While the US is debating which set of Al Qaeda "rebels" in Syria is the best local partner for the State Department to provide military support to, once Qatar's demands for a trans-Syria pipeline return some time in 2014, Vladimir Putin - fresh from his diplomatic oup in the Ukraine - is reinforcing his other major victory in 2013: the preservation of the Assad state, this time however with more than words. As Reuters reports, Russia has sent 25 armored trucks and 50 other vehicles to Syria to help transport toxins that are to be destroyed under an international agreement to rid the nation of its chemical arsenal, Defense Minister Sergei Shoigu said on Monday. Or in other words, Russia just sent Syria more than 75 military vehicles.
With both current conditions and future expectations indices jumping higher, the UMich consumer confidence headline final print rose at its equal fastest pace since Sept 2009. The surge in current conditions - the largest since Dec 2008 - has lifted it back to the highest level since July 2007. If there was anything to note that took the shine off such an exuberant surge it's the fact that the headline number did actually miss expectations (3rd miss of last 4) and the final outlook data dropped from the preliminary print. As we have noted before, it is confidence that 'inspires' the multiple-expanding hope as fundamental reality fades - bulls better hope it's different this time as we hit the year's highs in confidence.
A month ago, the press was aflutter with rumors that NYPD commissioner Ray Kelly, spurned by mayor-elect Bill de Blasio, would join JPMorgan in a "top security" position. The rumor was since denied and the fate of Kelly was unclear, until today, when the Council on Foreign Relations announced that the NYPD top man would join the CFR as a "distinguished visiting fellow" in turn opening the doors wide for a world of financial opportunities to Kelly. Considering his tenure, where Kelly served as senior managing director of global corporate security at Bear, Stearns & Co. Inc. from 2000 to 2001, he seems like a perfect fit for the CFR.
The ink on the final Volcker Rule has not dried yet, and already the TBTF armies of lawyers have found all the loopholes in the rule they need to continue prop trading as if nothing has changed. Enter Goldman Sachs which as the WSJ reported, is raising a new fund, to which it will contribute 20% in capital, which will make investments in commercial real estate-backed loans including office buildings, hotels, and shopping centers. "Goldman has raised more than $1 billion for the new fund, according to people briefed on the matter. The fund aims to boost that total to $2 billion, and Goldman expects to invest "up to 20% of total equity commitments," according to September marketing documents reviewed by The Wall Street Journal." Just how did Goldman get the green light to allocated up to $400 million for what is clearly a prop trading bet: "because regulators excluded many real-estate loans from the tough restrictions on investment funds, allowing Wall Street firms to continue making concentrated bets—sometimes risky ones—with their own capital." In other words, when it comes to reflating the precious real estate bubble, anything goes.
With still more than half the homeowners with a mortgage in the state of Nevada underwater on their mortage and a hoped for recovery in prices now petering out as 'investors' realize banks have completed foreclosures and are set to unload their huge inventories, fear is growing that Las Vegas (and for that matter Atlantic City) could be the next Detroit. However, as FoxNY reports, the nascent dreams of the good old days face an even bigger headwind - that of gambling regulation easements (online gambling for instance) and globalization which are impacting their biggest industries. Time will tell if these two cities will end up like Detroit.
US Savings Rate Slides As Personal Incomes Below Expectations; Real Disposable Income Growth TumblesSubmitted by Tyler Durden on 12/23/2013 09:49 -0400
Moments ago the BEA reported the latest, November, data on Personal Income and Spending. For the second month in a row, Income, which rose a modest 0.2%, missed expectations of a 0.5% rise for the month, even as Personal Spending rose by 0.5% - driven by a 2.2% increase in spending on Durable Goods while Non-durable expenditures were unchanged on the month, in line with expectations. As a result, the US consumers dug even deeper into their meager savings, and in November the savings rate dropped once more, sliding from 4.5% to 4.2%, the lowest since January 2013, after hitting a high of 5.2% in September on "government shutdown uncertainty."
- Apple, China Mobile sign long-awaited deal to sell iPhones (Reuters)
- U.S. growth hopes help shares shrug off China money market jitters (Reuters)
- Rule Change on Health Insurance Rattles Industry (WSJ), Obamacare's signup deadline on Monday has its exceptions (Reuters)
- Tale of Two Polish Mines Shows Biggest EU Producer’s Woes (BBG)
- Probes See U.K. Market Manipulation Reports Rise 43% (BBG)
- Shoppers Grab Sweeter Deals in Last-Minute Holiday Dash (BBG)
- Banks Mostly Avoid Providing Bitcoin Services (WSJ)
- Secret Handshakes Greet Frat Brothers on Wall Street (BBG)
Anyone who had the pleasure of trading the long bond March future ZB H4 just before 1:40 am Central witnessed one of the more abnormal fat fingers seen in recent months, one that did not involve equities but instead was all bond.... long bond, which soared from 130 to over 135, after a large clip was traded on what was apparently an erroneous buy order put through during very illiquid trading. Then again, with no trades busted by the CME (yet), maybe it was intentional.
Another day, another low volume overnight meltup to record highs in equity futures. Stocks traded higher in Europe this morning, with tech stocks outperforming following reports that Apple has finally secured a deal to bring the iPhone to China Mobile, which has more than 750 million subscribers. As a result, the likes of ARM Holdings and STMicro traded with gains of over 2% and Apple's German listing traded up around 2.5%. At the same time, French CAC index under performed its peers, with Technip among the worst performing stocks after being removed from Goldman's Sustained Focus List. Addtionally, over the weekend, the ECB's Praet said that the ECB is ready to intervene if credit contracts - and since Euro credit is contracting at a record pace, we wonder what he is waiting for. This happened as Fitch affirmed France at AA+, outlook stable. Looking elsewhere, thin trading conditions resulted in an aggressive spike higher in CME US 30y futures this morning after a large clip was traded, which consequently saw the exchange adjust prices lower, but did not bust any trades.
There was a time in America when retail brawls only broke out around Thanksgiving dinner time (and increasingly earlier with every passing year). It appears that's no longer the case as the recent release of the Air Jordan 11s reveals. USA Today reports that following the release of Jordan 11 Retro Gamma Blue sneakers on Saturday, "the nation just about fell apart." One week ago, a crowd tore down a mall door just to get an advance ticket to buy the $185 Jordans. With the shoes now officially on sale, the world appears to be ending.
UPDATE: 7-day repo is now up 220bps at 980bps - as the "liquidity crisis" is worse than any other seasonal effect on record
How do you "fix" a nations' banking system's increasingly desperate need (and dependence upon) for government-provided liquidity without giving in and just providing all the inflation-stoking liquidity the banks demand? Simple - in China - you ban the media from discussing it. As The FT reports, Chinese propaganda officials have ordered financial journalists and some media outlets to tone down their coverage of a liquidity crunch in the interbank market, in a sign of how worried Beijing is that the turmoil will continue. The censors have warned reporters not to "hype" the multiple-sigma spikes in overnight-funding rates and have forbidden the press from using the Chinese words for "cash crunch."
A new report from UBS finds that renewable energy and energy storage are together presenting a “perfect storm” for big utilities. The declining cost of solar, energy efficiency, and electric vehicle technologies threaten to upend centralized electricity generation, putting the utility business model in jeopardy. Grid parity has already been achieved in certain parts of the world where conventional electricity rates are high and renewable resources are plentiful.