- Gross Told El-Erian ‘Hell No’ Seeking to Stop Departure (BBG)
- How Caterpillar got bulldozed in China (Reuters)
- Davos Bankers Struggle to Convince Elite That Markets Are Safer (BBG)
- Lucrative Role as Middleman Puts Amazon in Tough Spot (WSJ)
- Arctic Air Blankets Northern U.S. as Texas to Get Snow (BBG)
- Lenovo buys IBM's server business in China's biggest IT acquisition (Reuters)
- SEC judge bars "Big Four" China units for six months over audits (Reuters)
- U.S. Accuses Security Background Check Firm of Fraud (WSJ)
- RIP BOE forward guidance: Bank of England rate rise is 'still some way off' - Fisher (Reuters)
Dedicated readers of The Wall Street Journal have recently been offered many dire warnings about a clear and present danger that is stalking the global economy. They are not referring to a possible looming stock or real estate bubble. Nor are they talking about other usual suspects such as global warming, peak oil, the Arab Spring, sovereign defaults, the breakup of the euro, Miley Cyrus, a nuclear Iran, or Obamacare. Instead they are warning about the horror that could result from falling prices, otherwise known as deflation. Get the kids into the basement Mom... they just marked down Cheerios!
Some of us stopped believing in fairytales long ago and then there were those that never thought that Goldilocks ate anybody’s porridge. So, there are two types of believers.
Having been un-shunned and then re-shunned by the UN and US over the Syria peace conference, an Iranian news agency has confirmed that for the first time in history, Iran's navy has dispatched warships on a mission to the Atlantic Ocean. No specific military mission or targets were announced but previous statements had discussed the move to protect the country's cargo ships and oil tankers against pirate attacks. Iran's Rear Admiral had a message of peace and friendship for the rest of the world and said the nation only sought to display its defensive capabilities (just like China, then?).
The Syrian peace talks - much heralded by investors and politicians worldwide as a brave step towards a better future - are on the ropes this morning. Following the UN acquiescence to the US demand that they rescind Iran's invite to the so-called Geneva II conference,and yet another suicide bombing in Lebanon, this morning's incredible SNAFU is thanks to the Greeks:
- GREECE REFUSES TO REFUEL SYRIAN GENEVA TEAM AIRCRAFT: SYRIA TV
- SYRIAN AIRCRAFT DELAY CANCELS MEETING WITH UN’S BAN: STATE TV
The peace accord set to begin tomorrow will be delayed and are in further jeopardy as CNN reports further evidence of Syrian President al-Assad systematically killing and torturng around 11,000 people.
- Hilsenrath: Next Cut in Fed Bond Buys Looms - Reduction to $65 Billion Could Be Announced on Jan. 29 (WSJ)
- China Workforce Slide Robs Xi of Growth Engine (BBG)
- Obama pulls the race card: Obama Says Race May Blunt Poll Standing in Interview (BBG)
- Chinese firm's IPO deal switches banks as chairman's daughter moves from JPMorgan to UBS (SCMP)
- China and Russia may hold joint naval drill in the Mediterranean (RT)
- Iran invite to Syria talks withdrawn after boycott threat (Reuters)
- Seven Chinese IPOs Halt Trading After 44 Percent Share (BBG)
- U.S. military says readying plans for Olympic security assistance (Reuters)
- Thank you Bernanke: Investors Most Upbeat in 5 Years With Record 59% Bullish in Poll (BBG)
- From His Refuge in the Poconos, Reclusive Imam Fethullah Gulen Roils Turkey (WSJ)
This morning's apparent U-turn in US-Iran relations - when the US demanded the UN rescind Iran's invite to the Syrian peace conference having somewhat instigated their invitation in the first place - is a little confusing for some. However, as OilPrice's Joao Peixe points out, reports are emerging that Iran and Russia are in talks about a potential $1.5 billion oil-for-goods swap that is sure to upset the powers that be in Washington.
While momentum has been with the hopes that Iran has gone full-peace-tard and following Iran's foreign ministry stating earlier that it would attend the conference on Syria, known as Geneva II; senior US officials have stepped in...
- *IRAN NOT ELIGIBLE FOR SYRIA CONFERENCE, US OFFICALS SAY: AP
- *U.S. SAID TO WANT UN TO RESCIND IRAN INVIATION TO SYRIA TALK
- *IRAN FAILS TO MEET REQUIREMENTS FOR GENEVA II TALKS:US OFFICIAL
After practically inviting them, the US demands that the UN rescind the invitation to Iran to attend since it "falls well short" of what is required.
On this day in 1980, after more than doubling in the prior month, gold prices peaked amid "trading that reached delirious proportions" at a record $820. Between The Hunt Brothers precious metals miasma and rumors that the Soviet Union had invaded Iran, one trader at the time described gold's bull run as "like going to a strip show knowing the place is about to be raided." The exuberance described in the WSJ's headlines below echo so strongly forward into the current "buying opportunity" that any dip represents in the US equity market... and just as it is never different this time, the WSJ reported, "no one wants to leave until they're sure the party is over."
The major disconnect between the rising of Brent Oil prices with global production outpacing demand on a weekly, monthly and annual basis is just an interesting feat in and of itself.
- NSA phone data control may come to end (AP)
- China to rescue France: Peugeot Said to Weigh $1.4 Billion From Dongfeng, France (BBG)
- China to rescue Davos: Davos Teaches China to Ski as New Rich Lured to Slopes (BBG)
- Hollande’s Tryst and the End of Marriage (BBG)
- Iran has $100 billion abroad, can draw $4.2 billion (Reuters)
- Target Hackers Wrote Partly in Russian, Displayed High Skill, Report Finds (WSJ)
- Nintendo Sees Loss on Dismal Wii U Sales (WSJ)
- Goldman's low-cost Utah bet buoys its bottom-line (Reuters)
- Royal Dutch Shell Issues Profit Warnin: Oil Major Hit by Higher Exploration Costs and Lower Oil and Gas Volumes (WSJ)
- EU Weighs Ban on Proprietary Trading at Some Banks From 2018 (BBG) - so no holding of breaths?
- Sacramento Kings to Accept Bitcoin (WSJ)
The positive momentum in equities slowed in Asian trading with losses seen on the Nikkei (-0.4%), and HSCEI , the SCHOMP unchanged and EM indices such as the Nifty (-
0.1%). In Australia, a disappointing December employment report saw a 23k fall in jobs for the month against consensus expectations of rise of 10k. The 10yr Australian government bond has rallied 5bp and the front end is outperforming as a number of investors expect the RBA to continue its easing bias over 2014. AUDUSD has sold off -1.1% to a three year low of 0.881. The ASX200 closed up 1.2% however, boosted by mining-giant Rio Tinto (+2%) who reported better than anticipated Q4 production. Amid recent fears of a Chinese growth deceleration, Rio Tinto reported record levels of production of iron-ore, coal and bauxite. In FX, USDJPY is finding further support in Asia, adding 0.1% to yesterday’s 0.38% gain to trade not too far from the 105 level. Which is also why the S&P futures are trading modestly lower: without a major breakout in the Yen carry, there can't be a sustained ramp in the US stock market which is driven entirely by the value of the Yen, which in turn is a reflection of the expectations of future BOJ easing.
While some will not be surprised, Al Arabiya reports that Iran's FARS News Agency claimed in a recent report that:
"The United States' domestic and international policy has been driven by an 'alien/extraterrestrial intelligence agenda' since 1945."
The "incontrovertible proof" supporting the revelations was (apparently) found in a Federal Security Service (FSB) report, carried out by American computer specialist Edward Snowden - and is confirmed (somewhat amazingly) by former Canadian Defense Minister Paul Hellyer in the following interview.
Following yesterday's major market drubbing, in which the sliding market was propped up by the skin of Nomura's (and BOJ, and Fed's) teeth at 103.00 on the USDJPY, it was inevitable that with Japan returning from holiday there would be a dead cat bounce in the Yen carry pair, and sure enough there was, as the USDJPY rose all the way back up to 103.70, and nearly closed the Friday gap, before starting to let off some air. However, now that US traders are coming back online, Japan's attempts to keep markets in the green may falter, especially since it only has a couple of ES ticks to show for its efforts, as for the Nikkei which dropped 3% overnight, it has now lost all US "Taper" gains.
- Full onslaught 1: New Jersey Gov. Chris Christie's Aides Pressed Hard for Endorsements (WSJ)
- Full onslaught 2: Feds investigating Christie's use of Sandy relief funds (CNN)
- Iran nuclear deal to take effect on January 20 (Reuters), Iran to get first $550 million of blocked $4.2 billion on February 1 (Reuters)
- Sen. McCaskill didn’t want to be in same elevator with Hillary Clinton (Hill)
- The banks win again: Basel Regulators Ease Leverage-Ratio Rule for Banks (BBG)
- Ireland's Rebound Is European Blarney (NYT)
- Democrats prove barrier for Obama in quest for trade deals (FT)
- Federal Reserve Said to Probe Banks Over Forex Fixing (BBG)