- Guess who doesn't believe in the "great rotation out of bonds and into stocks": Abe Aids Bernanke as Japan Seen Buying Foreign Debt (BBG)
- AIG Sues Federal Reserve Vehicle in Dispute Over Lawsuit Rights (WSJ)
- JPMorgan Said to Weigh Disclosing Whale Report Faulting Dimon (BBG)
- Ugly Choices Loom Over Debt Clash (WSJ)
- Credit Suisse to cut bonus pool by 20 percent (Reuters)
- Brazilian Bikini Waxes Make Crab Lice Endangered Species (BBG)
- EU redrafts plan for bank rescue funding (FT)
- JCPenney stock plunges after bad holiday (NY Post)
- Regulator Comments Buoy Shanghai Stocks (WSJ)
- Japan voters back PM Abe's efforts to spur growth, beat deflation (Reuters)
- Cameron averts row over Europe speech (FT)
- Swatch Buys Harry Winston Jewelry Brand for $1 Billion (BBG)
We are back to that phase in market euphoria where no news is good news, good news is better, and bad news is best. While there was little news over the weekend, and overnight, what news there was uniformly negative: northern China drowning in smog, the Apple fad bubble bursting, European Industrial production printing below expectations (-0.3%, exp.-0.2%, down from revised -1.0%), and ever louder rumors that the debt ceiling debate may metastasize into an actual government shutdown for at least a few days, which means the first technical default in US history. Yet nothing seems able to faze the risk on mood, still driven by a relentless surge in the EURUSD which touched on 1.34 overnight before retracing, and the EURCHF, which too has soared by over a 100 pips in recent trading action, which according to some is a result of Swatch buying the Harry Winston watch and jewelry brand for $1 billion, and an aggressively selling of CHF into USD by the company. Eventwise, today will be a quiet day in the US, although the action will pick up tomorrow as more companies report earnings as well as the all important retail sales report will put to rest all debate over just how good or bad this holiday shopping season (pre and post seasonal adjustments) truly was.
AAPL stock is currently trading at or just under the $500 "generational bottom" in the premarket session, or nearly a one year low, following news first from Japan's Nikkei that Apple has slashed orders for iPhone 5 components, and then from the WSJ, that demand for the flagship phone was far less than expected, resulting in a cut in orders in the supply chain. Per the WSJ: "Apple's orders for iPhone 5 screens for the January-March quarter, for example, have dropped to roughly half of what the company had previously planned to order, the people said. The Cupertino, Calif., company has also cut orders for components other than screens, according to one of the people. Apple notified the suppliers of the order cut last month, the people said."
In a world in which the NSA has access to everything, including - soon - one's bank accounts, because "the government is there to protect you", it was only a matter of time before the logical extension of abdicating all privacy was enforced in the city that never sleeps, and which ended up with 24/7 vigilant "alarm clocks" in the form of unmanned aerial vehicles, aka drones, "for the sake of security." From RT: "The head of the New York City Police Department announced this week that the largest local law enforcement agency in the United States might soon rely on spy drones for conducting surveillance. During an open conversation held Thursday between Reuters editor-in-chief Stephen Adler and NYPD Commissioner Ray Kelly, the chief of police confirmed that New York’s boys in blue aren’t entirely opposed to acquiring an unmanned aerial vehicle for the sake of security. “We’re looking into it," Kelly reportedly told an audience at the 92nd Street Y Thursday evening. “Anything that helps us.”
The investment world is convinced that China is about to engage in another massive round of stimulus. After all, this is what China did in 2008 when its economy slowed, so surely this is what they’ll do now that the economy is slowing again.
VIX rose majestically (by a mere 0.25 vols and still below 14%) for the first time in seven days (but the term structure steepened a little more) and while stocks did not like that, they still managed to pull off the lows, close green, and remain in a 1% range for the last week. Treasury yields continue to slide lower (even with a weak auction today) as it would appear the end of the bond bull market was called a little premature (and as we noted, merely reflected short-term rate-locks for corporate issuance). While HLF grabbed headlines, it is AAPL that seems to be swept under the rug as it ends the day crashtastically at its lows (where its margins will be after the iPoor is released). The USD leaked ever so gently higher on the day - ending practically unchanged on the week (with JPY 0.5% stronger on the week). Commodities chopped around non-directionally (though Silver is the week's winner so far). Financials, and Energy had a tough day (and homebuilders were sold hard after Europe's close). HYG seemed today's lever of rampaciousness and remains rich to intrinsics (as cash HY bonds just can't catch a bid at record-high prices). Once again the S&P reversed its (up)trend at around the European close but late-day VWAP reversion held us bid on the day.
- A Bold Dissenter at the Fed, Hoping His Doubts Are Wrong (NYT)
- China and Japan step up drone race as tension builds over disputed islands (Guardian)
- How Mario Draghi is reshaping Europe's central bank (Reuters)
- Merkel Economy Shows Neglect as Sick Man Concern Returns (BBG)
- US oil imports to fall to 25-year low (FT)
- China Loan Share at Record Low Shows Financing Risks (BBG)
- Dimon Says Some JPMorgan Execs ‘Acted Like Children’ on Loss (BBG) - children that reveleased who 'excess reserves' are truly used
- Fed injects new sell-off risk into Treasuries (FT) - really? So the Fed will stop monetizing the US deficit some time soon?
- Obama aide presses Republicans to accept more tax revenues (Reuters)
- Ex-SAC analyst named 20 alleged insider traders (FT)
- BOJ easing bets help dollar regain ground vs yen (Reuters)
- Goldman Sachs Said to Be Part of Fed-Led Foreclosure Settlement (BBG)
- Venezuela postpones inauguration for cancer-stricken Chavez (Reuters)
In what may be very disturbing news for the AAPL-borg collective and the broader Hotel AAPLfornia, WSJ is reporting that Apple is working on a lower-end iPhone, a move which it dubs "a big shift in strategy as its supremacy in smartphones has slipped." To call this a big shift is a major understatement: no longer will Apple have the premium, ultra-luxury, aspirational product cache, which for a broad selection of its customers was the primary reason to keep buying iteration after iteration of the company's releases and lining up in droves around the block on release day. Especially since anyone seeking a "cheaper" iPhone could just buy a previous generation iteration of a gadget whose new product launch cadence is now jumping to twice a year, soon thereafter three times, and so on. Yet saddest for all those who have watched the progress of this iconic company over the past decade from the sidelines regardless of sentiment, the consumer products "Ferrari" that Steve Jobs built, just announced it is launching its own Yugo.
How To Profit From The Impending Bursting Of The Education Bubble, pt 2 - "Knowledge How" & Diplomas As Fictitious AssetsSubmitted by Reggie Middleton on 01/07/2013 12:52 -0400
A complete & thorough explanation of how many (if not most) levered college diplomas are overvalued assets with fictitious values - that's including you too HBS and the ivy league! No wonder the education bubble in the US is about to collapse.
Gold dropped $8.20 or 0.49% in New York on Friday and closed at $1,656.30/oz. Silver slipped to as low as $29.22 in London, but it then rallied to as high as $30.25 in New York and finished with a gain of 0.2%. Gold finished down 0.05% for the week, while silver was up 0.53%.
Friday’s U.S. nonfarm payrolls for December were 155K, 150K was expected and this was down from the previous data of 161K. The unemployment rate was still an elevated 7.8% suggesting a frail U.S. jobs market.
Things change fast in the technology world.
Bernanke: Drop it Janet. My mind is made up. Meeting over.
Most people are missing the boat regarding the Netflix/SEC tangle as the more relevant issue is the seemingly “selective disclosure” on Facebook by the Netflix CEO.
- Just like last year: A Postholiday Letdown for Retailers (WSJ)
- Obama Fights Republicans on Debt as Investors Seek Growth (BBG)
- Housing a Sweet Spot for U.S. Economy as Recovery Expands (BBG)
- House chooses Boehner as speaker again despite dissent (Reuters)
- Backlash pushes Republicans to seek cuts (FT)
- Jobs Lost Hit 5 Million With Rigged Currencies (BBG)
- Chavez still has "severe" respiratory problem (Reuters)
- Paris promises flurry of economic reforms (FT)
- Investors Sour on Pro Stock Pickers (WSJ)
- Abe moves to ease South Korea tensions (FT)
- Wildfires Hit Australia Amid Worst Heatwave in Decade (BBG)
- Monti attacks ‘extremist’ rivals (FT)
How To Profit From The Impending Bursting Of The Education Bubble, pt 1 - A Bubble Bigger Than SubprimeSubmitted by Reggie Middleton on 01/03/2013 14:55 -0400
Truly ironic - anyone receiving a REAL business/finance education would be able to run these rudimentary calculations themselves, thereby invalidating the very diploma they are seeking