After last week's holiday-shortened exuberance over initial jobless claims, this week's slam back to reality is quite a shock to the "everything is awesome" crowd. Initial jobless claims jumped 31,000 to 313,000 - the biggest percentage rise since December 2013. Continuing claims dropped modestly but remain up around 3.5% over the last quarter - near the worst since 2009.
Yesterday we exposed the deja vu-ness of the API vs DOE inventory price moves in WTI. Today we begin to get some confirmation as a growing divergence between excess supply (and weak demand) for WTI and rising demand for Brent push the spread over $11 and the contango above $2...
- Goldman Employees Reaped $2 Billion From 2008 Options Last Year (BBG)
- On Bush turf, Obama blames immigration woes on Republicans (Reuters)
- Tougher Internet rules to hit cable, telecoms companies (Reuters)
- Russia's Gazprom says can exempt rebel-held areas from Ukraine gas contract (Reuters)
- Allianz Says Pimco Seeing ‘Substantially’ Lower Outflows (BBG)
- Merkel Faces Stepped-Up Dissent on Greek Bailout in Party (BBG)
- SEC Probes Companies’ Treatment of Whistleblowers (WSJ)
- 2-Year Trek From Turf to Table Delays Cheaper U.S. Beef (BBG)
- Turkish jets violate Greek air space (Kathimerini)
Following a quiet overnight session in which the main event appears to be a statement by Chinese premier Li for more active fiscal policy, which has pushed the metals complex higher, although technically every other asset class as well, with US equity futures set to open in fresh record high territory, even as 10Y yields around the world continue to decline, attention today will fall on the CPI print due out shortly, because if consensus is correct, January will be the first month this decade when US inflation posts a negative print, mostly due to the delayed effect of sliding commodity prices. As Deutsche recaps, the most important number today is the headline CPI where the headline YoY rate is predicted to be negative by the market (-0.1%) for the first time since 2009. Over this period the YoY rate stayed negative for 8 months. However before this we hadn't seen a full year decline since August 1955. In other words, a few months before what may be the first US rate hike for a new generation of traders, the US is set to print its first annual deflation since Lehman, transitory or not.
As Ukraine's socio-economic situation goes from wost to worst-er, today's announcement by President Poroshenko that the government will take actions to stabilize the currency (which as we previously noted, appears to be heading for hyperinflation) has Ukrainians rushing for the exits into precious metals... with only one goal in mind - wealth preservation.
The one chart which, both literally and metaphorically, will determine how much longer the USD will reign as the world's reserve, is the following.
"While some called us book-burning Nazis, Page 274 of “Civics in Practice” states, “Citizens must be alert to propaganda” and glittering generalities is a “type of propaganda which often uses words such as freedom and patriotism.” This world government indoctrination is augmented on Page 425, where a geographical map of North America eliminates the United States, and places our great nation in nine new “cultural nations.” For pointing this out, one public speaker at the School Board textbook workshop called us “narrow-minded, racist Bible-thumpers.”"
While faith in Japanese 'economics' is starting to falter (borne out by the split in the BoJ and endless macro data disappointments), trust in TEPCO and its governmental operators must be about to hit a new record low. Having promised and given up on the ice-wall strategy to stop radioactive water leaking into the ocean, Bloomberg reports TEPCO officials have admitted that it’s investigating the cause of a spike in radiation levels (23,000 becquerels/liter vs the legal limit of 90) in drainage water that it believes subsequently leaked into the Pacific ocean from the wrecked Fukushima nuclear power plant. The bigger problem, as NBC reports, TEPCO failed to report the leak for 10 months!
Janet Yellen is very alarmed that some members of Congress want to conduct a comprehensive audit of the Federal Reserve for the first time since it was created. During testimony this week, she made “central bank independence” sound like it was the holy grail. Even though every other government function is debated politically in this country, Janet Yellen insists that what the Federal Reserve does is “too important” to be influenced by the American people. Does any other government agency ever dare to make that claim? If the Fed is doing everything correctly, why should Yellen be alarmed? What does she have to hide?
It appears all the emerging/emerged economies of the world that are supposed to be the dynamic growth engines to lead the world to escape velocity are, well, not. Perhaps no better example is Brazil where hyper-growth expectations have disappeared into a black hole as business and consumer confidence collapsed this week to historical lows. As Goldman noted, "This poses major headwinds for private consumption and overall activity in the coming months."
Within the Earth’s crust, there is 1 gram of silver for every 12.5 tonnes of earth (27,600 lbs). This makes silver very difficult to find. The total amount of silver mined in global history is enough to create a 52m cube. So who controls that supply?
Amid the to-ing and fro-ing of John Kerry and the nuclear program negotiations, it seemed quite ironic that Iran would unleash a major naval drill near the strategically vital entrance of the Persian Gulf. As AP reports, more than a dozen swarming Iranian speedboats assaulted a replica of a U.S. aircraft carrier, as the Guard's navy chief, Adm. Ali Fadavi, who last month boasted that his force is capable of sinking American aircraft carriers in the event of war, said on state television, "American aircraft carriers are very big ammunition depots housing a lot of missiles, rockets, torpedoes and everything else."
No; Mr. Obama has not seen “the great light,” remaining as blind in Middle East affairs as he has been in his belligerent, anti-Russia approach in Eastern Europe. He, like Don Quixote, is still riding his Rocinante as he charges the windmills. Saint Paul did see the great light and is now known as Apostle of the Gentiles. As for Obama, given his present lackluster status, it’s unlikely he will be politically canonized, much less be known someday as Political Apostle of either Americans or Non-Americans.
Times, they are a'changing. For the first time in 75 years, according to multiple reports, CBS News reports, a new edition of Adolf Hitler's "Mein Kampf" will be bound for sale in bookstores in Germany. While the book, long known as "the Nazi bible," is widely available in the U.S. and much of the English-speaking world, it was for years banned from being reprinted in Germany over fears it would reignite the passions that plunged the country into World War II. Still, amid rising anti-semitism across Europe and a surge in nationalism, the timing is odd and as the head of Munich's Jewish community exclaimed, "this book is most evil."
In the global geopolitical chess game, does size matter?