Speaking like a jilted girlfriend, German finance minister Wolfgang Schaeuble exclaimed that "Russia needs Europe more than China to develop economy," following the signing of the 'holy grail' gas deal this week. But the German saved his sternest comments for his US "allies" as he explained discussions over sanctions and negotiations with Russia over Ukrains would "be even more successful if the United States understands that it is also part of the West." Reflecting on the waning US influence and slamming US Congress delays over IMF reform, Schaeuble unleashed the following: "Perhaps now more of those in power in the United States will ask themselves: Why is America's soft power, even though it is the indispensable nation, not so great as to be understood by the dumb Germans?" As the WSJ reports, Schaeuble reiterated "we won't seek military escalation, but we will of course use our political and diplomatic abilities to increase the pressure on Russia to abide by the rules."
So long as inflation stays under four percent, it's a bullish factor. In such environments, the S&P 500 (since 1948, according to S&P's Capital IQ) increases on average 70 basis points per month.
Following the only major overnight econ event, which was the May German IFO Business Climate Index which dropped from 111.2 to 110.4 missing expectations of 110.9, the USDJPY has been on a soaring rampage higher hoping to push equities along with it (because now that gold manipulation is a proven fact, it is only a matter of time before the link between manipulating the USDJPY on thin volume with massive leverage and rigging the equity market is uncovered too), and at last check was just shy of 102.000. For now equity futures have failed to be dragged along although with the S&P all time high just around the horizon, the psychological level of 1900 staring the rigged market in the face, and the weekend just around the corner, it is virtually assured that the S&P will close at an all time high today - after all the people need to be confident when they go shopping at malls with money they don't have (but delighted by paper profits they haven't booked) so they boost the US non-GAAP GDP (at least before like Italy, the BEA too changes the definition of GDP to include cocaine and hookers). Finally, assuring a (record?) low-volume levitation today is the early closure of the bond pit ahead of Memorial Day holiday which also means only a skeleton crew of algos will be frontrunning each other to push the S&P over 1,900.
A day after the Federal Reserve warned that "low level of expected volatility implied by some financial market prices might also signal an increase in risk appetite" and this complacency; the Bundesbank has decided to try and jawbone back investors' exuberance across Europe. As Die Welt reports, while stocks and bonds are near record highs across Europe - thanks to the ECB's Mario Draghi's promises, Bundesbank board member Andreas Dombret warned "we see risks - despite the fact that markets are calm," and perhaps incredibly suggested investors "flatten all risks now to avoid the herd behavior."
"I hope there are people who love the feature and post more," says Facebook's product manager excitedly about the new feature they just added. We suspect people will not... As The WSJ reports, starting Wednesday, the app has the ability to recognize music and television shows playing in the vicinity of users. Read that again... 'in the vicinity of users'. In other words, Facebook is unveiling its own NSA-style eavesdropping feature (on you and all your friends). Don't worry though... even if users decide not to share what they’re hearing or watching, Facebook will hold onto the data in anonymous form, keeping tabs on how many users watched particular shows. Sound familiar?
Despite the plethora of talking heads proclaiming credit markets as awesomely supportive of stocks - High-Yield bond spreads are flashing red... But that's not stopping investors piling into the worst of the worst. As Liberty Blitzkrieg's Mike Krieger notes, in an all too reminiscent scene from 2007 (MBIA CDS traded 11bps at one point then remember), investors have been buying up bonds with a triple-C-rating en masse.
Despite proclamations that markets would open 'normally', Thai SET50 (stock market) futures are indicated to open -4.2% - its biggest drop since January's collapse. Thai CDS are modestly wider (+5 to 130bps) but early Bhat weakness has been rescued back by a mysterious bidder (rumored to be the central bank by several traders). The last 2 times martial law was invoked - in an entirely non-coupy-coup-like manner - general market weakness was less than we have seen so far. Of course, the army has decided that in the interests of avoiding the "provocation of unrest and triggering fear" it will "ban the broadcast and distribution of news." Nothing like a military-coup, that is not a coup, with total media censorship to encourage capital flows and maintain peace in the nation.
- 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)
While many dismiss the impact of the "baby boomer" generation moving into retirement, the reality is likely to be far different. If the current survey is representative of that particular group, the drag on the financial markets and economy over the next decade could be quite substantial.
- 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)
A bunch of folks in Hedge Fund Land have this idea that they can force a bit of a squeeze in the bond markets....
When it comes to the San Francisco Fed, it is best known throughout the financial community as the group of crack economists who spend millions of taxpayer funds to investigate such probing, for kindergarteners at least, topics as: is water wet, do trees make a sound when they fall in the forest, is it still worth going to college, and are hedge funds important in a crisis. Little did we know that, at least some of them, are homicidal psychopaths with suicidal tendencies. Because this is precisely what was revealed moments ago when Bloomberg reported that the chief operating officer of the Federal Housing Finance Agency and 26-year San Fran Fed veteran, Richard Hornsby, is facing a felony charge for threatening to kill the agency’s former top official, Ed DeMarco, and then kill himself.
At this point it is clear that Malaysian Airlines flight MH 370 which has been missing for two months will almost certainly never be found: whether due to the nature of the disappearance, or because it is a cover up stretching all the way to the very top (recall that it was disclosed by none other than NBC that the released air traffic control recording with the plane was edited, suggesting that the government itself is complicit in whatever happened), the plane will forever be entombed in the annals of history, alongside CNN's Nielsen ratings, and its final resting place will remain a mystery. However, over the past 24 hours, another mystery surrounding the final voyage of flight MH-370 has emerged, one which this time involves the plane's cargo.