Futures Rebound On Collapse In Greek Negotiations, After Europe's Largest Derivatives Exchange BreaksSubmitted by Tyler Durden on 02/17/2015 07:43 -0400
There was a brief period this morning when market prices were almost determined by non-central banks. Almost. Because shortly before the European market open, a technical failure on the Eurex exchange prevented trading in euro-area bond futures the day after Greek debt talks collapsed. And sure enough, after initially seeing significant downward pressure, which nobody could capitalize on of course courtesy of the broken Eurex, risk both in Europe and the US has since rebounded courtesy of the ECB, SNB and BIS, led by the EURUSD (because a Grexit threat which according to Commerzbank has been raised from 25% to 50% is bullish for the artificial currency), which is now at the level last seen just before yesterday's negotiations broke down, and US futures are about to go green.
It has been a quiet start to the week, with US equity futures and European stocks mostly unchanged with all eyes on what progress (if any) will be made between Greece and the Eurogroup, where the press conference is scheduled for 7:00 pm GMT (expect significant delays) in what is otherwise expected to be a relatively subdued day with the US away from market and a light macroeconomic calendar.
- Greece will do 'whatever it can' to reach deal with EU (Reuters)
- ECB Urges Greek Political Deal as Emergency Cash Is Tight (BBG)
- Fighting rages in run-up to Ukraine ceasefire (Reuters)
- Eurozone GDP Picks Up, Thanks to Germany (WSJ)
- Two J. P. Morgan Executives Connected to Asia Hiring Probe Pushed Out (WSJ)
- Putin's High Tolerance for Pain and Europe's Reluctance to Inflict It (BBG)
- Indigestion Hits Top U.S. Food Firms (WSJ)
- Alibaba's Jack Ma seeks to reassure employees over U.S. lawsuits (Reuters)
The bond market may have gotten so fragmented in recent months that even Bloomberg was amazed at how little trading volume it necessary to make a price impact, the amount of bond traders (and certainly salesmen), and certainly their bonuses, appeared to only go up. "Appeared" being the key word, however, because as Bloomberg reports, "the average number of dealers providing prices for European corporate bonds dropped to a low of 3.2 per trade last month, down from 8.8 in 2009, according to data compiled by Morgan Stanley."
- 'Glimmer of hope' for Ukraine after deal at Minsk peace summit (Reuters)
- Ruble Rebounds, Russian Stocks Surge on Ukraine Cease-Fire Deal (BBG)
- Greek PM Tsipras in Brussels as clock ticks on EU bailout (Reuters)
- Emerging-Market Currencies Rout Not Over for Traders (BBG)
- Little noticed, new Saudi king shapes contours of power (Reuters)
- In Wake of Financial Crisis, Goldman Goes It Alone (WSJ)
- AmEx Is Losing Its Millionaires (BBG)
- Thousands to Lose Health Insurance Over Residency Questions (WSJ)
There have been ZERO times that the Federal Reserve has entered into a rate hiking campaign that did not have a negative consequence...
China’s stock market is on fire but its economy is cooling off. Can the divergence last? And what’s next for China? Stay tuned to find out.
The world economy stands on the brink of a second credit crisis as the vital transmission systems for lending between banks begin to seize up and the debt markets fall over. The latest round of quantitative easing from the European Central Bank will buy some time but it looks like too little too late.
Post-Crisis Scorecard: Debt Up $57 Trillion, 60% Of Jobs Created Are Low Level, Record Youth Living With ParentsSubmitted by Tyler Durden on 02/08/2015 15:15 -0400
This won't end well...
The NYT Exposes The Criminal Money-Laundering Underworld Supporting Manhattan's Luxury Housing BubbleSubmitted by Tyler Durden on 02/07/2015 16:02 -0400
“We like the money,” said Raymond Baker, the president of Global Financial Integrity, a Washington nonprofit that tracks the illicit flow of money. “It’s that simple. We like the money that comes into our accounts, and we are not nearly as judgmental about it as we should be”... Mayor Michael R. Bloomberg said on his weekly radio program in 2013, shortly before leaving office: “If we could get every billionaire around the world to move here, it would be a godsend.”
Two weeks ago we reported that "the next victim of crashing oil prices has been identified: housing", particularly non-residential construction among the energy producing regions, where the capex collapse reality is already being felt far and wide. Eventually, once the overall economy of these same oil producing regions is impacted sufficiently, the pain would spread to residential housing as well, as the energy boom that kept the local economies humming for years, turns to a bust. But while the US patiently, and nervously, awaits the outcome of the crude crash, one place is already starting to suffer the consequences of the price collapse is Canada's energy Mecca, Calgary, where as the Financial Post reports, "the stage has been set for a massive correction in the oilpatch."
In a stunningly honest reflection on itself (and its peer group of professional prognosticating panderers), The Federal Reserve's San Francisco research group finds that - just as we have pointed out again and again - that since 2007, FOMC participants have been persistently too optimistic about future U.S. economic growth. Real GDP growth forecasts have typically started high, but then are revised down over time as the incoming data continue to disappoint. Possible explanations for this pattern include missed warning signals about the buildup of imbalances before the crisis, overestimation of the efficacy of monetary policy following a balance-sheet recession, and the natural tendency of forecasters to extrapolate from recent data. The persistent bias in the track records of professional forecasters apply not only to forecasts of growth, but also of inflation and unemployment.
What ratings agency Fitch and the Bank of Canada had warned about has come to pass.
Amid the collapse in crude oil prices, the Norwegian central bank cut rates in December (after 1000 days on hold) and is likely to cut again as economic growth stalls. However, the country's financial regulator is warning falling interest rates risk pushing the Norwegian housing market beyond its breaking point into a "self-augmenting spiral." With prices up 8.1% YoY, and up 85% nationwide in the last decade, even Robert Shiller warned of Norway's housing bubble in 2012 - and since then household debt (and home prices) have surged. As Bloomberg reports, Morten Baltzersen, head of Norway’s Financial Supervisory Authority stressed "continued rapid growth in debt and house prices isn’t sustainable." Unintended consequences?