Presenting the US car market this cold, stormy, sunny, dry, and rainless winter according to "The Haves... and The Have-Nots..."
- Ukraine leader denounces coup bid, West weighs sanctions (Reuters)
- Time to buy Imodium calls: Kuroda Easing Doomed as Yen Seen Missing 120 Level (BBG)
- Teens Disappear From U.S. Workforce (BBG)
- Fed Sets Rules for Foreign Banks (WSJ)
- Quant Funds Feel Investor Bite After Underperforming (BBG)
- China Probes Qualcomm, InterDigital Over Monopoly Concerns (WSJ)
- Capital One says it can show up at cardholders' homes, workplaces (LATimes)
- SEC Gains Power to Take Profit Made From Insider Trading (BBG)
First Mercedes, then Porsche, and now Ferrari and Maserati post record US sales in January...
*FERRARI POSTS RECORD SALES IN U.S. AND U.K. IN 2013
*FERRARI AND MASERATI GLOBAL MORE THAN DOUBLE IN JAN TO 2,400
...a month where the non-1%-auto-makers struggled mightily. Of course, the latter missed expectations are blamed on weather (as opposed to dealer inventories stuffed at record levels, a replacement cycle that has run its course, or a consumer that is once again credit-tapped out). So, the clear findings from this is that the 1% - who are buying more luxury cars than ever before in January - clearly don't feel the weather...
The economist Herbert Stein once said that if something can't go on forever, it will stop. The pattern of the last few decades, in which higher education costs grew much faster than incomes, with the difference made up by borrowing, can't go on forever... There is no point in trying to preserve the old regime as "working your way through college" is now impossible. For an 18-year-old, investing such a six-figure sum in an education without a payoff makes no more sense than buying a Ferrari on credit.
When the first response taken by major banks such as JPMorgan, in the aftermath of the massive 40 million credit and debit card hack of the third largest US retailer Target, was to lower ATM withdrawal and purchase limits, it became clear that there was more here than simply a well-organized credit card number scrape. And indeed, as Reuters reports, the hackers who compromised up to 40 million credit cards and debit cards also managed to steal encrypted personal identification numbers (PINs) according to a senior payments executive familiar with the situation. And since from there to emptying bank accounts and saved deposits is only a keystroke away, with no credit card processor intermediate to offload liability to, banks had no choice but to immediately limit debit card access to as much 10% of their clients, in JPM's case, in an unprecedented first, which just may have shown the way of how to limit a cash withdrawal panic if and when the need to do so arises.
From the United States to Europe and Asia: The world's central banks are flooding markets with liquidity and pushing deeper into unknown monetary policy territory. Jim Grant tells Germany's Finanz und Wirtschaft that he "fears that this journey will not end well." The sharply thinking Wall Street veteran doesn’t trust the theoretical models of the central banks and warns of irrational exuberance in the financial markets adding that "the stock market is increasingly full of stocks that are borne aloft by hope rather than demonstrated performance."
In the US and Europe, 95% of the buyers are male. Average age is 55. What's different in China?
In China, 9 out of 10 billionaires are self-made, the highest percentage of any country (and by self-made we are unsure whether BusinessWeek's Christina Larson means via entrepreurial spirits or government connected handout) but there is another fact that makes the Chinese billionaire different from the rest of the average run-of-the-mill billionaires we discussed here. The average age of the country’s 157 billionaires is 53 years old - nine years younger than the world average. But perhaps the most shocking statistic among the luxury buyer is that the average Ferrari buyer in the U.S. is 47 years old; in China, he is 32.
The electric car dream may be ending, one flaming Lithium Ion battery pack a time (no matter how Borgified the cult following of the carmaker may be), but when it comes to combustible engines, some have never had it better. Such as Mercedes. According to Reuters "Daimler's luxury brand Mercedes-Benz sold the most cars in one month in its history in September, German paper Bild reported on Thursday. The carmaker sold over 142,000 cars last month, a rise of 15.9 percent, driven by demand in China and the United States, the paper said in an advance copy of an article to be published on Thursday." So who again says the wealth effect does not trickle down... If mostly to the Mercedes-Benz and the 0.01%-ers bottom line that is.
Crashing luxury sales in China is a hard-to-swallow concept for the industry.
- Derivatives Broker 1: Make 6m go lower! They r going up. [Senior yen trader] will buy you a ferrari next yr if you move 3m up and no change 6m (February 29, 2008, via text message to personal mobile phone)
- Yen Desk Head: Lord Baliff, I would suggest a lunch over golden week. Monday or Tuesday if you are around. *** As for kick backs etc we can discuss that at lunch and I will speak to [Senior Yen Trader] about it next time he comes up for a chat.
- Obama Holds Fire on Syria, Waits on Russia Plan (WSJ)
- China Shadow Banking Returns as Growth Rebound Adds Risk (Reuters)
- Not one but two: Greece May Need Two More Aid Packages Says ECB’s Coene (WSJ)
- BoJ insider warns of need for wage rises (FT) ... as we have been warning since November, and as has not been happening
- California city backs plan to seize negative equity mortgages (Reuters)
- Home Depot Is Accused of Shaking Down Suspected Shoplifters (BBG)
- Most-Connected Man at Deutsche Bank Favors Lightest Touch (BBG)
- Norway Pledges to Limit Oil Spending (BBG)
- China Shadow Banking Returns as Growth Rebound Adds Risk (BBG)
- Gundlach Says Fed Is Mistaken in How It's Ending Easing (BBG)
The war against privacy is ultimately being fought to make sure you don't keep anything hidden when the global government funding crises comes to a head.
- Obamacare, tepid U.S. growth fuel part-time hiring (Reuters)
- Cameron was behind UK attempt to halt Snowden reports (Reuters), Britain defends detention of journalist's partner (Reuters)
- Goldman Options Error Shows Peril Persists One Year After Knight (BBG)
- China expresses 'shock' as Japan's nuclear crisis deepens (Reuters)
- Inquiry into China insurance firm rattles industry (Caixin)
- Cheaper rivals eat into Apple’s China tablet share (FT)
- Exporting fast food: Subway Targets Europe With as Many as 1,000 New Outlets in 2014 (BBG)
- Reserve Bank of India boosts liquidity to ease pressure on banks (FT)
- Justice Department Plans New Crisis-Related Cases (WSJ) - Holder doing his cutest attempt to pretend the TBTProsecute aren't
- Syrian Opposition Alleges Gas Attack, Which Government Denies (WSJ)
- Egypt, U.S. on Collision Course (WSJ), Gunmen kill 24 Egyptian police in Sinai ambush (Reuters)
- India’s efforts fail to prevent new rupee low (FT)
- More bad news for AAPL: Steve Jobs Biopic Crashes on Opening Weekend (WSJ)
- "Sustainable" - U.S. Stocks Beat BRICs by Most Ever Amid Market Flight (BBG)
- Merkel cancels election rally after hostage taking (Reuters)
- Some day, Abenomics might work... Not today though: Japan Exports Rise Most Since ’10 as Deficit Swells (BBG)
- China July Home Prices Rise as Nation Seeks Long-Term Policy (BBG)
- Spanish Bank’s Bad Loan Ratio Rises to Record in June (Reuters)
- Recovery... for some - Ferrari NART Spyder Sets $27.5 Million Auction Record (BBG)
- Bund yields hit 17-month high, rupee slumps (Reuters)
- Regulatory Headaches Worsen for J.P. Morgan (WSJ)