Quiz - 1. How much natural gas is the United States currently extracting?
(a) Barely enough to meet its own needs
(b) Enough to allow lots of exports
(c) Enough to allow a bit of exports
(d) The United States is a natural gas importer
First we had Jeab-Claude Juncker saying it's ok to lie to the people, then President Obama's poster-child for Obamacare who later discovered she was unable to get the healthcare she expected and now following Janet Yellen's apparently 'uber-dovish' "jobs are not plentful" sob story spech yesterday we have more governmental factual inaccuracies. As Bloomberg reports, in her first speech as Federal Reserve chair, Janet Yellen told the stories of three people who had trouble finding work to illustrate her concern about the unemployed -- omitting the fact that two had criminal records that might have influenced employers’ decisions on whether to hire them. As we commented yesterday, "it’s troubling when we have to assume that everything we hear from any politician or any central banker is being said for effect, not for the straightforward expression of an honest opinion."
Suleyman Aslan is the CEO of Turkey's second largest bank; so imagine how shocked police were when, as Bloomberg reports, they raided his home and found $4.5 million cash stashed in shoeboxes and bookshelves. When asked why the funds weren't deposited at the bank he ran, he said that would mean declaring their origin and registering them officially...something he clearly preferred not to do. Add to this a massive 44% surge in non-monetary gold exports (and who knows how much gold smuggled - once again preferring not to explain its origin) and it appears increasingly clear 'wealth' is being extricated from the increasingly totalitarian nation before confiscations begin following the 'successful' elections this weekend for the ruling AKP party.
Though many blame the Global Crash of 2015 for the loss of faith in stocks, others say the erosion dated back to at least 2014...
The market may still be amused by Amazon's latest forward P/E boosting gimmick in the form of its entertaining (and stock price boosting if only briefly) proposal to deliver packages (some of which haven't even been ordered) by drone, but some US towns, tired of this endless invasion of just in time violators, are already taking aim at the messenger. Case in point: Deer Trail, Colorado, a city of 563, which Bloomberg reports, may approve today a measure that allows the town to issue hunting licenses for unmanned aerial vehicles, i.e., drones. Apparently some luddites people still place civil rights over the potential of bottom line profits achieved through increasingly more intrusive technology. People like Phillip Steel, a 49-year-old welding inspector, who wrote the proposed law as a symbolic protest after hearing a radio news report that the federal government is drafting a plan to integrate drones into civilian airspace, he said. The measure sets a bounty of as much as $100 for a drone with U.S. government markings, although anyone who shoots at one could be subject to criminal or civil liability, according to the Federal Aviation Administration.
We’ve chronicled the saga of “buy-to-rent” for well over a year now. From some of its most exuberant phases to its now epic retreat (investment firm property purchases are now down 70% year-to-date). It seems as if the pullback of private equity and hedge funds from this asset class is even more brutal in certain regions, with Blackstone now reporting its purchases in California down a staggering 90% this year. Not to worry, we're quite certain unemployed and deeply indebted recent college graduates will soon pick up the slack due to the anticipated resurgence of subprime lending.
Yesterday, we read with some amusement that Goldman has moved Guy Saidenberg, reportedly one of the greater profit centers at the firm - and how could he not be when he always traded against Tom Stolper's recommendations which led to tens of thousands of pips in losses to those who listened to him over the past five years - from head of global foreign-exchange trading to a new role, as co-head of commodities. Why did Goldman decide to scrap its once uber-profitable FX vertical and redo it from scratch? Simple - the ability to rig and manipulate FX markets, which are now under every global regulator's microscope after the "Cartel" members so foolishly let themselves be exposed to the entire world, is no longer there, as confirmed last night by news that a dozen large investors have filed a joint lawsuit against 12 banks for "allegedly conspiring to rig global foreign-exchange prices." Allegedly? Hasn't everyone read the Cartel chatroom transcripts yet?
Following the big plunge in January, the world's extrapolators have been exuberant over the snap-back from weather-driven anomalies... today, ISM dashed those hopes to some extent as the pace of the v-shaped recovery slowed notably and ISM missed expectations for the 3rd of the last 4 months. While new orders rose, employment fell to its lowest in 9 months. Of course this bad news is just what the doctor ordered and those oh-so-not-front-running algos just lifted stocks to a new all-time record high... imagine if it had missed by even more!!
The 2nd class data point, that quickly became the darling of the algo pumpers when it beat expectations by a record last month, has tumbled back to a less exuberant reality and missed expectations by the most in 7 months. Printing at 55.5 (vs 56.0 exp.) the index is still in expansion mode but factory jobs and factory orders sub-indices both fell...
The stock market really was rigged... “It’s 2009,” Katsuyama says. “This had been happening to me for almost two years. There’s no way I’m the first guy to have figured this out. So what happened to everyone else?” The question seemed to answer itself: Anyone who understood the problem was making money off it...
Japan's economic farce has gotten so bad it is becoming painful to even discuss it: first, every newspaper writes effusive, extended articles about how after nearly two years of consecutive declines in base pay praising Abenomics, and then the next month the "increase" is promptly revised lower in a footnote in some article which gets zero to no prominence, which however continues to reaffirm that Abenomics is an absolute, unmitigated disaster. Sure enough this is what happened today, when last month's bombastic "Japan Base Wages Rise for First Time in Nearly Two Years" can now be retracted and instead replaced with this: "regular pay slipped an annual 0.3 percent in February, falling for a 21st straight month after a 0.2 percent slip the previous month."
Saxo Bank's CEO Lars Seier Christensen has made it abundantly clear in the past that the EUR is a monumentally bad idea; he notes, the huge European bureaucracy and especially the political elite that feed off the EU will do all they can to prevent the EUR’s fall, at least until it becomes inevitable. This will be either due to pressure from voters (even if they are very rarely consulted in this post-democratic political structure) or from the markets, which eventually must reassume their role that has been perverted beyond recognition during the crisis: the true role of allocating capital and pricing money and assets rationally. But, Christensen explains, if we are stuck with this "Currency of Mass Destruction", shouldn’t we at least try to make some money from it?
For those used to smooth, undisturbed, Fed-assisted, no-risk-all-return, sailing, both the month of March and the entire first quarter were quite the wake up call.