Corruption and lack of ethics is now endemic to American life and the economy.
Having secured for himself the most expensive suite of all the leaders at the G-20 meeting in Brisbane, Australia on November 15th, The Daily Mail reports that President Obama's 4,096-room entourage of security guards and assistants cost taxpayers a stunning $1.732 million for the one-night-stand against Putin. "Some folks are being ripped off..."
While the S&P 500, Dow, and Trannies remain in the red (just), the meltup off the opening lows is something to behold as Small Caps are now +1.3% on the day. The driver of this muppetry... a huge squeeze of "most shorted" stocks once again that took them from down over 2.5% at the open to higher by more than 0.5% now... Stocks, though, have decoupled from credit and USDJPY in this last vertical ramp.
With interest rates near their lowest levels on record, they have nowhere to go from here "but up." This is the consensus of virtually all of the analysts and economists on Wall Street which currently suggests that rates will rise to 3.88% next year on the 30-year treasury. Is everyone still wrong?
President Obama Praises "Patriotic" Torturers, Says USA "Greatest Force For Human Dignity The World Has Ever Seen"Submitted by Tyler Durden on 12/09/2014 14:03 -0400
The White House just released President Obama's response to the CIA Torture Report...
Today at 9:30am Eastern, the two key people behind Obamacare will testify under oath before the House Committee on Oversight and Government Reform. One of them is Marilyn Tavenner, the CMS Administrator and the person who was tasked with managing the implementation of Obamacare: a process that was a complete disaster as those who tried to sign up on the healthcare.gov website in late 2013 will recall (and whose overhaul cost over $2 billion). On the other hand, Jonathan Gruber has recently gained notoriety after a series of videos with him were leaked, in which he bragged that deception and “the stupidity of the American voter” allowed Obama to ram his pet healthcare program into law.
A few weeks ago it was revealed that the mystery person behind the latest bout of monetary (if not so much fiscal) insanity in Japan is none other than Paul Krugman, a fact which has since assured the fate of Japan as a failed state: the demographically imploding country now has at best a few years (if not less) before it implodes into a hyperinflationary supernova. And for a very graphic, and tragic, preview of Japan's endgame - the direct result of following Keynesian and monetarist policies to a tee - we go to the AP, which looks at the village of Nagoro, located "deep in the rugged mountains of southern Japan once was home to hundreds of families" and finds that now, only 35 people remain, outnumbered three-to-one by scarecrows that Tsukimi Ayano crafted to help fill the days and replace neighbors who died or moved away. This and nothing more, is what all of Japan has to look forward to as it slowly (or very rapidly) fades away to nothing.
If there's one absolute truism we hear again and again, it's that central banks are desperately trying to create inflation. Perversely, their easy-money policies actually generation the exact opposite: deflation. Financial and risk bubbles don't pop in a vacuum--all the phantom collateral constructed with mal-invested free money for financiers will also implode.
In what we are confident everyone will find to be absolutely shocking news, moments ago the Senate Torture report was released. The key finding, hold on to your hats, is that the CIA "misled" Congress. As for the timing of the release, which takes place at the same time as Jonathan Gruber (Ph.D) is being grilled in the House, it is hardly a coincidence that Obama does everything in his power to deflect attention to what took place under the Bush administration, commenting that "torture techniques did significant damage to America’s standing” in the world. So what did the droning of thousands of innocent civilians do to the same "standing"?
VIX has been unable to make lower lows as stocks made higher highs in recent weeks as it appears managers protected these insane gains of the last few weeks rather than piled in - beta-chase-style - as financial media would have us believe. VIX has broken back above 16 this morning adding to its biggest 2-day surge in 2 months and suggesting notably more downside for stocks from here. We suspect credit hedgers are spilling over into the equity protection markets as bond liquidty dries up and protection costs soar.
As the sun sets in Athens, we thought a moment of reflection was worthwhile. Greek stocks are now down 13% - the biggest single-day drop since (drum roll please) the crash of 1987... led by total carnage in Greek banks (down 15-25% on the day). Greek bond yields exploded, 3YR +183bps to a new post-bailout high at 8.32% (and inverted to 10Y).
Media World In Turmoil: Bloomberg Editor In Chief Out, Replaced With The Economist's John MicklethwaitSubmitted by Tyler Durden on 12/09/2014 11:59 -0400
While hardly as attention grabbing as the events in Congress today, moments ago the newsworld was shaken following news that the Editor in Chief of Bloomberg news, Matt Winkler, would step down and continue as editor-in-chief emeritus, working directly with Mike Bloomberg, to be replaced with the Editor in Chief of The Economist, John Micklethwait.
10Y yields are back below 2.20% and 30Y below 2.85% - awkwardly close to the Bullard lows - and stocks appear to be waking up to the massive squeeze-driven decoupling in the last 6 weeks (as USDJPY tests below 118.00). Small Cap Russell 2000 has plunged back into the red year-to-date, and the rest of the equity complex is not "off the lows". Remember, it's all about the fun-durr-mentals.
China's overnight destruction of $80 billion of eligible collateral from the great global carry trade has had destructive consequences on the massively crowded short JPY (long USDJPY) trade. Haviung already lost ground following the dismal downward revisions in GDP, USDJPY is down 350 pips from yesterday morning's highs (This is the biggest 2-day drop in USDJPY in 18 months.) and the Nikkei 225 is down over 700 points in the same period... Abe approval ratings are plunging-er. Did the downward revision to Japanese GDP straw finally break the back of the Central Bank Omnipotence camel?
Alongside the just announced revenue warning, Citi's CEO Corbat also announced yet another $2.7 billion in legal, related charges in 4Q, as well as another $800 million in repositioning expenses. This simply means that for yet another quarter Citi will be charged with billions in recurring, non-one time "one-time, non-recurring" charges which will be dutifully added back to non-GAAP EPS by analysts at all the other banks (whose criminal employers are now engaged in the same racket with the US government). But what it really means is that it cost Citi some $3.5 billion to keep its employees out of jail for yet another 3 months.