- Emerging-Market Rout Seen Enduring on Low Real Rates (BBG)
- After rocky January, markets eye data and central banks (Reuters)
- Europe will feel the pain of emerging markets (FT)
- Lloyds delays dividend prospect after mis-selling charge (Reuters)
- Snow Set to Snarl New York Commute as U.S. Flights Halted (BBG)
- Rate Decision to Drive Yellen's Early Agenda (Hilsenrath)
- Thai protesters move to downtown Bangkok in bid to topple PM (Reuters)
- China says Japan's 'hype' on air defence zone spreads tension (Reuters)
- Hedge funds seek 1.8 billion euros damages from members of Porsche's owning family (Reuters)
If the stock market were already crashing then it would be simple to blame the dismally sad rash of dead bankers in the last week on that - certainly that was reflected in 1929. However, for the third time in the last week, a senior financial executive has died in what appears to be a suicide. As Bloomberg reports, following the deaths of a JPMorgan senior manager (Tuesday) and a Deutsche Bank executive (Sunday), Russell Investments' Chief Economist (and former Fed economist) Mike Dueker was found dead at the side of a highway in Washington State. Police said the death appeared to be a suicide.
Greece Is Back: Germany, France, Creditors Hold Secret Meeting Due To Greek Bailout "Mounting Concerns"Submitted by Tyler Durden on 01/31/2014 11:43 -0400
There was a time - roughly between May 2010 and the spring fall of 2011 - when all the world had to worry about was Greece. Then the realization finally dawned that since a Grexit from the Eurozone would kill the EUR and the European integration dream with so much "political capital" invested, crush Deutsche Bank, and bring back the much dreaded (by German exporters) Deutsche Mark, it became clear that there is no fear that Greece, which is now a decrepit shell of a country with a collapsed economy and society in shambles, has now become a slave state to European bureaucrats, business and banks (in Nigel Farage's words), will never be formally kicked out of Europe and only an internal coup would allow it to finally break free from the clutches of unelected European tyrants. And then the world moved on to more important things: like Japan, China Emerging Markets and how they are all enjoying the Fed's taper. Sadly, we have to report, that Greece is once again baaaaack.
- Even Obama's fans has turning on him: "The Decline and Fall of 'Hope and Change'"
- European Stocks Drop, Head for Worst January Since 2009 (BBG)
- Euro-Area Inflation at 0.7% Builds Rate Pressure on ECB (BBG)
- Japan’s Inflation Accelerates as Abe Seeks Wage Gains (BBG)
- Unpossible - this is the USSA: Detroit Debt Proposal Favors Pension Funds (WSJ)
- Keystone Report Said Likely to Disappoint Pipeline Foes (BBG)
- YHOO still pretending someone cares about it: Yahoo says detected hacking attempt on email accounts (Reuters)
- How Google's Costly Motorola Maneuver May Pay Off (WSJ)
- Mexico Surpassing Japan as No. 2 Auto Exporter to U.S. (BBG)
The wild volatility continues, with markets set to open well in the negative wiping out all of yesterday's gains and then some, only this time the catalyst is not emerging market crashing and burning (at least not yet even though moments ago the ZAR weakened to a new 5 year low against the USD and the USDTRY is reaching back for the 2.30 level) but European inflation, where the CPI printed at 0.70%, dropping once again from 0.8%, remaining under 1% for the fourth straight month and missing estimates of a pick up to 0.9%. Perhaps only economists are surprised at this reading considering last night Japan reported its highest (energy and food-driven) inflation print in years: so to explain it once again for the cheap seats - Japan is exporting its "deflation monster", Europe is importing it. It also means Mario Draghi is again in a corner and this time will probably have to come up with some emergency tool to boost European inflation or otherwise the ECB will promptly start to lose credibility - is the long awaited unsterilized QE from the ECB finally imminent?
I predicted this clearly, with loads of evidence, last spring. I even tipped the SEC/UK authorities. Tthe chickens come home to roost. Let it be known, Wall Street's margin IS my business model!!!
- Only time will define Bernanke's crisis-era legacy at Fed (Reuters)
- Record Cash Leaves Emerging Market ETFs (BBG)
- Investors Look Toward Safer Options as Ground Shifts (WSJ)
- Fed Policy Makers Rally Behind Tapering QE as Yellen Era Begins (BBG)
- Rating agencies criticise China’s bailout of failed $500m trust (FT)
- Russia to await new Ukraine government before fully implementing rescue (Reuters)
- U.S. readies financial sanctions against Ukraine: congressional aides (Reuters)
- Companies resist president’s call for minimum wage rise (FT)
- Secret Swiss Funds at Risk as Italy’s Saccomanni Visits Bern (BBG)
- Top Democrat puts Obama trade deals in doubt (FT)
- Erdogan to Give Rate Increase Time Before Trying Other Plans (BBG)
- Obama warns divided Congress that he will act alone (Reuters)
- Fed Decision Day Guide From Emerging Markets to FOMC Voter Shift (BBG)
- Fed poised for $10 billion taper as Bernanke bids adieu (Reuters)
- Bernanke’s Unprecedented Rescue Unlikely to Be Repeated (BBG)
- Argentina Spends $115 Million to Steady Peso (WSJ)
- Billionaires Fuming Over Market Selloff That Sinks Magnit (BBG)
- SAC’s Counsel Testifies at Insider Trading Trial in Unexpected Move by the Defense (NYT)
- Automakers Fuel Japan’s Longest Profit Growth Streak Since 2007 (BBG)
- Turkey Crisis Puts Jailed Millionaire at Heart of Gold Trail (BBG)
- Ukraine expects $2 billion tranche of Russian aid soon (Reuters)
The Fed tightens by a little (sorry, tapering - flow - is and always will be tightening): markets soar; Turkey tightens by a lot: markets soar. If only it was that easy everyone would tighten. Only it never is. Which is why as we just reported, the initial euphoria in Turkey is long gone and the Turkish Lira is basically at pre-announcement levels, only now the government has a furious, and loan-challenged population to deal with, not to mention an economy which has just ground to a halt. Anyway, good luck - other EMs already faded, including the ZAR which many are speculating could be the next Turkey, and certainly the USDJPY which sent futures soaring last night, only to fade all gains as well and bring equities down with it.
Overheard In A Gold Vault In Singapore: "We Need Additional Capacity", China's Appetite Is "Insatiable"Submitted by Tyler Durden on 01/28/2014 16:21 -0400
Yesterday we covered the supply side of the gold market from the perspective of global mints, which were kind enough to advise that they "can’t meet the demand, even if we work overtime." Today, courtesy of Bloomberg, we take a closer look at the demand aspect of the physical gold market, which as most know by now can be described with just one word: China.
Early this morning, at JPM's 33 story high London Headquarters located at 25 Bank Street in Canary Wharf, a 39 year-old man jumped to his death after falling onto a 9th floor roof. The police, who were called to the scene at 8:02 this morning, said they are not treating the death as suspicious and no arrests have been made, suggesting the death was indeed a suicide. London Ambulance Service and London Air Ambulance attended but they could not save the man.
- Emerging markets pray for Wall Street tumble (Reuters)
- Yellen Faces Test Bernanke Failed: Ease Bubbles (BBG)
- Samsung sets new smartphone sales record in fourth quarter, widens lead over Apple (Reuters)
- China’s Foreign-Reserves Investment Chief Said to Depart Agency (BBG)
- China’s Rescue of Troubled Trust May Stoke Risk-Taking (BBG)
- Ukraine PM Azarov offers to resign 'to help end conflict' (Reuters) ... And Russia says may reconsider aid if this happens
- But... but... it was all gold's fault: India Unexpectedly Raises Rate as Rupee Risks Inflation Goal (BBG)
- Former Belgian king 'boycotting' public events after complaining £760,000 is not enough to live on (Telegraph)
- Greek disposable income tumbles 8% in Q3 (Kathimerini)
That margin debt just soared to new all time highs in december should come as no surprise to anyone. However what may come as a shock to many is that the other key metric provided by the NYSE - total net free credit - also known as investor net worth (calculated as Free Credit Cash plus Credit Balances in Margin Accounts less Margin Debt) just dropped to a whopping $148 billion, double where it was in February 2013, and double where it was during the peak of the last stock (and credit and housing) bubble, when it rose to a then-all time high of $79 billion in June 2007. It was all downhill from there.
As we noted earlier, the "surprise" factor of the Turkish Central Bank's (CBT) emergency meeting is seeming to have the desired effect as the Lira has rallied over 1000 pips since the announcement. Officially there has been no intervention and, despite Erdogan's political pressure on the CBT not to raise rates (because of the "interest rates lobby"), Barclays (as we noted here) and most other banks are expecting more conventional dramatic interest rate hikes (since everyone knows the FX reserves are running dry):
*TURKEY NEEDS TO RAISE O/N RATE 300BPS FOR MKT EFFECT: JPMORGAN
However, JPMorgan adds that it "strongly doubts this will regain investors confidence" and Finansbank warns it has "significant doubts" that the CBT will deliver. And this is what the rest of the market thinks...