Initial "Results" From Turkish Municipal Elections Show Resounding Victory For Erdogan's Ruling PartySubmitted by Tyler Durden on 03/30/2014 13:52 -0400
IIn a country which has banned the free flow of information via social networks and other venues in order to preserve the corrupt government, why one would believe any official data is unclear, but for those who are curious, here are the early results from today's municipal elections (where eight people have already died as fights broke out between rival candidates in two villages near the southeastern border with Syria): with 12.4% of ballots counted, the ruling AKP party appears to be a blowout victory, with 48.1% of the vote, while CHP has 24% and MHP is at 13.8%, based on CNNTurk reporting. And, as expected, there are huge discrepancies between the numbers provided by the state run news agencies, and the pro-Gulen, Cihan, news agency.
By this point, one has to be impressed at the resilience with which algos repeat the same pattern over and over again, hoping for a different outcome. It is now the 6th day in a row that the JPY-carry trade (be it USDJPY, EURJPY or AUDJPY) driven levitation has pushed equity futures smartly up in overnight trading. And by all accounts - in the absence of ugly macro news which in today's sparse data line up (just Personal Income and Spending and UMich consumer condfidence) - the same post early highs fade we have seen every day in the past week will repeat again. The overnight euphoria was driven primarily by Europe where Bloomberg reported 2 Year Spanish yields have traded below those of the UK for the first time since 2009. And since it is obviously not the strong fundamentals, what is continuing to happen, as has been the case since October 2013, is everyone is pricing in the ECB's QE, which even Weidmann is openly talkin about now, which simply means it will most likely never actually happen, certainly not until it is too late.
UPDATE: *TURKEY'S DAVUTOGLU SAYS LEAK IS 'DECLARATION OF WAR': TURKIYE
As we noted here, Turkish Prime Minister Erdogan had blocked Twitter access to his nation ahead of what was rumored to be a "spectacular" leak before this weekend's elections. Then this morning, amid a mad scramble, he reportedly (despite the nation's court ruling the bans illegal) blocked YouTube access. However, by the magic of the interwebs, we have the 'leaked' clip and it is clear why he wanted it blocked/banned. As the rough translation explains, it purports to be a conversation between key Turkish military and political leaders discussing what appears to be a false flag attack to launch war with Syria.
"Either way you look at it, it's time for the Fed to stop inflating housing assets, and stop buying mortgages" is how Alex Pollock introduces the following live streamed event by AEI. With speakers such as Chris Whalen we suspect, as the moderator explains, they will explain why "financial markets never seem to grow smarter when it comes to real estate."
A week ago, we wrote that "Turkey Set To Block YouTube Momentarily, After Google Refuses To Yank Clips Exposing Prime Minister." As of minutes ago this too prediction appears to have come true based on reports from inside the country that Google's popular video service is now also blocked.
Yes, Russia is guilty of meddling in Ukraine, but then again so are the United States and the European Union. The major difference is that far less was said and much less reported by the international media over the Americans’ and Europeans’ interference than of Russia’s actions and the reactions it caused.
A Turkish court has ruled against Prime Minister Erdogan's unilateral decision to ban Twitter from the nation after the threatened leak of corruption allegations. As The FT reports, the Ankara district court imposed a stay on the measure after hearing arguments from the Turkish Bar Association that the ban was disproportionate and illegal. While government officials have agreed they would implement the court's ruling, so far there has been no change. Twitter has officially responded expressing concern at the ban and filing further petitions to have it lifted as rumors spread of a "spectacular leak" in the next few days ahead of Sunday's elections.
Russia has increased its gold holdings by 7.247 tonnes to 1,042 tonnes in February. Turkey and Kazakhstan also raised their bullion reserves, data from the International Monetary Fund showed today. Turkey's gold holdings rose 9.292 tonnes to 497.869 tonnes, the data showed. Many analysts are ignoring the important context of today's new geopolitical backdrop. Russia alone has some $400 billion in foreign exchange reserves - mostly in U.S. dollars. If they were to diversify just 5%, worth some $20 billion, of those reserves into gold - it would be equal to nearly 500 tonnes of gold or nearly 25% of global annual production. It will be interesting to see what Russian demand is in March and indeed in the coming months. Sanctions could lead to materially higher demand from the Russian central bank, Bank Rossii.
Another morning melt up after a less than impressive session in China which saw the SHCOMP drop again reversing the furious gains in the past few days driven by hopes of more PBOC easing (despite China's repeated warning not to expect much). A flurry of market topping activity overnight once again, with Candy Crush maker King Digital pricing at $22.50 or the projected midpoint of its price range, and with FaceBook using more of its epically overvalued stock as currency to purchase yet another company, this time virtual reality firm Oculus VR for $2 billion. Perhaps an appropriate purchase considering the entire economy is pushed higher on pro-forma, "virtual" output, and the Fed's capital markets are something straight out of the matrix. Despite today's pre-open ramp, which will be the 4th in a row, one wonders if biotechs will finally break the downward tractor beam they have been latched on to as the bubble has shown signs of cracking, or will the mad momo crowd come back with a vengeance - this too will be answered shortly.
With another session in which US futures levitate into the open, despite a modest drop in the Nikkei225 (to be expected after the president of Japan’s Government Pension Investment Fund, the world’s largest pension fund, said that a review of asset allocations into stocks is not aimed at supporting domestic share prices) and an unchanged Shanghai Composite while the currency pair du jour, the USDCNY, closes higher despite tumbling in early trade (which also was to be expected after a former adviser to the People’s Bank of China said China is headed for a “mini crisis” in its local- government debt market as economic reforms lead to the first defaults) everyone is asking: will it be deja vu all over again, and after a solid ramp into 9:30 am, facilitated without doubt by the traditional Yen carry trade, will stocks roll over as first biotech and then all other bubble stocks are whacked? We will find out in just over two hours.
While Naftogaz (Ukraine's gas pipeline operator) states that all gas transportation from Russia to Europe is running normally, Bloomberg reports that Russian natgas exports to Europe are declining. Shipments are down over 4% from the prior week and also lower to Ukraine. This 'adjustment' follows increased sanctions by the West as Medvedev's notable statement this morning that Ukraine owes Russia $16bn. Furthermore, Gazprom has cut its Diesel output by the most in 7 months... and just to rub some Black Sea salt into the wound, NY Times reports that Russia's asking price for natgas to Europe is soaring.
I bet you the Turkish government can explain the intrinsic value of Bitcoin to Krugman and Roubini very soon as they systematically lose the ability to censor information due to Namecoin and affiliated technologies.
If there was one thing that the market was demanding after last night's disappointing March HSBC manufacturing PMI, which has now fallen so low, local market participants are convinced a stimulus is imminent (despite China's own warnings not to expect this), and sent both the SHCOMP and the CNY surging, it would have been further weak data out of Europe, where the other possible, if not probable, "QE-stimulus" bank is located now that the Fed is in full taper mode. It didn't get precisely that however there was a step in the right direction when overnight the Euro area Composite Flash PMI eased marginally from 53.3 to 53.2 in March, largely as expected. The country breakdown showed a narrowing of the Germany/France Composite PMI gap owing to a notable (3.7pt) increase in the French PMI while the German PMI eased somewhat (1.4pt). On the basis of past correlations, a Euro area Composite PMI of 53.2 is consistent with GDP growth of around +0.4%qoq, slightly stronger than our Current Activity Indicator (+0.35%qoq).
- U.S. Small-Cap Rally Sends Valuation 26% Above 1990s (BBG)
- Russian troops seize Ukraine marine base in Crimea (Reuters)
- Apple in Talks With Comcast About Streaming-TV Service (WSJ)
- Top J.P. Morgan Executive in China to Leave Bank (WSJ)
- Treasury's Lew to undergo treatment for enlarged prostate (Reuters)
- Billionaire Sought by U.S. Holds Key to Putin Gas Cash (BBG)
- Israel closes embassies around the world as diplomats strike (Reuters)
- Herbalife to Nominate Three More Icahn Candidates to Board (BBG)
- Australian ship homes in on possible debris from Malaysia plane (Reuters)
- California DMV Investigating Potential Credit Card Breach (WSJ)
In the aftermath of what appears a tenuous detente over the Crimea while Putin plans his next step of how to "merge" with east Ukraine as he sets off to rebuild the USSR, Syria just may be set to regain its place at the top of the global geopolitical risk pyramid. Case in point, early this morning, the fragile ceasefire between Syria and Turkey was shatered after a Turkish F- 16 shot down a Syrian plane on Sunday after it crossed into Turkish air space in a border region where Syrian rebels have been battling President Bashar al-Assad's forces.