Will today be the beginning of the end of the Eurozone? The answer, as of this moment, is in the hands of some 9.8 million eligible to vote Greeks whose choice will determine the shape of the Eurozone in the coming days and months.
“No stock-market crash announced bad times. The depression rather made its presence felt with the serial crashes of dozens of commodity markets. To the affected producers and consumers, the declines were immediate and newsworthy, but they failed to seize the national attention. Certainly, they made no deep impression at the Federal Reserve.” - 1921 or 2015?
"No one believes the suicide hypothesis," one of Nisman's investigative team told Reuters, adding that, "he was very convinced of his ideas and prepared to see them through. He had received threats all his life and it never intimidated him." With the news of no gunpowder residue sinking in, and protests rising, even Argentina's President is now uncomfortably admitting it, saying on Thursday that she was "convinced" Nisman's death was not a suicide, explaining that people had led him astray in his investigation in order to smear her name and then "needed him dead." However, instead of vowing to shed light on the matter, Fernandez and her government have been on the defensive, trying to refute Nisman's claims against her. Neighboring Uruguay said it felt sorry for Argentina and that its justice system needs to clear up the case to maintain "the minimal confidence our societies need." Questions abound...
Minutes after last week's Swiss National Bank shocker, jokingly we mused: "Will be ironic if Soros was long EURCHF." As it turns out, we were almost correct, and according to the WSJ, Soros Fund Management, which manages more than $25 billion for investor George Soros, was betting against the Swiss franc in the fall before it removed those bearish positions. Why did the Soros so conveniently take off a bet which, with leverage, could have resulted in massive losses for his hedge fund? The WSJ says he did so after "viewing the risk as too high relative to potential gains, said people close to the matter." Well as long as "people close" think Soros did not have input directly from the Swiss central bank, or perhaps the occasional hint from Kashya Hildebrand, then one can't help but marvel at the octogenarian's impeccable timing.
The 7-month-old plunge in oil prices will force Moscow to cut its budget for 2015 by 10 percent, perhaps even 15 percent, a senior Russian government official told a panel discussion at the World Economic Forum in Davos Switzerland, adding that Russia may find itself reducing oil production by as much as 1 million barrels per day, but he stressed that such a cut would not be made in coordination with OPEC.
- Saudi Arabia’s New King Probably Will Not Change Current Oil Policy (BBG)
- Saudi King’s Death Clouds Already Tense Relationship With U.S. (WSJ)
- Oil Pares Gains as New Saudi King Says Policies Stable (BBG)
- Kuroda Says BOJ to Mull Fresh Options in Case of More Easing (BBG)
- U.S. pulls more staff from Yemen embassy amid deepening crisis (Reuters)
- Putin Said to Shrink Inner Circle as Hawks Beat Billionaires (BBG)
- A Few Savvy Investors Had Swiss Central Bank Figured Out (WSJ)
After first falling ill and being hospitalized in December, Saudi Arabia officials have announced:
*SAUDI ARABIAN KING ABDULLAH DIES, CROWN PRINCE SALMAN SUCCEEDS: STATE TV
As we noted previously when considering this possibility, "a new King can do (almost) anything he wants, including changing oil policy." 79-year-old Crown Prince Salman has been named succesor (and has his own health issues - reportedly suffering from Dementia). Oil prices popped around 80c on the news.
What Reforms: Hours After ECB's QE Announcement, French Government Fails To Reach Job Creation AgreementSubmitted by Tyler Durden on 01/22/2015 15:11 -0500
Remember when just a few short hours ago, the ECB's Mario Draghi said that under no circumstances should the ECB's historic launch of QE be taken by anyone as a substitute for legitimate fiscal and other labor reform: as in the one thing the continent that has youth unemployment higher than 50% in various nations truly needs, instead of a Dax at record highs? Well, we are happy to report that just hours after the launch of QE, French trade unions and employer groups failed to reach agreement in a final bid to spur job creation in a moribund market by simplifying rules on worker representation in firms, the government and unions said.
With NATO's top military commander, General Breedlove, proclaiming that fighting in Ukraine is worse than pre-truce levels (and noting he could not confirm Poroshenko's Russian force numbers accusations), the news overnight, as The Telegraph reports, that Ukrainian forces appeared to withdraw from Donetsk airport last night, ending an 8-month battle in a bitter blow for pro-Kiev forces and apparent triumph for the Russian-backed separatists they are fighting. While the Pro-Russian separatists' Pyrrhic victory over the completely destroyed (as we noted here) airport may be a blow, a Ukrainian military spokesman on Thursday played down the surrender of the terminal buildings, saying it was simply a tactical withdrawal. Additionally, Russia has denounced an attack on a bus in separatist-held Donetsk which killed civilians as a "monstrous crime."
- ECB to decide on bond-buying plan to revive euro zone (Reuters)
- Draghi Is Pushing Boundaries of Euro Region with QE Program (BBG)
- Investors Wonder Whether ECB Will Do Enough (WSJ)
- Treasuries Drop With Bunds Before ECB; U.S. Futures Rise (BBG)
- European shares hit seven-year high (Reuters)
- At least eight civilians killed in shelling of Ukrainian trolleybus (Reuters), both sides blame each other
- OPEC Will Blink First in Battle With Shale Drillers, Poll Shows (BBG)
- China Injects $8 Billion Into Banking System (WSJ)
- New York says Barclays not cooperating in 'dark pool' probe (Reuters)
With less than two hours until the ECB unveils its first official quantitative easing program, the markets appear to be in a unchanged daze. Well, not all markets: the Japanese bond market overnight suffered its worst sell off in months on a jump in volume, although for context this means the 10Year dropping from 0.25% to 0.32%. Whether this is a hint of the "sell the news" that may follow Draghi's announcement is unclear, although Europe has seen comparable weakness across its bond space as well and the US 10 Year has sold off all the way to 1.91%, which is impressive considering it was trading under 1.80% just a few days ago. Stocks for now are largely unchanged with futures barely budging and tracking the USDJPY which after rising above 118 again overnight, has seen active selling ever since the close of the Japanese session.
NATO's Jens Stoltenberg unleashed the latest tirade against Russia this morning proclaiming - though offering no proof - that there are Russian forces and heavy equipment in Ukraine and a high number of Russian forces on the border which "doesn't contribute to a peaceful solution." Apparently pre-empting this outburst, Pravda reports Anatoly Tsyganok, director of the Military Forecasting Centre, exclaims, "Ukraine reiterates that Russia is in the war, but it's not true," adding that in fact "the USA and the NATO have artificial satellites continuously circulating above this territory and control the situation," concluding with a jab at The US & NATO that "Russia has never participated in the military conflict. And no attempt to involve Russia in the conflict will be crowned with success." The propaganda battle continues...
Who will ultimately benefit from the action? Will it be the people of Europe or only the mega-rich? For whom, we have continuously pointed out QE has greatly benefitted and as Alan Greenspan recently pointed out – QE has been a “terrific success.” The intensification of currency debasement and currency wars shows the increasing importance of owning physical gold coins and bars.
And so with less than 24 hours to go, the ECB has decided to leak its deliberations not only to Merkel and Hollande, but Dow Jones. To wit:
DJ: ECB EXEC BOARD'S QE PROPOSAL CALLS FOR ROUGHLY EUR50B IN BOND BUYS A MONTH - SOURCES
ECB SAID TO PROPOSE QE OF 50 BILLION EUROS A MONTH THROUGH 2016
More as we see it, but if indeed this will be a program without risk-mutualization and conditional and limited burden-sharing, where the hope was that Draghi would "shock and awe" the world with the size of the bond purchasing program instead, €600 billion per year looks decidedly on the low side of any "surprise" announcement where the whisper number was for €1 trillion per year, and if indeed this is the final formulation may result in a substantial disappointment for stocks after the initial kneejerk reaction.
Yemen's Rebels Hold US-Backed President "Captive" In His House. Seize Country's Largest Ballistic Missile BaseSubmitted by Tyler Durden on 01/21/2015 08:49 -0500
As reported yesterday, Yemen became the latest foreign policy "success" story of the US after the local minority of Iran-friendly Shi'ite Houthi militiamen stormed, and captured, the presidential palane. At the same the whereabouts of Yemen's US-backed president Abed Rabbo Mansour Hadi were unknown. Moments ago we learned about his current location: according to AP, "two Yemeni presidential advisers say the Shiite rebels who are on a power grab campaign in the capital, Sanaa, are holding the president "captive" at his home, a day after seizing the presidential palace."