Just as the S&P appeared set to blast off to a forward GAAP PE > 21.0x, here comes Greece and drags it back down to a far more somber 20.0x. The catalyst this time is an FT article according to which officials of now openly insolvent Greece have made an informal approach to the International Monetary Fund to delay repayments of loans to the international lender, but were told that no rescheduling was possible. The result if a drop in not only US equity futures which are down 8 points at last check, but also yields across the board with the German 10Y Bund now just single basis points above 0.00% (the German 9Y is now < 0), on its way to -0.20% at which point it will lead to a very awkward "crossing the streams" moment for the ECB.
The Asian Infrastructure Investment Bank will establish an AIIB currency basket with China set to push for the yuan to take a prominent role and for “special currency funds” to be established in order to issue yuan-denominated loans through the fund. "The AIIB's grand vision for infrastructure investment [comes] with challenges but China should do its best to establish the yuan as a currency for settlement and denomination," one analyst says.
NFLX Goes Full Amazon: Burns Record Amount Of Cash But Stock Surges On Jump In International SubscribersSubmitted by Tyler Durden on 04/15/2015 16:24 -0400
The Amazon model of burning countless amounts of cash in hopes of one day reaching profitability has fully arrived at Netflix.
If yesterday stocks surged on the worst 4-month stretch of missing retail sales since Lehman, one which BofA with all seriousness spun by saying "it seems not unreasonable to suspect that the March 2015 reading on retail sales gets revised up next month", then the reason why futures are now solidly in the green across the board even as German Bunds have just 14 bps to go until they hit negative yields and before the ECB is fresh out of luck on future debt monetization, is that overnight China reported its worst GDP since 2009 together with economic data misses across the board confirming China's economy continues its hard landing approach despite a stock market that has doubled in the past year.
Neither Russia nor China is an imminent threat to the US, but a cataclysmic event is looming in the economic front, one which will forever change the perception of America by the rest of the world; or how we, Americans, perceive ourselves. It’s back to what that great cartoonist (and sociopolitical commentator), Walt Kelly, told us a half century ago as America struggled during the Vietnam War:
“We have met the enemy and he is us.”
While today's macro calendar is empty with no central bank speakers or economic news (just the monthly budget (deficit) statement this afternoon), it’s a fairly busy calendar for us to look forward to this week as earnings season kicks up a gear in the US as mentioned while Greece headlines and the G20 finance ministers meeting on Thursday mark the non-data related highlights.
The US stock market is trading at 1929-bubblesque valuations, with a CAPE of 27.34 (the 1929 CAPE was only slightly higher at 30. And when that bubble burst, stocks lost over 90% of their value in the span of 24 months.
A look ahead into next week's macro forces.
Smart meters are now being used by authorities to crack down on “water wasters” in the state of California, but this is just the tip of the iceberg as far as what they can be used for. Ultimately, smart meters are designed to be part of an entire “smart grid” that will enable government bureaucrats “to control everything from your dishwasher to thermostat“. And in recent years, there has been a massive push to install smart meters in as many homes in the United States and Europe as possible.
In a new study, the IMF asks whether there's a global slump in real private investment (spoiler alert: yes there is and it's broad-based and endemic in advanced economies) and also suggests that productivity growth across the globe is likely to remain constrained for the foreseeable future.
The era of infrastructure investment and multilateral banks and financial institutions controlled, in large part, by Washington - often as an aggressive strategic policy tool - has come to an end.
"The politicians are put there to give you the idea that you have freedom of choice. You don’t. . . . You have owners." - George Carlin, The American Dream
According to a new study from Princeton University, American democracy no longer exists. Using data from over 1,800 policy initiatives from 1981 to 2002, researchers Martin Gilens and Benjamin Page concluded that rich, well-connected individuals on the political scene now steer the direction of the country, regardless of – or even against – the will of the majority of voters. America’s political system has transformed from a democracy into an oligarchy, where power is wielded by wealthy elites.
- Israel, U.S. Lawmakers Press Case Against Iran Nuclear Deal (WSJ)
- Rand Paul tries to broaden libertarian appeal (Reuters)
- Fewer Oil Trains Ply America’s Rails (WSJ)
- Chicago voters go to polls in first ever mayoral runoff (Reuters)
- FedEx to buy TNT to expand Europe deliveries (Reuters)
- Mohamed El-Erian Has Most of His Money in Cash (BBG)
- In Surprise Move, Australia Holds Rates (WSJ)
- Oil falls as Iran, China discuss more supply (Reuters)
For the third month in a row, FX 'traders' in AUD "guessed" the Reserve Bank of Australia's decision in the seconds before it was released to the public. Aussie regulators, seemingly furious at the blatant-ness of the front-running, confirmed they will be investigating the price spike overnight...
It might prove to be a one-off. But one group in the gold industry this week forged ahead with a unique strategy - which might just change the market. The group is India’s largest jewellery-maker, Rajesh Exports. Which said that it is taking an unusual step in securing gold supply for its operations. Buying gold mines.