We are not exactly sure why the ballerinas of the Nutcracker can be found on the floor of the TV studio formerly known as the New York Stock Exchange (currently owned by the Atlanta-based ICE), but we are sure there is a good reason.
Two months after the CIO of Fortress Investment Group recommended "putting a little money in Bitcoin," the massive fund is preparing to luanch its own Bitcoin Fund (likely considerably larger than the SecondMarket offering). As Fortune reports, details remain scarce, although there are some rumors that info could be revealed tonight.
The Treasury bond has now closed for 2013 with the (highest duration) 30Y Treasury Future down 13% for the year. Of course, those invested in fixed income are not all long the long-end but across the whole complex yields are at highs. 10Y ended at 3.03% - its highest since July 2011 and 30Y at 3.97% - its highest since August 2011. The short-end remains under control (though 15bps higher than its mid-November trough and double the May lows at 40bps) but the 7Y yield has surged back to 2013 highs also not seen since mid 2011. Perhaps most notable is that despite all these moves, 5s30s is unchanged on the year, while 2s10s is +120bps.
Since no matter what, there will be yet another outcry against Uber tonight, mostly by its most fervent customers and the same confused media outlets, the company has preempted the sound and the fury, and has preannounced just what times riders can expect to pay up to 6x (or more) their usual fare as they contemplate going from point A to point B across the various metropolitan centers in which it operates.
With headlines crowing of gold's worst year since 1981 as a signal that the status quo is winning and proof positive that fiat-currency naysayers must be wrong, it would appear that the rest of the world's central banks (and banks) have used the price depreciation to stack the precious metal. As Bloomberg reports,
*RUSSIAN BANKS BOUGHT 181.4 TONS OF RUSSIAN GOLD IN 2013: RIA
*RUSSIAN BANKS BOUGHT ALMOST 90% OF RUSSIA 2013 GOLD OUTPUT: RIA
This 5.834 million ounce addition (8.3% YoY) is more than double that of Russia's central bank additions in 2013 with Bitcoin-favoring Sberbank piling up 48.5 tons alone in 2013.
Earlier this week, in "Why The Turkish Government May Be The Casualty Of A $119 Billion PetroDollar Loophole" we said "dare to mess with the Petrodollar and the wrath of the US government will hunt you down... sooner or later." Sure enough, after resulting in a Turkish government scandal, punishing its stock market and sending the Lira reeling, the blowback has reached Iran where billionaire Babak Zanjani was arrested yesterday on corruption charges, although in reality his chief transgression was allowing the Petrogold system to show that the Petrodollar is no longer irreplaceable.
In a year when everyone was a winner (thank you Fed and BOJ) if some were bigger winners than others yet when virtually everyone underperformed the S&P, the biggest irony was that the very aptly named Keynes Leveraged Quantitative Strategies Fund was actually down -6.88% YTD and one of the 20 worst performing funds of the year. As for everyone else, hopefully their LPs are forgiving and don't expect that in exchange for 2 and 20 that their funds would outperform the S&P for the first time in 5 years.
With the world watching mouth open at the 30% gains in the US equity market (and 57% gains in Japan), the Venezuelans are cock-a-hoop at their wealth-generation this year... a sprinkling of totalitarianism, nationalization, toilet-paper shortages, and hyperinflation and, drum roll please... the Caracas Stock Index is up a disappointed-not-to-make-it-to-500%, 480% in 2013... (time to greatly rotate and chase that momentum)...
In America today, there are close to 50 million people living in poverty and there are more than 100 million people that get money from the federal government every month. As the middle class disintegrates, poverty is climbing to unprecedented levels. Even though the stock market has been setting record high after record high, the amount of anger and frustration boiling just under the surface in our nation grows with each passing day. And now extended unemployment benefits have been cut off for 1.3 million unemployed Americans, and it is being projected that a total of 5 million unemployed Americans will lose their benefits by the end of 2014. In addition, 47 million Americans recently had their food stamp benefits reduced. The conditions for a "perfect storm" are certainly being created. So how much longer will it be until we see all of this anger and frustration boil over in the streets of our major cities? Is America about to reach a breaking point?
Jim Rogers hope-driven wish is that the politicians were smart enough at some point to say (to the central bankers), "we've got to stop this, this is going to be bad." He adds, on the incoming QEeen, "she’s not going to stop it, first of all she doesn't believe in stopping it, she thinks printing money is good." However, Rogers warns in this excellent interview with Birch Gold, "eventually the markets will just say, "We're not going to play this game anymore", and we'll have a serious collapse." The world is blinded by central bank liquidity, and as Rogers somewhat mockingly notes "if everybody says the sky is blue, I urge you to look out the window and see if it's blue because I have found that most people won't even bother to look out the window..." Rogers concludes, "everybody should own some precious metals as an insurance policy," because as he ominously warns, when 'it' collapses, "there will be big change.
Similar to UMich's confidence measure soaring by the most in 4 years, the Conference Board's confidence measure beat expectations and jumped the most in 6 months (though remains below the year's highs). This is the best beat in 4 months. The improvement is all based on "expectations" which soared the most in 6 months. Confidence is critical (as we noted below) especially since the massive majority of actual investors are already bullish...(and definitely not bearish)...
Stocks dropped and bonds rallied modestly as the early subscribers received the Chicago PMI which missed expectations significantly. Seemingly, with taper in place, bad news is bad news as the 59.1 print (vs a 60.8 exp) is the biggest miss in 6 months. Under the covers things are even worse with the lowest employment index since April. Inventories also collapsed (by the most since 1977) which is a problem since New orders and production also plunged suggesting the post-government shutdown 'surprise' GDP-enhancing inventory-build is entirely a one-off event (as we noted here).