"Data Dependent" Fed Chickens Out Again: Blames "Global" Risks For Unchanged Rates, Cuts Rate Hike ForecastSubmitted by Tyler Durden on 03/16/2016 15:32 -0400
Not too dovish (upgrade uncertainty), not too hawkish (lowered rate hikes), a goldilocks statement, with just a little less inflation and just a little less GDP growth, and just two more quarter of near-ZIRP rates is what it takes for the world to get it all together.
"we are taking a “punt” on the short side of the equity market, but this time we shall do so by buying volatility; that is, we shall buy the VXX volatility index ETF listed on the NYSE and we shall do so upon receipt of this commentary and the market’s opening"
Today Janet Yellen and the FOMC will go back to square one and try to reset global expectations unleashed by the ill-fated December rate "policy mistake" hike, when at 2pm the Fed will announce assessment of the economy, even if not rate hike is expected today. Just like in December the Fed will be forced to telegraph that it is hiking rates as a signal of a strengthening US, and global, economy where "risks are balanced" and hope that the subsequent global reaction will not be a rerun of what happened in January and February when confusion about the Fed's intentions led to a global market rout.
The Baltic Dry Index has risen for the last few weeks, buoyed by hopes (a la Iron Ore) of a National People's Congress stimulus surge from China. While the scale of the 'bounce' is negligible in real terms compared to the total collapse, it has caused such momentum-muppets as Jim Cramer to proclaim China 'fixed' and investible. So we have one quick question - if everything is awesome, why did the China Containerized Freight Index just crash to new record lows?
Remember last week, when China was "fixed" because after the National People's Congress a record-smashing short-squeeze hyped on the back of stimulus hope sent Iron Ore prices soaring 20% in a day? Well that's all over...
One Week After Trolling Zero Hedge For Being Negative, Jefferies Posts Worst Quarter Since Financial CrisisSubmitted by Tyler Durden on 03/15/2016 11:23 -0400
Moments ago Jefferies, which is still on the investment banking cycle of reporting where its earnings (and in this case, losses) arrive one month ahead of the other banks, and as such is a good bellwether into overall Wall Street revenue trends, reported an absolute disaster of a quarter, its worst since the financial crisis.
Was that it for the great February/March bear market rally?
While Asia was up on China's bad data, and Europe was higher again this morning to catch up for the Friday afternoon US surge, US equity futures may have finally topped off and are now looking at this week's critical data, namely the BOJ's decision tomorrow (where Kuroda is expected to do nothing), and the Fed's decision on Wednesday where a far more "hawkish announcement" than currently priced in by the market, as Goldman warned last night, is likely, in what would put an end to the momentum and "weak balance sheet" rally.
The Aussies did it with their employment data (and then admitted it), and now we see Japan's Economic and Social reserch Institute post the most ridiculous macro print ever. Over 4 standard deviations from expectations and almost double the highest expectations, Japan Machinery Orders spiked 15.0% MoM - the biggest since Jan 2003. We presume this means that Japan is "fixed" and there will be no need for additional extraordinarily idiotically experimental monetary policy this week...
Thus Donald Trump and his rebel yell, the great white hope (in distinct contrast to the 2008 great black hope), is simply a reflection of the escalation of Empire’s attempt to control whatever it perceives as a threat.
"To the extent this week’s ECB decision marks a shift towards private sector asset purchases, the ammunition the ECB has expands hugely. Assuming the ECB will be willing to navigate eventually into other private sector asset classes, the asset universe for QE purchases could expand to include uncovered bank bonds, bank loans and equities."
We are experiencing 1970’s style stagflation, coming from the supply side, not demand. Prices are going up because Norges Bank continues to destroy the Norwegian Krone, turning it into the Nordic Peso. This is where they are “hiding” the damage to save rest of the economy. For example, housing prices will rise in NOK but fall in USD or gold (universal commodity) terms. It’s a shell game, leading to long term decline or even worse, an unexpected period of elevated inflation, requiring a rapid rise in interest rates.
Factory output grew just 5.4% in January and February from a year earlier, data released by the National Bureau of Statistics (NBS) showed, slowing from a 5.9% rise in December to the weakest since November 2008; the print matched the lowest Wall Street estimate. Meanwhile, retail sales rose 10.2% over the two-month period from a year ago, below the lowest Wall Street estimate of 10.5%, and far below the December’s 11.1% increase, pushing the trend growth in this series to lows not seen since early 2015.
What The Average Zhou Thinks Of China's Housing Bubble: "Only After War Breaks Out, We'll Be Able To Afford It"Submitted by Tyler Durden on 03/11/2016 22:30 -0400
"[the empty homes] belong to the real estate speculators, the hoarders and the corrupt officials... It's just a game for the rich! Beijing isn't a livable city at all. The price makes it off-limits. It’s also a food chain: Only the richest and most capable people can live here... The housing market is part of the bubble economy. In 5 years or so, after a war has broken out, then the middle class will be able to afford a home."
After January's record-smashing CNY3.4 trillion (half a trillion dollars!) surge in aggregate credit expansion in China, the post-lunar-new-year hangover hit hard in February as credit growth tumbled 77% from Janaury's level to just CNY780 ($112bn). This is the weakest February loan growth since 2011. Drastically missing expectations, and following authorities comments on the need to "monitor" excess credit growth, all categories of total social finance registered a sharp drop... which as Goldman warns, means China's GDP growth target will be "challenging."