Fair enough week. Not sure data fits the performance, but if it's good enough...
What can be said? Rinse, repeat, rinse, repeat.
Everyone basking into the market truce provided by Super Mario. And taking some easy time off…
Friday afternoon Periphery squeeze barn stomp
Wow! Good equity swings in Europe: Down about 1% to the morning lows, up nearly 2% to noon highs and tanking back over 1.25% into the close.
Core & Soft EGBs rather muted in volatility, closing by and large unchanged, with Periphery bonds running a separate path.
Again that decorrelation.
Jump, Jive & Wail…
Getting caught in end of day divergence between recovering Bunds / UST and equities readying up a pre-close squeeze out.Note a rather muted, in line, Credit performance.
No real data anywhere tomorrow, so either the good spirits of recovery keep up their heads up – or not…
- Trade Slows Around World (WSJ)
- Debt limit lurks in fiscal cliff talks (FT)
- Welcome back to the eurozone crisis (FT, Wolfgang Munchau)
- Euro Leaders Face October of Unrest After September Rally (Bloomberg)
- Dad, you were right (FT)
- 25% unemployment, 25% bad loans, 5% drop in Industrial Production, and IMF finally lowers its 2013 Greek GDP forecast (WSJ)
- Global IPOs Slump to Second-Lowest Level Since Financial Crisis (Bloomberg)
- France's Hollande faces street protest over EU fiscal pact (Reuters)
- EU Working to Resolve Difference on Bank Plan, Rehn Says (Bloomberg)
- China manufacturing remains sluggish (FT)
- Samaras vows to fight Greek corruption (FT) ... and one of these days he just may do it
- Leap of Faith (Hssman)
- Germany told to 'come clean’ over Greece (AEP)
The “straightjacket” of the Eurozone
- Madrid Protesters March Again as Spain Braces for Cuts (Bloomberg)
- Euro Can Bear Fewer Members as Czech Leader Calls Greeks Victims (Bloomberg)
- Chinese Industrial Profits Fall 6.2% in Fifth Straight Drop (Bloomberg)
- China pours $58bn into money markets (FT)
- Beijing vows more measures on Diaoyu Islands (China Daily)
- Noda vows no compromise as Japan, China dig in on islands row (Reuters)
- Politico’s Paul Ryan Satire: The Joke’s on Them (Bloomberg)
- Electoral Drama Shifts to Ohio (WSJ)
- German opposition party targets banks (FT)
- Fed action triggers fear of new currency wars (FT)
- Ex-Credit Suisse CDO Boss Serageldin Is Arrested in U.K. (Bloomberg)
- Romney ‘I Dig It’ Trust Gives Heirs Triple Benefit (Bloomberg)
John Taylor, founder and CEO of the world's largest FX hedge fund, spoke with Bloomberg TV this morning and was his typically clarifying - if not sanguine - self when it comes to prospects in Europe and the US. Stating that he'll "probably always be a bear on the Euro", Taylor added that it is "hard to look at the European situation and see a cloudy sky become clear," and while there has been noisy swings in the movements of currencies of late, "the reason the euro is up is because the dollar is down - two guys have done this: Draghi and Bernanke." Ranging from FX to volatility, Taylor opines on the time-varying correlation of the weak euro with a strong US equity market and notes, however, that "the equity market is not showing any legs."
Desperate North Korea has exported more than 2 tons to gold hungry China over the past year to earn US $100 million. Even in tough times during the Kim Il-sung and Kim Jong-il regimes, North Korea refused to let go of its precious gold reserves. Chosun media reports that “a mysterious agency known as Room 39, which manages Kim Jong-un's money, and the People's Armed Forces are spearheading exports of gold, said an informed source in China. "They are selling not only gold that was produced since December last year, when Kim Jong-un came to power, but also gold from the country's reserves and bought from its people." This is a sign of the desperation of the North Korean regime and also signals China’s intent to vastly increase the People’s Bank of China’s gold reserves.
Today’s AM fix was USD 1,766.75, EUR 1,369.36, GBP 1,088.37 per ounce.
Yesterday’s AM fix was USD 1,758.50, EUR 1,361.91 and GBP 1,084.96 per ounce.
Gold fell $8.60 or 0.49% in New York yesterday and closed at $1,764.50. Silver slipped to a low of $33.594 then rebounded in New York, but it still finished with a loss of 1.62%.
Health Tip for Paper Money Users
Former ECB Chief Economist Says ECB Is In Panic, As Czech President Warns The End Of Democracy Is ImminentSubmitted by Tyler Durden on 09/22/2012 20:16 -0500
If anyone thought the bad blood between Germany and the rest of the insolvent proletariat, aka the part of the Eurozone which is out of money (most of it), and which has been now confirmed will be supporting Obama (one wonders what the quid for that particular quo is, although we are certain we will find out as soon as December), complete collapse of the Greek neo-vassal state of the globalist agenda notwithstanding, had gone away, here comes former ECB chief economist Juergen Stark to dispel such illusions. In an interview with Austrian Die Presse, the former banker said what everyone without a PhD understands quite well: "The break came in 2010. Until then everything went well..."Then the ECB began to take on a new role, to fall into panic.... Together with other central banks, the ECB is flooding the market, posing the question not only about how the ECB will get its money back, but also how the excess liquidity created can be absorbed globally. "It can't be solved by pressing a button. If the global economy stabilises, the potential for inflation has grown enormously... It gave in to outside pressure ... pressure from outside Europe" Why, whichever bank headquartered at 200 West, NY, NY might he be referring to?
Gazprom has Europe’s natural gas market in a stranglehold and Europe is attempting to fight back, first with a raid last year on the Russian giant’s offices and then with a probe launched earlier this week against its allegedly illicit efforts to control the EU’s natural gas supplies. The bottom line is that the same natural gas revolution in the US, which was enabled by hydraulic fracturing (fracking), is now threatening to loosen Gazprom’s noose on the EU, and Gazprom simply won’t have it. Let’s not pretend that energy companies are clean and that governments aren’t using them to forward nefarious geopolitical objectives (US multinationals in Northern Iraq, for instance). The point is not to paint Gazprom as the ultimate evil in energy. This is about Europe, and the EU’s “Mommy Dearest” struggle with Gazprom, which is undoubtedly playing an underhanded energy-politics game worthy of the most sinister of accolades.
- Germany says U.S. debt levels "much too high" (Reuters)
- Netanyahu ramps up Iran attack threat (Reuters)
- Burberry plummets by most ever, slashes guidance, rattles Luxury-Goods Industry as Revenue Growth (Bloomberg)
- FoxConn Again Faces Labor Issue on iPhones (NYT)
- Southern whites troubled by Romney's wealth, religion (Reuters)
- China's Xi not seen in public because of ailment (Reuters)
- Another California muni default: Oakdale, Calif., Restructuring Debt, Planning Rate Raise After Default (Bond Buyer)
- Spain's PM expects "reasonable" terms for any new aid (Reuters)
- Bernanke Proves Like No Other Fed Chairman on Joblessness (Bloomberg) - Ineffective like no other?
- John Lennon’s Island Goes on Sale as Irish Unpick Property Boom (Bloomberg)
There are three key factors to modeling trade flows - or relevance - in a post-globalization world. While competitiveness is important, countries gain from being generally 'Technology-rich', 'Labor-rich', and/or 'Resource-rich'. The following chart, from Deutsche Bank, shows where the world's countries fit into the Venn diagram of give-and-take in a post-globalization market. The red oval highlights where Italy, Greece, Portugal, and Spain (and Argentina sadly enough) do not fit into this picture. Two words - Euro-sustainability?