Just when the market thought it had priced in a new equilibrium without (or with - it is not quite clear) a Syria war, here comes Thursday with a data dump that will make one's head spin. Central bankers are once again on parade starting overnight, when the BOJ announced no change to its QE program and retaining its monetary base target of JPY270 trillion. The parade continues with both the BOE and ECB, the latter of which is expected to address the recent pick up in Eonia rates and take praise for the recent very much unsustainable "recovery" in the periphery even as Germany continues to slide lower (this morning's factory orders plunged 2.7% on exp. -1.0%), which in turn lead the Bund to pass above 2.0% for the first time since March 2011. Speaking of bonds blowing out, the US 10Y is now just 6 bps away from 3.00%, the widest since July 2011, and likely to breach the support level, taking out a boatload of stops and leading to the next big step spike in rates as the second selling scramble ensues. And just to keep every algo on its binary toes, today we also get a NFP preview with the ADP private payrolls at 8:15 am (Exp. 180K, down from 200K), Initial Claims (Exp. 330K), Nonfarm Productivity and Unit Labor Costs (Exp. 1.60% and 0.9%), Factory Orders (Exp. -3.4%), Non-mfg ISM (Exp. 55), Final Durable Goods, EIA Nat Gas and DOE Crude Inventories, oh and the G-20 meeting in St. Petersburg where Putin and Obama are not expected to share much pleasantries, and where John Kerry's swiftboat may not be allowed to dock.
Next week Congress can do far more than stop a feckless Tomahawk barrage on a small country which is already a graveyard of civil war and sectarian slaughter. By voting “no” it can trigger the end of the American Imperium - five decades of incessant meddling, bullying and subversion around the globe which has added precious little to national security, but left America fiscally exhausted and morally diminished. By long standing historical demonstration, the US Congress specializes in paralysis, indecision and dysfunction. In the end, that is how the American warfare state will be finally brought to heel and why the American Imperium will come to an end - at last.
Why on earth does the UN Security Council still exist when the rules and regulations that the people who have the right to veto set up in the first place are dumped just as quick as you can say Bachar al-Assad?
President Obama's speech last during the 50th anniversary of MLK may seem sadly ironic now. As he noted, "Dr. King explained that the goals of African-Americans were identical to working people of all races: decent wages, fair working conditions, livable housing..." but the facts are that, as Bloomberg reports, while, for most Americans, the real estate crash is finally behind them and personal wealth is back where it was in the boom. For blacks in the U.S., 18 years of economic progress has vanished, with a rebound in housing slipping further out of reach and the unemployment rate almost twice that of whites. The homeownership rate for blacks fell from 50% during the housing bubble to 43% in the second quarter, the lowest since 1995. The rate for whites stopped falling two years ago, settling at about 73%, only 3 percentage points below the 2004 peak. As Rev. Alvin Love, who knew Obama in the 80s notes, "it's going to take a generation to get back to the point where homeownership can build wealth in this community."
The first draft of the White House's war authorization legislation was leaked yesterday, signaling the opening round of the danse macabre, in which the bargaining and maneuvering over what Congress and the president both want -- war on Syria -- begins its public journey from conception to law. There will be fighting and sharp words along the way. Members will be coy and make impassioned speeches. It is all for show. It is important to make this clear to readers: The fight is not between whether the House and Senate will pass or reject the president's request for authorization to attack, but rather what kind of force authorization will ultimately be brought to the Floor for passage... and sure enough the headlines are starting with more drafts:
*OBAMA WANTS "TOO BROAD AUTHORITY'' IN SYRIA, TWO DEMOCRATS SAY
and Menendez/Corker propose a new US Senate resolution for authorizing use of military force in Syria setting a 60-day deadline, with one 30-day extension possible, while barring ground forces
It seems that the reason why Obama has been such a staunch supporter of a Syrian campaign without a land component, is because US-armed and trained Qatari mercenaries, also known elsewhere in the media as "rebels", are about to take to the battlefield (ignoring for a moment prior reports that American, Israeli and other troops have already long operated on Syrian territory). The Telegraph reports that "the first cell of Syrian rebels trained and armed by the CIA is making its way to the battlefield, President Barack Obama has reportedly told senators. During a meeting at the White House, the president assured Senator John McCain that after months of delay the US was meeting its commitment to back moderate elements of the opposition. Mr Obama said that a 50-man cell, believed to have been trained by US special forces in Jordan."
The equity futures euphoria carryover from this weekend, buoyed by sentiment that the Syrian war is postponed if not cancelled, carried over into Tuesday morning despite news that Israel had launched a missile test, which looked at from almost any angle was an attempt at provoking a response from its adversaries. Also the Chinese boost driven by a solid beat in the country's two manufacturing PMIs persisted despite a drop in the August Non-manufacturing PMI reported last night. So once again we have returned to a state where good news is good news and bad news can be ignored. This, even with the Taper announcement just two weeks away. Of note also is that overnight Nokia shares surged 40% after Microsoft announced that it is to buy Nokia mobile business. In tandem, other EU based related names such as STM and Ericsson also gained ground, trading up 3% and 4.5% respectively. Nokia shares traded sharply higher today after Microsoft said it will pay €3.79bln to purchase substantially all of Nokia's devices & services business and will also pay €1.65bln to license Nokia's patents. A fitting farewell present from Steve Ballmer perhaps. Once again, keep an eye on Syria as the president begins his congressional consultations to take the escalation to the next level, with or without provocations from Israel.
Demolishing the American War Brief Piece by Piece
The Hemisphere Project (f/k/a Hudson Hawk): The Latest Spy Scandal Involving 4 Billion Recorded Phone Calls Per DaySubmitted by Tyler Durden on 09/02/2013 15:02 -0500
It is convenient that in a recent post covering the latest historic Verizon M&A deal we showed a spaghetti chart, created by the WSJ, of the US telecom space because it lays roughly how many current subscribers that other US telecom giant, AT&T, has. The reason for this is that according to the latest revelations from the NYT, which following recent work-sharing with the Guardian is now another official distributor of the Edward Snowden leaks (who in a brilliant move has decided to spread out his disclosures week after week, many times allowing such staggered disclosures to catch the administration - which has no idea what is coming next - in flagrant lies), the chart above shows that 140 million landline and wireless paying AT&T customers is the minimum number of affected Americans whose every call is recorded, however not directly or indirectly by the government, but rather by a private corporation working in collaboration with the US government.
The name of the collaboration: the Hemisphere Project, fomerly Hudson Hawk.
Equity futures stormed out of the gate on initial relief that a Syria attack may be avoided, which sent oil and the PM complex flash crashing lower. However, overnight, sentiment shifted that the Syrian escalation is at best delayed and as a result Brent regained all losses, with the precious metals also largely unchanged from Friday's close. Futures on the other hand, were perfectly happy to rise on the transitory Syrian risk moderation reduction, and then continue rising when Syria returned to the forefront, this time prodded higher by PMI exuberance out of China and Europe. How credible such manufacturing data remains to be seen. A surging USDJPY was also rather helpful, with the pair breaching 99.00 stops to the upside shortly after the European PMI data printed. And with the cash US market closed, and electronic equity trade halted at 10:30 Central, it is unlikely that concerns about all those "other" things that will define September, will seep in and it is likely the HFTs will push equities to session highs before reopening for the Tuesday trading.
Someone wants to get the United States into a war with Syria very, very badly. Cui bono is an old Latin phrase that is still commonly used, and it roughly means "to whose benefit?" The key to figuring out who is really behind the push for war is to look at who will benefit from that war. If a full-blown war erupts between the United States and Syria, it will not be good for the United States, it will not be good for Israel, it will not be good for Syria, it will not be good for Iran and it will not be good for Hezbollah. The party that stands to benefit the most is Saudi Arabia, and they won't even be doing any of the fighting.
Imagine Dick Cheney in a “Saturday Night Live” skit fantasizing about Barack Obama handling the pressures of going to war...
After bringing the world to the edge of WWIII and nearly giving the first order to launch the ironically named Patriot missile, then dramatically punting in the very last second whether to invade Syria to Congress, something he should have done from the every beginning, Obama went on to do what he does best.
The most likely path of collapse to take place within the U.S. includes economic destabilization caused by a loss of the dollar's world reserve status and petro-status. This fiscal crisis event will likely not occur in the midst of a political vacuum. The central banks and international financiers that created our ongoing and developing disaster are not going to allow the destruction of the American economy, the dollar, or global markets without a cover event designed to hide their culpability. They need something big. Something so big that the average citizen is overwhelmed with fear and confusion. A smoke and mirrors magic trick so raw and soul shattering it leaves the very population of the Earth mesmerized and helpless to understand the root of the nightmare before them. The elites need a fabricated Apocalypse. Enter Syria...
*OBAMA SAYS USERS OF CHEMCIAL WEAPONS MUST BE HELD TO ACCOUNT
*OBAMA SAYS `MENACE' OF SYRIA MUST BE CONFRONTED
*OBAMA SAYS U.S. MUST TAKE MILITARY ACTION AGAINST SYRIA
*OBAMA SAYS HE WILL SEEK AUTHORIZATION FROM CONGRESS ON SYRIA
While Andrea Mitchell reports that the President will not be announcing airstrikes from the Rose Garden at 115ET, his press briefing this afternoon will update the American people on his decisions about how to proceed... so with no report due from the UN on Syrian chemical arms until lab tests are done, we wait with bated breath for Obama's next steps (but not on the ground...)
"I look forward to the debate"...