China

China

China Reports Worst Industrial Production Data Ever Outside Of The Global Financial Crisis

Activity data for the combined January-February period (the NBS releases these two months together given the difficulty of adjusting for Chinese New Year effects) was significantly weaker than expected across IP, FAI, and retail sales. For overall industrial production, this was the weakest year-over-year reading ever (China’s IP data starts from 1995) outside the global financial crisis.

Euro In Freefall, Dollar Surge Accelerates; Futures Rebound On USDJPY Rise; Greece On The Ropes

While the dollar strength this morning, which has pushed it to a fresh 13 year high and has accelerated the EURUSD plunge to under 1.06 - a drop of over 300 pips since the start of the week - has been a recap of yesterday's trading action, the main difference is that unlike yesterday, the USDJPY has managed to find a strong bid in the overnight session, pushing not only the Nikkei up by 0.4%, but also lifting US equity futures as the entire global marketplace is now merely a sandbox in which the central banks try to crush their currencies as fast as possible.

Worse Than The Cold War: 81% Of Russians Now View The US Negatively

Russians view the United States much more unfavorably today than they did during the end of the Cold War era.  As you will read about below, an astounding 81 percent of all Russians now view the United States negatively, and only 13 percent have a positive opinion of this country.  In all of the years when Russians have been surveyed on their attitudes toward the U.S., they have never been this negative.  But of course Americans generally do not view the Russian people unfavorably.  Even while most Americans are extremely apathetic about what is going on over in Russia, an increasingly large chunk of the Russian population is angry enough to go to war.

The Disintegrating Empire Of "Controlled" Chaos

"...as with the car on a slush-covered highway, any fool can get it to spin out, but that same fool is then unlikely to have the presence of mind, the skill and the steel nerves to keep it from hitting one of the barriers. Same goes for the would-be builders of an “empire of controlled chaos”: sure, they can generate chaos, but controlling it in a manner that allows them to derive some benefit from it is rather out of the question, and even their ability to stabilize it, so that they are not themselves hurt by it, is in grave doubt."

Central Banks Are Crack Dealers & Faith Healers

The entire formerly rich world is addicted to debt, and it is not capable of shaking that addiction. Not until the whole facade that was built to hide this addiction must and will come crashing down along with the corpus itself. Central banks are a huge part of keeping the disease going, instead of helping the patient quit and regain health, which arguably should be their function. In other words, central banks are not doctors, they’re crack dealers and faith healers. Why anyone would ever agree to that role for some of the world’s economically most powerful entities is a question that surely deserves and demands an answer.

Frontrunning: March 10

  • Dollar at 12-year peak versus euro, emerging markets spooked (Reuters)
  • CIA sought to hack Apple iPhones from earliest days (Reuters)
  • Draghi Urged Greece to Allow Troika Back Before It’s Late (BBG)
  • Brent crude dips below $58 on strong dollar and supply (Reuters)
  • Credit Suisse replaces CEO Dougan with Prudential's Thiam (Reuters)
  • More "distressed" energy M&A: Verisk buys Wood Mackenzie for £1.85bn (FT)
  • Prepare for a surge in defaults: Investors Are Buying Stocks and Bonds From Energy Producers Amid Oil Price Drop (WSJ)
  • Private equity executive ordered to pay £72m to ex-wife (FT)
  • Democratic donors unfazed by Hillary Clinton's use of private email (Reuters)
  • Expensive Hepatitis C Medications Drive Prescription-Drug Spending (WSJ)
  • 'ISIS Hackers' Almost Certainly Not ISIS Hackers (NBC)

Futures Sell Off As Soaring Dollar Weighs On Risk, European Yields Slide To Fresh Record Lows

As noted earlier, starting early with the overnight session there was already some serious fireworks in Asia, when first the USDJPY soared then tumbled, pushing the Nikkei lower some 0.7% with it, driven entirely by the surge in Dollar which rose to a fresh 12 year high overnight after gaining as much as 0.59%, in an extension of Friday’s post-NFP gains. Additionally, the EUR/USD slipped below 1.0800 to touch its lowest level since Sept’03 while USD/JPY rose above 122.00 for the first time since Jul’07, after breaching long-term resistance at 121.85. However, in recent trade the pair has seen a straight line sell-off which in turn has sent US equity futures sliding, and the ES down about 14 points as of this moment. Meanwhile, the frontrunning of the ECB continues, with German 10 Year yields sliding -3bps to 0.281%, the lowest in series history. Also touching fresh record lows were Austrian, Belgian, Dutch, Finnish, Irish, Italian, Spanish 10 Year rates.

Some Markets Are Turmoiling In Asia

No catalyzing event - China CPI modestly hotter than expected and Aussie confidence weak - but FX markets are fast in the Asia session with USDJPY surging above 122.00 for the first time since July 2007 and EURUSD dropping below 1.08 as USD strength dominates (up 1.65% from payrolls). Japanese stocks have decoupled from USDJPY's rally and are down notably and despite the USD strength,  WTI crude has jumped (perhaps on news of Iraqi forces taking back an oil field near Tikrit). Gold is falling as Offshore Renminbi weakens. All in all - markets are turmoiling for no good reason...

China Completes SWIFT Alternative, May Launch "De-Dollarization Axis" As Soon As September

Following a year of threats that the west would kick Russia out of SWIFT, Moscow finally took the plunge and created its own international payment system alternative. And now, seeing how easy and fast it can be done, here comes China next with its own "China International Payment System" or CIPS, as one after another major global powers wave goodbye to a dollar-based, Washington-controlled (and NSA-supervised) international funds-transfer protocol. One that no longer relies on the US Dollar.

How The World Is Being Fooled About Chinese Gold Demand

There is a story being told to the masses about Chinese gold demand that is grossly incorrect. The huge discrepancy between numbers from the World Gold Council (WGC) and actual gold demand is so wide yet cunningly hidden I must conclude there is essential information about physical gold demand deliberately kept privy.

If Everything's So Rosy, Why Is This Happening?

The financial news is astonishingly rosy: record trade surpluses in China, positive surprises in Europe, the best run of new jobs added to the U.S. economy since the go-go 1990s, and the gift that keeps on giving to consumers everywhere, low oil prices. So if everything is so fantastic, why are new orders cratering?

Key Events In The Coming Week

To some (mostly those in the 1-10% wealth bucket) the main event today is the iWatch unveiling. To others (mostly those not in the 1-10% wealth bucket) it is the Eurogroup meeting in which the fate of Greece will be discussed and perhaps decided. One thing is certain: virtually nobody will care when the Fed's Mester and Kocherlakota speak later today as the Fed is now - supposedly - set to hike no matter what. Here is what the other main events are for the balance of the week.

GM Authorizes $5 Billion Stock Buyback, Will Return All Cash Over $20 Billion To Shareholders

Doubting if the growth ahead of GM is now over, and the great post-bankruptcy "success story" is rapidly fading as the company has been pushed to resort to the kind of financial engineering which has pushed the S&P higher for all of 2014, and follows a record month of stock buyback announcements? Then doubt no more: moments ago GM announced it is authorizing an immediate $5 billion stock buyback, and plans to return all cash above a $20 billion floor to shareholders.