Germany

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Germany Openly Hostile To Putting Frenchman In Charge Of European Financial Affairs





Current finance minister Sapin, perhaps unsurprisingly, has admitted that France will miss EU deficit targets and needs more time to rein in public finances - proclaiming, as Reuters reports, that it may take until 2017 to bring it in line. Germany's response "nein, nein, nein" with Merkel demanding EU nations stick to commitments (rejecting any plans to 'bend rules') and Schaeuble blasting that Germany is "certain France is aware of its responsibilities." But the real stunner is that as France shows its utter ineptitude in managing an economy, EU President Juncker has placed former French finance minister Moscovici in charge of Europe's taxes and finances. German lawmakers exclaimed this is "not a wise personnel decision." The core splinters...

 
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Alan Greenspan's Nine Reasons "Why The Economy Stinks"





Yesterday, former Fed Chairman Alan Greenspan was the keynote speaker at KPMG’s 2014 Insurance Industry Conference Tuesday, where he answered questions such as 1) where the economy is going, 2) why, and 3) when (if ever) is it likely to improve. The answers, as reported by Property Casualty 360, are: 1) nowhere fast, 2) because nobody is willing to invest, and 3) eventually, but nobody can tell when. He listed 9 specific reasons why the "economy stinks", although surprisingly, nowhere did he mention the fact that the current and future economic disaster is all a direct result of his ruinous reign at helm of the Fed where as a result of his "great moderation" and the Fed's catastrophic monetary policies conceived mostly under Greenspan himself, the economy is now perpetually stuck in a boom-bust cycle, and where every time a bubble bursts another has to replace it or else the entire western way of life will be gone in a heartbeat.

 
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Meet The New Leadership Of Europe: Presenting The "Juncker Commission"





As reported ealier this morning, here, courtesy of Bloomberg, are the nominees for the next European Commission under the presidency of Jean-Claude "If Serioues Then lie" Juncker, with one from each of the European Union’s 28 countries. Job assignments were announced today by the incoming president, Jean-Claude Juncker of Luxembourg. What do these appointments mean for the European Union? The attached flash analysis from Open Europe should answer most initial questions.

 
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Markets Digest Wristwatch, NIRP Monetization, Catalan Independence News; Push Yields, USDJPY Even Higher





Overnight the most notable move has been the ongoing weakness in rates, with USTs reversing earlier Tokyo gains after BoJ Deputy Governor Iwata, in addition to commenting on a lot of things that didn't make much sense,  said he didn’t see any difficulties in money market operations even if BoJ bought bought government debt with negative yields, as InTouch Capital Markets notes. As a reminder, yesterday we noted that in a historic first the "Bank Of Japan Monetizes Debt At Negative Rates." As Bloomberg notes, this may be interpreted that BoJ may target negative yields to penalize savers, which "all boosts the appeal of yen-funded carry trades." In other words, first Europe goes NIRP, now it's Japan's turn! So while this certainly lit the fire under the USDJPY some more, which overnight broke about 106.50 and hit as high as 106.75 on Iwata's comments, it does not explain why the 10Y is currently trading 2.52% - after all the fungible BOJ money will eventually make its way into US bonds and merely add to what JPM has calculated is a total $5 trillion in excess liquidity sloshing in the global market.

 
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MH17 Was Struck By Multiple "High-Energy Objects From Outside The Aircraft", Crash Report Reveals





Over a month after the crash of flight MH 17 over east Ukraine, and with the confiscated Air Traffic Control voice recording still kept confidential by a western-led task force for reasons unknown, overnight the Dutch Safety Board released its preliminary report on the causes of the crash. As the AP reported, it agency "stopped short of saying the Boeing 777 was shot down by a missile, but its findings appear to point to that conclusion. It also did not say who might have been responsible." Actually, what the Dutch report did say is the following: MH17 was struck by multiple "high-energy objects from outside the aircraft," causing it to break up over eastern Ukraine, a preliminary report into the deadly aviation disaster concluded Tuesday. And while the punditry eagerly tries to once again cast all the blame on a pro-Russian rebel fired missile, we are stunned that nobody has even mentioned the possibility of a bullet volley by a warplane taking down the Malaysian Boeing.

 
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Frontrunning: September 9





  • Showtime for Apple: Big phones, smart watches and high expectations (Reuters)
  • Bank of England Gov. Mark Carney Signals Spring Rate Rise (WSJ)
  • Quebec Shows Scots Question Returns Even If Answer Is No (BBG)
  • Hush money with a 9 year vesting period: Ex-SAC Fund Manager Martoma Sentenced to Nine Years in Prison (BBG)
  • Dreams on hold, Brazil's 'new middle class' turns on Rousseff (Reuters)
  • Fed to Hit Biggest U.S. Banks With Tougher Capital Surcharge (WSJ)
  • Egypt court sentences Brotherhood leader, cleric to 20 years in jail (Reuters)
 
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US Equity Futures Levitate As Yen Fireworks Continue; All Attention Still On Scotland





While overnight US equity futures have done nothing notable, what everyone's attention has been fixed on, in addition to the GBP and the read-through to all things UK-ish ahead of the Scotland independence referendum, is the sudden flare up in USDJPY trading and volatility, which exploded by some 100 pips in the past 24 hours hitting fresh post-2008 highs, on what appears to be a major capital reallocation move (it surely is not driven by any news) and/or forced squeeze. What is more perplexing is the change in correlations signals, because while until recently the USDJPY was synonymous with the E-Mini, and thus the S&P, as of late the USDJPY pair has moved tick for tick with the 10Year yield: almost as if the NY Fed's favorite HFT trading shop was instructed to change its vast array of signal inputs away from the S&P and to force a gentle levitation in the 10Y.

 
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Merkel Ally Slams Draghi's Plan To "Buy Junk Paper"





While Italian and Spanish political (and business) leaders are lauding Mario Draghi's plan to buy more assets and print more money, it appears not everyone is so excited. As Reuters reports, Christian Social Union chairman and Bavaria state premier Horst Seehofer (who is well known as an ally of Angela Merkel), blasted the ECB's plan: "It's only going to frighten a lot of people when ECB chief Mario Draghi opens up the central bank's money tap and at the same time buys junk paper," somewhat breaking the political taboo of criticizing the potential independence of the central bank.

 
Tyler Durden's picture

Bob Janjuah's Most Watched Market Catalyst: VIX Under 10





As I have said for at least a year now, until and unless we see a weekly close (ideally consecutive weekly closes) in the VIX index below 10, then I judge risk-on has more to go. We got close in June/early July, but we did not get there. I would expect that, if I am right about the next quarter or two, then VIX should hit this target during this timeframe. At that point, positioning for the big turn and reversal of large chunks of the nominal wealth/asset price gains since early 2009 would take over as my key investment strategy.

 
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Key Events In The Coming Week: iPhone 6 Release And Other Less Relevant Happenings





One of the more amusing comments overnight came from Bank of America, which now predicts that China's export growth will be boosted by iPhone 6 by 1% per month through year-end. Whether or not this is accurate is irrelevant, but we are happy that unlike before, BofA has finally figured out that iPhone sales are positive for Chinese GDP, not US, which was the case with the release of the iPhone 4 and 5, when clueless strategists all came out boosting their US (!) GDP forecasts on the iPhone release. We note this because the long-awaited release of Apple's new iPhone will certainly grab some attention tomorrow. According to a BofA poll last week and of the 124 respondents surveyed, 66% of those have noted that they are going to buy the new iPhone and of those planning to buy 75% of those will be replacing their iPhone 5/5s.

 
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All Overnight Action Is In FX As Market Reacts To Latest News Out Of The UK





After being solidly ignored for weeks, suddenly the Scottish independence referendum is all anyone can talk about, manifesting itself in a plunge in the GBPUSD which ha slide over 100 pips in the past 24 hours, adding to the slide over the past week, and is now just above 1.61, the lowest since November 2013. In fact, the collapse of the unionist momentum has managed to push back overnight news from Ukraine, major Russian sanction escalations, Japan GDP as well as global trade data on the back burner. Speaking of global trade, with both China and Germany reporting a record trade surplus overnight, with the US trade deficit declining recently, and with not a single country in the past several month reporting of an increase in imports, one wonders just which planet in the solar system (or beyond) the world, which once again finds itself in a magical global trade surplus position, is exporting to?

 
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British Pound Collapses To 10-Month Lows





We warned here that the "Yes" vote for Scottish Independence was a "high risk" event, and as we noted earlier, with polls indicating its a high probability and 'English' leadership in full panic mode, it is perhaps not surprising that the British Pound opened down 160pips at 10-month lows... (a 500 pip drop in 3 days)... But, didn't the clever people on TV tell us 'it was priced in'?

 
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Ken Rogoff Warns Of The Exaggerated Death Of Inflation





Today, high inflation seems so remote that many analysts treat it as little more than a theoretical curiosity. They are wrong to do so. No matter how much central banks may wish to present the level of inflation as a mere technocratic decision, it is ultimately a social choice. And some of the very pressures that helped to contain inflation for the past two decades have been retreating. Modern central banking has worked wonders to bring down inflation. Ultimately, however, a central bank's anti-inflation policies can work only within the context of a macroeconomic and political framework that is consistent with price stability. Inflation may be dormant, but it is certainly not dead.

 
Marc To Market's picture

The Week Ahead: Calm before the Storm





Straight-forward discussion about the investment climate and the week ahead.  Light on hyperbole, heavy on analysis.  

 
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Ukraine, Separatists Agree On Cease-Fire; EU May Suspend Sanctions





UPDATE: So far no good...*HEAVY ARTILLERY BLASTS HEARD IN UKRAINE'S MARIUPOL: RIA

While we had grown weary of trashed truces and snapped cease-fires in Israel, it appears, according to Interfax, that Ukraine and the pro-Russian separatists in eastern Ukraine (having gained notably over the army in recent days) have agreed a cease-fire:

*UKRAINE, SEPARATISTS AGREE ON CEASE-FIRE FROM 6PM TODAY, PRELIM. PROTOCOL TO CEASE-FIRE SIGNED IN MINSK: BBC

Great news, especially for Merkel (and Hollande) who has already come out and noted that the cease-fire means EU could suspend sanctions (saving face and avoiding some further escalation). The question is - how much of Putin's 7-point-peace-plan will Ukraine acquiesce to? If any?

 
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