The not so good news about today's Treasury auction, the second of the week in which $24 billion in 10 Year paper was sold, is that the yield came at 2.439, which was a 0.4 bps tail to the When Issued. The good news is pretty much everything else: the Bid To Cover jumped from July's 2.57 to 2.83, well above the TTM average of 2.68. Indirects took down 47% of the auction, also an improvement of the 39.6% last month, and above the past year average as Direct takedown also rose modestly from 13.9% to 15.1%, which however was just below the TTM average print. The plug, dealers, were left holding 37.9% of the auction: the least since May. Overall, a rather uneventful auction.
Now that everyone is finally focusing on the strategy of bloating any available company with massive leverage in order to use the proceeds to either buyback stock or engage in "synergy-creating" M&A (leading to countless pink slips), which is affectionately known as "activism", here is Bill Ackman's latest, Q2, letter with his take on this topic of how massive leverage which is great for shareholders now, but a disaster waiting to happen for employees and bondholders in the future as soon as rates rise, is the greatest thing since sliced bread.
Market Catalyst? East Ukraine Rebel Leader Strelkov "Gravely Injured" According To A Russian Media Report; Promptly Denied As FakeSubmitted by Tyler Durden on 08/13/2014 11:07 -0500
Update: it took minutes for another media outlet, a Russian one again, this tima RIA, to deny the Itar-TASS report.
Moments after the tragic news that Brazil's presidential candidate Eduardo Campos died in a plane crash, Russian Itar-Tass reported, citing press agency Novorossya, that another prominent public figure, this time the leader of the Donetsk rebels and the minister of defense of the Donetsk People's Republic has been "seriously injured."
UPDATE: *BRAZIL PRES. CANDIDATE CAMPOS DIES IN PLANE CRASH: GLOBONEWS
Brazil's stock market is reeling this morning as rumors and now news hit that Brazilian Presidential candidate Eduardo Campos was on board a private jet that crashed in the city of Santos. Polls had put Mr. Campos head-to-head with Ms. Rousseff (but behind Ms. Silva). A police official in Santos said there were "certainly" fatalities in the crash, but could not say how many or provide any additional information. Campos had run on a platform of less government intervention and proposed a bill to ensure central bank indpendence.
Is $85 a barrel in the cards? Sure it is once the Fed Effect on Oil Price comes out of the market.
Presented with no comment...
Phantom wealth cannot possibly fund unprecedented retirement and healthcare promises. Only real wealth can do that, and central bank liquidity and the asset bubbles it inflates are not real wealth.
ISIS Now A Commodity "Trading" Powerhouse: Islamic States Steals Iraq's Grain Then Sells It Back To Iraq GovernmentSubmitted by Tyler Durden on 08/13/2014 09:24 -0500
A strategy so brilliant Goldman is wondering how it didn't think of it first...
How much longer can the myth of a housing recovery remain alive in the mainstream media's narrative? The smoothed average of Mortgage Applications in the US fell to its lowest since September 2000 this week. Mortgage applications have slumped for 9 months... as mortgage rates have declined notably... but still we are told 'rates are just too high'. And yet, bullish market protagonists are convinced rates are due to rise (and the bond market is wrong) - one can only imagine the slump if that should occur...
Interestingly, the FT also reports that there may be significant buying of silver in the coming days: “Indeed, there are already rumours in the market place that some big silver producers and consumers are preparing to pepper the market with orders.” This creates the possibility of the short squeeze that many market participants and silver analysts have been expecting for some time.
Oddly, overnight news in Asia and Europe was terrible enough to juice US equity futures back to Monday's highs (and run those stops) as USDJPY was pressed up to 102.50... but dismal US retail sales data sent them reeling. Treasury yields are tumbling (5Y now -3bps on the week), gold and silver are jumping (over $1310 and $20 respectively) after an early slam down, The USD is getting monkey-hammered as EUR repatriation strength dominates, oil is up, and stocks have leaked notably back off the day's highs.
But the talking heads said that the consumer is back and jobs are soaring? Retail sales missed expectations for the 3rd month in a row (after the weather rebound was supposed to kick in?) with an unchanged 0.0% print in July (against expectations of a 0.2% rise). This is dramaticaly off the 1.5% growth rate seen in March. Across the board, retail sales were weak with Ex Auto & Gas up only 0.1% against expectations of a 0.4% gain. Department Store sales fell 0.7% MoM. So much for pent-up demand.
With the Russian humanitarian convoy approaching the Ukraine border, there was much confusion yesterday whether Kiev would or wouldn't allow the roughly 280 trucks carrying "stuff" to enter its territory. The confusion rose yesterday afternoon when Russia's Lavrov told reporters in Sochi that Russia, after it asked for Germany's aid in getting Kiev to agree, received Ukraine’s permission for the convoy to enter after agreeing to Ukraine’s proposed route, agreeing that the convoy trucks will carry Ukrainian license plates, and complying with Ukraine’s demand for Ukrainian govt representatives to be on trucks. Turns out Ukraine was just kidding, and as Reuters reports this morning, the Kiev government once again denounced the dispatch of a Russian humanitarian aid convoy to eastern Ukraine as an act of Russian cynicism on Wednesday and said it would not be allowed in.
- Obama says Missouri shooting death tragic, reflection needed (Reuters)
- U.S. Weighs Iraq Rescue Mission to Save Yazidis (WSJ)
- Maliki says Abadi's appointment as Iraqi PM 'has no value' (Reuters)
- Iran Joins U.S. in Backing Replacement for Iraq’s Maliki (BBG)
- Kurds Push Attack in North Iraq as Maliki Clings to Power (BBG)
- Obama Donors Embrace Corporate Inversions He Criticizes (BBG)
- Syrian Forces Advance on Aleppo, Rebels Fear Another Siege (WSJ)
- Israel, Palestinians pursue Gaza deal with ceasefire clock ticking (Reuters)
- Ebola Drug’s Success Bolsters Approach for Other Diseases (BBG)
- With Natural Gas Byproduct, Iran Sidesteps Sanctions (NYT)
- Kazakhs to Hoard Food as Putin Sanctions Rattle Alliance (BBG)