• Monetary Metals
    01/28/2015 - 00:28
    It’s terrifying how fast the whole Swiss yield curve sank under the waterline of zero. Now even the 15-year bond has negative interest. The franc has reached the end.

Reuters

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Frontrunning: Halloween 2012 Edition





  • In Darkened NYC, Safety On The List Of Concerns (AP)
  • New York Subway System Faces Weeks to Recover From Storm (Bloomberg) ... as we said
  • Power Outages May Last More Than a Week (WSJ)... same
  • U.S. stock markets to reopen on Wednesday after storm (Reuters)
  • Questions Cloud Market Reopening (WSJ)
  • Apple revolution shows signs of reboot (FT)
  • Euro Chiefs Set to Grant Greece Extension Amid Squabbles (Bloomberg)
  • Italy Bank Poll Casts Shadow Over Savings (WSJ)
  • Shocked UBS staff take to Twitter (FT)
  • Corporate China hit by unpaid bills (FT)
  • Panasonic Posts Loss of Nearly $9 Billion (WSJ)
  • BoJ independence called into question (FT)
  • Barclays hit by fresh U.S. investigations (Reuters)
  • Adoboli’s Girlfriend Said Confess, Co-Worker Said to Run (Bloomberg)
 
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Greek Ruling Coalition Collapses Days Ahead Of Critical Vote





If one is curious why the EURUSD has been ramping as if no one will ever sell one more euro ever again, the reason is simple: the BIS is desperate to mask the fact that the fragile Greek coalition, whose creation sent Europe to the edge back in June during the Greek re-elections that just barely avoided a Grexit, has just crumbled. And with an illiquid market, the reflexive argument always is a simple one: if someone is buying, the news must be good, so dear momo-chasers - buy along. Only the news isn't good, and in a centrally-planned world, the only buyer left are central banks, who are now solely political, and not market, forces. What the news really is, is that with Greece poised to vote on critical labor reforms (read more layoffs) next week, which must be passed in Parliament with a majority vote in order to get the next Troika bailout tranche, the Samaras-led coalition just lost one of its three members, after the Democratic Left announced it would take its 16 votes and vote against any further austerity. In doing so it has effectively joined Syriza and any other anti-bailout powers, and has made certain that yet another Greek election is imminent, one which will finally see the rise of the "anti-memorandum" forces on top, and finally launch the 3 year overdue departure of the Greek ferryboat from the monetary landmass, with even more dire consequences for the USS EURtanic.

 
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The East Coast In Pictures: The Morning After





Stunning pictures of the devastation the east coast wakes up to the morning after.

 

 
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Frontrunning: October 30





  • U.S. Super Storm’s Record Flooding Lands Blackout Blow (Bloomberg)
  • Sandy Carves a Path of Destruction Across the U.S. East Coast (WSJ)
  • Losses May Exceed Those of 2011 Storm (WSJ)
  • Hurricane Sandy Threatens $20 Billion in Economic Damage (Bloomberg)
  • Huge fire in Sandy's wake destroys dozens of NYC homes (Reuters)
  • Possible levee break in New Jersey floods three towns (Reuters)
  • Apple Mobile Software Head Forstall Refused to Sign Apology (WSJ)
  • Stagflation in Spain (Bloomberg)
  • German Oct. Unemployment Rose Twice as Much as Forecast (Bloomberg)
  • A declining Japan loses its once-hopeful champions (WaPo)
  • Unable to copy it, China tries building own jet engine (Reuters)
  • Obama Signs Disaster Declarations for NY, NJ (YNN)
 
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Chart Of The Day: How To Grow Your Way To Prosperity Through Tax Hikes





...or not! As can be seen in the chart below showing the change in Spanish retail sales, there is nothing like a tax hike, in this case "Value Added", to completely obliterate any hope of increased economic transactions, monetary velocity or, well, general prosperity. In the least surprising data point of the day, Spanish retail sales plunged at their fastest rate on record (12.6% YoY) to complete the 27th month in a row of YoY drops. This nation whose economy is struggling through its second recession in three years and plagued by chronically high unemployment, has seen only three months of positive YoY comps for retail spending since November 2007. Whether this is a nation retrenching pure-and-simple on the back of anti-growth policies or an increasing amount of retail sales are completed in the gray market is unclear (as we discussed here); one thing is clear, Spain is bad and getting worse (bailout or no bailout), and as Reuters reports: "It's clear there are no signs the crisis is abating," economist at Nomura Silvio Peruzzo said. "The headline (retail) figures show a sharp drop and indicate that domestic demand is not going to be anywhere near what the government is anticipating."

 
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Frontrunning: October 29





  • Markets Go Dark Ahead of Storm (WSJ, RTRS, BBG, FT)
  • MF Global Problems Started Years Ago (WSJ)
  • Major Greek daily reprints Swiss accounts list, editor who published list to go on trial for violating data privacy laws (RTRS)
  • Coming soon to a USA near you: Hong Kong government imposes a property tax on overseas buyers (Bloomberg)
  • The pain in Spain is endless: Spain’s Pain Seen Intensifying as Slump Deepens Plight (BBG)
  • Las Vegas Sands Discusses Possible Settlement With Justice Department (WSJ)
  • Why Does the SEC Protect Banks’ Dirty Secrets? (BBG)
  • Honda slashes forecast on China territorial spat (AFP)
  • UBS shares jump on expected radical overhaul (Reuters) ...so if UBS cuts 150% of workforce, shares will hit +?
  • CEOs Seeking Global Range Tilts Market to 8,000-Mile Jets (Bloomberg)
 
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Overnight Sentiment: Cloudy, If Not Quite Frankenstormy





It is cloudy out there as Sandy enters the mid-Atlantic region, although for all the pre-apocalypse preparations in New York, the Frankenstorm may just be yet another dud now that its landfall is expected to come sufficiently south of NYC to make the latest round of Zone 1 evacuations about overblown as last year's Irene hysteria (of course it will be a gift from god for each and every S&P company as it will provide a perfect excuse for everyone to miss revenues and earnings in Q4). That said, Wall Street is effectively closed today for carbon-based lifeforms if not for electron ones, and a quick look at the futures bottom line, which will be open until 9:15 am Eastern, shows a lot of red, with ES down nearly 10 ticks (Shanghai down again as the same old realization seeps day after day - no major easing from the PBOC means Bernanke and company is on their own) as the Friday overnight summary is back on again: Johnny 5 must defend 1400 in ES and 1.2900 in EURUSD at all costs for just two more hours.

 
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As Thousands Of Italians March Against Austerity On "No Monti Day", Berlusconi Threatens To Scuttle Monti Government





First, it was Greece who failed to stick with the "do not rock the boat until the US election" script so meticulously crafted by Tim Geithner, and now it is Italy's turn as Europe threatens to come unhinged precisely in the week when complete peace and quiet is needed to avoid deflecting attention from the peak season of the US presidential theater. As Reuters reports, "Tens of thousands of people marched through Rome in a "No Monti Day" on Saturday, some throwing eggs and spraying graffiti to protest against austerity measures introduced by Prime Minister Mario Monti's government. Appointed in November when Italy risked being sucked into the euro zone debt crisis, Monti has pushed through painful austerity measures to cut the country's massive debt, including tax hikes, spending cuts and a pension overhaul. "We are here against Monti and his politics, the same politics as all over Europe, that brought Greece to its knees and that are destroying half of Europe, public schools, health care," said demonstrator Giorgio Cremaschi... In another demonstration in northern Italy, a small group of protesters scuffled with police near where Monti was addressing a rally on the theme of family values." So who gets to capitalize on the latest bout of surging discontent with the Goldman appointed technocrat? Why the same man who yesterday was sentenced to several years in jail (a sentence that will be never carried out of course), Silvio Berlusconi, and whom the ECB singlehandedly took down nearly a year ago, when it sent Italian bond yields to record highs: "The center-right bloc will decide "in the next few days" whether to withdraw confidence for Prime Minister Mario Monti in parliament or support him until elections in April, former Prime Minister Silvio Berlusconi said on Saturday. Monti's government of non-elected technocrats is backed by the center-left, the center and the center-right. It would have to resign if it lost the support of the entire center-right."

 
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Hurricane Sandy Update





Still unsure if to laugh off Sandy, memories of the overblown New York City panic over Irene still fresh, or if to sandbag the basement and first two floors of your house? Here is the latest on the storm courtesy of Jeff Masters' Wunderground blog, which at last check had the following characteristics: Wind: 75 MPH — Location: 29.0N -76.0W — Movement: NNE. In other words, slowly but surely approaching New York, with landfall still expected sometime Tuesday morning. One thing is certain: there will be at least some "boost" to Q4 GDP as a result of the quite a few broken windows, even as all domestic companies line up to blame Sandy for continuing to miss the top line and increasingly, their EPS numbers, some time in January.

 
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More than a Dozen Nuclear Plants Near Hurricane Sandy’s Path Brace for Impact





North Carolina, Virginia, Maryland, New Jersey, Pennsylvania, New York and Connecticut

 
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Gold To Rally Strongly In November After Expected October Correction





Gold climbed $11.80 or 0.69% in New York yesterday and closed at $1,712.70. Silver surged to a high of $32.232 and finished with a gain of 1.36%.


Gold in USD (2 Year) With Support At 100 and 200 Day Moving Averages - (Bloomberg)

 
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Frontrunning: October 26





  • Greece Faces Need for Additional Assistance: €30 billion (WSJ)
  • Greeks fail to agree on bailout terms (FT)
  • The report that got the NYT banned on the Chinese interweb: Billions in Hidden Riches for Family of Chinese Leader (NYT)
  • Bo Xilai: China parliament expels disgraced politician (BBC)
  • Japan Adds Stimulus Amid Threat of Bond-Sale Disruption... $9.4 billion (Bloomberg)
  • Hubbard Said to Prefer Treasury Chief to Fed If Romney Wins (Bloomberg)
  • 9 More Banks Subpoenaed Over Libor (WSJ)
  • Romney raises $112m in 17 days (FT)
  • Amid Cutbacks, Greek Doctors Offer Message to Poor: You Are Not Alone (NYT)... no, we are all broke
  • Muni Downgrades Top 2011 Total on Weak Economy: Moody’s (Bloomberg)
  • Ireland urges ECB to commit to bond-buying (FT)
  • Cameron and Clegg unite in EU demands (FT)
 
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Guest Post: Is The World Abandoning The U.S. Economy?





Go to any university, any center of equities trade, any meeting place for financial academia, any fiscal think tank, and they will tell you without the slightest hint of doubt in their eyes that the U.S. economy is essential to the survival of the world.  To even broach the possibility that the U.S. could be dropped or replaced as the central pillar of trade on the planet is greeted with sneers and even anger.  But let’s set aside what we think (or what we assume) we know about the American financial juggernaut and consider the sordid history of the money powerhouse myth. China’s incredible gold buying extravaganzas over the past few years indicate that they are indeed hedging against what they obviously expect will be devaluation in the dollar or multiple currencies around the world including the dollar.

 
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Silver Demand In China For Wealth Protection To Climb to Record 7,700 Tons





Bloomberg reports that Chinese silver demand is set to climb nearly 10% next year as investors look to preserve their wealth. Although China as the 2nd largest world economy may be in an economic slump, investors are seeking out silver as a value alternative investment.  Silver climbed 15% this year and ETF’s holding silver have gained 6.5%. Research from Beijing Antaike said that 33% of the country’s demand comes from jewellery and coins, the rest for use in photography, solar panels electrical appliances.  “Many producers and investors have hoarded the precious metal in the form of ingots or unwrought silver.” After the US Fed’s QE1, (December 2008-March 2010) silver rocketed 53%, almost twice the jump as gold, and for QE2, (ending June 2011) silver rose 24%. Morgan Stanley predicts that silver will again return more than gold after QE3 was announced this September. Chinese national statistics show that jewellery sales rose 19.3% for the first eight months compared to last year.  “I’m bullish on silver, so I personally have stockpiled 3 tons of it at home,” Yang Guohui, president at Hunan Yishui Rare & Precious Metals Recycling Co., said in Xiamen on Oct. 17. Yishui is based in Yongxing County, Hunan province, where about 20 percent of China’s silver is from, according to Huang Xiaoming, head of the local precious metals management bureau.

 
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Frontrunning: October 25





  • Japan grapples with own fiscal cliff (Bloomberg)
  • Japan Protests After Four Chinese Vessels Enter Disputed Waters (Bloomberg)
  • Asian Stocks Rise as Exporters Gain on China, U.S. Data (Bloomberg)
  • An obsolete Hilsenrath speaks: Fed Keeps Rates Low, Says Growth Is Moderate (WSJ)
  • ECB Said to Push Spain’s Bankia to Swap Junior Debt for Shares (Bloomberg)
  • Spain’s Bad Bank Seen as Too Big to Work (Bloomberg)
  • China postpones Japan anniversary events (China Daily)
  • Carney Says Rate Increase ‘Less Imminent’ on Economy Risk (Bloomberg)
  • Credit Suisse to Cut More Costs as Quarterly Profit Falls (Bloomberg)
  • Obama offers a glimpse of his second-term priorities (Reuters)
  • Draghi defends bond-buying programme (FT)
 
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