Bond Buyers Spooked By Imminent FOMC, Lead To Tailing 5 Year Auction, Lowest Bid To Cover Since July 2009Submitted by Tyler Durden on 10/29/2014 13:11 -0400
A Treasury auction an hour before the Fed is set to announce the end of the latest (if not last) iteration of QE may not have seemed like the best idea, and sure enough moments ago the Treasury sold $35 billion in 5 Year paper in what can be described as a miserable auction, when the 1.567% high yield tailed by 1.5 bps to the 1.552% When Issued. Not only that but the Bid to Cover tumbled from 2.56 to just 2.36: this was the lowest BTC since July 2009 when it actually had a 1-handle. Finally, the less exciting internals showed that Directs were largely in line with recent auctions, taking down 10.5% of the auction, above the TTM average of 13.5%, as Indirects bought just less than half or 47.8%, leaving Dealers with 41.7% of the final allotment, slightly above the 39.3% 12 month average.
As President Obama explained yesterday, "it's different this time" for the military. And sure enough, while non-symptomatic civilians can come and go around the world in the hopes that they do not become symptomatic following potential contact with Ebola patients, Chuch Hagel has ordered a 21-day mandatory quarantine for all US troops returning from West Africa. The use of the 'q' word is clearly against White House protocols and so The Pentagon refers to it as "controlled monitoring" but, as AFP reports, Hagel calls it a "prudent" measure to prevent the spread of the deadly disease - which just this morning the WHO said had topped 13,000 cases worldwide.
The conspiracy theories surrounding the death of Total SA’s chief executive, Christophe de Margerie, started the second the news broke of his death. One has better odds of being struck by lightning at an airport then a snow plow, or any other ground support vehicles hitting a plane and killing all inside the plane. Did this direct threat to the petrodollar make this “true friend of Russia” - as Putin called de Margerie - some very powerful and dangerous enemies amongst the power that be, whether in the French government, the EU, or the US? How many other Western executives who dare to help Russia bypass sanctions - and turn it into an energy powerhouse - will die under suspicious circumstances?
Just yesterday Apple's executives went on the offensive against retailers that refused to play by the Cupertino company's rules with veiled threats. So it is ironic at best that today, Wal-Mart's alternate-to-ApplePay mobile payment system - CurrentC - has been hacked. The company explains "within the last 36 hours, we learned unauthorized third parties obtained email addresses of some" of their clients...and "no other information."
Of the last 150 years of developed market monetary policy, we suspect nothing will prepare market participants or Fed members for the twisted terms and double-speak the FOMC will try to unleash today as they attempt to 'end' the most extreme policy measures ever. Goldman Sachs' 'base-case' for today's FOMC is a "steady as she goes" message with few substantive changes in language and asset purchases ending on schedule... but Goldman warns, recent macro and market action might bias the Fed dovish.
Could we have imagined anything more far-fetched and unlikely as this practice by the SEC itself? We’ll answer this question. No.
Presented with little comment.. because realistically what is there to say about a so-called 'housing recovery' when the volume of applications for home purchases is the lowest since August 1995. Keep believing that lower rates will support home prices... keep believing the Fed's QE worked... or face facts, this is not your mother's housing market any more...
Whether it is European banks (Greece and Italy) plunging again, lower-than-expected crude inventories, or expectations of an uber dovish Fed this afternoon, the US Dollar has suddenly gone bidless against the major currencies.
QE has finally come to an end, but public comprehension of the immense fraud it embodied has not even started. In stopping QE after a massive spree of monetization, the Fed is actually taking a tiny step toward liberating the interest rate and re-establishing honest finance. But don’t bother to inform our monetary politburo. As soon as the current massive financial bubble begins to burst, it will doubtless invent some new excuse to resume central bank balance sheet expansion and therefore fraudulent finance. But this time may be different. Perhaps even the central banks have reached the limits of credibility - that is, their own equivalent of peak debt.
10Y Russian bond yields have broken above 10%, trading at the highest yields since 2009 as the Ruble plunges once again to fresh record lows against the dollar. These significant moves come on the heels of two notable headlines overnight. First, German exports to Russia slumped 26.3% YoY in August (down a stunning 16.6% year-to-date with vehicle exports plunging 27.7%) as sanctions batter bilateral trade. Secondly, Rosneft has proposed what is being described as "radical" reactions to the West's sanctions, which the Kremlin has (for now) denied.
Oil Residue The Size Of Rhode Island Covers Gulf Of Mexico Seafloor In Macondo Well Disaster AftermathSubmitted by Tyler Durden on 10/29/2014 09:39 -0400
Ever since the April 2010 disaster on the BP-operated Macondo well in the Gulf of Mexico, there was one big outstanding question: where did the bulk of the oil gol? Now, thanks to a research team led by David Valentine, a microbial geochemist at the University of California, Santa Barbara, sampled more than 534 locations near the spill site, gathering more than 3,000 individual samples, we know the answer: the oil spill - some 10 million gallons of coagulated oil - left an oily "bathub ring" on the sea floor of the Gulf of Mexico, about 25 miles from the well, that's about the size of Rhode Island.
In what appeared to be a sign of discord, Bloomberg reported in September that Ferrari Chairman Luca Cordero di Montezemolo was poised to leave the super-car maker because of a clash over strategy with the brand’s parent Fiat, proclaiming "Ferrari is now American," which represents "the end of an era." It now seems Marchionne's Fiat strategy to compete with Volkswagen's Lambo division is no set to fail as Bloomberg reports: FIAT CHRYSLER PLANS TO SPIN OFF FERRARI. Expected to list in US and European markets, the IPO of 10% of Ferrari is expected to be completed in 2015... another sign of the top?
There it was --- a real market come and gone in half an hour, like a pregnant panda at Edinburgh zoo. What did it mean and what should you do? You should pay attention to what happens to the direction of prices when volumes surge and markets work. When the veil is lifted, pay attention to what you see beneath. Last Wednesday, in the space of half an hour of active trading, the Treasury market had one of its most rapid rises ever recorded and equities fell sharply. There is a very simple lesson that when the markets finally break through the manipulation they move to price in deflation and not inflation. This is key because it means financial repression has failed. Such repression requires the artificial depression of interest rates but, crucially, it must be paired with boosting inflation above such rates. On October 15th 2014, if only for a few short minutes, market forces broke out and the failure of central bankers was briefly evident.