Israel

Regime Change: America's Failing Weapon Of International Deception

After almost two centuries of political and economic meddling in Latin America under the Monroe Doctrine (1823) banner, much of it involving regime change, the US is finally coming to terms with the reality that its influence has not just waned but disappeared. To Washington’s despair, similar results, if for other reasons, are happening throughout North Africa and the extended Middle East; certainly not the results the US had hoped for or anticipated from the revolutionary wave in the Arab Spring, now entering its fifth year. The era of using regime change as a weapon of mass deception may have already ended for the United States of America… and hopefully for the entire world.

Frontrunning: March 23

  • Saudis keep on pumping, oil prices keep on slumping (Reuters)
  • Tenet Healthcare Nearing Deal to Buy United Surgical Partners (WSJ)
  • Dizzying Pre-IPO Tech Values Spurred by Rush of Hedge-Fund Money (BBG)
  • Russia threatens to aim nuclear missiles at Denmark ships if it joins NATO shield (Reuters)
  • Torrent of Cash Exits Eurozone (WSJ)
  • Draghi Cheerleads for Euro-Area Economy as Greek Risk Looms (BBG)
  • Fortescue Mines for More Financing Options (WSJ)
  • Topix Charts Evoke Calm Before ’13 Rout as Momentum Gains (BBG)

Guest Post: How Putin Can Win The Economic War Against The West

Russia must get aggressive in the economic war. You can win this economic contest in 24 months, if certain special zones in Russia simply are allowed to copy Swiss banking rules and regulations, as wealth will always flow to secure locations where taxes are low. You know what banking privacy and security did for Switzerland, it made a poor country with few natural resources the wealthiest nation in the world.

Sweden Slides Further Into NIRP: Cuts To -0.25%; Expands QE

Ahead of The Fed's 'impatience' today, and amid a tumbling EUR, the oldest central bank in the world has decided it is time to go further into the illustrious ranks of NIRP/QE'ers:

*RIKSBANK CUTS KEY RATE TO -0.25%, TO BUY GOVT BONDS FOR SK30 BLN

So as opposed to Denamrk's roundabout QE, Sweden just jumps in and monetizes that debt direct by expanding their QE program and shifts from small NIRP to bigger NIRP. All this while suggesting the labor market is strengthening and inflation has bottomed out. The reaction - SEK is plunging and OMX surges.

Frontrunning: March 18

  • Hilsenrath: Fed to Markets: No More Promises (WSJ)
  • Fed set to ditch 'patient' rate vow as it eyes U.S., world growth (Reuters)
  • Fannie, Freddie could need another bailout (Reuters)
  • Alibaba Stock-Sale Lockup Is Ending (WSJ)
  • Netanyahu Sweeps Aside Herzog’s Challenge to Win Israel Vote (BBG)
  • Oil Bonds Lose Investors $7 Billion in 10 Days (BBG)
  • There’s a mysterious $1.1 trillion in spending cuts in the House GOP’s budget (WaPo)
  • ECB's Celebration of Its New $1.4 Billion Tower Is Spoiled by Protesters (BBG)

Futures Weak Ahead Of "Impatient" Fed, Oil Slide Continues; China Stocks Go Berserk

The only news that matters to algos today is whether Janet Yellen will include the word "patient" in the FOMC statement as a hint of a June rate hike, even though the phrase "international developments" is far more important in a world in which everyone (such as the 25 or so central banks who have cut rates in the past 80 days) is now scrambling to export deflation to everyone else. And with carbon-based traders recuperating from St. Patrick's day, few will notice that the oil tumble continues as WTI touches new 6 year highs after yesterday's shocking 10MM+ API build, and is now openly eyeing a collapse into the $30s. Just as nobody will notice that even as futures in the US and European stocks are looking a little hungover ahead of the Fed and perhaps on the latest bout of anti-austerity out of Europe, the China levitation has gone full retard, with the SHCOMP up another 2.1% yesterday and now in full-blown parabolic mode as housing data confirms the Chinese housing bubble has truly burst, and as shadow bankers dump all their funds into stocks in hopes of making up for losses due to regulatory intervention.

As Israel Votes, Meet The "Anyone But Bibi" Coalition

Israelis will elect a new parliament March 17. As WaPo notes, the main contest pits the right-wing Likud party of Prime Minister Benjamin Netanyahu against a surprisingly strong challenge from the Zionist Union, a center-left political alliance led by Isaac Herzog of the Labor party. Polls place Herzog's bloc ahead of Likud, but that's no guarantee of victory. Since Israel's first election in 1949, no single party has ever won an outright majority in the 120-seat Knesset, the name for the Israeli parliament. That means smaller political parties -- and there are 26 in total -- play a significant role in shaping the ruling coalition that forms the Israeli government after the ballots get counted. There appear to be three main scenarios for Israel's next coalition...

Russia Cuts Interest Rate From 15% To 14%, Ruble Rises

Following the dramatic December surge in Russian interest rates when the Bank of Russia scrambled to preserve confidence in the then-plummeting currency and sent the interest rate to a whopping 17%, now that the oil price crash has stabilized it has been walking down this dramatic move, and after reducing rates by 2% on January 30 to 15%, moments ago the Bank of Russia once again cut rates this time by the expected 100 bps to 14%. The bank also said that more rate cuts are in the pipeline.

Bank Of Korea Unexpectedly Cuts Interest Rate To Record Low 1.75%, 24th Central Bank To Ease In 2015

The currency war salvos just keep on coming.  Moments ago the BOK unexpectedly (the move was predicted by just 2 of 17 economists polled by Bloomberg) cut its policy rate from 2.00% to a record low 1.75%, in what is clearly a full-blown retaliation against the collapse currency of its biggest export competitor, Japan, whose currency has cratered to a level that many in South Korea believe has become a direct subsidy for its competing exports. As such the only question is why the BOK didn't cut earlier. And following the surprise rate cut by Thailand earlier today, the "surprise" South Korean rate cut means there are now 24 easing policy actions by central banks in 2015 alone.

Thai Central Bank's Surprise Action Is 23rd Rate Cut Of The Year

Whether the world's central banks are 'co-operating' or competing is up for question but the tsunami of policy easings so far this year is making the 'surprise' rate cut, unsurprising. As Bloomberg reports, Thailand today became the latest to execute an unexpected interest-rate cut, bringing the total to 23 in 2015. While only 6 of 22 economists expected it, the Southeast Asian country -- a onetime export powerhouse that’s seen its manufacturing mojo dim somewhat in recent years amid historic flooding and political infighting -- lowered its main rate to 1.75%. "The surprise move suggests the economy is much weaker than expected," noted one analyst, adding that "it is negative for the baht and there’s concern that lower rates may lead to more outflows as the U.S. is expected to raise rates."