headlines

The problem of suggesting that we have once again evolved into a "Goldilocks economy" is that such an environment of slower growth is not conducive to supporting corporate profit growth at a level to justify high valuations. Such a backdrop becomes particularly problematic when the Federal Reserve begins to raise interest rates which removes one of the fundamental underpinnings of an overvalued market which was low interest rates. Ultimately, higher interest rates, particulalry in an economy with a deteriorating economic backdrop, becomes the pin that "pops the bubble."  It is true that the bears didn't eat Goldilocks at the end of the story...but then again, there never was a sequel either.

"... Gladio, amongst others, is just a perfect example of how governments used oppression against their own citizens to shape the mindset of the public to unify them towards a common goal and objective, which in our case is: counter-terrorism. The problem, however, is that by giving this support, the public indirectly relinquishes many freedoms and liberties."

So what happens when an insatiable state-mandated cartel attaches itself to households with declining real incomes?

While it is hoped that the economy can continue to expand on the back of the "service" sector alone, history suggests that "manufacturing" continues to play a much more important dynamic that it is given credit for... and that is a major problem as ISM Manufacturing just fell below 50 for the first time since Nov 2012, crashing to 48.6 - the weakest since June 2009. Across the components, new orders collapsed (worst since Aug 2012), and prices paid crashed. Seems like a perfect time to raise rates!!

BlueCrest Capital Management Limited "BlueCrest" announces it will, over the next several months, transition to a Private Investment Partnership, and will return to its clients the $8 billion it currently manages on their behalf.  Following the transition, BlueCrest will manage assets solely on behalf of its partners and employees.

Without a rerun of last Friday's Chinese stock market rout, European traders could focus on what "really matters", namely how much of the ECB's upcoming 20 bps rate cut and €20 billion QE expansion (with Commerzbank saying Draghi may even hint at Europe's QE3) is priced in, and whether the ECB's actions are just modestly priced in, or more than fully, and just how big the "sell the news" event will be.The result: the Euro falls to a new 7 month low, the dollar spot index hits a new all time high, and European stocks and US futures stage another remarkable overnight comeback on the usual low volume levitation and central bank intervention.

While US floor markets are closed for the Thanksgiving holiday (equity, rates and energy futures are open until 1pm Eastern), Europe and Asia (as well as US equity futures) were busy rebounding overnight on strength in the commodity complex following yesterday's news that China's metals producers have asked for a wholesale government bailout or the "QEmmodity" as we have dubbed it, for the first time since 2009, which together with news that China would soon start arresting "malicious metal sellers" has provided a push for commodity prices across the board.

The Pentagon's army colonel Steve Warren has made it clear how Washington feels about the unraveling situation in Syria. In not so many words, Warren explained 'not our problem', pointing out the Russian jet shootdown is "a Russia-Turkey issue," and that US was not ionvolved. He then quickly moved on to the propaganda section of the briefing, explaining how "sloppy, uncaring" Russia was "exaggerating" its achievements in Syria.

Futures tumble and bond yields slide following news that Turkish F-16s have taken down a Russian Su-24 fighter jet near the Syria border. Russia confirms its plane was downed but claims the plane was over Syrian territory for the entire flight.

These developments in terrorism are textbook Hegelian Dialectic, using problem-reaction-solution to justify a greater military presence in Syria and Iraq, despite nearly a decade and a half of fighting jihad, civil war and supporting “frenemies” across the region with arms, training and financial support. The founding fathers warned of this, but could scarcely foresee the cynical nature of today’s police state – where the terrorists created by the state have become the population’s worst nightmare.

While it is hoped that the economy can continue to expand on the back of the "service" sector alone, history suggests that "manufacturing" continues to play a much more important dynamic that it is given credit for.

Amid all the singing and dancing over Spain's miraculous recovery and Europe's renaissance on the back of Draghi's money-printing machine, it appears - just like in America - that below the glossy veneer of engineered equity and bond prices, all is not well. As Xinhua reports, the average wage in Spain has fallen to its lowest level since 2007, according to figures released by the Spanish Ministry of Finance, and after peaking at 19.3 million in 2009, the number of workers is also collapsing. It appears Catalan is righty to want out...

The latest poll following the attacks in Paris, by Fox News, shows Donald Trump moving ahead of Democrat-front-runner Hillary Clinton (in a head-to-head match up if the election were held today), but it is the turmoiling below the surface of the GOP nominations that is garnering most headlines. After a week or two of hope for GOP leadership, as Ben Carson appeared to catch up to Trump, the retired neurosurgon's lies and weakness on foreign policy ("he clearly has no idea what he's talking about," as one Iowa GOP insider noted), have sent his poll numbers reeling... and Cruz surging.

Spot rates for transporting containers from Asia to Northern Europe have crashed a stunning 70% in the last 3 weeks alone. This almost unprecedented divergence from seasonality has only occurred at this scale once before 2008! 

As the poor get poorer, so the saying goes, the rich get richer; and until recently that was not just true, but apparently mandated so by The Fed. However, the last few months have seen the so-called "1%" appearing to struggle a little in their largesse. As we noted previously, not only are luxury jet values dropping for the first time since 2009, London mansion prices plunging, San Francisco home sales collapsing, fine-wine and diamond prices at 2009 crisis lows, and Sotheby's laying people off, but now, as Bloomberg reports, Swiss watches - the ultimate in luxury extravagance - have seen exports crash by the most since the financial crisis.