A curious story, and one which should be taken with a mine of salt, has surfaced out of the pro-Russian newspaper Iskra, which reports - so far on an entirely unsubstantiated basis - that last Friday, in a mysterious operation under the cover of night, Ukraine's gold reserves were promptly loaded onboard an unmarked plane, which subsequently took the gold to the US.
Stocks in Europe failed to hold onto early gains and gradually moved into negative territory, albeit minor, as concerns over money markets in China gathered attention yet again after benchmark rates fell to lowest since May 2012. Nevertheless, basic materials outperformed on the sector breakdown, as energy and metal prices rebounded following yesterday’s weaker than expected Chinese data inspired sell off. At the same time, Bunds remained supported by the cautious sentiment, while EUR/USD came under pressure following comments by ECB's Constancio who said that financial markets misinterpreted us a little, can still cut rates and implement QE or buy assets. Going forward, market participants will get to digest the release of the weekly API report after the closing bell on Wall Street and the US Treasury will kick off this week’s issuance with a sale of USD 30bln in 3y notes.
It would appear, judging by the tumble in JPY crosses (i.e. JPY strength) that the carry-traders of the world are disappointed in the BoJ's lack of exuberance.
- *BOJ RETAINS PLAN FOR 60T-70T YEN ANNUAL RISE IN MONETARY BASE (no change)
But it is the commentary that is truly baffling in its contempt for the truth:
- *BOJ: EXPORTS HAVE LEVELED OFF MORE OR LESS (umm, record trade deficit?)
- *BOJ: PICKUP IN CAPEX HAS BECOME INCREASINGLY EVIDENT (Tankan Capex growth fallen for 2 quarters)
- *BOJ SAYS JAPAN'S ECONOMY IS RECOVERING MODERATELY (GDP growth worst since Abenomics began)
Black is white; water is not wet; and Abenomics will work any day now...
While progress on the search-and-recovery efforts of the missing Malaysian Airlines jet continues to disappoint, the stolen-passport plot thickens considerably. While earlier we discovered that it was a mysterious "Mr. Ali" that purchased the tickets for the two passengers traveling on stolen passports (with cash), The Telegraph reports that BBC Persia confirms they were Iranian nationals. According to another Iranian friend (who had hosted them while in Kuala Lumpur) the two were "looking for a place to settle" in Europe (intending to complete their journey in Frankfurt and Denmark).
Over the weekend we reported that even Goldman has now highlighted what has been clear to most, but certainly not the Fed, for quite some time: stocks are in such an epic bubble, with many of the key valuation metrics notably EV/sales, off the charts and at all time highs, that even Goldman's own clients are asking "When does the party end?" Goldman Sachs was kind enough to point out that while buying into undervalued stocks at this record high market junction may be a safe bet, the alternative, going long the most overvalued stocks usually ends in tears. So just what are these most overvalued stocks? To answer this question David Kostin screens for those Russell 1000 companies with the highest EV/Sales ratios, and finds 40 companies, with a ratio between 10x and 875x (median of 15x compared to the overall Russell's 2x), that fit the bill. The answer - the list of the America's most overvalued companies - is shown in the table below.
While the mystery builds over the still officially unexplained disappearance of Malaysian flight MH370, or just who the two passengers with "stolen" passports may have been although we expect a revelation on this issue shortly, the FT has added yet another twist to what is sure to be a conspiracy thriller for weeks to come: the paper reports that the Thai travel agent who booked the tickets for the men in question said that she had been asked to arrange the travel by an Iranian contact. Adding to the confusion is the revelation that originally the mysterious Iranian, known only as Mr. Ali, tried to reserve seats for the two men on separate flights not to China, but to Europe, one on a Qatar Airways flight, and the other on Etihad. And the punchline: a "friend" of Mr. Ali's paid for the tickets in cash.
While central bankers and politicians alike celebrate the great recorvery in the UK, the nation is increasingly divided between the haves and have-nots (or Londoners and non-Londoners). In no way is that more clearly evident that a dreadful new trend that, as The Sunday Post reports, desperate Brits are turning to Facebook to advertise their organs for sale at up to $50,000 despite the medical and legal risks involved.
For those who have been following every twist and turn of the Ukrainian political crisis ever since its start in November of last year, the following post is likely a recap of familiar facts and dates. For everyone else, or those who just wish to plug the occasional hole in their memory, here is a full timeline of events that led to the coup that replaced the elected president Yanukovich - despite the signing of an agreement memorandum which was endorsed by Europe and the West keeping him in power and calling for presidential elections - with an acting president who has been classified as illegitimate by Russia, in exchange for which, as well as for numerous other reasons, Moscow has completely occupied the Crimea and increasingly more cities in east Ukraine are telegraphing their alliance with Putin.