• Pivotfarm
    04/18/2014 - 12:44
    Peering in from the outside or through the looking glass at what’s going down on the other side is always a distortion of reality. We sit here in the west looking at the development, the changes and...

Gross Domestic Product

Phoenix Capital Research's picture

Here's The Real Financial Situation For Europe... Clear as Day





This will NOT be permanent, nor will we enter some kind of Mad Max apocalypse. But there will be temporary shutdowns of the banking system as they work through this mess. And given that most folks rely almost entirely on their credit cards to survive and haven’t prepared at all, things could indeed get very messy at times

 


Tyler Durden's picture

Bad Economic News Trifecta Hits: Jobs And Core Durable Goods Worse, Savings Rate Higher As Consumers Hunker Down





The economic data dump is here. In order of appearance, first we have jobless claims which rose from an upwardly revised (of course) 391,000 to 393,000, worse than expectations of 390,000. That is Seasonally Adjusted. Not Seasonally Adjusted claims exploded by 74,214: good thing nobody looks at the unfudged number. The bleeds from the 99 week cliff continued as a net of 7K people dropped from EUC and Extended Claims. Next we have durable goods which while on the surface were better than expected declining by just -0.7% on expectations of -1.2% (with the previous month revised massively lower from -0.8% to -1.5%), the orders ex volatile non-defense and air dropped by a whopping 1.8%, on expectations of -1.0%, and the revised September number collapsing from +2.4% to +0.9%. This means that not only will the final Q3 GDP be revised even lower, but that Q4 GDP rebound hopes have been all but dashed. Finally, in Personal Spending data, we learn that consumers spent less, with spending rising only 0.1% on expectations of 0.3%, while income increased (thank you Uncle Sam) from 0.1% to 0.4% on expectations of 0.3%. This was to be expected: after all the savings rate in September hit 3.3% - the lowest since August 2008. It had only one way to go, and so it did, with the October Savings Rate increasing to 3.5%. Expect this number to keep rising as consumer finally re-retrench yet again, in the process hitting the economy.

 


Tyler Durden's picture

"Phase Shift" - JP Morgan Downgrades All Commodities To "Sell"





If the ECB will not take the hint, JPM will bring the mountain to Mohammed. Or something. In a note just released by JPM's Colun Fenton, the firm has downgraded the entire commodity complex to "underweight" (yes, that includes gold). The reasoning? It is all the Supercommittee's fault. It also likely has nothing to do with the fact that JPM was selling commodities to clients all through this run up, and is now in finally buying, in anticipation of ECB printing and Fed's LSAP. Full report attached.

 


Tyler Durden's picture

Fitch Pours A-98 Gasoline On The European Fire, Threatens AAA Rating Of Parent France





It just goes from bad to surreal in Europe where the latest moment of pure Greek "gods kill titans" tragicomedy, comes from French rating agency Fitch threatening to cut... France? Excerpts via Bloomberg:

  • FITCH: FRANCE CAN'T ABSORB MORE SHOCKS WITHOUT UNDERMINING AAA
  • FITCH: FRENCH AAA WOULD BE AT RISK IF CRISIS INTENSIFIES
  • FITCH: ADDED MEASURES LIKELY NEEDED FOR FRANCE '13 DEFICIT GOAL
  • FITCH PROJECTS FRANCE DEFICIT IN '13 ABOUT 4% OF GDP

 

 


Tyler Durden's picture

From Bad To Worse As Europe Opens





The overnight news of worries over Dexia's bailout deal and the weak Chinese PMI print did nothing to help the generally poor sentiment as the US closed on the stress test news. Equity and Treasury Futures (as cash was closed in Tokyo) were in risk off mode but stabilized with ES around 1170 (-1% from US close). With Europe opening and TSYs trading once again, CONTEXT shows that the sell-off is broad based and supports equity weakness for now. European sovereigns are opening generally higher in yield and spread across the board with Ireland the stand-out currently. France and Belgium are also weak performers (Dexia?) followed by Italy and Spain. European credit has gapped down on the open with senior and sub financials worst performers (+7bps and +14bps respectively) followed by XOver and Main (+11bps and +3.5bps) - in line with US underperformance for now. Bloomberg's BE500 equity index just opened gap down around 1% but is outperforming credit for now as EURUSD touches 1.3440 again.

 


Econophile's picture

The Economy Is In Jeopardy





This white paper is a thorough analysis of the current economic situation and what are the most likely outcomes. The result is that the U.S. will be joining the rest of the world in an economic decline. This is not a new recession but a continuation of the existing one. Many of the data reports from the government, especially GDP, are grossly misleading and paint a hopeful but false picture of what is happening. We give our forecast for the next six months.

 


Tyler Durden's picture

Policy News Trumps Economic Data As Biggest Driver Of Tail Risk Events





The last six months have been anything but 'normal' in terms of market movements. Whether equity, bond, or FX markets, the high correlations and crashing disconnects have at times been incredible - leaving every risk manager's VaR calculation and desk-quants gamma-hedging program sorely lacking. Goldman specifically surveys the largest moves across asset-classes of the last six months and finds that it is policy announcements that have been far larger drivers of outsize market moves than economic data. This is a significant departure from the previous six months and while neither policy or economic outcomes are specifically harder to hedge, it is the Knightian uncertainty of the desparate policy-makers that is perhaps most worrisome going forward - especially given the lack of resolution anywhere in the world.

 


Tyler Durden's picture

Guest Post: Is Gold Still The Answer For Investors?





Though late to the party as usual, the proverbial man on the street – along with members of mainstream media and Wall Street heavyweights – is finally waking up to the decade-long, 700% increase in the price of gold, joining a growing buzz around the monetary metal. From questions whether gold is in a bubble to predictions that soaring prices are just around the corner, one thing is clear: a new phase of awareness for gold is upon us. How far might it move before these troubling times are over?

 


ilene's picture

Super Tuesday Committee Failure - So What?





The conclusion is inescapable. Fox News is deliberately misinforming its viewers and it is doing so for a reason. 

 


Tyler Durden's picture

Treasuries at 7-Week Low Yields As HYG Signals Way Again





UPDATE: CONTEXT - the broad basket of risk assets has now caught up and is supporting post-stress-test equity weakness after hours as TSYs slide lower in yield.

Gold and Silver outperformed their less precious commodity cohorts today as equities (and credit in general) managed a see-saw day centered around a dud IMF-bazooka and more-of-the-same from the FOMC. Stock and Bond markets stayed in sync early on as risk was decidedly off this morning following the weak GDP print though we do note that IG protection was bid even as stocks managed a small rally across the open. Equity and CDS indices tracked each other (as liquidity in the latter is low this week already) but the IMF-credit-line news jagged both notably higher and out of sync with HYG (the high-yield ETF) once again, and then as the FOMC minutes offered little immediate hope of QE3, reality set back in and equity and credit markets drifted back to the reality of HYG's risk aversion. The late day plunge in ES on the back of the stress-test announcement is not being followed by IG, HY, or CONTEXT for now as Gold and Oil were flat, FX marginally lower USD though TSYs were the main driver of risk weakness ending at the day's low yields and their lowest yield since 10/05. Implied Correlation diverged upward from index vol into the close suggesting strong macro-protection demand even as VIX leaked lower. Equities remain in catch-up-to-credit-weakness mode and given the reaction to today's mini-IMF-bazooka, we suspect derisking is here for the week.

 


Tyler Durden's picture

Is Jawboning All The Fed Has Left? Goldman's Take On The FOMC Minutes





It seems from our initial take on the minutes from the last FOMC meeting that there was a lot of talk about how to tell us mere plebeians what they are not capable of doing as opposed to actually doing anything. Maybe, given Bernanke's recent comments and subtle suggestions towards the need for fiscal policy, all the Fed has left is jawboning and their new policy of talking about potential policy. Goldman's rather less pessimistic perspective sees a communications policy aimed at explicit rate paths and they note the unusual inclusion of a 'risks and uncertainties' section - no longer then perhaps Bernanke's '100% sure' view of his actions.

 


Tyler Durden's picture

FOMC Minutes Leaked Early





While the FOMC Minutes have not yet been officially released by the Fed, it appears someone has broken the embargo. Here are the headlines.

  • A FEW FOMC MEMBERS BELIEVED OUTLOOK MAY WARRANT MORE EASING
  • FED OFFICIALS AGREED TARGETING NOMINAL GDP NOT ADVISABLE
  • A FEW FOMC MEMBERS FAVORED TIME PERIOD FOR INTEREST-RATE PLEDGE
  • A FEW FOMC MEMBERS BELIEVED OUTLOOK MAY WARRANT MORE EASING
  • A FEW FOMC MEMBERS FAVORED TIME PERIOD FOR INTEREST-RATE PLEDGE
  • FED OFFICIALS BACKED IDEA OF OFFERING MORE DATA ON RATE PATH
  • US RECOVERY SUBJECT TO SIGNIFICANT DOWNSIDE RISKS

In other news - nothing substantially different from the statement or the conference that followed.

 


Phoenix Capital Research's picture

Why is the IMF Giving More Funds, When the G20 Won't?





The IMF move is just a backdoor bailout that the Powers That Be are hoping the public won’t notice. None of the IMF backers were willing to commit money at the G20 meeting last month… so why are they willing to do so via the IMF now?

 


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