en Nigeria, Belarus Halt All FX Trading As Central Bank Urges "Don't Panic" <p>Just because Russia has managed to stabilize its currency for the time being as crude tries to find a floor, that certainly does not mean the <em>soaring dollar tantrum</em>-cum-<em>crude crash </em>episode is anywhere near over, nor that stability has returned to the rest of the oil-exporting countries. Case in point, crude-exporting powerhouse Nigeria, where things are going from worse to #REF! </p> <p>As Bloomberg <a href="">reported yesterday</a>, the temporary Russian FX-trading halt appears to have inspired all other nations with plunging currencies (the Nigeria Naira just hit a new record low against the dollar in recent trade), and as a result Nigerian FX dealers halted trading after a central bank rule change meant to "limit speculation" against the plunging naira confused investors. “This raises concerns about the credibility of the central bank,” Kevin Daly, senior portfolio manager at Aberdeen Asset Management Plc, said by phone from London. “<strong>If it was their intention to stabilize or see some appreciation of the naira, it’s backfired</strong>.” </p> <p><strong>Bid and ask prices for the naira were quoted from 162 to 190 per dollar with only 16 trades by 1 p.m. in Lagos [yesterday]</strong>, compared with more than 170 by the same time yesterday, according to data compiled by Bloomberg. The naira fell 12 percent against the dollar this quarter, the worst among 24 African currencies tracked by Bloomberg after Malawi’s kwacha. Investors dropped Nigerian assets as the outlook for Africa’s biggest oil producer worsened with Brent crude prices almost halving since late June. </p> <p>This is how you implement currency controls like a true boss: "The Abuja-based regulator met currency traders about a circular issued on its website today that <strong>cut banks’ maximum foreign-exchange net-open position to zero of shareholder funds by the end of each business day from 1 percent. </strong>Interbank naira trading ground to a halt, according to Samir Gadio, head of African strategy at Standard Chartered Plc. The central bank later updated the circular to say the change was temporary."</p> <p>“Banks have to sell all dollars they buy from the market, not to keep them until the following day,” Deputy Central Bank of Nigeria Governor Sarah Alade said by phone from Abuja. “It is to ensure dollar liquidity. We have noticed some dealers speculating on the currency because of the pressure from declining oil prices.”</p> <p><img src="" width="500" height="333" /></p> <p><em>Deputy Central Bank of Nigeria Governor Sarah Alade said, <br />“Banks have to sell all dollars they buy from the market, <br />not to keep them until the following day.”</em></p> <p>But the punchline surely was Nigeria's central bank's advice to the public: <em><strong>Don't Panic.</strong></em></p> <p>Lenders will still be able to buy dollars on the interbank market if they have orders from customers needing to import goods and services, Gadio said. The central bank will continue to support the naira with sales of dollars in the interbank market, Alade said.</p> <p><strong>“The banks can’t stop trading because of the circular,” </strong>the Deputy Central Bank of Nigeria Governor Sarah Alade said. “<strong>It is not supposed to close the market. We have told them we’ll continue intervening in the market, <span style="text-decoration: underline;">so there is no need to panic</span>.</strong>”</p> <p>Maybe there is:</p> <p><a href=""><img src="" width="500" height="266" /></a></p> <p>To be sure, "don't panic" is the <strong>only</strong> code word investors need to hear to completely bug out: </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Aberdeen Asset Management cut its naira holdings completely over the last two months and has no immediate plans to re-enter the market as the currency could fall further, Daly said. </p> <p>&nbsp;</p> <p>“I’m happy to sit on the sidelines and wait to see it go higher against the dollar,” he said. “<strong>We’re getting to 200 quicker than I expected. But if someone called me right now and said they’d offer me 200” naira for each dollar, “I’d say no,” Daly said.</strong></p> </blockquote> <p>This was yesterday. Today the completely halt of FX trading continues: as Bloomberg commented earlier today, "the policy on retaining zero bank’s shareholders funds as FX trading position by close of business remains in effect."</p> <p>* * * </p> <p>And just in case there is confusion that the currency crisis is confined simply to energy exporters (as previewed <a href="">here over a month ago</a>), today the Belarus central bank shocked its own population when it also announced full-blown capital controls designed, releasing additional measures to stem the "negative trends of currency and financial markets " including raising mandatory sales of FX revenue to 0%, suspending all OTC FX trading (so pretty much all FX), introducing a 30% fee on all FX purchases, "recommending" that banks halt BYR lending until February, and sending 1-yr interest rates on liquidity operations with banks to a eyewatering 50% in hopes this leads to an increase in BYR deposit rates. It will. What it won't lead to is stabilization in the deposit market as the natives realize they too are next up on the hyperinflation train. </p> <p>End result:</p> <p><a href=""><img src="" width="499" height="260" /></a></p> <p>Full <a href=";l=en">NBRB press release</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>On Measures Taken by the Government and the National Bank with a View to Preventing Development of Negative Trends in the Financial Market</strong></p> <p>&nbsp;</p> <p>Having regard to the situation in the neighbouring states’ economies, primarily in the Russian Federation, the Government and the National Bank of the Republic of Belarus took a number of measures aimed at preventing the development of negative trends in the foreign exchange and financial markets of the Republic of Belarus and rising attractiveness of savings in Belarusian rubles.</p> <p>&nbsp;</p> <p>The National Bank increased the interest rates on standing facilities and bilateral operations designed to support banks’ liquidity to 50% per annum. This measure, in turn, will result in the proportional increase in the rates on deposits in the national currency. </p> <p>&nbsp;</p> <p>All major Belarusian banks should introduce a term guaranteed saving deposit with the mechanism of ruble savings indexation in case of the Belarusian ruble exchange rate changes. This measure will protect the savings in the national currency from the exchange rate risks and raise their attractiveness compared with the savings in foreign exchange. </p> <p>&nbsp;</p> <p>Having regard to the increased demand for foreign exchange in the domestic foreign exchange market, it was resolved to introduce a temporary 30% fee for purchase of foreign exchange by legal and natural persons. Enterprises and banks will pay this fee when purchasing foreign exchange at the stock exchange; natural persons – in the form of commission when purchasing foreign exchange at banks. The paid funds will be directed to the budget.</p> <p>&nbsp;</p> <p>At the same time, the approaches to setting up the exchange rate in the domestic market will remain unchanged. Any citizen may purchase and sell foreign exchange without any limitations; economic entities – at the Belarusian Currency and Stock Exchange. <strong>The operations involving purchasing/selling of foreign exchange by economic entities – residents of the Republic of Belarus in the over-the-counter foreign exchange market are temporarily suspended. </strong></p> <p>&nbsp;</p> <p>Besides, the norm of obligatory sale of foreign exchange proceeds inflowing to the country has been increased to 50% since December 19, 2014.<br />Along with the above-mentioned measures, the approaches to the monetary policy implementation has been tightened for the purpose of limiting money supply growth and increasing the "cost" of money. </p> <p>&nbsp;</p> <p>In particular, the banks have been recommended to avoid the build-up of credit portfolio in Belarusian rubles till February 1, 2015 and not to change the currency of monetary obligations of the borrowers under credit agreements. </p> <p>&nbsp;</p> <p>At the same time, it was resolved not to apply the supervisory response measures to banks for non-compliance with the requirements of Resolution of the Board of the National Bank of the Republic of Belarus No. 260 dated April 22, 2014 "On Maximum Amounts of Interest Rates on the Banks’ Operations Involving Provision of Monetary Funds (Credits) to the Legal Persons – Residents of the Republic of Belarus" from December 18, 2014 to January 1, 2015. </p> <p>&nbsp;</p> <p><strong>The above-mentioned measures will make it possible to raise the attractiveness of savings in Belarusian rubles, balance the foreign exchange market under the conditions of the increased demand for foreign exchange and avoid the growth of speculative expectations.</strong></p> </blockquote> <p>So as globalization goes into full reverse, and as major countries isolate themselves from global trade, clearly it's time to load up and fall back on that good ole' BTFATH mentality.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1200" height="800" alt="" src="" /> </div> </div> </div> BTFATH Crude Don't Panic Hyperinflation Monetary Policy Money Supply OTC Standard Chartered Stop Trading Fri, 19 Dec 2014 14:08:12 +0000 Tyler Durden 499342 at PUTIN, NORTH KOREA, OIL...HAPPY HOLIDAYS <p><strong><a href="">Follow Zerohedge in Real-Time on Financialjuice</a></strong></p> <p><iframe src="//" width="640" height="360" frameborder="0"></iframe></p> <p>&nbsp;</p> <p><img src="" /></p> <p><a href=""><img src="" /></a></p> North Korea Fri, 19 Dec 2014 13:46:43 +0000 Pivotfarm 499341 at Greek Vote Bribery Scandal Brings Goldman's "Worst Case" Scenario Closer <p>While no one will be entirely surprised in today&#39;s consequence-less world, the &quot;bombshell&quot; news that <strong>Greek Independent MP Pavlos Haikalis claims he was offered EUR 2-3 million in order to vote for Greece&#39;s next President</strong> is no less shocking in its exposure. As AP reports, it is the second such claim from the Independent Greeks. Another of the party&#39;s lawmakers claimed last month that someone had approached her with the intention of bribing her. The government immediately jumped into defense mode and <strong>dismissed the claims as &quot;badly acted theater&quot;</strong> and called for any evidence to be made public. However, as KeepTalkingGreece reports, &quot;sources&quot; from the prosecutor&rsquo;s office told media that <strong>Haikalis did indeed submit footage, and according to latest information, told the briber&rsquo;s name to the Greek Police</strong>. <a href="">This can only bring Goldman&#39;s worst-case scenario - a Cyprus-style collapse - even closer for Greece</a>.</p> <p>&nbsp;</p> <p><a href=""><em>As AP reports,</em></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>A lawmaker from a small right-wing party claimed Friday that someone he did not identify had attempted to bribe him to vote in favor of electing Greece&#39;s new president.</strong></p> <p>&nbsp;</p> <p>Bailed-out Greece is in the midst of a presidential vote that could trigger early general elections, if its 300-member parliament fails to elect a president by the third round of voting on Dec. 29. The sole candidate, nominated by the government, fell 20 votes short of the necessary 180 in the first round Wednesday.</p> <p>&nbsp;</p> <p>Actor Pavlos Haikalis of the Independent Greeks claimed during a phone-in to a live television program that he was <strong>offered about 700,000 euros in cash, a loan repayment and advertising contracts, with the alleged bribe&#39;s total value amounting to about 2-3 million euros ($2.4-$3.7 million). </strong>He said he had informed a prosecutor about two weeks ago and had turned over audio and video material.</p> <p>&nbsp;</p> <p><strong>It is the second such claim from the Independent Greeks. </strong>Another of the party&#39;s lawmakers claimed last month that someone had approached her with the intention of bribing her.</p> <p>&nbsp;</p> <p><strong>Government spokeswoman Sofia Voultepsi dismissed the claims as &quot;badly acted theater&quot; and called for any evidence to be made public.</strong></p> <p>&nbsp;</p> <p>&quot;It is obvious why these ridiculous performances are set up: so that a president of the republic is not voted for, and the country is led to early elections,&quot; Voultepsi said in a statement. &quot;For reasons of public interest, the evidence must be made public immediately. If there is no evidence, legal procedures must begin immediately against the perpetrators of this wretched affair.&quot;</p> <p>&nbsp;</p> <p>The Independent Greeks&#39; popularity has been waning, with opinion polls indicating it could struggle to make it into parliament in general elections.</p> </blockquote> <p><a href="">And KeepTalkingGreece </a>provides some more local color...</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;It started as a joke, but then things got serious,&rdquo; Haikalis adding that he had video and audio material and that he took the case to the prosecutor and that he also gave name and address of the briber.</strong></p> <p>&nbsp;</p> <p>The MP refused to name the person who attempted to bribe him, but stressed that the person &ldquo;was known to the economic and political world.&rdquo;</p> <p>&nbsp;</p> <p>Chaikalis&rsquo; claims come just two days after the first round of voting for the country&rsquo;s next President and four days before the second round. Last Wednesday, the coalition government of Nea Dimokratia and PASOK failed to gather enough votes to elect Stavros Dimas for President. 127 ND lawmakers, 28 PASOK and 5 MPs voted in favor of Dimas. The 160 votes were far below the needed 200.</p> <p>&nbsp;</p> <p><strong>Independent Greeks is a nationalist, anti-austerity party that voted against Dimas candidacy. The party want snap polls</strong>.</p> <p>&nbsp;</p> <p>Pavlos Haikalis told ANT1 TV that he submitted the video material to prosecutor 15 days ago adding that &ldquo;we kept the issue secret waiting for Justice to intervene, but nothing has happened so far.&rdquo;</p> <p>&nbsp;</p> <p>...</p> <p>&nbsp;</p> <p><strong>&ldquo;Sources&rdquo; from the prosecutor&rsquo;s office told media that Chaikalis did indeed submitted footage.</strong> According to the Justice sources, the footage contained &ldquo;clear sound&rdquo; but &ldquo;blur image.&rdquo; Therefore the prosecutor brief the police that established a special team to optimize the video quality and recognize the briber.</p> <p>&nbsp;</p> <p>...</p> <p>&nbsp;</p> <p><u><strong>According to latest information, Chaikalis told the briber&rsquo;s name to the Greek Police.</strong></u></p> <p>&nbsp;</p> <p>As whole Greece is keen to learn who attempted to bribe an MP in order to elect the President and avoid early elections, according to investigative journalist Kosta Vaxevanis , the briber was allegedly from the &ldquo;environment of&nbsp; former PM George Papandreou&rdquo; and <u><strong>&ldquo;somebody who has worked for a Greek and a German bank.&rdquo;</strong></u></p> <p>&nbsp;</p> <p>So far it is not clear whether the briber was just a middleman.</p> <p>&nbsp;</p> <p>According to Vaxevanis&rsquo;s website To Kouti tis Pandoras, <strong>Haikalis had three meetings with the briber, </strong>he had brief Independent Greeks chairman Panos Kammenos and they had decided to wiretap the meetings and conversations. <strong>The police had entrapped Haikalis&rsquo; home but that the briber did not appear in the crucial meeting.</strong></p> </blockquote> <p><a href="">Bringing Goldman&#39;s worst-case scenario closer...</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><span style="text-decoration: underline;"><strong>In the event that the parliament fails to elect a president, general elections would be held and market uncertainty/pressures would extend. </strong></span>At this stage it is important to understand that market pressures are not linked to the democratic process of elections nor to a potential government change, whatever the ensuing government formation may be. <strong>They are linked to the risk of policy discontinuity and a severe clash between Greece and international lenders</strong>. More specifically, we think the room for Greece to meaningfully backtrack from the reforms that have already been implemented is very limited. Any such attempt would lead to an interruption of official financing to Greece.</p> <p>&nbsp;</p> <p><strong>Examining the downside scenario. </strong></p> <p>&nbsp;</p> <p>To be sure, even in the event of a government change, there is room for a cooperative solution between Greece and Europe. Greece has made significant reform progress between 2012 and the gap between what has already been implemented and what remains to be done is not insurmountable.</p> <p>&nbsp;</p> <p>Also, the incentives for a clash are not there. For instance any Greek government would likely want to capitalize on the momentum that the economy is building on the activity front, rather than trigger a disruptive capital flight that would lead Greece to a double&ndash;dip recession. In addition, given that more than 80% of Greek debt is held by the official sector and given that any OSI would be feasible only as part of an agreement with the Euro-area, there is an incentive for a Greek government to pursue cooperative solutions.</p> <p>&nbsp;</p> <p>However, the history of the Euro-area crisis has shown that the probability of an &ldquo;accident&rdquo; can never be dismissed, when it comes to intra-EMU politics. And it is important for markets to be able to understand and quantify the aspects of a potential downside scenario, where official financing to Greece is interrupted.</p> <p>&nbsp;</p> <p>The Biggest Risk is an Interruption of the Funding of Greek Banks by The ECB.</p> <p>&nbsp;</p> <p>Pressing as the government refinancing schedule may look on the surface, it is unlikely to become a real issue as long as the ECB stands behind the Greek banking system. In fact, refinancing became a lot more pressing between 2011 and 2012. But financing needs were met despite the impasse in negotiations between Greece and international lenders &ndash; partly via the issuance of T-bills repoable at the ECB by Greek banks. Such methods can always be revisited at times of extreme need.</p> <p>&nbsp;</p> <p>But herein lies the main risk for Greece. <strong>The economy needs the only lender of last resort to the banking system to maintain ample provision of liquidity. And this is not just because banks may require resources to help reduce future refinancing risks for the sovereign. But also because banks are already reliant on government issued or government guaranteed securities to maintain the current levels of liquidity constant.</strong></p> <p>&nbsp;</p> <p>And this risk can become more pressing from a timing perspective. At the heat of the Greek crisis, there was evident deposit and broader capital flight, which Greek banks helped accommodate with ECB&rsquo;s help via the ELA facility. <span style="text-decoration: underline;"><strong>In the event of a severe Greek government clash with international lenders, interruption of liquidity provision to Greek banks by the ECB could potentially even lead to a Cyprus-style prolonged &ldquo;bank holiday&rdquo;. And market fears for potential Euro-exit risks could rise at that point.</strong></span></p> </blockquote> <p>*&nbsp; *&nbsp; *</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="507" height="354" alt="" src="" /> </div> </div> </div> George Papandreou Greece Recession Fri, 19 Dec 2014 13:37:45 +0000 Tyler Durden 499340 at Howard Marks On "The Lessons Of Oil" <p><em>Select excerpts from the latest note by Oaktree's Howard Marks "<a href="">The Lessons Of Oil</a>"<br /></em></p> <p><span class="a" style="left: 796px; top: 3734px; word-spacing: -2px;">The following list is designed to illustrate the wide range of <span class="w6">&nbsp;</span>possible implications of an oil price </span><span class="a" style="left: 796px; top: 3828px; word-spacing: -2px;">decline, both direct consequences and their ramifications:</span></p> <ul> <li>Lower prices mean reduced revenue for oil-producing nations such as Saudi Arabia, Russia and Brunei, causing GDP to contract and budget deficits to rise.</li> <li>There’s a drop in the amounts sent abroad to purchase oil by oil-importing nations like the U.S., China, Japan and the United Kingdom.</li> <li>Earnings decline at oil exploration and production companies but rise for airlines whose fuel costs decline.</li> <li>Investment in oil drilling declines, causing the earnings of oil services companies to shrink, along with employment in the industry.</li> <li>Consumers have more money to spend on things other than energy, benefitting consumer goods companies and retailers.</li> <li>Cheaper gasoline causes driving to increase, bringing gains for the lodging and restaurant industries</li> <li>With the cost of driving lower, people buy bigger cars - perhaps sooner than they otherwise would have – benefitting the auto companies. They also keep buying gasoline- powered cars, slowing the trend toward alternatives, to the benefit of the oil industry.</li> <li>Likewise, increased travel stimulates airlines to order more planes – a plus for the aerospace companies - but at the same time the incentives decline to replace older planes with fuel-efficient ones. (This is a good example of the analytical challenge: is the net impact on airplane orders positive or negative?)</li> <li>By causing the demand for oil services to decline, reduced drilling leads the service companies to bid lower for business. This improves the economics of drilling and thus helps the oil companies.</li> <li>Ultimately, if things get bad enough for oil companies and oil service companies, banks and other lenders can be affected by their holdings of bad loans. </li> </ul> <p>* * * </p> <p>To give you an idea about how events in one part of the economy can have repercussions in other economic and market segments, I’ll quote from some of the analyses I’ve received this week from Oaktree investment professionals:</p> <ul> <li>Energy is a very significant part of the high yield bond market. In fact, it is the largest sector today (having taken over from media/telecom, which has traditionally been the largest). This is the case because the exploration industry is highly capital- intensive, and the high yield&nbsp; bond market has been the easiest place to raise capital. The knock-on effects of a precipitous fall in bond prices in the biggest sector in the high yield bond market are potentially substantial: outflows of capital, and mutual fund and ETF selling. It would be great for opportunistic buyers if the selling gets to sectors that are fundamentally in fine shape . . .&nbsp; because a number of them are. And, in fact, low oil prices can even make them better. </li> <li>An imperfect analogy might be instructive: capital market conditions for energy-related assets today are not unlike what we saw in the telecom sector in 2002.<br />As in telecom, you’ve had the confluence of really cheap financing, innovative technology, and prices for the product that were quite stable for a good while. [To this list of contributing factors, I would add the not-uncommon myth of perpetually escalating demand for a product.] These conditions resulted in the creation of an oversupply of capacity in oil, leading to a downdraft. It’s historically unprecedented for the energy sector to witness this type of market downturn while the rest of the economy is operating normally. Like in 2002, we&nbsp; could see a scenario where the effects of this sector dislocation spread wider in a general “contagion.” </li> <li>Selling has been reasonably indiscriminate and panicky (much like telecom in 2002) as managers have realized (too late) how overexposed they are to the energy sector. Trading desks do not have sufficient capital to make markets, and thus price swings have been&nbsp; predictably volatile. The oil selloff has also caused deterioration in emerging market fundamentals and may force spreads to gap out there. This ultimately may create a feedback loop that results in contagion to high yield bonds generally.</li> </ul> <p>Over the last year or so, while continuing to feel that U.S. economic growth will be slow and unsteady in the next year or two, I came to the conclusion that any surprises were most likely to&nbsp; be to the upside. And my best candidate for a favorable development has been the possibility that the U.S. would sharply increase its production of oil and gas. This would make the U.S. oil-independent, making it a net exporter of oil and giving it a cost advantage in energy&nbsp; –&nbsp;&nbsp; based on cheap production from fracking and shale&nbsp; –&nbsp;&nbsp; and thus a cost advantage in manufacturing. Now, the availability of cheap oil all around the world threatens those advantages. <strong>So much for macro forecasting! </strong></p> <p>There’s a great deal to be said about the price change itself. A well-known quote from economist Rudiger Dornbusch goes as follows: “In economics things take longer to happen than you think they will, and then they happen faster than you thought they could.”&nbsp; I don’t know if many people were thinking about whether the price of oil would change, but the decline of 40%- plus must have happened much faster than anyone thought possible.</p> <p>I said it about gold in <em>All That Glitters</em> (November 2010), and it’s equally relevant to oil: it’s hard to analytically put a price on an asset that doesn’t produce income. In principle, a non-perishable commodity won’t be priced below the variable production cost of the highest-cost&nbsp; producer whose output is needed to satisfy total demand. But in reality and in the short run, strange things can happen. It’s clear that today’s oil price is well below that standard. </p> <p>It’s hard to say what the right price is for a commodity like oil . . . and thus when the price is too high or too low. Was it too high at $100-plus, an unsustainable blip? History says no: it was there for 43 consecutive months through this past August. And if it wasn’t too high then, isn’t it laughably low today? The answer is that you just can’t say. Ditto for whether the response of the&nbsp; price of oil to the changes in fundamentals has been appropriate, excessive or insufficient. And if you can’t be confident about what the right price is, then you can’t be definite about financial decisions regarding oil.</p> <p>* * *</p> <p><em>Full note below (<a href="">pdf</a>)</em></p> <p><iframe src=";view_mode=scroll&amp;access_key=key-EAIIW4nwJHxAX1FPmF3s&amp;show_recommendations=false" width="100%" height="600" frameborder="0" scrolling="no"></iframe></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="454" height="454" alt="" src="" /> </div> </div> </div> Bond China High Yield Howard Marks Japan Market Conditions Oaktree Reality Saudi Arabia United Kingdom Fri, 19 Dec 2014 13:10:34 +0000 Tyler Durden 499339 at Frontrunning: December 19 <ul> <li>Icahn, Paulson Suffer Large Losses as Energy-Related Bets Sour (<a href="Icahn, Paulson Suffer Large Losses as Energy-Related Bets Sour">WSJ</a>)</li> <li>Oil Investors Keep Betting Wrong on When Market Will Bottom (<a href="">BBG</a>)</li> <li>U.S. to sell final $1.25 billion shares of Ally Financial from bailout (<a href="">Reuters</a>)</li> <li>Ally Financial Gets Subpoena Related to Subprime Automotive Finance (<a href="">WSJ</a>)</li> <li>Russia's parliament rushes through bill boosting banking capital (<a href="">Reuters</a>)</li> <li>How a Memo Cost Big Banks $37 Billion (<a href="">WSJ</a>)</li> <li>ECB considers making weaker euro zone states bear more quantitative easing risk (<a href="">Reuters</a>)</li> <li>How the U.S. Could Retaliate Against North Korea (<a href="">BBG</a>)</li> <li>U.S. backed talks with ISIS over American hostage (<a href="">Reuters</a>)</li> <li>Oil Crash Exposes New Risks for U.S. Shale Drillers (<a href="">BBG</a>)</li> <li>Exxon Mobil Shows Why U.S. Oil Output Rises as Prices Plunge (<a href="">BBG</a>)</li> <li>Eight children killed in Australia in reported mass stabbing (<a href="">Reuters</a>)</li> <li>No Selfies, Tweets or Leaks: Why Cuba Talks Had to Be Kept Top Secret (<a href="">BBG</a>)</li> <li>Sony Hackers Seen Having Snooped for Months, Planted Bomb (<a href="">BBG</a>)</li> <li>Oil-Led Slump Spurring Fastest Investor Exit From Commodities Since 2008 (<a href="">BBG</a>)</li> <li>Despite billions in aid, U.S. unable to get Pakistan to confront militants (<a href="">Reuters</a>)</li> </ul> <p>&nbsp;</p> <p><strong>Overnight Media Digest</strong></p> <p><em><span style="text-decoration: underline;">WSJ</span></em></p> <p>* Ripples from Sony Pictures' decision not to release its controversial comedy "The Interview" immediately reached other entertainment projects in the works as producers and studios sought to distance themselves from productions involving North Korea. (<a href="" title=""></a>)</p> <p>* If the Obama administration's move to normalize ties with Cuba does lead to an end to the U.S. embargo, it could reignite battles over the U.S. rights to sell two of the island's most prized exports: cigars and rum. (<a href="" title=""></a>)</p> <p>* Car makers are not pulling out of Russia yet, but they are growing increasingly nervous and moving to control the damage from plunging consumer demand and exposure to Russia's swooning currency. (<a href="" title=""></a>)</p> <p>* Deezer, the French music streaming service, has appointed a new boss as it prepares for a full-scale launch in the already crowded U.S. market. (<a href="" title=""></a>)</p> <p>* Madison Square Garden Co, which said in October that it would explore separating its entertainment businesses from its media and sports operations, added on Thursday that it would consider breaking up further. (<a href="" title=""></a>)</p> <p>* Computer-services company Atos will buy Xerox's information technology outsourcing business for $1.05 billion in cash, a deal that would bolster the French company's position in the U.S. (<a href="" title=""></a>)</p> <p>* Luxembourg agreed Thursday to share with the European Commission information on tax deals secured by multinational companies with operations in the small nation. (<a href="" title=""></a>)</p> <p>* RadioShack Corp said its head of marketing is leaving the company, the second top level executive departure in the middle of its all-important holiday sales drive, as the electronics chain tries to stave off bankruptcy. (<a href="" title=""></a>)</p> <p>* Liberty Media Corp's CommerceHub is set to announce it has agreed to acquire e-commerce advisory firm Mercent as it seeks to broaden its clients' reach online, particularly through Inc and Google Inc . (<a href="" title=""></a>)</p> <p>* American Apparel Inc has been approached by Irving Place Capital about a possible takeover, according to people familiar with the matter. (<a href="" title=""></a>)</p> <p>* Unilever Plc on Thursday said it was withdrawing a high-profile lawsuit it filed against a California food startup over the marketing of mayonnaise. (<a href="" title=""></a>)</p> <p>* Hulu has won the rights to a large trove of FX Networks shows like "The Strain" and "Tyrant" in a deal designed to minimize the damage many media executives fear streaming services are wreaking on traditional cable TV. (<a href="" title=""></a>)</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">FT</span></em></p> <p>Germany's BASF and Russia's Gazprom neft' OAO have decided to call off an energy asset swap due to "difficult political environment", the chemical producing company said on Thursday.</p> <p>Hampton Creek, maker of Just Mayo spread, has raised $90 mln from Horizons Ventures, Li Ka-shing's investment fund, and Khosla Ventures, a Silicon Valley venture-capital firm, both of which are already investors in the company.</p> <p>France's competition authority has issued a 951 million euros ($1.17 billion) fine to companies including L'Oreal and Unilever after finding them guilty of secretly fixing prices of household and personal care products.</p> <p>Ireland's former flag carrier Aer Lingus said on Thursday that it rejected a takeover bid from British Airways owner IAG as it "fundamentally undervalued" the business.</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">NYT</span></em></p> <p>* Within hours of President Obama's historic move to restore full diplomatic relations with Cuba, companies in the United States are already developing strategies to introduce their products and services to a market they have not been in for the better part of 50 years - if ever. (<a href="" title=""></a>)</p> <p>* Switzerland is introducing a negative interest rate on deposits held by lenders at its central bank, moving to hold down the value of the Swiss franc amid turmoil in global currency markets and expectations that deflation is at hand. (<a href="" title=""></a>)</p> <p>* The European Union announced new sanctions over Ukraine on Thursday, outlawing European investment in Crimea, the Black Sea peninsula annexed by Russia in March, as leaders of the 28-nation bloc gathered in Brussels to review their strategy toward Russia. (<a href="" title=""></a>)</p> <p>* A White House official said the administration was considering a "proportional response" against those who hacked into Sony Pictures computers, a retaliation that could thrust the United States into a direct confrontation with North Korea. (<a href="" title=""></a>)</p> <p>* A European Union investigation into possible price fixing by Europe's largest truck manufacturers appeared to be gathering momentum after Daimler of Germany said it had set aside 600 million euros to cover possible costs resulting from the inquiry. (<a href="" title=""></a>)</p> <p>* Under pressure from regulators, Ford Motor Co is expanding nationwide the recall of vehicles with airbags manufactured by the Japanese supplier Takata Corp, the automaker said. (<a href="" title=""></a>)</p> <p>* The private equity firm Westbrook Partners has thrown in the towel and says it will sell the New Era Estate, a London housing block whose tenants protested its plans to raise rents. (<a href="" title=""></a>)</p> <p>* Ally Financial Inc said it had received a Justice Department subpoena as part of an investigation "related to subprime automotive finance and related securitization activities." (<a href="" title=""></a>)</p> <p>* Xerox Corp has agreed to sell its information technology outsourcing business to Atos, the French technology company, for just over $1 billion. (<a href="" title=""></a>)</p> <p>* Goldman Sachs Group Inc named John E. Waldron as one of its co-heads of investment banking, succeeding John S. Weinberg, a vice chairman and a member of one of the firm's most prominent families. (<a href="" title=""></a>) </p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">Canada</span></em></p> <p>THE GLOBE AND MAIL</p> <p>** In its continuing bid to boost competition in the wireless industry, Ottawa confirmed it will reserve the majority of cellular airwaves in a coming public auction for small carriers. At the same time, the federal government, which has pushed pro-consumer policy, assured Canadians in rural areas they will not lose what Internet access they already have and revealed plans to hold another auction of valuable low-band airwaves. (<a href="" title=""></a>)</p> <p>** Grupo Bimbo SAB de CV is buying the Vachon family of snack cakes from Saputo Inc for C$120 million ($103.55 million) as the Mexican baked-goods company widens its footprint in Canada. (<a href="" title=""></a>)</p> <p>** U.S. ambassador Bruce Heyman is urging Canada to continue sharing security information with the United States in the wake of a damning report on the CIA's brutal interrogation methods. In a recent interview with The Globe and Mail, Heyman said co-operation between the two countries is critical to keeping citizens safe. (<a href="" title=""></a>)</p> <p>NATIONAL POST</p> <p>** BlackBerry Ltd unveiled a new phone that harks back to the company's glory days of being the world's leading smartphone maker, capping a year dedicated to stabilizing finances and winning back investor confidence. Earnings on Friday will shed light on how successful the turnaround has been. (<a href="" title=""></a>)</p> <p>** The Ontario government wants Ottawa to pony up C$1 billion for the massive "Ring of Fire" mineral belt, but the federal natural resources minister is warning that key structural challenges still need to be overcome. The Ring of Fire, named after the famous Johnny Cash song, is a vast but very remote mineral belt located in Ontario's James Bay Lowlands. (<a href="" title=""></a>)</p> <p>** Court documents allege the Ontario Liberal party paid the spouse of a top aide to Dalton McGuinty C$10,000 to wipe computer hard drives in the premier's office. The allegation is contained in police documents used to obtain a search warrant that was executed in November at an Ontario government cyber security office in downtown Toronto. (<a href="" title=""></a>) </p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">China</span></em></p> <p>CHINA SECURITIES JOURNAL</p> <p>- Corn starch futures would start trading on Dec. 19 in Dalian Commodity Exchange (DCE), which would be the 44th commodity futures in China, the Dalian Futures Exchange said.</p> <p>CHINA DAILY</p> <p>- China is to set up an offshore observation network by 2020 to cope with disasters, guarantee development of the coastal economy and protect the country's maritime interest, according to a guideline released by the State Oceanic Administration.</p> <p>- Domestic solar panel producers are looking to emerging markets to offset mounting difficulties they face in the United States, where they fear they may be squeezed out completely by a new ruling on dumping duties.</p> <p>SHANGHAI DAILY</p> <p>- A former housing official has been sentenced to 25 years in prison for bribery, corruption and embezzlement by a court in Zhengzhou, capital of central China's Henan Province. The Zhengzhou court said Zhai illegally owned 20 properties, of which 11 were registered under his daughter's names and nine under his son's.</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">Britain</span></em></p> <p>The Times </p> <p>JOHN LAING BUILDS HEAD OF STEAM TO BE FIRST BIG 2015 LONDON FLOAT</p> <p>John Laing is on the verge of being brought back to the stock market seven years after it was taken private. The infrastructure investor and construction project management firm is likely to be one of the first big London floats of 2015. John Laing's owner, Henderson, the international investment house and private equity firm, has hired HSBC Holdings Plc and Barclays Plc to marshal an initial public offering. (<a href="" title=""></a>)</p> <p>The Guardian </p> <p>FRANCE FINES 13 CONSUMER GOODS FIRMS 951 MLN EUROS FOR PRICE-FIXING</p> <p>Some of the world's biggest consumer products companies, including Unilever , Reckitt Benckiser, Procter &amp; Gamble and Gillette, have been fined a combined 951 million euros ($1.17 billion) by the French competition watchdog for price fixing in supermarkets. (<a href="" title=""></a>)</p> <p>ROYAL MAIL SELL-OFF UNDERVALUED FIRM BY 180 MLN STG, REPORT FINDS </p> <p>The government could have made 180 million pounds ($281.97 million) more from the 2 billion pounds sale of Royal Mail Plc last year but this would have involved "considerable risk," a report commissioned by business secretary Vince Cable concluded. (<a href="" title=""></a>)</p> <p>The Telegraph </p> <p>UK GOVERNMENT RECOVERS 1.36 BLN STG OF MONEY USED TO BAIL OUT SAVERS IN ICELANDIC BANK</p> <p>The government has now recovered 85 percent of the money it spent bailing out hundreds of thousands of British consumers who risked seeing their savings wiped out when Icesave collapsed. The Treasury announced on Thursday that it had recovered another 1.36 billion pounds from the estate of Landsbanki, which went bust in 2008. (<a href="" title=""></a>)</p> <p>Sky News </p> <p>MOBILE NETWORKS AGREE DEAL TO BOOST UK COVERAGE A 5 billion pound project to guarantee mobile phone voice and text coverage to 90 percent of the UK geographical area by 2017 will go ahead. The deal means the four mobile networks - EE, O2, Three and Vodafone Group Plc - have all agreed to tackle poor coverage in so-called partial "not spots." (<a href="" title=""></a>)</p> <p>The Independent</p> <p>NORTH SEA JOBS TO BE AXED AS OIL PRICE DIVES</p> <p>Aberdeen could suffer devastating employment cuts say analysts, after warnings that the North Sea oil industry is "close to collapse" because of the dramatic fall in oil prices. (<a href="" title=""></a>)</p> <p>AER LINGUS REJECTS TAKEOVER BID FROM BRITISH AIRWAYS OWNER IAG</p> <p>Irish airline Aer Lingus Group Plc has rejected a takeover bid by the International Consolidated Airlines Group , the parent company of British Airways. (<a href="" title=""></a>)</p> <p></p> <p><strong>Fly On The Wall Pre-market Buzz</strong></p> <p>ECONOMIC REPORTS<br />Domestic economic reports scheduled for today include:<br />Kansas City Fed manufacturing index for December at 11:00--consensus 7</p> <p>ANALYST RESEARCH</p> <p>Upgrades</p> <p>CVS Health (CVS) upgraded to Buy from Neutral at SunTrust<br />EPR Properties (EPR) upgraded to Hold from Underweight at KeyBanc<br />First Marblehead (FMD) upgraded to Buy from Neutral at Compass Point<br />Medical Properties Trust (MPW) upgraded to Hold from Underweight at KeyBanc<br />Orange SA (ORAN) upgraded to Buy from Hold at Deutsche Bank<br />Potash (POT) upgraded to Buy from Neutral at UBS<br />Ryanair (RYAAY) upgraded to Outperform from In-Line at Imperial Capital<br />Unum Group (UNM) upgraded to Buy from Neutral at Compass Point<br />WPP PLC (WPPGY) upgraded to Buy from Neutral at Citigroup</p> <p>Downgrades</p> <p>Actuant (ATU) downgraded to Hold from Buy at Jefferies<br />EastGroup Properties (EGP) downgraded to Neutral from Buy at Goldman<br />Hartford Financial (HIG) downgraded to Neutral from Buy at Citigroup<br />Healthcare Realty Trust (HR) downgraded to Hold from Buy at KeyBanc<br />Kinross Gold (KGC) downgraded to Neutral from Buy at UBS<br />Maxim Integrated (MXIM) downgraded to Neutral from Buy at Goldman<br />OGE Energy (OGE) downgraded to Hold from Buy at Wunderlich<br />Otonomy (OTIC) downgraded to Underperform from Neutral at BofA/Merrill<br />RPC, Inc. (RES) downgraded to Neutral from Buy at Citigroup<br />STAG Industrial (STAG) downgraded to Hold from Buy at MLV &amp; Co.<br />Teekay Tankers (TNK) downgraded to Neutral from Buy at UBS<br />The Pantry (PTRY) downgraded to Underperform from Sector Perform at RBC Capital<br />Wesco Aircraft (WAIR) downgraded to Sell from Hold at Deutsche Bank<br />Worthington (WOR) downgraded to Hold from Buy at KeyBanc</p> <p>Initiations</p> <p>Adept Technology (ADEP) initiated with an Overweight at Piper Jaffray<br />AeroVironment (AVAV) initiated with a Neutral at Piper Jaffray<br />Anadarko (APC) initiated with a Buy at Guggenheim<br />Ashford (AINC) initiated with a Buy at MLV &amp; Co.<br />BE Aerospace (BEAV) resumed with a Buy at Citigroup<br />Capitala Finance (CPTA) initiated with a Buy at UBS<br />Clean Harbors (CLH) initiated with a Neutral at Macquarie<br />Continental Resources (CLR) initiated with a Buy at Guggenheim<br />Corrections Corp. (CXW) initiated with a Market Perform at Wells Fargo<br />Customers Bancorp (CUBI) initiated with a Market Perform at Keefe Bruyette<br />Demandware (DWRE) initiated with an Outperform at RBC Capital<br />Ellie Mae (ELLI) initiated with an Outperform at RBC Capital<br />Ellington Residential (EARN) initiated with a Market Perform at JMP Securities<br />Geo Group (GEO) initiated with a Market Perform at Wells Fargo<br />GrubHub (GRUB) initiated with an Outperform at Oppenheimer<br />Intermolecular (IMI) initiated with a Market Perform at Northland<br />Internap (INAP) initiated with a Buy at Stifel<br />iRobot (IRBT) initiated with an Overweight at Piper Jaffray<br />Jumei (JMEI) initiated with a Hold at Brean Capital<br />KLX Inc. (KLXI) initiated with a Hold at Deutsche Bank<br />Microchip (MCHP) reinstated with a Neutral at Goldman<br />Newfield Exploration (NFX) initiated with a Buy at Guggenheim<br />Oasis Petroleum (OAS) initiated with a Buy at Guggenheim<br />Opco unsure if Twitter (TWTR) has mass market appeal, starts at Perform<br />RSP Permian (RSPP) initiated with a Neutral at Guggenheim<br />Rackspace (RAX) coverage resumed with a Buy at Stifel<br />Rexford Industrial (REXR) initiated with a Hold at Jefferies<br />SM Energy (SM) initiated with a Neutral at Guggenheim<br />Sotherly Hotels (SOHO) initiated with an Outperform at JMP Securities<br />Southwestern Energy (SWN) initiated with a Neutral at Guggenheim<br />Stericycle (SRCL) initiated with an Outperform at Macquarie<br />Telefonica (TEF) reinstated with a Sell at Deutsche Bank<br />Travelport (TVPT) initiated with a Perform at Oppenheimer<br />Ubiquiti Networks (UBNT) initiated with a Sell at Goldman<br />Wabtec (WAB) initiated with a Neutral at Macquarie<br />Whiting Petroleum (WLL) initiated with a Neutral at Guggenheim<br />Wright Medical (WMGI) initiated with a Market Perform at Wells Fargo</p> <p>COMPANY NEWS</p> <p>Ally Financial (ALLY) received DOJ subpoena over subprime automotive finance<br />Ally Financial (ALLY) to exit Troubled Asset Relief Program<br />Atos to buy Xerox's (XRX) IT outsourcing business for $1.05B<br />Carnival (CCL) announces two new ship orders with Fincantieri<br />DuPont (DD) announces restructuring, spinoff of chemicals company<br />Eli Lilly (LLY), Adocia to co-develop BioChaperone Lispro<br />FMC Technologies (FTI) awarded $393M subsea systems contract<br />ImmunoGen reports Phase III MARIANNE study met non-inferiority endpoint<br />Journal Communications (JRN) and DISH reach retransmission agreemnt<br />Madison Square Garden (MSG) board directs management to consider additional spin-offs<br />Maximus (MMS) awarded North East Yorkshire, Humber work Work Programme contract<br />Men's Wearhouse (MW), Eminence in standstill agreement amendment<br />MetLife (MET) says 'disappointed' in FSOC decision<br />NQ Mobile (nq) to sell FL Mobil to Tack Fiori International<br />RCS Capital (RCAP) issues statement regarding recent market developments<br />Red Hat (RHT) CFO to retire in next 12 months<br />Roche (RHHBY) says breast cancer study did not meet PFS superiority endpoint<br />Roche (RHHBY) to discontinue Phase III study of Alzheimer's disease drug<br />Solazyme (SZYM) begins restructuring plan to reduce 2015 operating expenses by $18.0M<br />Stadium Capital Management urges Big 5 Sporting (BGFV) to eliminate 'staggered board'<br />Transocean (RIG) to scrap seven floaters, sees Q4 charge of $100M-$140M<br />Wabash (WNC) authorizes stock repurchase program for up to $60M<br />Xerox (XRX) to sell IT outsourcing business to Atos for $1.05B</p> <p>EARNINGS</p> <p>Companies that beat consensus earnings expectations last night and today include:<br />Cintas (CTAS), Nike (NKE), AAR Corp. (AIR), Red Hat (RHT)</p> <p>Companies that matched consensus earnings expectations include:<br />Pier 1 Imports (PIR)</p> <p>Xerox (XRX) lowers FY14 adjusted EPS to $1.04-$1.06 from $1.11-$1.13, consensus $1.12<br />Xerox (XRX) lowers Q4 adjusted EPS view to 28c-30c from 30c-32c, consensus 31c<br />Xerox (XRX) lowers FY15 adjusted EPS to $1.05-$1.11 from $1.11-$1.17, consensus $1.17</p> <p>Nike (NKE) sees Q3 constant dollar revenue growth in low teens<br />Nike (NKE) backs FY15 constant dollar revenue growth view<br />Nike (NKE) sees FY15 China revenue growth in mid teens range</p> <p>Red Hat (RHT) sees Q4 EPS 40-41c, consensus 41c<br />Red Hat (RHT) raises FY15 EPS to $1.57-$1.58, consensus $1.55</p> <p>NQ Mobile (NQ) raises FY14 revenue view to $325M-$326M from $320M-$325M</p> <p>Cintas (CTAS) sees FY15 EPS ex-tems $3.20-$3.25, consensus $3.15</p> <p>Pier 1 Imports (PIR) backs FY15 EPS view 95c-$1.05, consensus 98c</p> <p>NEWSPAPERS/WEBSITES</p> <p>Fortress (FIG) looks to sell TRAC Intermodal, Reuters says<br />Google's (GOOG) next version of Android to be built directly into cars, Reuters says<br />Obama administration to ease many parts of Cuba embargo, NY Times says<br />Oracle (ORCL) looks like a 'buy', Barron's says<br />Sony (SNE) loss on 'Interview' may not be covered by insurance, NY Post says<br />Sony (SNE) shares could climb 50%, Barron's says<br />Sony (SNE) unable to find outlet for film as relationships damaged, NY Times reports<br />Toyota (TM) to consolidate seat-making operations, Nikkei reports</p> <p>SYNDICATE</p> <p>Alcoa (AA) files to sell 36.52M shares of common stock for holders<br />Ally Financial (ALLY) files automatic common stock shelf<br />Juno Therapeutics (JUNO) 11M M share IPO priced at $24.00<br />PlasmaTech (PTBI) 3.5M share Secondary priced at $4.00<br />Teekay Tankers (TNK) files to sell 20M shares of Class A common stock</p> <p></p> Australia Barclays China Citigroup Corruption Daimler Deutsche Bank European Union Exxon Ford France Germany Goldman Sachs goldman sachs GOOG Google Henderson Johnny Cash Keefe Merrill Nikkei North Korea Obama Administration Private Equity Quantitative Easing Reuters Swiss Franc Switzerland Toyota Transocean Twitter Twitter Ukraine Wells Fargo White House Whiting Petroleum Fri, 19 Dec 2014 12:45:27 +0000 Tyler Durden 499338 at Russia Busts "Gold-Selling" Rumors, Reports It Bought Another 600,000 Ounces Taking Gold Holdings To New Record High <p>Yesterday, <a href="">when we reported </a>the latest rumor of Russian gold selling, this time out of SocGen, we said that "it should be noted that SocGen and its "sources" have a conflict: in an indirect way, none other than SocGen is suddenly very interested in Russia stabilizing its economy because as we wrote before,<strong> "<a href="">Russia Contagion Spreads To European Banks : French SocGen, Austrian Raiffeisen Plummet</a></strong>" which also sent SocGen's default risk higher in recent days. So if all it will take to stabilize the RUB sell off, reduce fears of Russian contagion, and halt the selloff of SocGen stocks is a "source" reporting what may or may not be the case, so be it."</p> <p>Moments ago, as if to deter further speculation that Russia is indeed converting hard money earned from real resources for fiat paper, the <a href=";pid=svs&amp;sid=mipzrRF_01">Russian monetary authority </a>made it quite clear, that at least in November, Russia not only did not sell any gold, but in fact <em><strong>bought </strong></em>another 600K ounces in the month of November. </p> <ul> <li>RUSSIAN MONETARY GOLD HOLDINGS RISE VS 37.6M ON NOV. 1</li> <li>RUSSIAN MONETARY GOLD HOLDINGS 38.2M TROY OZ AS OF DEC. 1</li> </ul> <p>So we can now add another 600K to Russia's most recent holdings:</p> <p><img src="" width="600" height="302" /></p> <p>Which of course means that the very "Russia is selling" rumors that were so effectively used to keep the price of gold low into the recent risk-flaring episode, were capitalized on by the <em>very same Russia, </em>which we do however know <a href="">sold some $8 billion </a>in US Treasurys in October bringings its total holdings of US paper to the second lowest since 2008...</p> <p><a href=""><img src="" width="600" height="468" /></a></p> <p>... and which used these same low prices not to sell, but to buy. At the lowest prices possible.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="131" height="98" alt="" src="" /> </div> </div> </div> default None Raiffeisen SocGen Fri, 19 Dec 2014 12:10:52 +0000 Tyler Durden 499337 at Futures Continue Rising As Illiquid Market Anticipates More Volatility In Today's Quad-Witching <p>Yesterday's epic market surge, the biggest Dow surge since December 2011 on the back of the most violent short squeeze in three years, highlighted just why being caught wrong side in an illiquid market can be terminal to one's asset management career (especially if on margin), and thus why hedge funds are so leery of dipping more than their toe in especially on the short side, resulting in a 6th consecutive year of underperformance relative to the confidence-boosting policy tool that is the S&amp;P. And with today's session the last Friday before Christmas week, compounded by a quadruple witching option expiration, expect even less liquidity and even more violent moves as a few E-mini oddlots take out the entire stack on either the bid or ask side. Keep an eye on the USDJPY which, now that equities have decided to ignore both HY and energy prices, is the only driver for risk left: this means the usual pre-US open upward momentum ignition rigging will be rife to set a positive tone ahead of today's session. </p> <p>On the last trading day of the week, markets have been subdued with most European equities trade lower after coming off best levels with the FTSE MIB among the underperformers due to the weakness seen in the Italian banking sector with Banca Carige shares halted. Furthermore, the SMI is also under pressure as Roche (-5.3%) discontinued their scarletred drug trial with MorphoSys (-8.3%). In fixed income markets, Bunds initially edged lower taking cues from yesterday’s continued post-FOMC sell-off across USTs, but has since pared those earlier losses as choppy price and light volumes dictate the state of play.</p> <p>One hour ago a <a href="">Reuters report was released </a>citing ECB sources, stating that in any QE program, officials are looking into making weaker Euro-zone countries face a large cost and take larger risk burdens, <strong>the reports further suggest that the ECB could require weaker central banks, such as Greece or Portugal, to make provisions to cover any potential losses from a sovereign bond buying QE program. </strong>A step in this direction could help push Germany into accepting a sovereign QE program. However, these comments failed to impact the market and if anything pushed European stocks lower. </p> <p>Asian equities traded mostly higher after the rally on Wall Street, which saw the DJIA soar over 400 points and the S&amp;P 500 gain the most since Jan’13. Nikkei (+2.39%) led with gains underpinned by further JPY weakness and is on course for its best session since Oct. 31. Hang Seng traded up 1.25% while the Shanghai Comp (+1.7%) pared earlier losses and made its 6th consecutive weekly gain. Further speculation for PBOC stimulus has stemmed from the on-going Chinese liquidity crunch as money-market rates jumped the most since the June 2013 record cash crunch. The 7-day and 14-day Repo rates touched their steepest level since January 2014 while the O/N Shibor rate fixed at its highest since February 6th.</p> <p>The USD-index has remained flat with most major pairs following suit with USD/JPY trading higher aided by the slightly weaker JPY after the BoJ raised their assessment on output and exports providing some reprieve to the Japanese economy. In addition, RANsquawk sources note of a large USD 10.8bln expiry in EUR/USD at 1.2300 and a USD 3.8bln expiry at 1.2250-60 at the NY cut (1000EST/1500GMT).</p> <p>In the energy complex, WTI and crude have slightly bounced back from yesterday’s sharp selloff helped by the stable USD. Brent rebounds to $60 as the falling knife catchers attempt to time the lows once again following late day selloff yesterday. "We have seen a little bit of a strike back this week from the market, stabilizing since hitting a new low on Tuesday," says Saxo Bank head of commodity strategy Ole Hansen cited by Bloomberg. "The fact we continue to see bottom fishing could indicate investors are trying to dip their toes back into the market, but we are not out of the woods yet."</p> <p>Separately, Copper bounced back from yesterday’s lows as it heads for its 1st weekly decline this month, with prices pressured following yesterday’s weak China property data and the current liquidity concerns which has led to increases in Chinese money market rates. Elsewhere, iron-ore prices were marginally higher overnight to halt its prior 9-day decline. In precious metals, Gold has traded relatively range-bound in sympathy with the USD which has been flat due to a lack of macro news dictating movements.</p> <p><strong>Bulletin Headline Summary</strong></p> <ul> <li>European equities trade lower with light volumes and choppy price action in a rather subdued session.</li> <li>Looking ahead, we have possible comments from Fed’s Evans and Lacker, quadruple witching and Canadian CPI and Retail Sales.</li> <li>Treasuries head for weekly loss led by 7Y notes as crude oil advances, ruble strengthens; S&amp;P 500 up ~3% this week, biggest gain since October, after Fed promised patience on rate increases.</li> <li>U.S. Treasuries are on track to return about 6% in 2014 led by double-digit gains for 10Y and 30Y sectors, according to BofAML indexes, even as Fed policy evolution pushed 2Y, 3Y yields to highest since 2011</li> <li>UST 5/30 curve spread has narrowed by more than 100bps to lowest levels since Jan. 2009</li> <li>Banks added to their wins in Washington this month by getting a reprieve from the Volcker Rule that will let them hold onto billions of dollars in private-equity and hedge-fund investments for at least two more years</li> <li>While slumping crude prices are projected to boost U.S. economy by leaving more cash in consumers’ pockets, they also threaten to limit growth, tax revenue and job opportunities from Texas to North Dakota, subduing the most rapidly expanding U.S. regions</li> <li>ECB could require central banks in countries such as Greece or Portugal to set aside extra money or provisions to cover potential losses from any bond-buying, reflecting the riskiness of their bonds, Reuters reports, citing unidentified officials</li> <li>France’s Hollande floated the prospect of scaling back sanctions on Russia, becoming the first major EU leader to offer to ease the Kremlin’s economic pain</li> <li>The Swiss National Bank’s resort to negative rates leaves President Thomas Jordan holding a weaker hand for when the ECB ramps up stimulus</li> <li>London home prices are losing ground to other U.K. cities as restrictions on mortgage lending deterred buyers in the country’s best-performing market this year</li> <li>China revised the size of the economy by $308.8b, adding almost the entire output of Malaysia; GDP of world’s second- largest economy was 58.8t yuan in 2013, according to a nationwide economic census; revision won’t affect 2014 growth</li> <li>China’s benchmark money-market rate jumped the most since a record cash crunch in June 2013 as new share sales locked up funds in the banking system</li> <li>Sovereign yields mostly higher. Asian stocks gain, European stocks lower, U.S. equity-index futures rise. Brent crude and copper gain, gold lower</li> </ul> <p><strong>US Event Calendar</strong></p> <ul> <li>11:00am: Kansas City Fed Manf. Activity, Dec., est. 7 (prior 7)</li> <li>10:00am: Fed’s Evans speaks in Chicago</li> <li>12:30pm: Fed’s Lacker speaks in Charlotte, N.C</li> </ul> <p>***</p> <p><strong>As usual, DB's Jim Reid concludes the overnight summary</strong></p> <p>Before we make our final comments of the year regular readers will know I'm one for pointless anniversaries well today marks another one. 5 years ago today on the first very snowy day for years I moved out of London after 14 and a half years and migrated back home to the Surrey countryside. As a result my golf handicap has improved immeasurably but my social life has diminished. I don't get told off for playing my music too loud anymore but I also have to drive to get a pint of milk. I have to commute rather than walk everyday but I don't get so frustrated at having to battling through hoards of people most of the time. I don't pay ridiculously high service charge on a flat anymore but 5 years on I still haven't finished exorbitant refurbishments. What looked a bargain at the time is proving less so with all the building work. Overall I'd recommend it to people who are naturally becoming more anti-social as they age, who love golf, who like to play music louder and who want much, much more space for their money. However be realistic about any house that needs work. It will cost you 3 or 4 times what you think, especially if you get married during the process and have your eyes opened to the finer things in life!!! Who knew the cost of wallpaper! Overall no regrets although my retirement has been pushed back a few decades!!</p> <p>Having said that if markets extrapolate the past 2 days continuously for a few years maybe I can retire before my building work is finished. The S&amp;P 500 (+2.40%) saw its best 2-day gain (+4.49%) since November 2011 with the Dow (+2.43%) last night seeing its best single-day gain since December 2011. The S&amp;P 500 is now back to just 0.7% off its December 5th highs. Most of the wires seem to link it to the Fed being dovish and using the word 'patient' but the truth is that you could equally say that Yellen made some surprisingly hawkish comments given all that has been going on of late. In reality equity markets were also given a late boost from a turnaround in energy stocks despite what turned out to be a weak day for oil overall. The energy component of the S&amp;P 500 closed +2.13% with the bulk of the gains coming in the last hour of trading as both WTI and Brent rallied 1%-1.5% off their intraday lows at the end of the US session. It was in fact another day of<br />volatility in oil markets however with significant intraday high-to-low ranges for both WTI (7.97%) and Brent (7.11%). After both grades traded as high as +4% in the morning, WTI (-4.18%) and Brent (-3.12%) closed weaker, dropping to $54.11/bbl and $59.27 respectively – the latter closing below $60 for the first time since May 2009. Comments from the Saudi Arabia oil minister Al-Naimi did little to calm the oil market. Specifically the minister said that ‘it is difficult, if not impossible', that the kingdom or OPEC would carry out any action that may result in a reduction of its share in market and an increase of others. Although the minister did provide some hope for those hoping that the current drop in prices is more of a temporary thing, stating that ‘what we are facing now and what the world is facing is a temporary situation and will pass’.</p> <p>Credit markets strengthened further, CDX IG closed 4.6bps tighter (nearly 12bps in two days) whilst US HY energy names extended their two-day gains to rally 61bps in cash spread terms. Spreads have now tightened 96bps over the past two days to 780bps – back to last Thursdays levels. Treasuries also swung around, the yield on the 10y benchmark opened at 2.136%, traded to an intraday low of 2.109% and then weakened in the afternoon to close near its wides at 2.208% - 7bps wider on the day. With the market largely focused on further digesting the Fed statement and comments, as well as keeping up with the swings in oil, data yesterday was something of an afterthought although readings were largely unexciting. Jobless claims once again printed below 300k, decreasing by 6k to 289k and nudging the four-week average down to 298.75k. Elsewhere the flash PMI services reading came in weaker than expected at 53.6 (vs. 56.3 expected) and the December Philadelphia Fed business outlook dropped to 24.5 from 40.8 in November – although this still remains at the higher end of the historical range. The leading index series (+0.6% vs. +0.5% expected) was largely in line.</p> <p>Back to markets and earlier in the day Europe closed notably stronger. The Stoxx 600 finished +2.95% which marked the largest one day gain since November 2011. Energy stocks (+2.12%) benefited from the earlier day’s rally in oil although much of the focus was on the Swiss National Bank who announced that they are to introduce negative interest rates on deposits (- 0.25%) in an effort to curb demand for the Swiss Franc. The Franc weakened as much as 0.7% versus the Euro – only to then retrace the bulk of the losses and finish 0.26% weaker at 1.204 to the Euro. Over in Russia, the ruble closed relatively unchanged (+0.05%) at 61.622 although swung over the course of Putin’s annual conference in which the President appeared to shift the blame for Russia’s woes onto western nations. Putin did however appear to acknowledge a potential for oil prices to stay continually low, noting that ‘under the most negative external economic scenario, this situation can last two years’, and going on to say that ‘if the situation is very bad, we will have to change our plans, cut some things’. Russian equities closed firmer, the $- RTS closed +6.50% whilst 10y hard currency yields rallied 26bps to close at 6.845%. Following the results of the first round of the Presidential election, Greek assets continue to firm. The ASE closed +1.47% and short-end yields bounced further off their recent highs. The 3y notes closed 42bps tighter at 9.556% whilst 5y notes rallied 35bps to 8.956%. Elsewhere, Bunds finished weaker with the 10y yield climbing 2.4bps off Wednesday’s record low to close at 0.617%.</p> <p>Before we look at the day ahead, markets in Asia are following the US lead this morning with most major bourses trading in the green. The Nikkei (+2.16%), Hang Seng (+1.30%) and Kospi (+1.71%) are all trading firmer, although Chinese equities have bounced between gains and losses. The CSI 300 is currently unchanged and the Shanghai Comp +0.61%. The Bank of Japan, as largely expected kept its current pace of stimulus on hold at ¥80tn. It’s a quiet end to the week in the US this afternoon with just the December Kansas City Fed manufacturing index print due. Of more interest perhaps will be comments from the Fed’s Evans and Lacker who are due to speak this afternoon. Before this in Europe this morning we’ve got trade data due out for the Euro-area as well as PPI and consumer confidence prints due in Germany. In France we get manufacturing and business confidence and in Italy we receive industrial orders.</p> Bank of Japan Bond Central Banks China Consumer Confidence Copper CPI Crude Crude Oil Equity Markets fixed France Germany Greece Italy Japan Jim Reid Nikkei OPEC Portugal Precious Metals Price Action RANSquawk Reality Reuters Saudi Arabia Saxo Bank Swiss Franc Swiss National Bank Tax Revenue Volatility Yuan Fri, 19 Dec 2014 12:04:18 +0000 Tyler Durden 499336 at "It's A Huge Crisis" - The UK Oil Industry Is "Close To Collapse" <p>It seems like only yesterday when <a href="">back on October 11, we first explained</a> - and previewed - the collapse of oil courtesy of the secret deal between the US and Saudi Arabia. However, it seems like only this morning when we subsequently wrote that "<a href="">If The Oil Plunge Continues, "Now May Be A Time To Panic" For US Shale Companies</a>." In retrospect, it was, and with the price of crude far below mid-October levels, the pain for both Russia <em><strong>and </strong></em>shale is now quite unbearable (even as Saudi Arabia explained earlier today that the reason for collapsing oil has nothing to do with supply and <a href="">everything to do with plunging demand</a>, and after seeing <a href="">this chart </a>we believe it). </p> <p>All of this was perfectly obvious months ago to anyone who cared. <a href="">To wit</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>... while we understand if Saudi Arabia is employing a dumping strategy to punish the Kremlin as per the "deal" with Obama's White House, very soon there will be a very vocal, very insolvent and very domestic shale community demanding answers from the Obama administration, as once again the "costs" meant to punish Russia end up crippling the only truly viable industry under the current presidency.</p> </blockquote> <p>So with great delight we present the latest blowback from Obama's "brilliant" strategy to cripple Putin: in addition to the default wave about to crush America's own shale industry, America's biggest foreign ally and military partner when it comes to "ideologically pure missions of liberation" - the UK, and specifically its North Sea oil industry which <a href="The UK's oil industry is in &quot;crisis&quot; as prices drop, a senior industry leader has told the BBC. Oil companies and service providers are cutting staff and investment to save money. Robin Allan, chairman of the independent explorers' association Brindex, told the BBC that the industry was &quot;close to collapse&quot;. Almost no new projects in the North Sea are profitable with oil below $60 a barrel, he claims.">according to the BBC </a>is in a "crisis" and according to Robin Allan, chairman of the independent explorers' association Brindex, <strong>the industry was "close to collapse".&nbsp; </strong></p> <p><strong><img src="" width="624" height="351" /><br /></strong></p> <p>The story is the same as in the shale patch, only in the far colder and stormier North Sea: "Almost no new projects in the North Sea are profitable with oil below $60 a barrel, he claims. 'Everyone is retreating'" </p> <p><strong>"It's almost impossible to make money at these oil prices</strong>", Mr Allan, who is a director of Premier Oil in addition to chairing Brindex, told the BBC. "<strong>It's a huge crisis. </strong>This has happened before, and the industry adapts, but the adaptation is one of slashing people, slashing projects and reducing costs wherever possible, and that's painful for our staff, painful for companies and painful for the country."</p> <p><strong>"It's close to collapse. In terms of new investments - there will be none, everyone is retreating, people are being laid off at most companies this week and in the coming weeks. Budgets for 2015 are being cut by everyone.</strong>" </p> <p>And to think it was just yesterday that the <a href="">WSJ telling anyone </a>who believes propaganda that "Christmas has come early for British consumers. </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Tumbling oil prices, rising wages and declining borrowing costs are lifting households’ spending power, sending a powerful signal that consumers are set to keep Britain’s economy growing in the New Year. </strong></p> <p>&nbsp;</p> <p>BOE officials in December concluded the decline in the oil price in particular should act as a mini-stimulus for the U.K. and its major trading partners, even as Russia and other energy producers reel from crude’s recent slide. The BOE estimates the oil price has fallen 35% in sterling terms since June.<strong><br /></strong></p> </blockquote> <p>Which once again shows that when it comes to being utterly clueless about the real world, central bankers truly have no peers. Well, side from their media cheerleaders of course. </p> <p>But hold on: wasn't only Putin supposed to be getting crushed as a result of the oil collapse? Suddenly the "secret" Saudi agreement isn't looking all that hot.</p> <p>As for the truly "best" news: the collapse in the oil field will remain hidden from official government data. <strong>Mr Allan said many of the job cuts across the industry would not have been publicly announced. Oil workers are often employed as contractors, which are easier for employers to cut.</strong> </p> <p>His remarks echo comments made by the veteran oil man and government adviser Sir Ian Wood, who last week predicted a wave of job losses in the North Sea over the next 18 months. </p> <p>BOE bullshit aside, this is what is really going to happen:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>The US-based oil giant ConocoPhillips is cutting 230 out of 1,650 jobs in the UK</strong>. This month it announced a 20% reduction in its worldwide capital expenditure budget, in response to falling oil prices. </p> <p>&nbsp;</p> <p>Other big oil firms are expected to make similar cuts to their drilling and exploration budgets. Research from the investment bank Goldman Sachs predicted that they would need to cut capital expenditure by 30% to restore their profitability at current prices. </p> <p>&nbsp;</p> <p>Service providers to the industry have also been hit. Texas-based oilfield services company Schlumberger cut back its UK-based fleet of geological survey ships in December, taking an $800m loss and cutting an unspecified number of jobs. </p> <p>&nbsp;</p> <p>On Wednesday Aberdeen-based Wood Group <strong>announced a pay freeze for staff, and cut rates for its contractors.</strong> </p> <p>&nbsp;</p> <p>Apache, one of the North Sea's biggest producers, has followed suit and will impose a 10 percent reduction on its contractors' wages from January 1st.</p> </blockquote> <p>So what happens to the UK oil and energy industry? "The industry was hoping to see continued high levels of investment, stemming the inevitable decline of production as North Sea's resources are used up. But falling oil prices have put that in doubt."</p> <p>However, the Department of Energy and Climate Change said: "The recent sharp reductions in oil prices are very challenging for companies active in the North Sea. <strong>We have seen very little evidence of new projects being cancelled or deferred in reaction to lower oil prices." </strong></p> <p>Which means the real pain is only just starting, first in the UK and soon everywhere else.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="624" height="351" alt="" src="" /> </div> </div> </div> BOE Borrowing Costs Crude default Department Of Energy Goldman Sachs goldman sachs None Obama Administration Saudi Arabia White House Fri, 19 Dec 2014 04:21:14 +0000 Tyler Durden 499331 at United States Of Newspeak – Obama Spins Executive Orders As "Presidential Memoranda" To Avoid Scrutiny <p><a href=""><em>Submitted by Mike Krieger via Liberty Blitzkrieg blog</em></a>,</p> <p>If there&rsquo;s one thing we have learned about Barack Obama, it&rsquo;s that he is a master of deception and absolutely loves to lie to the public. He seems to enjoy conning the plebs to such a degree, I think he actually receives blasts of dopamine every time he does it. The bigger the lie, the better the rush.</p> <p>The latest example relates to his&nbsp;issuance of executive orders, or lack thereof, something that Obama Inc. has actively attempted to portray as evidence of his restraint when it comes to executive power. Here are a few examples from <a href="">a <em>USA Today</em> article</a> published earlier today.</p> <p>First, from the man himself:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>&ldquo;The truth is, even with all the actions I&rsquo;ve taken this year, I&rsquo;m issuing executive orders at the lowest rate in more than 100 years,&rdquo; Obama said<a href="" title="">&nbsp;in a speech in Austin last July</a>. &ldquo;So it&rsquo;s not clear how it is that Republicans didn&rsquo;t seem to mind when President Bush took more executive actions than I did.&rdquo;</em></strong></p> </blockquote> <p>Harry Reid also proudly chimed in:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>In a&nbsp;<a href="" title="">Senate floor speech in July</a>, Majority Leader Harry Reid said, &ldquo;While Republicans accuse President Obama of executive overreach, they neglect the fact that he has issued far fewer executive orders than any two-term president in the last 50 years.&rdquo;</em></strong></p> </blockquote> <p>Finally, the message wouldn&rsquo;t be complete without some words from Bootlicker in Chief Jay Carney:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>&ldquo;There is no question that this president has been judicious in his use of executive action, executive orders, and I think those numbers thus far have come in below what President George W. Bush and President Bill Clinton did,&rdquo;&nbsp;<a href="" title="">said Jay Carney, then the White House press secretary</a>, in February.</em></strong></p> </blockquote> <p>Nice spin, but what&rsquo;s the truth? Also <a href="">from<em> USA Toda</em>y</a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>WASHINGTON &mdash; President Obama has issued a form of executive action known as the presidential memorandum more often than any other president in history &mdash; using it to take unilateral action even as he has signed fewer executive orders.</em></strong></p> <p>&nbsp;</p> <p><strong><em>Like executive orders, presidential memoranda don&rsquo;t require action by Congress. They have the same force of law as executive orders and often have consequences just as far-reaching.&nbsp;And some of the most significant actions of the Obama presidency have come not by executive order but by presidential memoranda.</em></strong></p> <p>&nbsp;</p> <p><strong><em>The Office of Legal Counsel &mdash; which is responsible for advising the president on executive orders and memoranda &mdash; says there&rsquo;s no difference between the two.</em></strong></p> </blockquote> <p>With that in mind, how does Obama&rsquo;s record stand up when you combine his issuance of executive orders and executive memoranda? Well, here you go:</p> <p><a href=""><img alt="Screen Shot 2014-12-17 at 11.31.49 AM" class="alignnone size-large wp-image-19970" src="" style="width: 600px; height: 643px;" /></a></p> <p>Oh, and let&rsquo;s not forget this guy still has two years left to further separate himself from the pack.</p> <p>More <a href="">from <em>USA Today</em></a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>WASHINGTON &mdash; President Obama has issued a form of executive action known as the presidential memorandum more often than any other president in history &mdash; using it to take unilateral action even as he has signed fewer executive orders.</em></strong></p> <p>&nbsp;</p> <p><em>Obama has issued executive orders to give federal employees the day after Christmas off, to impose economic sanctions and to determine how national secrets are classified. He&rsquo;s used presidential memoranda to make policy on gun control, immigration and labor regulations. Tuesday, he used a memorandum to declare Bristol Bay, Alaska, off-limits to oil and gas exploration.</em></p> <p>&nbsp;</p> <p><strong><em>Like executive orders, presidential memoranda don&rsquo;t require action by Congress. They have the same force of law as executive orders and often have consequences just as far-reaching. And some of the most significant actions of the Obama presidency have come not by executive order but by presidential memoranda.</em></strong></p> <p>&nbsp;</p> <p><em>Obama has made prolific use of memoranda despite his own claims that he&rsquo;s used his executive power less than other presidents. &ldquo;The truth is, even with all the actions I&rsquo;ve taken this year, I&rsquo;m issuing executive orders at the lowest rate in more than 100 years,&rdquo; Obama said<a href="" title="">&nbsp;in a speech in Austin last July</a>. &ldquo;So it&rsquo;s not clear how it is that Republicans didn&rsquo;t seem to mind when President Bush took more executive actions than I did.&rdquo;</em></p> <p>&nbsp;</p> <p><em>Obama has issued 195 executive orders as of Tuesday. Published alongside them in the&nbsp;Federal Register&nbsp;are 198 presidential memoranda &mdash; all of which carry the same legal force as executive orders.</em></p> <p><em><strong>He&rsquo;s already signed 33% more presidential memoranda in less than six years than Bush did in eight. He&rsquo;s also issued 45% more than the last Democratic president, Bill Clinton,</strong> who&nbsp;assertively&nbsp;used memoranda to signal what kinds of regulations he wanted federal agencies to adopt.</em></p> <p>&nbsp;</p> <p><strong><em>Obama is not the first president to use memoranda to accomplish policy aims. But at this point in his presidency, he&rsquo;s the first to use them more often than executive orders.</em></strong></p> <p>&nbsp;</p> <p><em>So even as he&rsquo;s quietly used memoranda to signal policy changes to federal agencies, Obama and his allies have claimed he&rsquo;s been more&nbsp;restrained in his use of that power.</em></p> <p>&nbsp;</p> <p><em>In a&nbsp;<a href="" title="">Senate floor speech in July</a>, Majority Leader Harry Reid said, &ldquo;While Republicans accuse President Obama of executive overreach, they neglect the fact that he has issued far fewer executive orders than any two-term president in the last 50 years.&rdquo;</em></p> <p>&nbsp;</p> <p><em>&ldquo;There is no question that this president has been judicious in his use of executive action, executive orders, and I think those numbers thus far have come in below what President George W. Bush and President Bill Clinton did,&rdquo;&nbsp;<a href="" title="">said Jay Carney, then the White House press secretary</a>, in February.</em></p> <p>&nbsp;</p> <p><em>Executive orders are numbered &mdash; the most recent, Executive Order 13683, modified three previous executive orders. <strong>Memoranda are not numbered, not indexed and, until recently, difficult to quantify.</strong></em></p> </blockquote> <p>That&rsquo;s precisely why Obama is utilizing them at a record clip.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>Indeed, many of Obama&rsquo;s memoranda do the kinds of things previous presidents did by executive order.</em></strong></p> <p>&nbsp;</p> <p><em>&bull; In 1970, President Nixon issued&nbsp;<a href="" title="">an executive order</a>&nbsp;on unneeded federal properties. Forty years later, Obama issued a similar policy&nbsp;<a href="" title="">by memorandum</a>.</em></p> <p>&nbsp;</p> <p><em>Presidential scholar Phillip Cooper calls presidential memoranda &ldquo;executive orders by another name, and yet unique.&rdquo;</em></p> <p>&nbsp;</p> <p><em>The law does not define the difference between an executive order and a memorandum, but it does say that the president should publish in the&nbsp;Federal Register executive orders and other documents that &ldquo;have general applicability and legal effect.&rdquo;</em></p> <p>&nbsp;</p> <p><strong><em>There are subtle differences. Executive orders are numbered; memoranda are not. Memoranda are always published in the&nbsp;Federal Register&nbsp;after proclamations and executive orders. And under&nbsp;<a href="" title="">Executive Order 11030</a>, signed by President Kennedy in 1962, an executive order must contain a &ldquo;citation of authority,&rdquo; saying what law it&rsquo;s based on. Memoranda have no such requirement.</em></strong></p> <p>&nbsp;</p> <p><em>Whatever they&rsquo;re called, those executive actions are binding on future administrations unless explicitly revoked by a future president, according to legal opinion from the Justice Department.</em></p> <p>&nbsp;</p> <p><em>The Office of Legal Counsel &mdash; which is responsible for advising the president on executive orders and memoranda &mdash; says there&rsquo;s no difference between the two.</em></p> <p>&nbsp;</p> <p><em>Even the White House sometimes gets tripped up on the distinction. Explaining Obama&rsquo;s memoranda on immigration last month, Press Secretary Josh Earnest said the president would&nbsp;happily &ldquo;tear up his own executive order&rdquo; if Congress passes an immigration bill.</em></p> <p>&nbsp;</p> <p><em>Obama had issued no such executive order. Earnest&nbsp;later corrected himself. &ldquo;I must have misspoke. I meant executive actions. So I apologize,&rdquo; he said.</em></p> </blockquote> <p>Not to fear, we just found out that Jeb Bush will be running for President in 2016. There&rsquo;s always something to look forward to. For example:</p> <p>Here&rsquo;s your American &ldquo;democracy.&rdquo;</p> <p><img alt="Screen Shot 2014-12-17 at 11.44.13 AM" class="alignnone size-large wp-image-19975" src="" style="width: 600px; height: 445px;" /></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="581" height="447" alt="" src="" /> </div> </div> </div> Barack Obama President Obama White House Fri, 19 Dec 2014 03:50:28 +0000 Tyler Durden 499329 at Frenzied Chinese Stock Buyers Soak Up So Much Liquidity, Central Bank Forced To Intervene, Prevent Seizure <p>While today's rabid explosion in the S&amp;P500, coupled with a <a href="">literal break in the NY Fed/Citadel market boosting algo </a>which went haywire in the last moments of trading and pushed the S&amp;P up to 2130 in milliseconds via Kevin Henry's preferred SPY ETF, may be the stuff of market manipulating legends, nothing compares to the far more berserk situation China finds itself in, where a 50% surge in the Shanghai Composite over the past few months - not on improving fundamentals but just the opposite, hopes of massive liquidity injections to halt China's economic hard landing - has found the PBOC scrambling to find a way to, politely, burst the stock market bubble without causing too much pain. </p> <p>This is because <a href="">as reported overnight</a>, China's seven-day repurchase rate, a gauge of interbank funding availability in the banking system, surged 139 basis points, to a 10-month high of 5.28% in Shanghai, the biggest since Jan. 20. The reason for the sudden cash crunch, according to Bloomberg, is that subscriptions for the biggest new share sales of the year lock up funds. Twelve initial public offerings from today through Dec. 25 will draw orders of as much as 3 trillion yuan ($483 billion), Shenyin &amp; Wanguo Securities Co. estimated. In other words, the scramble to allocate capital into China's surest way of making money, IPOs, has led to a drying out of general liquidity in the entire market. </p> <p>This in turn forced the PBOC to intervene and inject short-term money loans to commercial lenders <strong>in order to prevent the kind of interbank liquidity lock up that emerged in China in June 2013 in the aftermath of the first Taper Tantrum </strong>(and which before all is said and done, will likely take place again) and which sent global capital markets around the globe reeling before China resumed its massive liquidity injections which are at the heart of China's debt-fuelled bubble in the first place.</p> <p><a href="">From Bloomberg</a>: “The IPOs are affecting the market, leading to cautious sentiment with fewer institutions willing to lend,” said Li Haitao, a Shanghai-based analyst at China Guangfa Bank Co. “<strong>Quite a few traders found it very difficult to meet their funding needs yesterday.”</strong></p> <p>Why? Because everyone wants to get rich quick so badly, they are risking collapsing the entire market. </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Lenders paid 4.65 percent for 60 billion yuan of three-month treasury deposits auctioned today by the PBOC, the most they’ve paid since January for such funds. The central bank also rolled over this week at least some of the 500 billion yuan of three-month loans granted to lenders in September, a government official said yesterday, declining to be identified as the details haven’t been made public.</p> </blockquote> <p>“Banks have to prepare for quarter-end regulatory checks, including loan-to-deposit requirements, and hoard cash to meet year-end demand,” said Wang Ming, chief operations officer at Shanghai Yaozhi Asset Management LLP, which oversees 2 billion yuan of fixed-income investments. “With all these factors affecting the market, it’s no surprise it’s suffering more than during previous IPOs.” </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The cost of one-year interest-rate swaps, the fixed payment to receive the floating seven-day repo rate, rose five basis points to 3.38 percent, data compiled by Bloomberg show. </p> <p>&nbsp;</p> <p>The yield on China’s sovereign bonds due September 2024 fell two basis points to 3.78 percent, according to data from the National Interbank Funding Center. It’s increased 27 basis points this month.</p> <p>&nbsp;</p> <p>The PBOC is expected to cut lenders’ reserve requirements before the Lunar New Year holiday in February to top up the money supply as the prospect of U.S. interest-rate increases draws cash from China, according to Ding Shuang, senior China Economist at Citigroup Inc. in Hong Kong.</p> </blockquote> <p>And since the Chinese stock market is surging ever higher on momentum-driven euphoria, China which wants to if not burst its bubble than certainly tame it as it is already having adverse impacts on cross-asset classes, the last thing regulators want to do is risk a full blown slam in equities, which are now so far above their fair value, a Chinese market correction correction could have dramatic consequences on all other aspects of China's bubble economy. </p> <p>They better decide quick just how they will do this, becauase as Bloomberg also reported moments ago:</p> <ul> <li><strong>CHINA 7-DAY REPO RATE TOUCHES 5.81%, HIGHEST SINCE JAN.</strong></li> </ul> <p><a href=""><img src="" width="600" height="319" /></a></p> <p>Ironic, and very much reflexive: with all the "money on the sidelines" is being soaked up in the stock market, there is nothing left to keep the rest of the facade operating efficiently, which ultimately assures a stock market crash. </p> <p>Perhaps even in a time of pervasive central-planning, a Princeton economist can only pull the rubber band so far before it finally snaps.</p> Capital Markets China Citadel Citigroup fixed Hong Kong Market Crash Money On The Sidelines Money Supply SPY Yuan Fri, 19 Dec 2014 03:18:45 +0000 Tyler Durden 499335 at