Before the new Royal prince showed his face (and waved to his people), gold was limping higher at around $1335. Soon after, it appears the world demand for gold surged as baby-baubles were bid and gold has spiked to Pre-FOMC levels around $1350. Not only is gold back to pre-Taper levels but it has broken one of its more odd correlations in the last few days - that of the AAPL-coupling.
A BP official who led the company before the 2010 incident in the Gulf of Mexico marked his return to the region in a $3.75 billion deal with Houston-based Apache. Apache seemingly said goodbye to the Gulf of Mexico in the deal, opting instead to focus its efforts onshore. Former BP Chief Executive John Browne helped nab 1.9 million net acres in the agreement with Apache last week. Apache's "good run" in the Gulf of Mexico may suggest assets onshore may hold more long-term value for explorers as new drilling technologies have contributed to exponential production gains for onshore oil and natural gas in the United States.
Last week Federal Reserve Chairman Ben Bernanke delivered what may well be his last Congressional testimony before leaving the Federal Reserve in 2014. Unfortunately, his farewell performance was full of contradictory comments about the state of the economy and the effects of Fed policies on the market. One thing Bernanke inadvertently made clear was that the needs of Wall Street trump Main street, the economy, and sound money.
Federal Reserve Chairman Bernanke's term expires January 31, 2014. While his continuation as Fed chair cannot be ruled out, he has given no public indications that he plans to seek another term and most market participants - as well as many members of Congress in last week's Humphrey-Hawkins hearings - seem to believe he will retire from public service early next year. As Goldman notes, the announcement of the next Chair of the Federal Reserve seems most likely to come in October, though nominations for Fed Chair have been announced as early as five months before the current term expires and as late as less than a month before expiration. There does not appear to be much risk to the Senate's ultimate confirmation of whomever the President chooses, though the Fed nominations have become more politically controversial over the last few years, which is likely to lengthen the confirmation process. Following previous confirmations, financial market volatility has typically increased slightly, though whether this occurs following the upcoming transition will of course depend on who is nominated.
If last month's 2 Year auction was all sparks and fireworks, when the yield priced at a two year high coupled with a plunging Bid To Cover, then today's issuance of $35 billion in 2 Year paper was all yawns and snoozes. Moments ago the Treasury issued another $35 billion in 2 Year near-cash equivalent bonds, at a 0.336% high yield, stopping through the When Issued 0.338% and slumping from the 0.43% in June, when the market was terrified that tapering means tightening (it does for the long-end, and for stocks but we will get there eventually), even if the Bid To Cover was barely unchanged, and at 3.08, it was only higher compared to the past two months' disastrous demand. Going further back would mean looking all the way back at 2 Year auctions from the summer of 2011, after which the BTC soared. In fact, the LTM average bid to cover is a far higher 3.61 although don't expect this to return at least no until the US has another "debt ceiling fiasco" type of event.
The SEC alleges that Trendon T. Shavers, who is the founder and operator of Bitcoin Savings and Trust (BTCST), offered and sold Bitcoin-denominated investments through the Internet using the monikers “Pirate” and “pirateat40.” The SEC alleges that Shavers, who lives in McKinney, Texas, paid 507,148 Bitcoin in investor withdrawals and purported interest payments. He transferred at least 150,649 Bitcoin to his personal account at an online Bitcoin currency exchange. Shavers suffered a net loss from his day trading, but realized net proceeds of $164,758 from his sales of 86,202 Bitcoin. Shavers transferred $147,102 from his personal account at the online Bitcoin currency exchange to accounts he controlled at an online payment processor as well as his personal checking account. He used this money to pay his rent, utilities, and car-related expenses as well as for food and retail purchases and gambling.
Amid a collapsng economy and as illegal party financing allegations close in around Spanish Prime Minister Mariano Rajoy, his 42-year-old deputy has kept her name clean. Now, Der Spiegel reports, Soraya Sáenz de Santamaría, the most powerful woman in Spanish politics, is well poised to be his successor. As Rajoy becomes increasingly mired in the massive scandal over illegal party donations, corruption and financial contributions, Sáenz de Santamaría, a former state lawyer who represented the country's highest court, is one of the few in the party to remain untouched by the allegations. And that alone - sadly - may be enough to qualify her for the government's top job.
"Should Goldman And JPMorgan Control Power Plants, Warehouses And Oil Refiners?" - Live Senate WebcastSubmitted by Tyler Durden on 07/23/2013 10:01 -0400
No really, that is the actual name of the hearing that the Senate Committee on Banking, Housing and Urban Affairs will hold today in order to "clarify" why banks like Goldman are currently the owners of the largest aluminum warehouse in the US, or why Goldman, JPM and BlackRock are set to control 80% of all copper stores. The hearing's official name: "Examining Financial Holding Companies: Should Banks Control Power Plants, Warehouses, and Oil Refineries?"
Think Goldman would take accusations that it is, gasp, manipulating the RMBS, HFT, crude commodities market sitting down? Think again. Like every mollusc in self-preservation mode, here is Goldman's just released ink, pardon, press release saying all accusations about it are nothing but sheer rampant confusion. After all - Goldman simply makes markets. Move along.
— PIMCO (@PIMCO) July 23, 2013
Dow Jones industrial staple Caterpillar, better known as CAT, has made these pages quite often in the past few months for all the wrong reasons: be it due to operational weakness ("CAT Misses Across The Board, Slashes Sales And Profit Outlook"), weak top line growth ("Collapse In Caterpillar North American Sales Not Helping Bernanke's "Recovery") or simply gross management negligence ("Caterpillar Punked By Chinese Fraud, To Write Off Half Of Q4 Earnings"). It got so bad that none other than China permabear Jim Chanos declared Caterpillar his "best short idea" last week. However, CAT's troubles are far more than just China related as today's June dealer retail sales showed, which which posting a modest 'increase' in North American sales (from -16% to -10%), the weakness has returned to Asia where sales resumed sliding from -14% to -21%, in Latin America where growth plunged from 22% to 9%, in the ROW where sales dropped from -2% to -8%, all of it resulting in yet another downward inflection point in world sales from -7% (which had been a four month high) to -8%. But why bore with words when one picture should suffice. So what is the future for CAT? According to a new report released by @VolSlinger, things may get far worse in the coming months. So bad, in fact, that based on his analysis, which has a price target of $28 for the stock, there is some 67% upside to a short position.
Thanks to a total and utter collapse in new order volume (from +9 to -15 - worst in 2 years) and order backlog (-1 to -24), the Richmond Fed manufacturing survey just printed at -11 (against expectations of an exuberant +8). This is the biggest miss since May 2006. Wages plunged; the average work-week plunged; capacity utlization plunged; but on the bright-side, the number of employees was flat (at 0). Perhaps more concerning is the outlook that sees prices paid rising notably more than prices received and capacity ultization dropping notably.
In December we asked if a "short squeeze was imminent as Tilson jumps aboard the Herbalife bandwagon" at $26. The answer is yes and following a nearly 150% jump off the lows, with much comedy ensuing (if not for the shorts), Dan Loeb has a special message for those still waiting for the Ackman "thesis" to materialize...
There was a time when the US housing market was not "driven" by hedge funds armed with government-subsidized, "REO-to-Rent" loans loading up on distressed properties, by banks refusing to release foreclosed properties into the market (thus creating a market subsidy) or by foreigners eager to park their "tax-evaded" wealth with the Anti Money-Laundering exempt National Association of Realtors. Instead, the main driver of US housing were first-time home buyers, "typically couples in their late 20s or early 30s" who historically have accounted for about 40% of home sales. Alas, last year, and all throughout the New Normal, this number has been about 25% lower, or representing just 30% of all sales (except for a brief spike to 50% in 2009 courtesy of recession-era tax credits). Then again, what 30 year old needs a home when one can now get an E-trade terminal under the bridge to generate "the wealth effect"?