So much for that whole "decoupling" meme... Just as China and then Europe saw weakness in their manufacturing PMIs, so the US data just hit, printing 53.9 (missing expectations modestly) and falling for 4 straight months to the lowest since January 2014's Polar Vortex. Production volumes are also the weakest since Jan 2014 and the employment sub-index collapsed. Markit warns, "this suggests a slowdown could become more entrenched."
- The year of dollar danger for the world (Ambrose Evans-Pritchard)
- Draghi Says ECB Prepares Action as Deflation Risk Non-Negligible (BBG)
- Obama Pivots to Lawmakers: New Plan to Advance Policy Goals by Working With Congress Draws Skeptics (WSJ)
- Affordable Care Act Creates a Trickier Tax Season (WSJ)
- Oil pares early gains, trades near $57 as supply glut prevails (Reuters)
- Iran says Saudi Arabia should move to curb oil price fall (Reuters)
- Pimco Fund Trails Peers in 2014 After Missing Rally (BBG)
- Piketty rejects Légion d’Honneur award (FT)
- UK manufacturing activity hits three-month low (BBC)
Draghi Launches New Year With More QE Jawboning, Sending Euro To New 4 Year Low, Yields Lower, US Futures HigherSubmitted by Tyler Durden on 01/02/2015 07:00 -0500
The new year has officially started because it wasn't even a day in and Mario Draghi was once again out and about, jawboning the Euro to a lower level than where it was when he said back in 2012 he would do "whatever it takes" to push it higher. The reason, as Reuters reports, why the Euro sank to a nearly 5 year low against the USD, was "clear indications that the European Central Bank will soon embark on outright money-printing." Actually, it was on just more hollow rhetoric by Draghi, who told German Handelsblatt that "the risk that we don’t fulfill our mandate of price stability is higher than it was six months ago." He also added that "it’s difficult to say” how much the institution will have to spend on government-bond purchases.
If the tech mania was based on magic, and the housing mania was based on a supposed fact that was historically untrue, today’s mania is a mania of manias, interlinked and resting on premises that are patently illogical, contradicted by both the historical record and current experience. Those premises are: central planning works, government debt promotes prosperity, and economic growth stems from central banks buying that debt with money they create from thin air. On these premises rest manias in governments, their debts, and central banking.
Goldman head Lloyd Blankfein was completely wrong when he declared his firm was doing “god’s work”. That couldn’t be. In fact, Goldman and its principal competitors have become nothing less than the devils workshop during the modern era of Keynesian central banking instigated by Alan Greenspan. Greenspan’s “committee to save the world” did no such thing. What it did was bury the American middle class in debt, while massively outsourcing US goods production capacity to China and elsewhere in the EM.
The goal is always the same: if they can't have the run of the place, they make sure that nobody else can either, by setting up a conflict scenario that nobody there can ever hope to resolve. And so if you see Anglo-imperialists going out of their way and spending lots of money to poison the political well somewhere in the world, you can be sure that they are on their way out. Simply put, they don't spend lots of money to set up intractable problems for themselves to solve - it's always done for the benefit of others.
The sixth anniversary of Zero Hedge is just around the corner, and so, for the sixth year in a row we continue our tradition of summarizing what you, our readers, found to be the most relevant, exciting, and actionable news of the year, determined by the number of page views. Those eager for a brief stroll down memory lane of prior years can do so at their leisure, by going back in time to our top articles of 2009,2010, 2011, 2012 and 2013. For everyone else, without further ado, these are the articles that readers found to be the most popular posts of the past 365 days.
"As a former military analyst myself I can tell you that by now the Russian intelligence community's "indicators and warnings" should be "flashing red" and that in all likelihood Russia is already preparing for war..."
Amid the European crisis in 2012, European banks reached deep deep down to encourage depositors to lodge their savings in these highly levered financial institutions. Most notably, now defunct Bankia, which offered no lesser gift than a Spiderman Towel in exchange for a EUR300 deposit. So, one wonders just how desperate they are - and just how close to total collapse - when Chinese banks are offering Mercedes Benz, iPhones, or a gold pendant to encourage cash as Bloomberg reports one analyst warns, "Chinese banks are hemorrhaging their deposits."
Hugh Hendry's Eclectica Fund has had a great Q4 (up 3.3%, 4.0%, and 5.0% in the last 3 months) despite portfolio risk being quadruple his 'old normal'. How did he achieve this? He begins... "There are times when an investor has no choice but to behave as though he believes in things that don't necessarily exist. For us, that means being willing to be long risk assets in the full knowledge of two things: that those assets may have no qualitative support; and second, that this is all going to end painfully. The good news is that mankind clearly has the ability to suspend rational judgment long and often... He who hangs on to truth has lost. The economic truth of today no longer offers me much solace; I am taking the blue pills now."
2014 is in the bag and there's something for everyone to celebrate. Here are the narratives that painted the past year - what’s real about them versus what we’re being told they are about.
Saudi King Abdullah Hospitalization Sends Stocks Tumbling But It's Oil That Is Suddenly Paying AttentionSubmitted by Tyler Durden on 12/31/2014 10:29 -0500
Earlier today, Saudi Arabia's stock market fell sharply with the Tadawul All Share Index plunging following a Saudi state TV report that King Abdullah had been admitted to hospital for tests. As shown in the chart report, the index tumbled as much as 6% lower in the minutes after the Saudi Press Agency report which quoted a brief royal court statement. But while the ill king of the King, aged 90, is hardly news to the discounting stock market, a few more nuanced interpertation of not just what happens if and when the King passes away but what Saudi succession looks like, is much more relevant for oil - especially now that Saudi Arabia has unilaterally decided to tear apart OPEC in its push to put US shale producers out of business.
- Behind the Scenes at Sony as Hacking Crisis Unfolded (WSJ)
- Oil Set for Biggest Slump Since 2008 as OPEC Battles U.S. Shale (BBG)
- Praet Warning of Oil Effects Signals Higher Chance of ECB QE (BBG)
- U.S. Opening Door to More Oil Exports Seen Foiling OPEC Strategy (BBG)
- Venezuela confirms recession, inflation hits 63.6 percent in Nov (Reuters)
- U.S. to station 150 armored vehicles in Europe (Reuters)
- China Stocks Rise to Finish Off Big Year (WSJ)
- RBS Suspends Bonuses of 18 Traders Amid FX Rigging Fine (BBG)
While the last trading day of 2014 will be important if only to see if Dow 18,000 can be recaptured on what is sure to be the lowest volume in years, don't expect much help from Brent which continues to slide and was down nearly 3% at $56.20 or WTI which is also flirting with the $53 level, down almost 2% overnight both set to cap the worst year for the commodity since 2008. Not much should be expected from Treasuries either, set to return over 6% in 2014 - the best performance since 2011 - crushing the latest hoard of bond shorts all of which got the Treasury move in 2014 epically wrong, which will close early at 2 pm. Which means that the HFT algos will once again be driven off the illiquid USDJPY correlation, where low volume will mean 5-10 pip moves today should be the norm, as well as European stocks, whose Stoxx Europe 600 Index rose 0.3% earlier on the latest round of jawboning by an ECB member, this time Dutchman Peter Praet, who said in an interview with German newspaper Boersen-Zeitung that lower oil prices increasingly risk de-anchoring inflation expectations, indicating that quantitative easing is becoming more likely.