Iran uses China bank to transfer funds to Quds-linked companies (Reuters)
  • Porn Mags With Free Madrid Theater Tickets in Tax Protest (BBG)
  • Hong Kong, China stocks ease on profit-taking after stock connect launch (Reuters) - Hang Seng down 500 points in past 2 days
  • Halliburton Mega-Deal Sealed by CEOs Over Coke and Coffee (BBG)
  • Wall Street to Reap $316 Million From Day of Mega Deals (BBG)
  • Mass murderer Charles Manson gets marriage license, state says (Reuters)

Algos Sell The News, Then BTFD Following Much Anticipated Abe Snap Election Announcement

After weeks of relentless flashing red headline barrage whose only purpose was to force snap algo buying of the USDJPY pair time after time after time, Japan is once again out of FX algo danging carrots after moments ago Abe confirmed what everyone had known already: he called a snap election to seek a mandate for his decision to delay by 18 months a further sales-tax increase that had been planned for next year; he also said he would dissolve the lower house of parliament on Nov. 21 in preparation for an election in December, without specifying a date. Cited by the WSJ, Abe said "To ensure the success of Abenomics, I’ve concluded that it shouldn’t be carried out next October and instead be postponed by 18 months,” the prime minister told a nationally televised news conference, stressing that the additional tax burden would risk putting the economy back into deflation. “I will seek the people’s judgment over our economic policy."