Just last week we asked "Is college waste of time and money?" It appears, based on the latest data from the BLS, that for all too many, it absolutely is. As CNN Money reports, about 260,000 people who had a college or professional degree made at or below the federal minimum wage of $7.25 last year.
Considering that Europe’s problems took years to unfold, despite the clear evidence that its banking system was virtually insolvent, the fact that things appear calm in Europe today doesn’t really say much about the true state of affairs over there.
Yesterday, we read with some amusement that Goldman has moved Guy Saidenberg, reportedly one of the greater profit centers at the firm - and how could he not be when he always traded against Tom Stolper's recommendations which led to tens of thousands of pips in losses to those who listened to him over the past five years - from head of global foreign-exchange trading to a new role, as co-head of commodities. Why did Goldman decide to scrap its once uber-profitable FX vertical and redo it from scratch? Simple - the ability to rig and manipulate FX markets, which are now under every global regulator's microscope after the "Cartel" members so foolishly let themselves be exposed to the entire world, is no longer there, as confirmed last night by news that a dozen large investors have filed a joint lawsuit against 12 banks for "allegedly conspiring to rig global foreign-exchange prices." Allegedly? Hasn't everyone read the Cartel chatroom transcripts yet?
France may ask for more time to reach its fiscal objectives.
Following the big plunge in January, the world's extrapolators have been exuberant over the snap-back from weather-driven anomalies... today, ISM dashed those hopes to some extent as the pace of the v-shaped recovery slowed notably and ISM missed expectations for the 3rd of the last 4 months. While new orders rose, employment fell to its lowest in 9 months. Of course this bad news is just what the doctor ordered and those oh-so-not-front-running algos just lifted stocks to a new all-time record high... imagine if it had missed by even more!!
Japan's economic farce has gotten so bad it is becoming painful to even discuss it: first, every newspaper writes effusive, extended articles about how after nearly two years of consecutive declines in base pay praising Abenomics, and then the next month the "increase" is promptly revised lower in a footnote in some article which gets zero to no prominence, which however continues to reaffirm that Abenomics is an absolute, unmitigated disaster. Sure enough this is what happened today, when last month's bombastic "Japan Base Wages Rise for First Time in Nearly Two Years" can now be retracted and instead replaced with this: "regular pay slipped an annual 0.3 percent in February, falling for a 21st straight month after a 0.2 percent slip the previous month."
Saxo Bank's CEO Lars Seier Christensen has made it abundantly clear in the past that the EUR is a monumentally bad idea; he notes, the huge European bureaucracy and especially the political elite that feed off the EU will do all they can to prevent the EUR’s fall, at least until it becomes inevitable. This will be either due to pressure from voters (even if they are very rarely consulted in this post-democratic political structure) or from the markets, which eventually must reassume their role that has been perverted beyond recognition during the crisis: the true role of allocating capital and pricing money and assets rationally. But, Christensen explains, if we are stuck with this "Currency of Mass Destruction", shouldn’t we at least try to make some money from it?
Among the key overnight events was the February Euro area unemployment report, which was unchanged at 11.9%, lower than the 12% median estimate; in Italy it rose to a record 13% while in Germany the locally defined jobless rate for March stayed at the lowest in at least two decades Euro zone PMI held at 53 in February, unchanged from January and matching median estimate in a Bloomberg survey HSBC/Markit’s China PMI fell to 48 in March, the lowest reading since July, from 48.5 in February; a separate PMI from the government, with a larger sample size, was at 50.3 from 50.2 the previous month NATO foreign ministers meet today to discuss their next steps after Putin began withdrawing forces stationed on Ukraine’s border Gazprom raised prices for Ukraine 44% after a discount deal expired, heaping financial pressure on the government in Kiev as it negotiates international bailouts.
UPDATE: Abenomics double #fail - Japanese Base Labor Earnings dropped YoY for the 21st straight month...
Another night, another disaster for Abe. Japan's all-important Tankan Business conditions forecast dropped to a one-year low and missed by the most since Lehman (but apart from that Abenomics is "nailing it"). China's "official" Manufacturing PMI beat expectations modestly and printed at a stimulus-busting 50.3 (expanding) as imports and new export orders jumped rather cough-notably-cough given external conditions and all other economic data. Rather remarkably, the New Order sub index of the Steel Industry PMI report showed a huge surge from 32.4 to 46.1 as New Export orders tumbled - this is the biggest jump in new Steel orders in.. well as far back as we have data...Then HSBC's PMI hit. Printing at 48.0 - worse than the flash print at 48.1 and still firmly in contraction territory leaving China once again in Schrodinger baffle 'em with bullshit economic growth mode.
The disappointment on the faces of talking-heads everywhere is writ large as it appears Q1 2014 will be a flat quarter - the worst quarter in a year and a down one for the Dow. After promises of "as goes January" failed, and "it's just the weather", the promise of a magnificent H2 recovery remains firmly in traders' minds in spite of the total collapse in fundamentals during the last few months. Just how bad? Top-down economic data has plunged to its lowest in 19 months and bottom-up earnings forecasts... well, take a look...
Stocks Surge As Yellen Goes Uber-Dovish, Says "Fed Short Of Reaching Employment And Inflation Goals"Submitted by Tyler Durden on 03/31/2014 10:00 -0400
As if there was any surprise that Yellen was fundamentally an uber dove, she just confirmed it. Here are the key highlights from her speech from Bloomberg.
- YELLEN SEES `CONSIDERABLE SLACK' IN ECONOMY, LABOR MARKET
- YELLEN SAYS QE TAPER DOESN'T MEAN REDUCED STIMULUS COMMITMENT
- YELLEN SAYS ECONOMY, JOB MARKET `ARE NOT BACK TO NORMAL HEALTH'
And the punchline:
- Pool of 7m people who work part time and want full-time jobs is much larger than should be expected at 6.7% unemployment rate; this is sign that labor conditions are worse than unemployment rate indicates
However, the only thing that matters for algos is that their interpretation of Yellen is that more stimulus from the Fed, i.e., the long-awaited untaper, may be just around the corner. And stocks surge.
After ramping in overnight trading, following the spike in Japanese stocks following another batch of disappointing economic data out of the land of the rising sun and setting Abenomics which sent the USDJPY, and its derivative Nikkei225 surging, US equity futures have pared some of the gains in what now appears a daily phenomenon. Keep in mind, the pattern over the past 6 consecutive days has been to ramp stocks into the US open, followed by a determined fade all the way into the close, led by "growthy" stocks and what appears to be an ongoing unwind of a hedge fund basket by one or more entities. Could the entire market be pushed lower because one fund is unwinding (or liquidiating)? Normally we would say no, but with liquidity as non-existant as it is right now, nothing would surprise us any more.
The start of Q2 2014. US economy to strength. Japan's to weaken. Euro-area is barly growing, while the UK continues apace.
A look at the price action in the foreign exchange market, within the context of fundamenal developments.
The Federal Reserve is likely to suffer significant losses on its Treasury holdings once interest rates rise from historic lows. Indeed, the researchers at the San Francisco Fed have recently called for "stress tests" on the Fed itself. Fail to prepare ... prepare to ...