- UK economy shows 0.3% growth (FT)
- Texas University Fund Sold $375 Million in Gold Bars (BBG)
- Spain Jobless Rate Breaches 27% on Recession Woes (BBG)
- Letta calls for easing of austerity policies (FT)
- Italy Led by Letta Brings Berlusconi Back as Winner (BBG)
- Fed Debate Moves From Tapering to Extending Bond Buying (BBG)
- South Korea wants talks with North on shuttered industrial zone (Reuters)
- Republicans advance bill to prepare for debt ceiling fight (Reuters)
- Republicans claim White House failed to warn on severity of cuts (FT)
- Xi meets former US heavyweights (China Daily)
- Next BoE chief Carney says clear framework key to policy success (Reuters)
- Chinese roll out red carpet for Hollande (FT)
How much changes in six months. Last September, everyone, including the hotdog vendor, the shoeshine boy and the kitchen sink, was screaming that AAPL $1000 is just around the corner, and cartoon analysts named for state capitals were coming up with idiotic price targets (hint: $1111) that only intellectually-stunted dyslexics could love. Six months later, the former growth company (and now levered-divdend value play) can barely break above $300. So, just to set the record straight, here, courtesy of marketsqueeze.com, is a small sample of the penguins who could barely outscream each other on the way to a "certain" $1 trillion market cap. Ooops.
While immediately after earnings, we were treated to a plethora of self-justifying talking heads exclaiming how wonderful the worst news was, how positive the future looked, how leveraged dividends were great, and how awesome iPhones 5S sales will be inevitably; it seems the market (which one bright chap noted 'must know something' when the stock was soaring) is now testing its recent lows... The selling appears to have started once Tim Cook began pitching the future like a European politician and bitching about the competition as opposed to discussing the current state of affairs. AAPL has dropped almost 9% from its overnight highs and is near 17 month lows.
- The Inland Empire bubble is back: BMW to Amazon Space Demand Spurs Rush to Inland Empire (BBG)
- Tamerlan Tsarnaev was on classified government watch lists (Reuters)
- Brothers in Boston Bombing Case Said Drawn to Radicalism (BBG)
- Germany Spurns Calls to Loosen Austerity Stance (WSJ)
- Spain poised to ease austerity push (FT)
- What ever happened to France's voice in Europe? (Reuters)
- U.S., South Korea Reach Nuclear Deal (WSJ)
- U.S. Sees No Hard Evidence of Syrian Chemical Weapons Use (BBG)
- RBA Set to Invest Foreign Currency Reserves in China, Lowe Says (BBG)
- FedEx Wins $10.5 Billion Postal Contract as UPS Shut Out (BBG)
It is one thing for the market to no longer pay attention to economic fundamentals or newsflow (with the exception of newsflow generated by fake tweets of course), but when the mainstream media turns full retard and comes up with headlines such as this: "German Ifo Confidence Declines After Winter Chilled Recovery" to spin the key overnight event, the German IFO Business climate (which dropped from 106.2 to 104.4, missing expectations of 106.2 of course) one just has to laugh. In the artcile we read that "German business confidence fell for a second month in April after winter weather hindered the recovery in Europe’s largest economy... “We still expect there to have been a good rebound in the first quarter, although there is a big question mark about the weather,” said Anatoli Annenkov, senior economist at Societe Generale SA in London." We wonder how long Bloomberg looked for some junior idiot who agreed to be memorialized for posterity with the preceding moronic soundbite because this really is beyond ridiculous (and no, it's not snow in the winter that is causing yet another "swoon" in indicators like the IFO, the ZEW and all other metrics as we patiently explained yesterday so even a 5 year old caveman financial reported would get it).
Confused why AAPL is opting for the dividend recap route (as we predicted it would in January )? Simple: as the first chart below reminds us, as of December 31, nearly 70% of the company's total cash, which has grown to a record $145 billion in the current quarter, was held offshore. This means that if AAPL wanted to repatriate this $100 billion or so in cash, it would have to pay Federal tax on it, amounting to dozens of billions in remittances to Uncle Sam as this is cash which AAPL does not have full access to for US based operations. Hence: it has opted to raise cash by issuing debt instead of repatriating its cash.
Apple is out with Q2 results which are hardly inspiring. Revenue and sales beat, but margins missed and guidance is weak:
- The good news: Q2 Revenue: $43.6 billion, Exp. $42.3 billion
- Q2 EPS: $10.09, Exp $9.98
- And the not so good news: Q2 margin weaker than expected 37.5%, Exp. 38.5%
- And Q3 revenue seen at $33.5-$35.5 billion far below the estimate consensus $38.4. Remember: AAPL no longer sandbags the future
For those looking for a special dividend you won't see it, instead will have to be satisfied with a buyback expansion by $50 billion (eventually), and an increase of 15% in the dividend. Ironically, cash cow AAPL just announced it will raise debt (and got rated by various rating agencies) in order to fund its cash outflow. In other words, it is slowly but surely becoming a utility. So much for the near infinite growth projections.
Yet another round of less than impressive macroeconomic data from China and Eurozone failed to deter equity bulls and heading into the North American crossover, stocks in Europe are seen higher, with tech and financials as best performers. The disappointing PMI data from Germany, where the Services component fell below the expansionary 50, underpins the view that the ECB will likely cut the benchmark interest rates next month and may even indicate that it is prepared to provide additional support via LTROs. As a result, the EONIA curve bull flattened and the 2/10s German spread flattened by almost 3bps to levels not seen since June 2012. In turn, Bund future hit YTD peak at 146.77 and the next technical level to note is 146.89, 1st June 2012 high. However it is worth noting that the upside traction is also being supported by large coupon payments and redemptions from France, the second highest net market inflow for 2013.
- China’s Recovery Falters as Manufacturing Growth Cools (BBG)
- Gloomy eurozone output points to rate cut (FT)
- Limit Austerity, EU appartchik Barroso Says (WSJ)
- Regulators Get Banks to Rein In Bonus Pay (WSJ)
- SEC looks to ease rules for launching ETFs (Reuters)
- Easy come, easy go: U.S. Seizes $21 Million From Electric Car Maker Fisker (WSJ)
- Japan nationalists near disputed isles (Reuters)
- OECD in fresh warning on Japan debt (FT)
- S&P says more than one-third chance of Japan downgrade, cites risks to Abenomics (Reuters)
If there was any debate about the global economic contraction, driven largely due to pundits confusing manipulated stock market levitation with this anachronistic thing called the "economy" and fundamentals for the fourth year in a row, all doubts were removed after this morning's manufacturing PMI data out of China, which as reported previously was a big disappointment (sending the Composite firmly into the red for the year down 2.57% to 2184.5) only to be followed by just as disappointing manufacturing and services PMI data out of Germany, which tumbled from 49 and 50.9 to 47.9 and 49.2, respectively, missing estimates of 49.and 51. The composite German PMI tumbled to a 6-month low of 48.8 as a result, meaning the European economic deterioration is just getting started, and at the worst possible time for Merkel several months ahead of her reelection campaign. The end result was a miss in the blended Eurozone Mfg PMI, which dropped from 46.8 to 46.5, even as the less relevant Services component eaked out a small gain from 46.4 to 46.6, on the back of a dead cat bounce in French economic indicators. Bottom line: a contraction in both European manufacturing and services for the 15th consecutive month. Some "recovery."
With 33% of the S&P 500 market cap having reported, earnings season has had mixed results thus far. Earnings are pacing 4.1% ahead of expectations - 2.8% excluding financials; company guidance was generally negative leading into earnings season, and thus companies are beating lowered estimates and "clearing low hurdles." Early revenue results have been weaker than bottom-line numbers with revenues missing already lowered expectations by 0.3%. However, As Morgan Stanley's Adam Parker notes, three things stand out: negative guidance persists with negative-to-positive guidance surging to a multi-year high of 4.7; Margin expansion expectations remain at multi-year highs; and the consensus EPS for the S&P 500 is being marked down slowly by 0.6% and 1.1% for 2013 and 2014 respectively. With Apple set to report, and its huge relative weighting in many of the indices still, these 'expectations' could shift dramatically.
- Turn to Religion Split Bomb Suspects' Home (WSJ)
- The propaganda is back for the 4th year in a row: Spring Swoon Sequel No Reason for Economic Growth Scare in U.S. (BBG)
- Bernanke Jackson Hole Absence Contrasts With Greenspan Adulation (BBG)
- Large economies promise to boost growth (FT)
- Tata Faces Crisis as $20 Billion Spent on Water (BBG)
- U.S. Eyes Pushback On China Hacking (WSJ)
- Fed's Bernanke sees no U.S. inflation risks: Nowotny (Reuters)
- Austerity on Trial With U.S. Versus Europe Amid New Evidence (BBG)
- Eurozone anti-austerity camp on the rise (FT)
- Spain Aims to Soften Budget Cuts (WSJ)
- Japan's Aso Calls Recovery 'Few Years' Away (WSJ)
- BOJ Said to Consider Price Forecast Upgrade (WSJ)
Why the Western Banking Cartel’s Gold and Silver Price Slam Will Backfire - And How You Can Protect Yourself from the BlowbackSubmitted by smartknowledgeu on 04/22/2013 04:27 -0500
Let's get down to the facts of the recent banker gold & silver paper price smash and the lies about the banker gold & silver paper price smash being propagated by the mass media and banking shills like Paul Krugman so everyone can understand why this smash will blow up in the face of the very bankers that executed it at some point down the road. Retail individuals AND global institutions all around the world are finally beginning to understand that physical ownership of gold and silver is how to counter banker fraud & intervention into the gold and silver markets and this realization is going to produce massive blowback.
Those who have been following the US debt to GDP ratio now that the US officially does not have a debt ceiling indefinitely, may have had the occasional panic attack seeing how this country's leverage ratio is rapidly approaching that of a Troika case study of a PIIG in complete failure. And at 107% debt/GDP no explanations are necessary. Luckily, the official gatekeepers of America's economic growth (with decimal point precision), the Bureau of Economic Analysis have a plan on how to make the US economy, which is now growing at an abysmal 1.5% annualized pace, or about 5 times slower than US debt growing at 7.5% annually, catch up: magically make up a number out of thin air, and add it to the total. And it literally is out of thin air: according to the FT the addition will constitute of a one-time addition of intangibles, amounting to 3% of total US GDP, or more than the size of Belgium at $500 billion, to the US economy.
There have been several recent developments that have flown in the face of both neo-liberalism and ordo-liberalism and thrown investors off balance. Discuss.