- Reinhart and Rogoff: Responding to Our Critics (NYT)
- Differences with centre-right delay Italy's Letta (Reuters)
- Italy's Letta moves forward to shape government (Reuters)
- China’s leaders warn on financial risks (FT)
- Norway oil fund makes big move from bonds to stocks (FT) - worked wonders for the Bank of Israel
- Smuggling milk is the new smuggling heroin in HK: Milk Smugglers Top Heroin Courier Arrests in Hong Kong (BBG)
- RenTec's mean reversion models fail on BOJ lunacy: Yen Bets Don't Add Up for a Fund Giant (WSJ)
- From 'Fabulous Fab' to Grad Student (WSJ)
- BOJ in credibility test as divisions emerge over inflation target (Reuters)
- Boston Bombing Suspect Moved from hospital to prison (WSJ)
- Provopoulos Says ECB May Never Need to Use Bond-Buying Program (BBG) which is good because, legally, it doesn't exist
- China’s Recovery Falters as Manufacturing Growth Cools (BBG)
- Gloomy eurozone output points to rate cut (FT)
- Limit Austerity, EU appartchik Barroso Says (WSJ)
- Regulators Get Banks to Rein In Bonus Pay (WSJ)
- SEC looks to ease rules for launching ETFs (Reuters)
- Easy come, easy go: U.S. Seizes $21 Million From Electric Car Maker Fisker (WSJ)
- Japan nationalists near disputed isles (Reuters)
- OECD in fresh warning on Japan debt (FT)
- S&P says more than one-third chance of Japan downgrade, cites risks to Abenomics (Reuters)
Caterpillar just can't catch a break. First, in January the firm was punk'd by a Chinese acquisition fraud, forcing the company to write off half of its Q4 earnings. This, of course, in the aftermath of the miss in both Q3 and Q4 earnings. And now we get the latest disappointing news from the firm as Q1 numbers are reported lower across the board.
- Q1 EPS $1.31, Exp $1.38; this includes a tax benefit of $87 million
- Q1 revenue: $13.2 billion, Exp. $13.8 billion
- Guides much lower, with revenue now seen at $57-61 billion, compared to $60-68 billion previously
- CAT forecasts profit per share of $7.00, compared to $7.00-9.00 previously.
- Operating cash flow of $900MM, but all of it generated from net working capital, i.e., inventory liquidation
- And when you can't spend on capex, you spend on buybacks: CAT to extend buyback through 2015
So much for that.
Where German industrial companies plan to invest: a slew of losers out there, including Germany
Participants don’t see them. Outsiders shake their heads, until they get sucked in. Central banks create them, but deny their existence. Risks no longer exist. Take natural gas.
- Police Searching for 19-Year-Old Boston Bombing Suspect (BBG)
- Mayhem Erupts in Boston After MIT Campus Officer Slain (BBG)
- Elvis Impersonator Accused of Ricin Letters Sowing Fear (BBG)
- Blackstone Pulls Out of Dell Bid on Rapidly Falling PC Sales (BBG)
- Before Texas plant exploded: What did regulators know? (Reuters)
- Aso Says Japan Policy Unopposed at G-20 Meeting as Yen Falls (BBG)
- Bipartisan pair target $2.5tn US savings (FT)
- Plan for new Cyprus vote casts uncertainty on bailout (Cyprus Mail)
- Ireland picks through debtors’ lifestyles (FT)
Fresh from his humiliating defeat in the Senate to promote his pacifist gun-control agenda yesterday, in the name of the "90%" of course (who apparently need to pick their senatorial representative just a little more effectively), the Nobel Peace Prize winner has decided that guns just may be the right answer when it comes to promoting peace, or least his agenda abroad. WaPo reports that the Obama administration has ordered additional U.S. troops to Jordan for possible chemical weapons control, humanitarian response or “stability operations” in Syria. "The new troops, a headquarters element of the 1st Armored Division based at Fort Bliss, Tex., will not greatly increase the number of U.S. forces in Jordan. About 150 troops were sent last year to help train Jordanian military and Syrian opposition forces. Some of those troops will remain, and the new arrivals will increase the total to more than 200."
In what may be a first in at least 3-4 months, instead of the usual levitating grind higher on no news and merely ongoing USD carry, tonight for the first time in a long time, futures have drifted downward, pushed partially by declining funding carry pairs EURUSD and USDJPY without a clear catalyst. There was no explicit macro news to prompt the overnight weakness, although a German 10 year auction pricing at a record low yield of 1.28% about an hour ago did not help. Perhaps the catalyst was a statement by the Chinese sovereign wealth fund's Jin who said that the "CIC is worried about US, EU and Japan quantitative easing" - although despite this and despite the reported default of yet another corporate bond by LDK Solar, the second such default after Suntech Power which means the Chinese corporate bond bubble is set to burst, the SHCOMP was down only 1 point. The Nikkei rebounded after strong losses on Monday but that was only in sympathy with the US price action even as the USDJPY declined throughout the session.
President-elect Nicolas Maduro has stern words for his opposition, Henrique Capriles, who lost by an apparent 1.8% of the vote (the closest margin in 45 years) and is demanding a recount. Capriles is urging his supporters to take to the street tomorrow to push for the recount, but Maduro warned doing so is a "death wish," as Bloomberg reports, he added, "going to downtown Caracas will fill it with blood and death." With little to lose in this zero-sum game, the protests have already turned deadly with 61 injured and 7 dead. The government's refusal to complete the recount is polarizing the country, "if supporters lose faith in formal politics, the violence will become unpredictable." The images and clips below suggest things are escalating rapidly as Maduro has called the election a choice between capitalism and socialism warning Spanish corporations such as Repsol that they could face 'exemplary action' from his government. The violence of the 2002 coup against Chavez is fresh in people's mind, but today's situation is far more worrisome since the relative legitimacy of Maduro is less clear.
Goldman Keeps Gold Short As It Lowers Stop Price, Even As It Is Stopped Out On Commodity Basket For 6% LossSubmitted by Tyler Durden on 04/16/2013 09:43 -0400
Yesterday, Goldman was stopped out of its inflationary Long Brent reco for a 15.5% loss (for the clients of course, not for the Goldman counterparty traders who made 15.5%). Today, it was time for Goldman to get stopped out on its Commodity Carry Basket, after the firm's 6.0% stop loss was triggered: "Spillover from gold and renewed European and EM macroeconomic concerns also created sharp sell-offs in crude oil and base metals, that were mostly front-end driven, crushing spreads (the carry), as longer-dated prices remained remarkably stable. This stopped us out of our CCB (Commodity Carry Basket) recommendation with the potential loss reaching our 6.0% stop." With gold now trading below the revised stop out target, we will watch to see if Goldman lower its target once more to buy even more paper gold that its clients are furiously selling.
- Investigators hunt for clues in marathon bombing (Reuters)
- Investigators scour video, photos for Boston Marathon bomb clues (Reuters)
- 'Act of Terror' Kills at Least Three, Injures About 140 as Bombs Wreak Carnage on Marathon Crowd (WSJ)
- Brent Crude Below $100 (WSJ)
- Slower China Growth Signals Days of Miracles Are Waning (WSJ)
- Central Banks at Ease Limit Risk Political Backlash (BBG)
- Merkel plans to quit midterm, says author (FT)
- Monte Paschi Prosecutors Seize $2.3 Billion of Nomura Assets (Businessweek)
- Treasuries back on investors’ buy lists (FT)
- J.C. Penney Said to Seek Ways to Separate Real Estate for Cash (BBG)
- Climate scientists struggle to explain warming slowdown (Reuters)
- Putin Calls for Stimulus Plan After Recession Alarm (BBG)
- TIPS in Longest Selloff Since ’08 as U.S. Bancorp Cuts (BBG)
When news hit the tape in February of 2007 that TXU would be acquired by a consortium of PE firms including KKR, TPG and Goldman, for the mind-boggling price of $45 billion, to this day the biggest LBO in history, there were those who were morbidly excited about the future as money was flowing freely, bonuses would hit a record, and there was only upside, and then there were those who knew this was the can't miss top-tick indicator of the beginning of the end. The latters ones turned out to be right. And not only because a year later the entire financial system imploded and only a $25 trillion global coordinated bailout prevented the collapse of the western way of life as we know it, but because now six years later, in the worst kept secret of Wall Street of the past month, TXU, now known as Energy Futures Holdings, is on the verge of the ultimate humiliation for private equity investors: Chapter 11, and a complete wipe out of not only the equity but major impairment of the debt holders as well.
- Venezuela Says Chávez Successor Wins Vote (WSJ)
- China growth risks in focus as first quarter data falls short (Reuters)
- Japan Gets Calls From U.S. to Europe Not to Drive Down Yen (BBG)
- EU Set to Clash on Bank Deal as Germany Sees Treaty Limit (BBG)
- Dish Launches $25.5 Billion Bid for Sprint (WSJ)
- Commodities Tumble, Stocks Slide as China Growth Slows (BBG)
- Top fund managers take home $8bn less (FT)
- Obama Programs Derided by Republicans as Pejorative Entitlements (BBG)
- Gene swapping makes new China bird flu a moving target (Reuters)
- McDonald's Cranks Up The Volume on 'Value' (WSJ)
- UK pension deficits set to rise by £100bn (FT)
If You Don't Believe In Global Warming, Please Forward This to Your Friends Who Do
You can almost hear the snickering among European politicians.