- China economic growth seen slowing despite policy easing (Reuters)
- FBI, Justice Department Investigating Daily Fantasy Sports Business Model (WSJ)
- Obama to slow pace of withdrawal of U.S. troops from Afghanistan (Reuters)
- Corporate America's Epic Debt Binge Leaves $119 Billion Hangover (BBG)
- Islamic State battles insurgents as Syria army prepares assault (Reuters)
- Why Hillary Clinton Can’t Win by Going After the NRA (BBG)
Given the fact that for the first time since the recession, manufacturing has added zero jobs this year, that ADP just saw a drop in manufacturing jobs, Markit reports September US Manufacturing PMI has stagnated for the last 2 months at 2 year lows (printing 53.1 final vs 53.0 prelim). Worst still, and confirming even further the demise of the US manufacturing "renaissance", the Employment sub-index dropped to 50.8 - the lowest since June 2013. As Markit sums up, "The Fed is therefore likely to keep an open mind as to whether tighter policy is appropriate given current economic conditions and await a clearer idea of the health of the economy in the fourth quarter."
The data, according to many analysts, have been broadly supportive, with stronger growth and a tightening in the labor market that should allow the Fed to be "reasonably confident" that inflation will gradually return to target. That said, heightened global risks could lead to a tactical delay. Economisseds remain evenly split on the prospect of the first rate increase in 9 years.
Ironic, because it is precisely CNBC's constant cheerleading of what little viewers it had left that pushed the market to such nosebleed levels that on August 24 it suffered its second flash crash in just five years. It is even more ironic, because instead of a rational, objective coverage of the newsflow, the constant stream of cherry-picked, double seasonally adjusted good news is precisely why viewers had left the Comcast cable station in droves realizing the disconnect between the economy and stocks is simply too gargantuan to stomach, and that they are being lied to. As a result, it wasn't until the much dreaded market crash that viewers finally came back. At least some of them.
The American dream has become perverted into the equivalent of hoping to pick a winning economic lottery ticket: hoping that you somehow will become one of the lucky 0.00001% who strike it big and make millions upon millions of Dollars.
Hope, quite simply, just isn’t close to enough for a real recovery. There is an undeniable element of troubling prevarication in the whole attempt to coax unearned optimism, as taken to the extreme it means that policymakers will never quite be honest about especially realistic downsides. That may even mean, in their zeal to “fool” consumers, they fool themselves on the circular logic.
With all eyes currently transfixed on Iran’s nuclear future, there is seemingly little attention being paid to another landmark Middle Eastern nuclear trend, spearheaded by Russia.
Japan Inc Rocked By Massive Accounting Fraud: Toshiba CEO Quits After Admitting 7 Years Of Cooked BooksSubmitted by Tyler Durden on 07/21/2015 07:58 -0400
While Abenomics has been an unmitigated disaster for Japan's ordinary population, where the soaring stock market has benefited the top decile of the population while everyone has been slammed by a record 25 consecutive months of declining real wages and soaring input costs, there had been one bright spot: corporate earnings. Then on Friday, a report out of Reuters caught our attention when news hit that 140 year old electronics conglomerate, and "pillar of Japan Inc", Toshiba had inflated profits by a stunning $1.2 billion for a whopping 7 years, with fabricated figures amounting to 30% of the company's "profits" since 2008!
The dollar has been a stalwart of international trade over the majority of the last century. Around the time of the formation of the Eurozone, it reached its recent peak at 71.0% of official foreign exchange reserves. Since then, its composition of global reserves has more recently dropped to a more modest 62.9% in 2014. However, the dollar is slowly losing its status as the world’s undisputed reserve currency.
With all hopes and dreams of economic renaissance in America pinned on small businesses (see ADP's recent gains), today's data from the NFIB will strike fear in the heart of the wealth-effect-creating Fed. The NFIB small business optimism index disappointed expectations in June (94.1 vs. consensus 98.5), falling to its lowest level since March 2014 - the biggest drop since 2012. All components were weaker but most notably hiring and plans to raise worker compensation tumbled. Furthermore, Deloitte's Q2 latest survery shows American CFOs are more worried than at any time since 2013.
If earnings are the mother's milk of stock bull markets, then the endless supply of talking heads bloviating on the next leg of the stock market rally being driven by a post Q1 renaissance in earnings growth (ever ready to pull out their hockey-stick forecasts) may want to look away from the following chart...
Strong Conviction + Low Volatility + High Levels/Low Costs of Leverage [irrespective of Dodd-Frank] + More Absolute Capital at Risk + Increased Concentration of “At Risk” capital + “Doing the Same Thing" = combustible market cocktail.
Through a series of "fairly complicated" and "quite amazing" legal maneuvers, Jim Simons' Renaissance Technologies has devised a way for employees to invest their retirement savings tax free in Medallion fund which has averaged 72% annually for the past ten years.
It just blows our mind, that in the face of almost every indicator having collapsed over the first 6 months of this year, market ‘pros’ just act as though it isn’t happening! It’s impressive to watch the insanity, the denial, the delusion, that has become the basis of the steady state market. What is continuing is us extending ourselves again on the very assumption that the American Consumer will rebound to its peak strength. Because there are those few all powerful economic cannibals that profit on policy rather than economics, we will continue down this flawed path until the legend of the Almighty American Consumer succumbs to reality. And that day my friends will be an ugly one for the record books.