It has been a quiet overnight session, following yesterday's epic short-squeeze driven - the biggest since 2011 - breakout in the S&P500 back to green for the year, with European trading particularly subdued as the final session of the week awaits US nonfarm payroll data, expected at 230K, Goldman cutting its estimate from 250K to 210K three days ago, and with January NFPs having a particular tendency to disappoint Wall Street estimates on 9 of the past 10. Furthermore, none of those prior 10 occasions had a massive oil-patch CapEx crunch and mass termination event: something which even the BLS will have to notice eventually. But more than the NFP number of the meaningless unemployment rate (as some 93 million Americans languish outside of the labor force), everyone will be watching the average hourly earnings, which last month tumbled -0.2% and are expected to rebound 0.3% in January.
according to the latest update from the 29 west coast ports that serve as the entry point of the bulk of Asia/Pac trade into and out of the US, things are about to get far worse for America's manucaturing base, because as RILA reported earlier, talks between the Pacific Maritime Association (PMA) representing port management, and the International Longshore and Warehouse Union (ILWU) officially broke down on Wendesday, and without an agreement, experts have suggested that nearly 30 west coast ports could be shut down within a week. As RILA reports, "a work slowdown during contract negotiations over the past seven months has already created logistic nightmares for American exporters, manufacturers and retailers dependent on an efficient supply chain. A complete shutdown would be catastrophic, with hundreds of thousands of jobs at risk if America’s supply chain grinds to a halt."
If you are not part of the solution, you are part of the problem an accomplice. The Troika’s willingness to turn Greece into a failed state first, as a side effect of its “rescue the French and German banks” operation, and now, as part of its German hegemony protection racket, is killing people and in the longer term will only accelerate the rise of extreme right wing elements in the Eurozone. Readers in the US know that the #BlackLivesMatter campaign has succeeded in bringing people of all races together to protest police brutality against African Americans. Given The ECB, IMF, and Germany's moves, perhaps it's time for #GreekLivesMatter to get as much attention.
The End Of Guitar Center (And An Irrational Addiction To Growth & The Scourge Of Unregulated Structured Finance)Submitted by Tyler Durden on 02/05/2015 20:15 -0500
The fact is, the die is cast. In a couple of weeks, Guitar Center will need to report its Christmas performance to its bondholders. If things do not look good, its bonds will be ripped apart like RadioShack’s. Here’s what this really means: it’s the end of big box retail, an irrational addiction to growth, and the scourge of unregulated structured finance. For a few years, unwise urban planning and unregulated banks created a new bubble in the American suburbs. The objective truth is that the growth of the last decade was financed by banking fraud, and that financial trickery of this sort only fools people in the short-term. Eventually, you must have a product people demand, sold by competent people who care about the business, financed in a way that makes sense.
The US chief analyst of Nordea, Johnny Bo Jakobsen, points out a curious statistical finding: in the past decade, consensus forecast over-estimated January reading on 9 out of 10 occasions. As the chart below shows, the average overoptimistic consensus miss for January is just about 50K, with the last time consensus was lower than the final result taking place in 2012, and before that, one has to go all the way back to 2003 for the second payrolls "beat".
This was the “Rubicon” moment: the instant at which Central Banks gave up pretending that their actions or policies were aimed at anything resembling public good or stability.
The earnings season is all over except for the shouting, but the outcome doesn’t remotely validate Wall Street’s happy times narrative. Reported Q4 earnings for the S&P 500 companies (with about two-thirds reporting) stand at $25.02 per share compared to $26.48 in the year ago quarter. That’s right. So far Q4 profits are down 5% but shrinking corporate profits is something that you most definitely have not heard about on bubble vision. But that’s just the tip of the iceberg. We have had a tremendous inflation of PE multiples during the last three years in anticipation, apparently, of the US economy hitting escape velocity and the overall global economy continuing to power onwards and upwards. As is evident from the financial news and “incoming” data, however, that presumption is not remotely correct.
It Will Now Cost You 0.75% To Save Money In Denmark: Danish Central Bank Cuts Rates For FOURTH Time In Three WeeksSubmitted by Tyler Durden on 02/05/2015 10:07 -0500
It has become a weekly thing now. In its desperation to preserve the EURDKK peg, the Danish central banks has cut rates into negative, then cut them again, then again last week, and moments ago, just cut its deposit rate to negative one more time, pushing NIRP from -0.5% to -0.75%, its fourth "surprise" rate cut in the past 3 weeks!
SNB Said To Be Buying EUR Crosses In Aftermath Of ECB's Greek Fiasco; Europe Boosts Its Own Growth ForecastSubmitted by Tyler Durden on 02/05/2015 06:33 -0500
If you are one of the slithering acolytes of political theory then the primary tool of organization for you is to lie, and to lie often. Tricking people into action using false premises, telling people what they want to hear rather than opening their eyes to reality, is perhaps the easiest way to build a movement. Of course, that movement will eventually destroy itself as the lies begin to inhibit progress rather than inspire it. But in most cases, by the time the organization self-destructs it has already been exploited for the nefarious purpose it was intended. For the liberty movement, the movement against globalization and forced centralization of financial and political power, lies are simply not an option. We must organize around the truth, no matter how painful it happens to be.
With S&P facing billion-dollar fines for defying the narrative, Goldman Sachs just dared to go even further against the US government by suggesting that the new oil order may be a blessing in disguise for Russia's oil industry. Simply put, the impact of the lower oil price and sanctions on the Russian economy increase the importance of oil industry tax reform, which could provide stimulus for upstream investments and commercialisation of the country’s vast oil reserves. An acceleration of upstream/downstream tax rebalancing could incentivise the development of substantial new basins in Russia, leading to a production capacity increase and a reduction in refining volumes to levels necessary to supply the domestic market. As a result, in Goldman's view, Russian crude exports would increase, improving the country’s current account, government revenues would grow, and upstream would attract material incremental investments.
President Of Euro Parliament Warns Greece Risks National Bankruptcy; Varoufakis Replies: "Greece Already Is Bankrupt"Submitted by Tyler Durden on 02/04/2015 19:00 -0500
With the ECB escalating matters this afternoon, the craziness of European leaders talking past one another in an effort to create the next headline-driven narrative continued to gather pace today. That idiocy was nowhere more obvious than when EU President Martin Schulz warned ominously that Greece risks national bankruptcy if it continues down the path of non-agreement when Greek finance minister Yanis Varoufakis has previously explained quite clearly that "Greece is already bankrupt."
The Face Of The Oligarch Recovery: Luxury Skyscrapers Empty As NYC Homeless Population Hits Record HighSubmitted by Tyler Durden on 02/04/2015 15:55 -0500
As Manhattan builds eight figure luxury apartment units merely to serve as bank accounts for international oligarchs, New York City’s homeless population soars to a new record high. It’s the ultimate manifestation of how criminal and crony this so-called “recovery” has been.
Well, actually, we have seen this bubble before haven't we? Is GM really doing that well? In 2007, they did well too. In 2008 their finance arm= .gov bailout, 2009 GM Bankrupt! It's amazing what mainstream media will report, and even more amazing how many "smart" people (including analysts) will go along with it. Reggie's truth laid bare...
Market Wrap: Equity Futures Subdued On Oil, Energy Profit Taking Following Latest Crude Inventory SurgeSubmitted by Tyler Durden on 02/04/2015 06:54 -0500
Following the torrid surge in crude in the past 4 days, overnight oil price have taken a step back - if only until the "newer normal" 2:30pm ramp into the Nymex close - with both Brent and WTI down nearly 3%, with yesterday's latest API inventory data showing another massive crude build when it was released after the close, which in turn is pressuing futures modestly if decidedly, and not even the surprise PBOC RRR-cut (which many had seen as likely if only in advance of the liquidity sapping Chinese New Year) which hit the tape an hour ago managed to push ES into the green, at least for now. Curiously, not even the now standard low volume levitation in the USDJPY in recent trading has had any impact on US futures, which appear to have found a new correlation regime for the time being, one which tracks what oil does more than any other asset class.