• GoldCore
    07/23/2014 - 07:21
    Ukraine, Gaza, Iran, Isis, Syria and Turkey are all just pawns in a grotesque geopolitical game. All sides have their narratives. But in all cases, innocents must die ...

Gross Domestic Product

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The Indian Election Is Over: The Full Summary





Congress party President Sonia Gandhi concedes defeat after coalition led by Narendra Modi’s opposition Bharatiya Janata Party sweeps Indian election.
BJP bloc leads in 335 seats and Congress-led bloc in 59, according to NDTV tally of count as of 4:39 p.m. in Mumbai.
BJP alone set to cross majority mark of 272 seats from 543 up for grabs: Election Commission data
“India has won,” Modi says on Twitter
BJP poised for biggest victory for any single Indian party in 30 years on pledge to revive growth, improve governance
Congress heading for wost-ever performance after graft scandals, economic slowdown, elevated inflation

 
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Frontrunning: May 16





  • Bank of England sees 'no housing bubble' (Independent)
  • ‘If the euro falls, Europe falls’ (FT)
  • India's pro-business Modi storms to historic election win (Reuters)
  • Global Growth Worries Climb (WSJ)
  • Bitcoin Foundation hit by resignations over new director (Reuters)
  • Blackstone Goes All In After the Flop (WSJ)
  • SAC's Steinberg loses bid for insider trading acquittal (Reuters)
  • Beats Satan: Republicans Paint Reid as Bogeyman in 2014 Senate Races (BBG)
  • Tech Firms, Small Startups Object to Paying for Internet 'Fast Lanes' (WSJ) - but they just provide liquidity
  • U.S. Warns Russia of Sanctions as Ukraine Troops Advance (BBG)
  • Major U.S. hedge funds sold 'momentum' Internet names in first-quarter (Reuters)
 
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Yen Carry Slide Drags Futures To Lows





The perfectly expected if completely irrational overnight ramp in various Yen carry pairs tried, and failed, and both the USDJPY and EURJPY were tumbling to overnight lows as we go to print. This is happening despite a rout in India in which Narendra Modi's opposition block is poised for the biggest Indian election win in 30 years, with his BJP party currently leading in 332 of 543 seat - an outcome that is seen as very pro business (and seemingly pro asset bubbles: the INR soared and the Sensex was up as much as 6% in intraday trading before paring virtually all gains following what many say was RBI intervention). And while the Nikkei (down 200 points) did not help the mood this move was mostly in response to yesterday's US selling, which means as usual the culprit for lack of algo risk-taking overnight has been the Yen carry, which moments ago hit intraday lows, and is increasingly flirting with the 101 level (after which double digits, and Abe's second resignation, come very quickly).

 
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Scotiabank On Treasuries & The Fed: "You Got Some 'Splaining To Do"





Treasuries are still cheap. The FOMC statement says that “even after employment and inflation are near mandate-consistent levels” the committee may keep “the target federal funds rate below levels” viewed as normal in the longer run. Whenever we read this, we think of Desi Arnaz screaming, “Lucy! You got some ‘splainin’ to do!” Treasury prices do not care if Q4 is around 4%. Economic data matters little for the time being. Prices are being driven more by positions, relative value, and future Fed policy. Markets know the Fed is ending QE. What it really wants to know is the terminal Fed Funds level in the new ‘world order’. In the meantime, stay long.

 
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David Stockman Debunks More Keynesian Rubbish From Europe's Jon Hilsenrath





Once upon a time Wall Street Journal reporters were economically literate. Now, apparently, when they muster-in for the job they get a Keynesian chip implant while signing their HR forms. Otherwise, how can you explain the bullshit penned this morning by Brian Blackstone on the EU’s “disappointing” Q1 GDP report. He didn’t say Keynesian economists say you need more inflation to get jobs and growth. He just declared it!

 
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Subprime 2.0: 125% LTV Loans Are Coming Back





Yesterday we mocked China for being desperate enough to push its tumbling housing market (which directly and indirectly accounts for some 80% of Chinese GDP per SocGen estimates) no matter the cost, that at least 20 developers were offering the kinds of mortgages that resulted in the first credit bubble crack up boom and collapse, namely "Zero money down." Little did we know that the US, never one to lag in the financial innovation department had once again one-upped China, by bringing back from the dead the company that according to Housing Wire was "once a poster child for pre-crash subprime lending" - Ditech Mortgage Corp.  But best of all, ditech was known as a leader in subprime. The bulk of the mortgages were interest-only, low-documentation subprimes, and ditech was a pioneer in offering 125% loans allowing the borrower to borrow more than the sale price.

 
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Russia Dumps 20% Of Its Treasury Holdings As Mystery "Belgium" Buyer Adds Another Whopping $40 Billion





Moments ago the May TIC numbers did come out, and as expected, Russia indeed dumped a record $26 billion, or some 20% of all of its holdings, bringing its post-March total to just over $100 billion - the lowest since the Lehman crisis. But as shocking as this largely pre-telegraphed dump was, it pales in comparison with what we first observed, is the country that has quietly and quite rapidly become the third largest holder of US paper: Belgium.

 
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“Global Bubble ... Ends Very Badly” Warns 'Death Of Money' Rickards





Francine Lacqua (Interviewer): Jim, you also have this new book out, right, saying "The Death of Money" and this basically argues that if a number of things come together, we could have financial warfare, deflation, hyperinflation, market collapse. And yet the markets are merrily going along. Are we in a fictitious world?

 
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Greek Stocks Tumble, Drag Periphery Down, On Election Fears, Retroactive Tax





Four years and three prime ministers after Greece’s then premier, George Papandreou, requested an international bailout that slammed his nation with painful austerity (but saved the EU banks), Bloomberg notes that political instability still haunts Greece. Despite issuing bonds and GDP coming in slightly better than expected (still in recession/depression), former Prime Minister Costas Simitis of Pasok admits "The euro crisis seems to be over but its causes have not withered away," and if election polls are anything to go by, the fragile fraud that is a Greek recovery is set for problems Samaras' governing coalition as Syriza (the opposition that rejected the bailout terms) support soars and Pasok plunged to sixth place with just 5.5% support. In addition, retroactive taxes on gains are weighing on European bond markets (and Greek stocks).

 
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Initial Claims Plunge To Lowest Since May 2007





"Mission Accomplished"... At 297k this is the lowest initial claims print since May 2007 (beating expectations of 318k by the most in 8 months). This rebound jump lower in claims reflects on many of the most recent indicators bouncing back from weather-effects but the question is its sustainability - and extrapolatibility (which we are sure is a word being used by the sell-side strategists expecting 4% GDP growth in Q2). Total benefits dropped 9k to 2.67 million - the lowest since Dec 2007. All things considered - America is fixed... so why are bond yields collapsing and GDP so piss-poor? Just like Japanese GDP however, good news appears to be bad news as the US equity market did not flinch on this record-setting jobs print.

 
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Europe's "Very Disappointing" Q1 GDP In Charts





Thank god for Germany, whose Q1 GDP printed at 0.8%, above the expected 0.7%, and higher than Q4's 0.4%, or else the Eurozone's very disappointing Q1 GDP, which printed at 0.2% or half the expected 0.4%, could have been flat or negative.

 
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Surge In Japan's Economy Pushes Futures Lower, But European GDP Miss Welcomed By Stocks





In this brave new centrally-planned world, where bad is good, very bad is very good, and everything is weather adjusted, Japan's blistering GDP report last night, printing at 5.9% on expectations of 4.3% was "bad" because it means less possibility for a boost in QE pushing futures lower, while the liquidity addicts were giddy with the GDP miss in Europe where everyone except Germany missed (as for the German beat, Goldman's crack theam of economic climatologists, said it was due to the weather), and the Eurozone as a whole came at 0.2%, half the forecast 0.4%, which in turn allowed futures to regain some of the lost ground.

 
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How The Debt Trap Swallowed Asia In Three Charts





When it comes to the topic of the marginal utility of debt, or how much GDP does a dollar of debt buy (an example of which can be seen here), most people are aware that the developed world is facing ruin: with debt across the west already at record, nosebleed levels, and with GDP growth slowing down (due to capital misallocation, thank you Fed, demographic and productivity reasons), it is only a matter of time before it doesn't matter how many trillions in debt a given treasury will issue (and a given central bank will monetize) - the credit impulse will simply not translate into incremental economic growth. But did those same people also know that Asia is almost as bad if not worse as the west when it comes to the marginal utility of debt?

 
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Bye Taper Tantrum, Hello Tepper Tantrum: Appaloosa Head "Nervous", Says "Dont' Be Too Freakin' Long"





Almost exactly a year ago Bernanke unleashed what Zero Hedge first dubbed the Taper Tantrum. Moments ago, the head of Appaloosa revealed what may be the catchphrase of mid-2014 with the "Tepper Tantrum", when during his presentation at the annual SALT conference in Las Vegas, the usually bubbly and cheerful billionaire (who last year made $400,000 per hour or a total of $3.5 billion) spooked everyone and in what for someone who has traditionally been long everything on leverage can pass as sheer doom and gloom basically told his wide audience that he is "nervous, it's nervous time" and in this "dangerous market", it is "time to preserve money"; his advice to anyone listening: "don't be too freakin' long".

 
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Moar QE Hopes Dashed As Japanese GDP Rebounds To Best Since Q3 2011





Following last quarter's biggest miss in 18 months, Japanese GDP surged to its biggest beat in 3 years. This is the same kind of reflexive (and at that time entirely unsustainable) bounce that was seen after the Tsunami in 2011. Of course the big problem is that this removes much of the crutch for further QQE in July that so many have been hoping for. The initial pop in the Nikkei has faded rapidly into selling pressure and USDJPY is also losing ground... good news is once again, terrible news for equity investors.

 
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