With home prices in the UK driving people to live in boxes and Bob Shiller worried about the US, Bloomberg's Niraj Shah notes that the Knight Frank global house price index has risen to a record. The index, now 4% above the previous high in Q3 2008 is led by China and Emerging Nations (with Europe weakest) as investor speculation amid central bank liquidity fuels yet another bubble (that no one could see coming again).
Syria may be old news as any escalation has been put on hold at least until next summer, but the hilarity resulting from the bungled US foreign policy intervention in the country lingers. The latest chapter in John Kerry's book of "Diplomacy for Idiots" is the case of General Salim Adris, a so-called moderate the top Western-backed commander of the Free Syrian Army, who was literally run out of the country by the more extremist, Al Qaeda based factions among the Syrian CIA armed and Qatar funded "rebel" forces. As the WSJ eloquently puts it, "Islamist fighters ran the top Western-backed rebel commander in Syria out of his headquarters, and he fled the country, U.S. officials said Wednesday." Any references to brave Sir Robin are purely accidental. It got better when the same Al Qaeda fighters "took over key warehouses holding U.S. military gear for moderate fighters in northern Syria over the weekend." In other words, as we repeatedly forecast over the summer, the US is now once again arming Al Qaeda fighters with weapons that sooner or later will be used against the US, at a time of the CIA's choosing.
The US data flow is relatively light which is typical of a post-payrolls week but it’s worth noting wholesale inventories on Tuesday and retail sales on Thursday. Importantly US House and senate negotiators are supposed to come to an agreement on a budget before the December 13th deadline. A lot of optimism has been expressed thus far from members of congress, and there are reports that a budget deal will be unveiled this week.
Western central banks have tried to shake off the constraints of gold for a long time, which have created enormous difficulties for them. They have generally succeeded in managing opinion in the developed nations but been demonstrably unsuccessful in the lesser-developed world, particularly in Asia. It is the growing wealth earned by these nations that has fuelled demand for gold since the late 1960s. There is precious little bullion left in the West today to supply rapidly increasing Asian demand, and it is important to understand how little there is and the dangers this poses for financial stability.
The world has changed immensely and there were once things that were sacrilegiously respected. But, that’s no longer the case.
Previewing the rest of this week’s events, we have a bumper week of US data over the next five days, in part making up for two days of blackout last week for Thanksgiving. Aside from Friday’s nonfarm payroll report, the key releases to look for are manufacturing ISM and construction spending (today), unit motor vehicle sales (tomorrow), non-manufacturing ISM (Wednesday), preliminary Q3 real GDP and initial jobless claims (Thursday), as well as personal income/consumption and consumer sentiment (Friday). Wednesday’s ADP employment report will, as usual, provide a preamble for Friday’s payrolls.
Mobs, Stampedes, Fights, Brawls, A Stabbing And Shooting: A Video Compilation Of Black Thursday 2013Submitted by Tyler Durden on 11/29/2013 22:17 -0500
That greatest of all American traditions - the Black Friday Thursday stampede, this year accompanied with a stabbing and a shooting, is back. A quick review of all readers may have missed by not lining up in droves outside of stores that were selling products at just above cost instead of the usual massive pre-Thanksgiving markup. So what did it all look like? The answer: like this...
While moderate recovery in growth and inflation is BofAML's rates team's base case, there are numerous risks to that forecast. The risk of tapering is already quite well known and they suspect it may not result in the significant market-moving event many expect when it actually happens; however, the following downside and upside risks threaten BofAML's central scenarios for 2014 as well.
With Thanksgiving comes Black Friday and Cyber Monday, two of the biggest days for retail stocks each year. Thanksgiving isn't just an opportunity to gorge on turkey; it's also one of the most important weekends of the year for the retail sector. As much as 40% of American shopping occurs on the now infamous Black Friday and Cyber Monday – the first two business days that fall after Thanksgiving. But to complicate the matter, meteorologists are tracking an epic super-storm that is slowly working its way east, threatening to bring even more chaos to the holiday season. So who will win?
While shoppers will perceive the discounts on Black Friday as 'saving' them fortunes, the cost of the 2013 Thanksgiving Day dinner may be the most expensive ever. As the gorging commences, despite an entirely benign inflation in the eyes of the Federal Reserve, the prices of everything from chocolate chip cookies to ice cream are on the rise. But it is the centerpiece of the meal that is weighing on pocket-books. As Bloomberg's Michael McDonough notes, Americans are paying the most for whole frozen turkeys since the Bureau of Labor Statistics began publishing data on the series in 1980.
"Black Friday is America's most honest holiday. It is immediately preceded by Thanksgiving, which is when Americans of all races, except the native kind, get together and exchange a mutual wink and a nod that they're giving thanks for the majestic land that God inexplicably bestowed upon them and then have a turkey dinner. But Black Friday actually embodies the pioneer spirit that carried smallpox riddled settlers from one coast to the other. Like raiders in the night, shoppers drunk on red wine and diabetes crouch before the gates of the enemy's castle, or Best Buy, waiting to storm through the breach and rape and pillage and ask if this can be returned if it turns out your sister already has one..."
From consumer and retailer surveys to quantitative data such as household spending and private jet bookings, ConvergEx's Nick Colas has amassed a collection of 10 clues about this year's holiday shopping season. On the plus side, disposable personal income and consumer spending on discretionary items are rising, and travel to Palm Beach via private jet is quite popular this Christmas season. However, consumer confidence surveys are particularly weak, and consumer debt has ballooned to a 5-year high. Roughly equal parts good and bad, Colas' collection of holiday spending indicators points to a mediocre (at best) 2013 shopping season (as we noted earlier).
There were two events of note in the overnight session: first was the return of the Japanese jawboning, because now that the Nikkei has upward momentum - nearly hitting 15600 in early trading only to close unchanged - and the Yen has downward momentum, the Abe, Kuroda, Amari trio will do everything to talk Mrs. Watanabe to accelerate the momentum. In this case BoJ Governor Kuroda said he does not think JPY is at abnormally low levels and consumer inflation likely to hit 2% by fiscal year to March 2016. Kuroda also said he does not think JPY is excessively weak or in a bubble now and JPY has corrected from excessive strength after Lehman. This also means look forward to the daily bevy of Japanese speaker headlines in overnight trading to push the USDJPY and EURJPY higher on an ad hoc basis. The other notable event was the German IFO Business climate which jumped from 107.4 to 109.3, beating expectations of 107.7 and in the process pushing the EUR notably higher, and particularly the EURJPY which moved from 136.30 to nearly 137 or a fresh four year high. At this point European exporters must be tearing their hair out, as must the ECB whose every effort to talk the Euro lower has been met with relentless export-crushing buying.
The following Top Ten Market Themes, represent the broad list of macro themes from Goldman Sachs' economic outlook that they think will dominate markets in 2014.
- Showtime for the US/DM Recovery
- Forward guidance harder in an above-trend world
- Earn the DM equity risk premium, hedge the risk
- Good carry, bad carry
- The race to the exit kicks off
- Decision time for the ‘high-flyers’
- Still not your older brother’s EM...
- ...but EM differentiation to continue
- Commodity downside risks grow
- Stable China may be good enough
They summarize their positive growth expectations: if and when the period of stability will give way to bigger directional moves largely depends on how re-accelerating growth forces the hands of central banks to move ahead of everybody else. And, in practice, that boils down to the question of whether the Fed will be able to prevent the short end from selling off; i.e. it's all about the Fed.