- Canada PM vows crackdown after capital shocked by fatal attacks (Reuters)
- Canada Gunman Was Convert to Islam With Criminal Record (BBG)
- Some U.S. hospitals weigh withholding care to Ebola patients (Reuters)
- But... Great rotation... Bond funds stock up on Treasuries in prep for market shock (Reuters)
- Saudis at War With Islamic State Confront Echo of Kingdom’s Past (BBG)
- EU’s Top Banker Warns of Rule Fixation ‘Going Beyond Reason (BBG)
- U.S.-led air strikes killed 521 fighters, 32 civilians in Syria (Reuters)
- Growing Kurdish Unity Helps West, Worries Turkey (WSJ)
- Don’t Be Distracted by the Pass Rate in ECB’s Bank Exams (BBG)
- Hedge Funds Add to Venture-Capital Bounty (WSJ)
- Speed-of-Light Trading Grows in Europe With McKay Network (BBG)
Equity Levitation Stumbles After Second ECB Denial Of Corporate Bond Buying, Report Of 11 Stress Test FailuresSubmitted by Tyler Durden on 10/22/2014 05:57 -0500
If the ultimate goal of yesterday's leak was to push the EUR lower (and stocks higher of course), then the reason why today's second rejection did little to rebound the Euro is because once again, just after Europe's open, Spanish Efe newswire reported that 11 banks from 6 European countries had failed the ECB stress test. Specifically, Efe said Erste, along with banks from Italy, Belgium, Cyprus, Portugal and Greece, had failed the ECB review based on preliminary data, but gave no details of the size of the capital holes at the banks.
"He's invincible. He beheads. He smuggles. He conquers. He's the ultimate jack-of-all-trades. No Tomahawk or Hellfire can touch him. He always gets what he wants; in Kobani; in Anbar province; with the House of Saud (which he wants to replace) trying to make Putin (who he wants to behead) suffer because of low oil prices..."
- Stick to tapering and rates pledge, says Boston Fed chief (FT)
- Turkey to let Iraqi Kurds reinforce Kobani as U.S. drops arms to defenders (Reuters)
- Obama makes rare campaign trail appearance, some leave early (Reuters)
- Japan GPIF to Boost Share Allocation to About 25%, Nikkei Says (BBG)... or three months of POMO
- Japan Stocks Surge on Report GPIF to Boost Local Shares (BBG)
- China Growth Seen Slowing Sharply Over Decade (WSJ)
- Russia, Ukraine Edge Closer to Natural-Gas Deal (WSJ)
- Leveraged Money Spurs Selloff as Record Treasuries Trade (BBG)
- After clashes, Hong Kong students, government stand their ground before talks (Reuters)
In late August, we drew the world's attention to the fact that ISIS had acquired three fighter jets when the Iraqi military ran away. Now, six weeks later, as Reuters reports, having been trained by Iraqi pilots who have joined Islamic State, a group monitoring the war said on Friday, saying it was the first time that the militant group had taken to the air.
- M&A Bubble is bursting: AbbVie Says It Reconsiders Merger Pact With Shire (WSJ)
- Winner of bad headline timing award: Spinoffs Could Set Stage for Next Merger Wave (BBG) - and now wait for the spinoffs getting pulled
- Record mortgage settlement pushes Bank of America into third-quarter loss (Reuters)
- Korea joins the Japan currency war: Bank of Korea Cuts Base Rate (WSJ)
- Double Irish’s Slow Death Leaves Google Executives Calm (BBG)
- Global Oil Glut Sends Prices Plunging (WSJ)
- Slow Rise in Prices Shows China’s Economy Is Still Struggling (WSJ)
Equity markets live and die on several well-established conventions, according to ConvergEx's Nick Colas, noting that these are the rules that investors use as the bedrock of their fundamental analysis. The volatility of the last few weeks shows that some of these paradigms are now under attack. Chief among the question marks: “Do central banks always have the power to tip the balance between growth and recession?” Another rising concern: “Can stocks constantly shrug off recessionary signals from commodity and fixed income markets?” Lastly, “How many exogenous, if largely unpredictable, global events can equities ignore before their collective weight halts a bull market?” Bottom line: the debate on these topics isn’t over for October or the balance of the year.
Today US activity will be very light given the Columbus Day holiday. As DB summarizes, we have a relatively quiet day for data watchers today but the calendar will pick up tomorrow and beyond with a big focus on inflation numbers amongst other things. Indeed tomorrow will see the release of Germany’s ZEW survey alongside CPI prints from the UK, France and Spain. Wednesday’s data highlights will include the US retail sales for September, the Fed’s Beige Book, CPI readings from China and Germany, US PPI, and the NY Fed Empire State survey. Draghi will speak twice on Wednesday which could also be a source for headlines. On Thursday, we will get Industrial Production stats and the Philly Fed Survey from the US on top of the usual weekly jobless claims. European CPI will also be released on Wednesday. We have the first reading of October’s UofM Consumer Sentiment on Friday along with US building permits/housing starts. Yellen’s speech at the Boston Fed Conference on Friday (entitled “Inequality of Economic Opportunity”) will also be closely followed.
- Privately, Saudis tell oil market: get used to lower prices (Reuters)
- OPEC Members’ Rift Deepens Amid Falling Oil Prices (WSJ)
- Russia Spending $6 Billion Not Enough to Stop Ruble Rout on Oil (BBG)
- Deutsche clampdown on bad behaviour prompts exodus of traders (FT)
- Can't beat the spin: China trade data eases slowdown fears, more stimulus may still be needed (Reuters)
- China’s Exports Buoy Growth as IPhone Inflates Imports (BBG)
- Italy on Sale to Chinese Investors as Recession Bites (BBG)
- Hong Kong Protesters, Antiprotest Activists Clash (WSJ)
- Turkey Offers Military Bases to U.S.-Led Coalition (BBG) ... and the price is a small piece of post-Assad Syria
- Passenger With Flu-Like Symptoms Causes Ebola Scare At LAX (CBS)
- Boston patient deemed unlikely to have Ebola virus (Boston Globe)
A week ago we noted how critical the seige in Kobani was (and why it suggested President Obama's strategy was a fiasco given a lack of commitment from supposed allies such as Turkey). 7 days later.. and America's plans to fight Islamic State are in ruins as the militant group's fighters come close to capturing Kobani and have inflicted a heavy defeat on the Iraqi army west of Baghdad. While John Kerry has today stated, "Kobani does not define strategy against Islamic State," the 'loss' is symbolic as The Independent's Patrick Cockburn notes, in both Syria and Iraq, ISIS is expanding its control rather than contracting.
Qatar may be tiny, but it is having a major impact across the Arab world. By propping up violent jihadists in the Middle East, North Africa, and beyond, while supporting the United States in its fight against them, this gas-rich speck of a country – the world’s wealthiest in per capita terms – has transformed itself from a regional gadfly into an international rogue elephant. Using its vast resources, and driven by unbridled ambition, Qatar has emerged as a hub for radical Islamist movements. In doing so, Qatar is destabilizing several countries and threatening the security of secular democracies far beyond the region. For the sake of regional and international security, this elephant must be tamed.
Two weeks ago, we revealed one part of the "Secret Deal" between the US and Saudi Arabia: namely what the US 'brought to the table' as part of its grand alliance strategy in the middle east. What was not clear is what was the other part: what did the Saudis bring to the table, or said otherwise, how exactly it was that Saudi Arabia would compensate the US for bombing the Assad infrastructure until the hated Syrian leader was toppled, creating a power vacuum in his wake that would allow Syria, Qatar, Jordan and/or Turkey to divide the spoils of war as they saw fit. The full answer comes courtesy of Anadolu Agency, which explains not only the big picture involving Saudi Arabia and its biggest asset, oil, but also the latest fracturing of OPEC at the behest of Saudi Arabia which however is merely using "the oil weapon" to target the old slash new Cold War foe #1: Vladimir Putin.
It was heinous. It was underhanded. It was beyond the bounds of international morality. It was an attack on the American way of life. It was what you might expect from unscrupulous Arabs. It was “the oil weapon” -- and back in 1973, it was directed at the United States. Skip ahead four decades and it’s smart, it’s effective, and it’s the American way. The Obama administration has appropriated it as a major tool of foreign policy, a new way to go to war with nations it considers hostile without relying on planes, missiles, and troops. It is, of course, that very same oil weapon.
While the western world couldn't care less about the fate of some backwater town on the border between Syria and Turkey, it certainly cares about what happens to the Iraqi oilfields located south of Baghdad (which serve to determine the marginal price of oil around the world). Well, the world may not care, but crude traders certainly do, and the reason why oil appears to be rising in recent trade is due to news that ISIS militants have infiltrated one of Baghdad's outer suburbs, Abu Ghraib which is only eight miles from the runway perimeter of Baghdad's international airport.
- It wasn't Obama this time: Pakistani teen, Indian activist win Nobel Peace Prize (Reuters)
- Surging VIX Shakes Bulls as S&P 500 Charts Go Haywire (BBG)
- Global shares hit six-month low as growth worries mount (Reuters)
- Police, protesters clash in St. Louis ahead of weekend of rallies (Reuters)
- We're Sitting on 10 Billion Barrels of Oil! OK, Two (BBG)
- Spain seeks answers as seven more enter Ebola isolation (Reuters)
- Iran will sell its oil to Asia in November at the biggest discount (BBG)
- Redefining honeypot: U.S. DEA 'most interested' in U.S. investors in Canadian marijuana firms (Reuters)
- UKIP Wins First Commons District With Conservative Defector (BBG)
- Fake Ebola Patients Help Hospitals Prepare for Next Case (BBG)