- "Slaughter House"
- "Job cuts in India STG. Announced today including managers.Asked to return laptops with in 2 hrs and leave premises."
- "STG Bangalore literally turned into a slaughter house today.
- "Several employees were called to a meeting and RA'd.
- "Their TPs were confiscated and they were asked to vacate premises immediately.
- "Severance package was on an average 3 months basic component of salary, which is like 6 weeks full pay.
While January was a bad month for the market, it was certainly one which the majority of hedge funds would also rather forget as we showed yesterday. So with volatility, the lack of a clear daily ramp higher (with the exception of the last 4 days which are straight from the 2013 play book), and, worst of all, that Old Normal staple - risk - back in the picture. what is a collector of 2 and 20 to do (especially since in the post-Steve Cohen world, one must now make their money the old-fashioned way: without access to "expert networks")? For everyone asking this question, here is Deutsche Bank with its take on which will be the best and worst performing strategies of 2014. So without further ado, here is the Deutsche Bank Asset and Wealth Management's forecast of hedge fund performance matrix...
So what happened to the unemployment rate that it dropped so fast it surprised and embarrassed even the "venerable" Federal Reserve, which had initially expected a 6.5% unemployment rate some time in 2015. To get the answer we go back in time to the last (and only previous) time when the US unemployment rate dropped from roughly 10%, which was in June 1983, to 6.6%, which took place three and half years later, in December 1986 - let's call it the "Reagan Recovery" in short.
A few short months after Putin cornered the US state department into a disastrous foreign relations dead end with the false flag Syrian escalation which achieved none of the predetermined nat-gas-to-Europe pipeline ambitions, instead alieanting the US from both staunch allies Saudi Arabia and Israel, the Russian president has just managed to inflict yet more pain on US foreign policy this time by infuriating (even more) a core US ally in Europe - Angela Merkel. Just two days after the phone recording of Victoria Nuland emerged in which she not only made it explicitly clear it was the US who was the puppetmaster behind the Ukranian opposition with the traditional CIA tractics as was expected all along, but also explained just how the US freels toward the EU with the now infamous "Fuck the EU" comment, Angela Merkel called the obscene remark "absolutely unacceptable."
Less than a year ago, David Rosenberg fundamentally shifted his thesis from deflationary to stagflationary at first, and then to outright inflationary, aka from bearish to bullish, based on one simple thesis: labor costs, and thus wage inflation - that all important harbinger of broad economic inflation - have nowhere to go but up. Unfortunately, they also have another direction they can go: down.
"Financial systems are unstable with excessive risk-taking," warns PIMCO's now solo guru Bill Gross, telling Bloomberg TV's Stephanie Ruhle that in a "Soros reflexivity... Once you get the levered system going, it hardly knows when and where to stop." Credit, as we have noted, has been relatively more stable (though less positive on the the way up) Gross notes and "the way to get rich in the past was to borrow money and to lever [up]," but Gross explains that now, "assets are artificially priced... from this point forward, double-digit returns, getting rich on leverage, no. You better look elsewhere for – for your profits," and not Asia. China is "the mystery meat" of emerging market countries, Gross cautions, "nobody knows what’s there and there’s a little bit of baloney."
If it seems like it was exactly a year ago that turmoiling retailer Radioshack shut down 500 stores due to lack of consumer interest in its wares (and or consumer disposable cash), it is because it was. So how does Radioshack demonstrate its morbid sense of humor on the one year anniversary of said announcement? Well, by closing another 500, or about 12% of the retailer's total 4500 outlets currently in existence. The WSJ reports that the company which once was the butt of all LBO-rumor jokes (and still is, only this time in the context of an M&A-rumor with JCPenney and/or the Joseph A. Wearhouse joint venture), is "planning to close around 500 stores in the coming months as the electronics retailer continues working with advisers to restructure the company."
"Not beating expectations" is the new "killing it" if today's markets are any judge. First, Facebook is up 19% ($150bn market cap). Gold and silver are being monkey-hammered in their new normal "I don't always sell gold, but when I do, I do it all at once in massive size) manner. Bond yields are pressing 3-4bps higher. The USD is surging (as JPY and EUR weakness trumps AUD strength) and that should provide the hint as to what is levitating stocks... JPY carry correlation remains extreme as the USDJPY bounce off 102 holds for now (and NKY is catching up).
"For the year ended Dec. 31, UPS generated $5.3 billion in free cash flow, producing a net income-to-cash conversion ratio of more than 120%. The company paid dividends of $2.3 billion, an increase of nearly 9% per share over the prior year, and repurchased more than 43 million shares for approximately $3.8 billion."
We have some great news for those Americans who are still in the labor force (so that excludes about 92 million working age US citizens) and still have a (full-time) job: you are now working longer than ever! In fact, as JPM's Michael Cembalest observes using Conference Board data, the average manufacturing workweek is now just shy of 42 hours - the longest in over 60 years. And there are those who say Americans are lazy...
Just because it wasn't enough of a vote of confidence in Jamie "Dear Congress: oath I vouch under oath that it was nothing but a tempest in a teapot" Dimon that his pay rose 74% to $20 million in 2013 despite JPM's Net Income crashing as the bank had to provision for tens of billions in legal expenses (conveniently excluded from Non-GAAP earnings) - but that's ok because the Fed's pumping of $1 trillion in fake buying power meant the stock soared - here comes folksy Crony Capitalist #1, aka cuddly Uncle Warren seemingly desperate for close encounters of the rectal kind with the JPM CEO, telling the world just how underappreciated poor, poor (we use the term loosely) Jamie is and said that if he owned J.P. Morgan, "he would keep Chief Executive James Dimon at the helm and would pay him even more than he’s making now."
IBM Asian Revenues Crash, Adjusted Earnings Beat On Tax Rate Fudge; Debt Rises 20% To Fund Stock BuybacksSubmitted by Tyler Durden on 01/21/2014 17:40 -0400
Fudging Non-GAAP numbers is nothing new: everyone does it, even if it means that real, operating earnings for IBM (and most other companies) are substantially lower, and sure enough IBM's real EPS was $5.73. But this is just the tip, because one has to look deep into the income statement to find just how it is that IBM, whose pre-tax income actually declined by 11% could post a 14% increase in non-GAAP EPS. The answer: taxes. And just like Bank of America, IBM decided to crater its Q4 tax rate, which was 25.5% in Q4 2012 and in Q4 2013 dropped to... 11.2%. Seriously IBM? Incidentally, this epic accounting gimmick is also why one should look at IBM's revenues which were a debacle: not only did they miss expectations of a $28.3 billion in Q4, printing at $27.7 billion, but were down 5%. And while most revenue items were weak, the piece de resistance was Systems and Tech revenue, which cratered 25%!
Said Dr. El-Erian: “I have been extremely honored and fortunate to work alongside Bill Gross, who is one of the very best investors in the world. His talents are truly exceptional, as is his dedication. I have also been amazingly privileged to work with the most talented group of professionals in the investment management industry. Their commitment and tireless work on behalf of our clients have been a consistent inspiration for me since I first joined PIMCO back in 1999. I wish them continued great success.”
"The latest review shows how the seeds of the current divergence were already sown in the early years of the euro, as unbalanced growth in some Member States, based on accumulating debt fuelled by low interest rates and strong capital inflows, was often associated with disappointing productivity developments and competitiveness issues. In the absence of the currency devaluation option, euro area countries attempting to regain cost competitiveness have to rely on internal devaluation (wage and price containment). This policy, however, has its limitations and downsides not least in terms of increased unemployment and social hardship, and its effectiveness depends on many factors such as the openness of the economy, the strength of external demand, and the presence of policies and investments enhancing non-cost competitiveness." - European Commission