Frontrunning: February 12

  • The Man Who Killed Osama bin Laden... Is Screwed (Esquire)
  • G7 fires currency warning shot, Japan sanguine (Reuters)
  • North Korea Confirms It Conducted 3rd Nuclear Test (NYT)
  • Italian Police Arrest Finmeccanica CEO (WSJ)
  • Legacy, political calendar frame Obama's State of the Union address (Reuters)
  • China joins U.S., Japan, EU in condemning North Korea nuclear test (Reuters)
  • Wall Street Fading as Emerging-Market Banks Gain Share (BBG)
  • Berlin Conference 2.0: Drugmakers eye Africa's middle classes as next growth market (Reuters)
  • Barclays to Cut 3,700 Jobs After Full-Year Loss (BBG)
  • US Treasury comment triggers fall in yen (FT)
  • ECB Ready to Offset Banks’ Accelerated LTRO Payback (BBG)
  • Fed's Yellen Supports Stimulus to Spur Jobs (WSJ)
  • Libor Scrutiny Turns to Middlemen (WSJ)
  • Samsung Girds for Life After Apple in Disruption Devotion (BBG)

Frontrunning: February 5

  • Obama to meet with Goldman's Blankfein, other CEOs Tuesday (Reuters)
  • Chinese Firms Shrug at Rising Debt (WSJ)
  • McGraw-Hill, S&P Sued by U.S. Over Mortgage-Bond Ratings (BBG)... but not Moody's or Fitch
  • Dime a Dozen: Dollar Stores Pinched by Rapid Expansion (WSJ)
  • Dell Board Said to Vote Monday Night on $24 Billion LBO (BBG)
  • BOJ Governor Shirakawa to step down on March 19 (Reuters)
  • Alberta may offer more to smooth way for Keystone (Reuters)
  • Facebook Is Said to Create Mobile Location-Tracking App (BBG)
  • Barclays takes another $1.6 billion hit for mis-selling (Reuters)
  • Apple App Advantage Eroded as Google Narrows IPhone Lead (BBG)
  • Texas School-Finance System Unconstitutional, Judge Rules (BBG)
  • World Risks ‘Perfect Storm’ on Capital Flows, Carstens Says (BBG)

The Stock Market Is Back To December 2007 Levels; Here Is What Isn't

This past week, America's premier financial comedy channel, which lately specializes in such "epic financial journalism" as the real billionaire hedge husbands of New York (because sagging Nielsen ratings are always a direct corollary of central market planning) wasted no time in advising its few remaining viewers that the market, which soared past 1,500, has now regained levels last seen before the start of the recession in December 2007. Sadly, this is the only thing that has been regained. Below we present some things that have not been regained since the last time the S&P 500 was at 1500.

Piers Morgan Vs Alex Jones - The "Gun Fight" At The CNN Corral

With the Notre Dame vs Alabama game a complete one-sided demolition, the night was in desperate need of some entertainment... until Piers Morgan and Alex Jones stepped in. While the headline topic was "guns", it was 13 minutes of unbridled spitting, stuttering, and screaming, which achieves nothing in converting anyone on the fence on either side of the "gun control" argument, but certainly helps with CNN's sagging Nielsen ratings, which after having become disinformation central following the Obamacare "rejection" and the NYSE floor "flooding", is now slowly but surely converting itself into the Jerry Springer show for Gen Y. If nothing else, this is far more fun than watching the all too controlled Notre Dame implosion.

Frontrunning: December 19

  • Republicans put squeeze on Obama in "fiscal cliff" talks (Reuters)
  • Inquiry harshly criticizes State Department over Benghazi attack (Reuters)
  • Banks See Biggest Returns Since ’03 as Employees Suffer (BBG)
  • Italy president urges election be held on time (Reuters)
  • Bank of England Says Sterling Hurting Economy (WSJ) - there's an app for that, it's called a Goldman BOE chairman
  • China slowdown hits Indonesian farmers (FT)
  • China dispute hits Japanese exports (FT)
  • Market to get even more monopolized by the HFT king: Getco wins Knight with $2 bln sweetened offer (Reuters)
  • MF Global Cases Focus on 'Letters' (WSJ)
  • UBS fined $1.5 billion in growing Libor scandal (Reuters)
  • Spotlight swings to interdealer brokers (FT)
  • China Widens Access to Capital Markets (WSJ)
  • With Instagram, Facebook Spars With Twitter (WSJ)

Frontrunning: November 7

  • Obama Wins Re-election With Romney Defeated in Key States (Bloomberg, Reuters)
  • Romney's last, greatest 'turnaround' falls short (Reuters)
  • Control of Congress set to remain split (FT)
  • Republicans to Hold Most Governor Offices Since 2000 (Bloomberg)
  • Economic Unease Looms After Win (WSJ)
  • Storm-lashed New York, New Jersey scramble as weather threatens (Reuters)
  • Democrats Assured of Keeping U.S. Senate Majority (Bloomberg)
  • Greece to vote on austerity, protests intensify (Reuters)
  • France offers businesses €20bn tax break (FT) ... Wait, what?
  • Putin Fires Defense Chief in Rare Move (WSJ)
  • China premier Wen calls for deeper cooperation on disasters (China Daily)
  • China wrestles over democratic reform (FT)
  • Top-Performing Won Threatens to Hurt Korea Export Rebound (Bloomberg)

Frontrunning: October 29

  • Markets Go Dark Ahead of Storm (WSJ, RTRS, BBG, FT)
  • MF Global Problems Started Years Ago (WSJ)
  • Major Greek daily reprints Swiss accounts list, editor who published list to go on trial for violating data privacy laws (RTRS)
  • Coming soon to a USA near you: Hong Kong government imposes a property tax on overseas buyers (Bloomberg)
  • The pain in Spain is endless: Spain’s Pain Seen Intensifying as Slump Deepens Plight (BBG)
  • Las Vegas Sands Discusses Possible Settlement With Justice Department (WSJ)
  • Why Does the SEC Protect Banks’ Dirty Secrets? (BBG)
  • Honda slashes forecast on China territorial spat (AFP)
  • UBS shares jump on expected radical overhaul (Reuters) if UBS cuts 150% of workforce, shares will hit +?
  • CEOs Seeking Global Range Tilts Market to 8,000-Mile Jets (Bloomberg)

Why Asset-Allocators Are Anxious And Balanced-Funds Are Baloney

Modern Portfolio Theory (MPT) is broken. That is how we interpret Niels Jensen's (Absolute Return Partners) latest missive as he draws a concerning line between the number of managers who rely sheep-like on the diversifying 'artifacts' of MPT in a new normal world of undiversifiable systemic risks. The shifts in intra- and inter-asset class correlations (both long- and short-term) have been incredible both in terms of direction change and magnitude - for example (as Nielsen notes) - In the 2000-03 bear market commodities were an excellent diversifier against equity market risk with the two asset classes being virtually uncorrelated (+0.05). Nowadays, the two are highly correlated (+0.69). This shift to a risk-on / risk-off world, fed by central bankers, makes the empirical Sharpe ratios of olde and track records of your favorite balanced-fund manager entirely useless for any investor seeking protection from not just volatility risk but ultimate risk - the permanent loss of capital.

Frontrunning: August 1

  • Bundesbank’s Weidmann Says ECB Shouldn’t Overstep Mandate (Bloomberg)
  • Hollande and Monti Vow to Protect Euro (FT) - be begging Germany to death
  • Monti Calls French, Finns to Action as Italy Yields Rises (Bloomberg)
  • not working though: Banking license for bailout fund is wrong: German Economy Minister (Reuters)
  • Switzerland is ‘New China’ in Currencies (FT)
  • Regulator Says no to Obama Mortgage Write-Down Plan (Reuters) - tough: there will be socialism
  • Gauging the Triggers to Fed Action (WSJ)
  • When domestic monetization is not enough: Azumi Spurns Calls for Bank of Japan to Buy Foreign Bonds to Curb Yen (NYT)
  • Indonesia’s July Inflation Accelerates on Higher Food Prices (Bloomberg) - remember: the Deep Fried black swan
  • China Manufacturing Teeters Close to Contraction (Bloomberg)
  • Spain Introduces Regional Debt Ceilings to Achieve Budget Goals (Bloomberg) - yes, they said "budget goals"

With Total Viewers Sliding To 7 Year Lows, Is CNBC Fading Into Obscurity?

In the past 24 hours, some readers have been surprised to learn that as Jeff Reeves of InvestorPlace states, total Q2 CNBC viewership as calculated by Nielsen, has tumbled to to the lowest it has been since Q3 2005. This merely confirms that the trendline in our periodic observations of CNBC traffic was more than merely seasonal or VIX-related: it has been one long secular decline, peaking in the quarter of Lehman's demise and down hill ever since.

Is Central Planning About To Cost The Jobs Of Your Favorite CNBC Anchors?

Something funny happened when last August CNBC hired access journalist extraordinaire Andrew Sorkin to spiff up its 6-9 am block also known as Squawk Box: nothing. At least, nothing from a secular viewership basis, because while the block saw a brief pick up in viewership driven by the concurrent (first of many) US debt ceiling crisis and rating downgrade, it has been a downhill slide ever since. In fact, as the chart below shows, the Nielsen rating for the show's core 25-54 demo just slid to multi-year lows. And as NY Daily News, the seemingly ceaseless slide has forced CNBC to start panicking: "CNBC insiders tell us executives at the cable business channel are “freaking out” because viewership levels are down essentially across-the-board, particularly with its marquee shows, “Squawk Box” and “Closing Bell." “Their biggest attractions have become their biggest losers,” says one TV industry insider familiar with the cable channel’s numbers. According to Nielsen ratings obtained by Gatecrasher, from April 2011 to April 2012, “Squawk Box” is down 16 percent in total viewers and 29 percent in the important 25-54 demographic bracket that advertisers buy." Yet is it really fair to blame the slide of the morning block's show on just one man?

Presenting The Source Of The "US-Europe Decoupling" Confusion

Over the past several months, starting with the great US stock market surge back in October 2011 which was not paralleled by virtually any other index in the world (and especially not Spain which recently breached its March 2009 low), there has been a great deal of speculation that just because the US stock market was doing "better", that the US economy has by implication "decoupled" from Europe. Well, as yesterday's GDP number showed in Q1 the economy ended up rising at a pace that was quite disappointing, but more importantly, which even Goldman admits is due for a substantial slow down in the coming months. And ironically, in the past 6 months it was not the Fed, but the ECB, that injected over $1.3 trillion in the banking system. One would think that this epic "flow" of liquidity from the central bank would result in a surge in the only metric that matters to 'Austrians', namely the expansion in money (or in this case the widest metric officially tracked on an apples to apples basis - M2). One would be very wrong. Because as the chart below shows, while US M2 has soared from the 2009 troughs, money "movement" in Europe has barely budged at all.

Frontrunning: March 19

  • There is no Spanish siesta for the eurozone (FT)
  • Greece over halfway to recovery, says PM (FT) - inspired comedy...
  • Sarkozy Trims Gap With Rival, Polls Show (WSJ) - Diebold speaks again
  • IMF’s Zhu Sees ‘Soft-Landing’ Even as Property Slides: Economy (Bloomberg)
  • Obama Uses Lincoln to Needle Republicans Battling in Illinois (Bloomberg)
  • Three shot dead outside Jewish school in France (Reuters)
  • Osborne Seeks to End 50% Tax Spat With Pledge to Aid U.K. Poor (Bloomberg)
  • Monti to Meet Labor Unions Amid Warning of Continued Euro Crisis (Bloomberg)

Daily US Opening News And Market Re-Cap: March 7

Markets appear to be tentatively recovering some of yesterday’s heavy losses, recording modest gains so far this morning. Comments made overnight by the German finance minister as well as senior officials from the Greek finance ministry may have mercifully given market participants some hope as they are confident the Greek PSI deal will be completed by the deadline tomorrow evening. The DAX index has underperformed the other European equity indices in recent trade following the release of some disappointing factory orders data for January, with markets expecting an expansion of 0.6%, however the reading came in at -2.7%, moving DAX stock futures into negative territory. WTI crude and Brent have also retraced some of their losses made earlier in the week following a drawdown in US gasoline inventories reported last night as well as a generally weak USD index in the FX markets today. Markets are awaiting US ADP employment change later in the session, as well as the weekly DOE oil inventories casting further light on the US energy stocks.