Update: We remove SanDisk from the Conviction List post the negative preannouncement this morning. Our positive call has clearly been wrong and the timing was particularly poor.
If you liked it at $83, you'll love it at $66... is apparently the message from Goldman Sachs as last week's transition of Sandisk to the company's "Conviction Buy" list has left clients with a Cramer-esque muppet-hole of around 17% (and rising). One wonders if it is still a conviction buy... or if Goldman should be convicted for selling it to clients...
Oil prices bounced back on March 24 on a sliding U.S. Dollar, and then again overnight on Middle East turmoil, but the pain may not be over yet.
US Hegemony, Dollar Dominance Are Officially Dead As China Scores Overwhelming Victory In Bank BattleSubmitted by Tyler Durden on 03/25/2015 17:00 -0400
The China-led development bank essentially marks an epochal shift away from traditionally US-dominated multinational institutions like the IMF and the ADB. Meanwhile, it also represents an implicit attempt by the Chinese to usher in a kind of sino-Monroe Doctrine. The more isolated the US becomes as it relates to the new venture, the more transparent its motives seem. This was never about “standards” (the original excuse for Washington’s opposition to the bank), but rather about stifling Chinese ambition. "America seems to be confirming China’s darkest fears: it has adopted a policy of containment that is wrong in principle and has failed in practice," notes The Economist.
Four and a half years after Brazil's FinMin Guido Mantega first re-introduced the world to the term "currency wars," it appears the Brazilians have admitted defeat. Amid what Goldman calls a sharp decline in consumer confidence - to the lowest level in series history - which could also extend the ongoing macroeconomic adjustment processes and therefore delay the recovery of the economy; Brazil's central bank has announced that it will no longer intervene to support the Real via its Dollar-Swap program. In a SNB2.0-esque move, though somewhat anticipated by the market, Brazil enables the devaluation that has occurred to perhaps extend (improving competitiveness) and removing what was becoming a notable fiscal drag. Implicitly, Brazil just followed the Swiss and admitted defeat in the global currency war...
Greek Finance Minister Praised By FT In 2010 As Europe's "Top Politician" Is Now A Convicted CriminalSubmitted by Tyler Durden on 03/25/2015 12:46 -0400
Back in 2010, a panel of Financial Times "experts" was asked to rank Europe's finance ministers. Nineteen European finance ministers were judged. Greece's then finance minister George Papaconstantinou was found to have the best political skills among the 19 EU ministers and got an over 8th rank overall. Specifically, as Keep Talking Greece reported then, the FT said Papaconstantinou had "the best political skills after displaying “panache” in his handling of the country’s economic crisis." That was then, this is now: Yesterday a special court found him guilty of fabricating a Swiss bank account document and handed him a one-year suspended prison sentence.
Last December, traditionally permabullish energy trader Andy Hall shocked the world when he became the first casualty of the oil crash after Phibro, his 113 year old employer then owned by Occidental Petroleum after its sale by Citigroup, would liquidate in the US after it failed to buy a buyer. He wouldn't be the last. Overnight, Nexen Energy, a wholly owned subsidiary of China's CNOOC Ltd, reported it too would close its crude oil trading division following a round of job cuts announced last week, four market sources said on Monday.
"The Fed is a reluctant Dollar bull," explains Goldman Sachs, noting that Yellen inadvertently revealed the FOMC's expectation that coming policy changes will boost the greenback. Broadly speaking the rest of the sell-side has herded along into the strong US Dollar camp with only Unicredit (rate shift may slow recent very strong USD momentum) and Morgan Stanley (suggesting USD corrective activity) backing away from full dollar bull though most suggest adding to dollar longs on any dip as the most crowded trade in the world gets crowded-er. Then Stan Fischer added... "DOLLAR WON'T KEEP RISING FOREVER."
"Leverage is risky. Purchasing assets with borrowed money can amplify small movements in prices into extraordinary gains or crippling losses, even default."
- San Fran Fed
The $665 Million Evolution in a Space Nobody Respected a Year Ago - Already Outpacing the Internet Circa 1994
The inverted relationship between gold and the dollar broke down in November 2011. The dollar soared from July to the present, spiking 21% against the other major currencies. Most of the negative commentary regarding gold in recent months misses the rather bigger point that the gold price has held up remarkably well given the extent of dollar’s move.
Debt, Distraction, Currency Wars, Itchy Fingers
"It would be transformative if everybody voted," Obama said during a town hall event in Cleveland, Ohio. "That would counteract (campaign) money more than anything. If everybody voted, then it would completely change the political map in this country." Obama also added that the people who tend not to vote are "young, they're lower income, they're skewed more heavily toward immigrant groups and minorities ... There's a reason why some folks try to keep them away from the polls."
- Fed May Not Hit Neutral Until 10th Anniversary of Lehman Collapse (BBG)... make that never
- Global stocks and bonds roar Fed approval, dollar fights back (Reuters)
- EU to tell Greece time, patience running out (Reuters)
- U.S. likely to delay planned closure of two Afghanistan bases (Reuters)
- Norway Signals Reduction After Unexpectedly Holding Rate (BBG)
- Oil Falls to $55 as Kuwait Comments Refocus on Oversupply (Reuters)
- Tsipras Heads to Summit as Merkel Tries to Defuse Greek Crisis (BBG)
- Yahoo Pulls the Plug on China Operations (WSJ)
- Hilsenrath: Fed to Markets: No More Promises (WSJ)
- Fed set to ditch 'patient' rate vow as it eyes U.S., world growth (Reuters)
- Fannie, Freddie could need another bailout (Reuters)
- Alibaba Stock-Sale Lockup Is Ending (WSJ)
- Netanyahu Sweeps Aside Herzog’s Challenge to Win Israel Vote (BBG)
- Oil Bonds Lose Investors $7 Billion in 10 Days (BBG)
- There’s a mysterious $1.1 trillion in spending cuts in the House GOP’s budget (WaPo)
- ECB's Celebration of Its New $1.4 Billion Tower Is Spoiled by Protesters (BBG)
Things are not going well for the Greeks. Bond yields are at post-default highs, implicitly shutting them out of the capital markets; stocks are cratering; and deposit outflows continue as the cash crunch looms. Even ex-Goldman silver-lining-finder Erik Nielsen stated this weekend that he is "throwing in the towel," on Greece, adding, as Bloomberg reports, that things have gone "plain nuts" in Athens. However, things are going great for the Germans - borrowing costs have never been lower, and the stock market is at record-er highs every day, as Draghi's money-printing fiasco has succeeded in one thing (and one thing only) dividing an already fragile 'union' into ever-greater 'haves' and ever-lesser 'have-nots'.