Wells Fargo

Key Events And Issues In The Coming Week

After last week's economic fireworks, this one will be far more quiet with earnings dominating investors' attention: US financials reporting this week include JPM and Wells Fargo tomorrow, BofA on Wednesday, GS and Citi on Thursday, BoNY and MS on Friday. Industrial bellwethers Intel (Thurs) and General Electric (Fri) are also on this week’s earnings docket. On the macro front, this coming week we have two MPC meetings - both in LatAm. For Brazil consensus expects a 25bps hike in the policy rate. For Chile consensus forecasts monetary policy to remain on hold. Among the data releases, one should point out inflation numbers from the US (CPI and PPI), Eurozone, the UK and India. We also have three important US producer and consumer surveys - Empire Manufacturing, Philadelphia Fed (consensus +8.5), and U. of Michigan (consensus 83.5). Among external trade and capital flow stats, we would emphasize US TIC data, as well as current account balances from Japan and Turkey. Finally, the accumulation of FX reserves in China is interesting to track as it provides an indication of CNY appreciation pressure.

Post Payrolls Market Recap

With no major macro news on today's docket, it is a day of continuing reflection of Friday's abysmal jobs report, which for now has hammered the USDJPY carry first and foremost, a pair which is now down 170 pips from the 105 level seen on Friday, which in turn is putting pressure on global equities. As DB summarizes, everyone "knows" that Friday's US December employment report had a sizeable weather impact but no-one can quite grasp how much or why it didn't show up in other reports. Given that parts of the US were colder than Mars last week one would have to think a few people might have struggled to get to work this month too. So we could be in for another difficult to decipher report at the start of February. Will the Fed look through the distortions? It’s fair to say that equities just about saw the report as good news (S&P 500 +0.23%) probably due to it increasing the possibility in a pause in tapering at the end of the month. However if the equity market was content the bond market was ecstatic with 10 year USTs rallying 11bps. The price action suggests the market was looking for a pretty strong print.

Frontrunning: January 10

  • From the guy who said the market is not overvalued: Q&A with Fed’s Williams on Upbeat 2014 Outlook and What Keeps Him up at Night (Hilsenrath)
  • Obama Readies Revamp of NSA (WSJ)
  • Indian envoy leaves U.S. in deal to calm diplomatic row (Reuters)
  • China overtakes US as largest goods trader (FT)
  • Wall Street Predicts $50 Billion Bill to Settle U.S. Mortgage Suits (NYT)
  • Low-End Retailers Had a Rough Holiday: Family Dollar, Sears Struggle as Lower-Income Customers Remain Under Pressure (WSJ)
  • ECB charts familiar course as Japan, US and UK begin to diverge (FT)
  • Housing experts warn of hiccups as new U.S. mortgage rules go live (Reuters)
  • It's a HFT eat HFT world: Infinium ex-employees sue over $4.1m loss (FT)
  • Slowing China crude imports to challenge exporters (FT)

For First Time Ever, Most Members Of Congress Are Millionaires

A month ago, we showed a chart of median household income in the US versus that just in the District of Columbia. The punchline wrote itself: "what's bad for America is good for Washington, D.C." Today we got official verification that Bernanke's wealth transfer in addition to benefitting the richest 1%, primarily those dealing with financial assets, also led to a material increase in the wealth of one particular subgroup of the US population: its politicians.  According to the OpenSecrets blog which conveniently tracks the wealth of America's proud recipients of lobbying dollars, aka Congress, for the first time ever the majority of America's lawmakers are worth more than $1 million.

Frontrunning: January 9

  • Carney Guidance Threshold Strained as BOE Holds Policy (BBG)
  • Does one laugh or cry: China Tells Banks to Improve Disclosures in Shadow-Lending Fight (BBG)
  • Big Business Doubles Down on GOP Civil War With Tea Party (BBG)
  • CIA sued for records on possible role in Nelson Mandela arrest (RT)
  • Bridge Scandal Destroys Christie's 'Nice Jerk' Image (BBG)
  • Borrowers Hit Social-Media Hurdles (WSJ)
  • U.S. Leverage in Iraq Tested As Fears of Civil War Mount (WSJ)
  • Austerity drive cuts into Chinese inflation (FT)
  • Dish Pulling Its Bid for LightSquared (WSJ)
  • BlackRock agrees to end analyst surveys (Reuters)
  • Germany defends economic policies after US criticism (FT)
  • Bank of Korea Holds Rate Even as Yen Clouds Export Outlook (BBG)

Frontrunning: January 8

  • Here comes JPM's next multibillion legal reserve: Federal Probe Targets Banks Over Bonds (WSJ)
  • Mulally Bows Out of Microsoft CEO Race, Staying at Ford (BBG)
  • United States sending more troops and tanks to South Korea (Reuters)
  • Eurozone unemployment sticks at record high (FT)
  • China-Japan 'Voldemort' attacks up ante in propaganda war (Reuters)
  • Alternative Lenders Peddle Pricey Commercial Loans (WSJ)
  • John McAfee: glad Intel dropping name from security software (Reuters)
  • Jobless Benefits Bill Stays Alive Amid Talks on Offsets (BBG)
  • Chicago Colder Than South Pole as Frigid Air Clamps Down (BBG)
  • Former Miss Venezuela shot dead in attempted robbery (Reuters)

Frontrunning: January 7

  • Yellen’s Record-Low Senate Support Reflects Fed’s Politicization (BBG)
  • Euro-Zone Inflation Rate Falls in December, even further below ECB's target (WSJ)
  • Zambia politician charged for calling president a potato (AFP)
  • Blame gold: India Savings Deposit Scam Collapse Leaves Thousands Penniless (BBG)
  • Hedge Funds Raise Gold Wagers as Yamada Sees $1,000 (BBG)
  • George Osborne limits cuts options with pensions promise (FT)
  • Vietnam Raises Foreign Bank Ownership Caps to Aid System (BBG)
  • But they said buy a year ago... Goldman to JPMorgan Say Sell Emerging Markets After Slide (BBG)
  • SAC Trial Seen by Probe Convict as Latest Abusive Tactic (BBG)

Forbes Reveals Its "Top 30 Under 30" In Finance

With Trader Monthly magazine having, ironically, gone out business long ago, all those traders whose egos demanded that their insider trading connections put them at least in one of the iconic "Top X under X" league tables, pardon, rankings, had to bide their time in expectation of one day when their prowess to frontrun others or move markets with repeated calls to 555-7617 (with or without references to Anacott Steel) would be appreciated by such sterling Wall Street "experts" as Anthony Scaramucci. Well, for this year's crop of some 30 traders under 30, the day has arrived. And while Forbes may not be Trader Monthly, the amusement, the hubris and the behind the scenes dealing to appear in such a list, sure are still the same...

Frontrunning: January 6

  •  'Life-threatening' cold bites Midwest, heads east (Reuters)
  • Gold Analysts Get Most Bullish in a Year After Rout (BBG)
  • Asian Stocks Fall Most in Three Weeks on China Services (BBG)
  • Angela Merkel in skiing accident, cancels visits (Reuters)
  • High-Speed Traders Form Trade Group to Press Case (WSJ)
  • Toyota and Honda post record China sales (FT)
  • China Shadow Banking Risks Exposed by Local Debt Audit (BBG)
  • J.P. Morgan to Pay Over $2 Billion to U.S. in Penalties in Madoff Case (WSJ)
  • Corruption trial of Trenton, N.J., mayor starts Monday (Reuters)
  • Car Makers at Consumer Electronics Show Tout Ways to Plug Autos Into the Web (WSJ)

Frontrunning: January 2

  • Threatening snowstorm may be early test for N.Y. Mayor de Blasio (Reuters), U.S. Northeast Threatened With Blizzard, Travel Delays (BBG)
  • Scarred U.S. consumers a hard sell for traditional retail (Reuters)
  • Edward Snowden, Whistle-Blower (NYT)
  • A Few Brave Investors Scored Huge, Market-Beating Wins (WSJ)
  • Fiat gets full control of Chrysler for $4.35 billion (Reuters)
  • Billions Vanish in Kazakh Banking Scandal (WSJ)
  • SAC’s Cohen Focus of Trial as Martoma Rebuffs U.S. (BBG)
  • World's first state-licensed marijuana retailers open doors in Colorado (Reuters)
  • Hyundai, Kia face fading growth as currency tides buoy Japan rivals (Reuters)
  • Bond investors braced for new year shock (FT)
  • Putin vows total destruction of 'terrorists' after bombings (AFP)

Frontrunning: December 31

  • Firms to Face new Rules Over Pay, Taxes (WSJ)
  • US to test commercial drones at six sites (CNN)
  • China’s Local Debt Swells to 17.9 Trillion Yuan in Audit (BBG) - which is about 2 trillion less than where it actually is (Reuters)
  • Fears after key China debt level soars 70% (FT) and in reality the debt level is saoring far more
  • Pot Shops in Denver Open Door to $578 Million in Sales (BBG)
  • China Says It Will Shun Abe After Shrine Visit (WSJ)
  • De Blasio Taking Office Citing Wealth Gap as Crime Falls (BBG)
  • China Approves $353 Million of Share Sales as IPOs Resume (BBG)
  • Obama Seeks Way to Right His Ship (WSJ)
  • Netflix Tests Subscription Fees Based on Number of Account Users (BBG)
  • Three big macro questions for 2014  (FT)

"You're Simply Continuing To Feed The Wolves Of Wall Street" - One Victim's Open Letter To The Kings Of Hollywood

"So here's the deal. You people are dangerous. Your film is a reckless attempt at continuing to pretend that these sorts of schemes are entertaining, even as the country is reeling from yet another round of Wall Street scandals. We want to get lost in what? These phony financiers' fun sexcapades and coke binges? Come on, we know the truth. This kind of behavior brought America to its knees. And yet you're glorifying it -- you who call yourselves liberals. You were honored for career excellence and for your cultural influence by The Kennedy Center, Marty. You drive a Honda hybrid, Leo. Did you think about the cultural message you'd be sending when you decided to make this film? You have successfully aligned yourself with an accomplished criminal, a guy who still hasn't made full restitution to his victims, exacerbating our national obsession with wealth and status and glorifying greed and psychopathic behavior. And don't even get me started on the incomprehensible way in which your film degrades women, the misogynistic, ass-backwards message you endorse to younger generations of men. But hey, listen boys, I get it. I was conned too. By. My. Own. Dad! I drove a white Range Rover in high school, snorted half of Colombia, and got any guy I ever wanted because my father would take them flying in his King Air."

Frontrunning: December 27

  • Millions of Tons of Metals Stashed in Shadow Warehouses (WSJ)
  • Moguls Rent South Dakota Addresses to Dodge Taxes Forever  (BBG)
  • Fastest Japan Inflation Since ’08 Stokes Wage Pressure (BBG)
  • Thai crisis deepens as army chief hints at intervention (Reuters)
  • Anti-Assad Lebanese ex-minister killed in Beirut bomb (Reuters)
  • Foreigners Unload Turkey Bonds as Probe Tarnishes Erdogan Growth  (BBG)
  • Small ISS Change Shakes Up Boards: Tweak to Influential Shareholder Adviser's Recommendations Has Directors Rethinking Proposals (WSJ)
  • Japan’s Nishimura Calls for Quick Corporate Tax Cut to Under 30% (BBG)
  • Japan's Abe bets U.S. alliance, ratings can weather shrine visit (Reuters)

Frontrunning: December 24

  • Edward Snowden, after months of NSA revelations, says his mission’s accomplished (WaPo)
  • Japan’s Nikkei 225 Extends Six-Year High on U.S. Data  (BBG)
  • Retailers blend stores, e-commerce to snag holiday stragglers (Reuters)
  • Storm wreaks havoc in Britain, France ahead of Christmas (Reuters)
  • Big Rally to Pump Up Wall Street Bonuses (WSJ)
  • Obamacare Sign-Up Extended as Record 1 Million Use Site (BBG)
  • Merkel Hits Wall With Europe Fix (WSJ)
  • Boaz Weinstein Loses for Second Year as European Bet Sours (BBG)
  • UniCredit has reached an agreement to sell almost €1 billion in nonperforming loans to Cerberus (WSJ)
  • U.S. mortgage applications fall as refinance hits five-year low (Reuters)
  • Cohen Said to Have Warned Friend About Possible Federal Investigation (NYT)
  • ‘Duck Dynasty’ Dad Risks $500 Million With Gay-Sin Remark (BBG)