One glance at the following chart prepared by the Economist, showcasing the world's largest importers of weapons, and more importantly, exporters, and one could almost imagine why both the US and Russia have an interest in a "contained" (or not so much) regional war...
Take a moment and look at your hands. Specifically, compare the length of your ring finger to the one you use to point. Is the ring finger longer or shorter than your pointer, and by how much? It turns out that the answer to that question can tell a lot about your mental abilities and appetite for risk. As ConvergEx's Nick Colas details, a 2009 study of mostly male traders working in London found that the ones with longer ring fingers were generally more profitable than those with shorter ones. Traders with the largest fourth finger/second (pointer) finger ratios actually made 11 times more than those with the smallest.
- 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)
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).
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!
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.
- More than 20 dead, doctor says, as anti-China riots spread in Vietnam (Reuters)
- Russia's Gazprom plans Singapore stock exchange listing (Reuters)
- Inside Europe’s Plan Z (FT)
- Ukraine slides deeper toward war as Russia warns to vote (BBG)
- Fast-Food Protests Spread Overseas (NYT)
- BOJ Beat, Officials Could Upgrade Outlook for Capex (WSJ)
- Euro-Zone Economy Shows Weaker-Than -Expected Expansion (WSJ)
- Yahoo to YouTube Ads Spreading Viruses Rile Lawmakers (BBG)
- New York Times Ousts Jill Abramson as Executive Editor, Names Dean Baquet (BBG)
- NYT Publisher Said to Always Have Clashed With Abramson (BBG)
- Google gets take-down requests after European court ruling - source (Reuters)
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.
Geithner Confirms Mafia-Linked Berlusconi's Forced Ouster, But Says US Did Not "Have Blood On Our Hands"Submitted by Tyler Durden on 05/14/2014 22:38 -0400
Silvio Berlusconi - ironically nicknamed "The Teflon Don" - has been found to have done business with the Sicilian Mafia for nearly two decades, according to Italy's Supreme Court of Cassation in Rome. Having attacked the "biased judges" who called his actions "a continuous crime," Berlusconi wriggled out from under this result since the link to the Cosa Nostra was, as The Independent reports, via his conduit and former senator Marcello Dell’Utri who was sentenced to 7 years for mafia association. While this confirms as fact yet another conspiracy theory, the bigger story was the confirmation of a broad-based bloodless coup to ouster the Italian Prime Minister at the peak of the credit crisis. "At one point that fall, a few European officials approached us with a scheme to try to force Italian Prime Minister Silvio Berlusconi out of power," Tim Geithner writes in his new book, and after telling the President about "this surprising invitation," they decided not to get involved (publicly): "We can't have his blood on our hands."
Headlines were made earlier today as Ireland’s ten year borrowing costs dropped below the UK’s for the first time in six years. Given that it only recently exited a bailout programme and not long ago was mired in the worst crisis in a generation, this is a pretty astonishing turnaround. Nor is Ireland alone. Spain and Italy can now borrow at similar rates to the USA on ten year debt. More broadly, in the past year peripheral countries borrowing costs have plummeted to levels seen before the crisis, or below, as countries begin exiting bailouts and returning to the markets. There are three key factors driving this 'bubble" and five major problems stemming from this seeming nirvana.
This week markets are likely to focus on a few important data prints in DMs, including Philly Fed in the US (expect solid expansionary territory) and 1Q GDP releases in the Euro area (with upside risks). In DMs, the highlights of the week include [on Monday] Japan’s trade balance data and Australia business conditions; [on Tuesday] US retail sales, CPI in Italy and Sweden; [on Wednesday] US PPI, Euro area IP, CPI in France, Germany and Spain; [on Thursday] US Philly Fed, CPI, capacity utilization, Euro area and Japan GDP; and [on Friday] US Univ. of Michigan Confidence. In the US, we expect Philly Fed to print in solidly expansionary territory (at 14, similar to consensus) and to inaugurate what we call the active data period of the month. We also expect CPI inflation to print at 0.3% mom (similar to consensus), and core CPI inflation at 0.18% mom (slightly above consensus).
- Hillary and Me: The 2008 campaign was a nightmare. Will 2016 be as bad? (Politico)
- What Timothy Geithner Really Thinks (NYT)
- Rebels declare victory in east Ukraine self-rule vote (Reuters)
- Race for AIG's Top Job Has Two Favorites (WSJ)
- America on the Move Becomes Stay-at-Home Nation for Millennials (BBG)
- Old, Fired at IBM: Trendsetter Offers Workers Arbitration (BBG)
- Bad luck Jonathan: Pressure Mounts on Nigerian President (WSJ)
- Iran leader slams West's 'stupid' missile stance before talks (Reuters)
- Conchita Wurst of Austria Wins Eurovision Song Contest (WSJ)
- Greek Finance Ministry expects Q1 GDP contraction of less than 1.5 pct (Kathimerini)
After a job well done by a public servant, and by a job well done we of course mean facilitating the transfer of middle class, taxpayer wealth to private bank accounts, it is customary to reward them with a comfortable job in the same bank as repayment. This is also known as the revolving-door phenomenon and is the norm in US "regulation" (the epitome of career development by any SEC employee or US Treasury Secretary is to be hired by a Too Big To Fail Bank or private equity firm) and generally, politics. But not only US. Bloomberg reports that it is just as prevalent in Europe:
- Vittorio Grilli joins JPMorgan as chairman of corporate and investment bank in Europe, Middle East and Africa.
- Grilli will report to Daniel Pinto
- JPMorgan announces Grilli hire in memo to staff, obtained by Bloomberg News
Because when the time comes to bailout the likes of JPMorgan, again, it will certainly help to have connected former "public servants" like Grilli on board of course. Rinse. Repeat.
... To the astonishment of almost everyone in the room, Angela Merkel began to cry. “Das ist nicht fair.” That is not fair, the German chancellor said angrily, tears welling in her eyes. “Ich bringe mich nicht selbst um.” I am not going to commit suicide. For those who witnessed the breakdown in a small conference room in the French seaside resort of Cannes, it was shocking enough to watch Europe’s most powerful and emotionally controlled leader brought to tears....
Dispassionate discussion of the near-term forces at work in the foreign exchange market.