Following yesterday's inexplicable ramp in stocks, which perhaps was driven by the collapse in oil (which sent energy companies higher because a 30x energy forward PE is cheap), and by the latest battery of disappointing economic data which made it less likely the Fed will proceed with a tightening move, overnight futures have given up a portion of the gains, and were trading down 0.3% at last check. And yet, if yesterday's weakness was driven by USD weakness, today's jump in the EURUSD above 1.06 (on absolutely disastrous German ZEW investor index print) is now somehow responsible for risk offness? And, adding confusion to insult, the 10 Y is down to 2.05% and in danger of re-entering a 1% handle. Sadly, nothing makes sense any more and today's conclave of central planners in the Marriner Eccles building ahead of tomorrow's 2pm FOMC "impatient" announcement isn't going to make it any better.
China overtakes Germany to become the world's third largest arms exporter just as Western military spending outside the US fails to keep pace with China and Russia.
The Best "Democracy" Money Can Buy: For Every Dollar Spent Influencing US Politics, Corporations Get $760 BackSubmitted by Tyler Durden on 03/16/2015 18:37 -0400
Between 2007 and 2012, 200 of America’s most politically active corporations spent a combined $5.8 Billion on federal lobbying and campaign contributions. What they gave pales compared to what those same corporations got: $4.4 Trillion in federal business and support. Here is the visual representation of this stunning finding: for every dollar spent on influencing politics, the nation’s most politically active corporations received $760 from the government.
In his fiercest rhetoric yet, Germany's angry Finance Minister Wolfgang Schaeuble unloaded at a CDU event today:
SCHAEUBLE SAYS DOESN'T KNOW WHAT TO DO WITH GREECE NOW, NEW GREEK GOVERNMENT HAS DESTROYED ALL THE TRUST THAT HAD BEEN REBUILT
He went on to explain that "no one I talk to sees how Greek approach can work," which perhaps explains why Greek 3Y bond yields spiked back above 20% for the first time since the election today.
It was a tough weekend (again) for Greece's embattled FinMin Yanis Varoufakis. After walking out on a CNBC interview when asked if he was a liability (after his photo shoot caused a storm in Greece), a video surfaced showing the outspoken minister giving the middle finger to Germany saying "solve the problem yourself." He has come out swinging this morning, as The Telegraph reports, Varoufakis exclaims, "That video was doctored. I've never given the finger, I've never given the middle finger ever." However, the user who uploaded it to YouTube denied it was a fake and, based on The Telegraph's poll, 67% believe Varoufakis did it. Furthemore, the German talk-show that aired the clip has confirmed "no evidence of manipulation or falsification," and, for the first time, a majority of Germans now want Greece out of the union.
This week's main event will be the FOMC announcement on Wednesday at 2:00 pm and the subsequent press conference, the conclusion of the March 2-day Fed meeting, in which it is widely expected that Yellen will announce the end of the Fed's "Patience" with an economy in which resurgent waiters and bartenders continue to skew the job market even if it means consistently declining wages for 80% of the US labor force. Here is a summary of what else to expect this week.
- Germans Tired of Greek Demands Want Country to Exit Euro (BBG)
- Weak euro powers European stocks to new highs (Reuters)
- Siemens Cheers Euro Slump as Emerson Eases Dollar’s Sting (BBG)
- A Police Gadget Tracks Phones? Shhh! It’s Secret (NYT)
- If Economists Were Right, You Would Have a Raise by Now (BBG)
- iWatch: who’s going to pay $17K for a device that will be obsolete in two years? (Barrons)
- Ferguson Suspect Said to Claim He Wasn’t Firing at Police (BBG)
- Why Bankers Are Leaving Finance for No-Salary Tech Jobs (BBG)
It started off as the perfect storm for futures: after Sunday night's latest plunge in WTI, which saw it drop to the lowest price since Lehman, the double whammy that has now forced Deutsche Bank to become the first major institution to forecast no growth for S&P500 EPS in 2015, namely the strong dollar, reared its ugly head and the EURUSD seemed dangerouly close to breaching the all important 1.04-1.05 support level we first noted last week. However, overnight parties tasked with preserving "financial stability" appear to have once again stepped in, and not only has the EURUSD rebounded off 1.05, but crude is now just barely down from the Friday close as all firepower is put to the same use, that sent the Shanghai Composite soaring by 2.3% overnight, and which sent the Dax over 12,000 for the first time ever.
The Austrian Black Swan Claims Its First Foreign Casualty: German Duesselhyp Collapses, To Be Bailed OutSubmitted by Tyler Durden on 03/16/2015 06:13 -0400
Moments ago we got confirmation that the next domino from the appearance of the Austrian black swan has tipped over, following a Reuters report that Germany's deposit protection fund will take over the property lender Duesseldorfer Hypothekenbank AG (DuesselHyp), which has "run into problems" due to its exposure to Austrian lender Hypo Alpe Adria's "bad bank" Heta.
I am not sure how long Mario Draghi can carry on this QE Charade, but it is quite obvious that there is nothing more to be gained from the program.
Varoufakis' "Strategy": "No Grexit, But Default Inside The Euro, And Stick The Middle Finger To Germany"Submitted by Tyler Durden on 03/15/2015 21:24 -0400
If the German media needed a photo-op which to put on their front pages and rile up public opinion against Greece even more, they just got it.
As Greeks solemnly remembered the horrific acts of 72 years ago (when the first of 19 trains transported nearly 50,000 local jews to Nazi death camps), the Greek President Pavlopoulos made statements today that he "remains adamant" that "Greece's demands for German war reparations and the occupation loan are active and can be claimed legally." German Finance Minister Wolfgang Schaeuble has once again ruled out the possibility of a retreat from what Berlin has already officially said on the matter - that the issue has been settled decades ago. But, today the Greek Defense Minister issued a statement confirming that archives that they possess from Nazi armed forces support the country's claims for reparations.
When even JPMorgan strongly implies that the ECB's QE is about to fail, one short week after it started, now may be a time to panic: "In all, we note the above analysis challenges the ability of the Eurosystem to meet its quantitative target without distorting market liquidity and price discovery."
Fed to lose patience. Many expected Norway and Switzerland to cut rates. Could they be disappointed?
This anti-capitalistic mentality has brought about today’s essentially bankrupt “middle of the road” welfare state system, in which governments and big business are in a tight embrace that utterly deadens economic progress. The EU’s latest “Four Year Plan” is yet another in a long list of examples of this prototypical continental tradition (incidentally, Europe’s moribund banking system is one of the end results of these economic policies as well). What is really required is a return to free market principles, not yet another “government plan”.