Everything that is broken with the US judicial system, explained with the help of two judges... and why nothing in this broken, corrupt system can ever be fixed until the grand reset finally sweeps every last remnant of the existing farce.
- Falling Prices Spread Pain Far Across The Oil Patch (WSJ)
- ISIS Group Claims Responsibility for Attacks That Killed 27 in Egypt (NBC)
- Russia Unexpectedly Cuts Key Rate as Economy Eclipses Ruble (BBG)
- Greece’s Feisty Finance Minister Tries a More Moderate Message (NYT)
- U.S. homeownership hits 20-year low, but new households growing (Reuters)
- Indian Banks’ Shares Plunge as Bad-Loan Provisions Surge (BBG)
- Underground Terror Network Said to Benefit Would-Be Jihadists in Europe (WSJ)
- Russia warns West support for Kiev could lead to 'catastrophe' (Reuters)
- Fed seen remaining patient with rate guidance amid global turmoil (Reuters)
- National Weather Service apologizes for blizzard forecast miss (CBS)
- Greek PM Tsipras pushes on with radical change, markets tumble (Reuters)
- Obama Drops Plan to Raise Taxes on ‘529’ College Savings Accounts (WSJ)
- Hard Choices on Easy Money Lie Ahead for Fed Chief (Hilsenrath)
- Debt That Once Boosted Its Cities Now Burdens China (WSJ)
- Skymark Said to File for Bankruptcy After Airbus Deal Flops (BBG)
- Heavy Fighting Drains Ukraine Government’s Options and Finances (WSJ)
Three masked men smashed an SUV into the front-windows of The Wells Fargo Museum in San Francisco's financial district at around 230am Tuesday, making off with 10 ounces of "historic gold nuggets." As AP reports, robbers in Northern California have targeted precious metals in museum displays before and the tactics of the heist have marked other recent robberies in the area. The men escaped in a second vehicle, according to KGO, and the vehicle reportedly headed east across the Bay Bridge. Local coin dealers said the robbers may have difficulty selling the nuggets unless they melt them down. No dollar bills, Euros, or Japanese Yen notes were stolen during the robbery.
- Saudi Arabia’s New King Probably Will Not Change Current Oil Policy (BBG)
- Saudi King’s Death Clouds Already Tense Relationship With U.S. (WSJ)
- Oil Pares Gains as New Saudi King Says Policies Stable (BBG)
- Kuroda Says BOJ to Mull Fresh Options in Case of More Easing (BBG)
- U.S. pulls more staff from Yemen embassy amid deepening crisis (Reuters)
- Putin Said to Shrink Inner Circle as Hawks Beat Billionaires (BBG)
- A Few Savvy Investors Had Swiss Central Bank Figured Out (WSJ)
- ECB to decide on bond-buying plan to revive euro zone (Reuters)
- Draghi Is Pushing Boundaries of Euro Region with QE Program (BBG)
- Investors Wonder Whether ECB Will Do Enough (WSJ)
- Treasuries Drop With Bunds Before ECB; U.S. Futures Rise (BBG)
- European shares hit seven-year high (Reuters)
- At least eight civilians killed in shelling of Ukrainian trolleybus (Reuters), both sides blame each other
- OPEC Will Blink First in Battle With Shale Drillers, Poll Shows (BBG)
- China Injects $8 Billion Into Banking System (WSJ)
- New York says Barclays not cooperating in 'dark pool' probe (Reuters)
- Obama Targets Income Gap in Address That Shapes 2016 Election (BBG)
- Republicans Reject Obama’s Main Economic Proposals (WSJ)
- Senate’s Shelby Says White House Bank Tax Is Dead on Arrival (BBG)
- Is Dollar Next? Investors Reassess After Swiss Shock: Currencies (BBG)
- Bank of Japan Cuts Price Forecast, Maintains Record Stimulus (BBG)
- Pound Weakens After BOE Policy Makers Drop Call to Raise Rates (BBG)
- Putin not flinching on Ukraine despite economic crisis (Reuters)
- Indonesia will not make public full preliminary AirAsia crash report (Reuters)
- Party Hasn't Stopped for Russians at Davos Even With Ukraine Sanctions (BBG)
Market Wrap: Futures Lower After BOJ Disappoints, ECB's Nowotny Warns "Not To Get Overexcited"; China SoarsSubmitted by Tyler Durden on 01/21/2015 07:55 -0400
Three days after Chinese stocks suffered their biggest plunge in 7 years, the bubble euphoria is back and laying ruin to the banks' best laid plans that this selloff will finally be the start of an RRR-cut, after China's habitual gamblers promptly forget the market crash that happened just 48 hours ago and once again went all-in, sending the Shanghai Composite soaring most since October 9, 2009. It wasn't just China that appears confused: so is the BOJ whose minutes disappointed markets which had been expecting at least a little additional monetary goosing from the Japanese central bank involving at least a cut of the rate on overnight excess reserves, sending both the USDJPY and US equity futures lower. Finally, in the easter egg department, with the much-anticipated ECB announcement just 24 hours away, none other than the ECB's Ewald Nowotny threw a glass of cold water in the faces of algos everywhere when he said that tomorrow's meeting will be interesting but one "shouldn’t get overexcited about it."
- Obama to focus on middle class in State of Union address (Reuters) - all 4 of them?
- European Stocks Buoyed by ECB Hopes (WSJ)
- China's 2014 economic growth misses target, hits 24-year low (Reuters)
- Federer on Swiss Franc Shock: "Does It Mean I've Got to Win Now?" (BBG)
- First-time buyers help Christie’s reach record sales (FT)
- So it was the NSA? U.S. Spies Tapped North Korean Computers Prior to Sony Hack (BBG)
- Why Chinese Developer Kaisa's Default Risk Has Money Managers Spooked (BBG)
- Morgan Stanley Misses Estimates on Drop in Bond-Trading Revenue (BBG)
The 30 Year U.S. Treasury bond yield hit 2.35% yesterday. Long term interest rates are not controlled by Yellen. They reflect the economic prospects of the country. When they are rising it means the economy is doing well. When they are plummeting to all time lows, the economy is either in recession or headed into recession. Take your pick. No amount of government data manipulation, feel good propaganda spewed by the captured mainstream media, or Ivy League educated Wall Street economist doublespeak, can change the fact this economy is in the dumper and headed much lower. The Greater Depression is resuming its downward march toward inevitable war.
Canary... meet coalmine. While the divergence between US financial stock prices and their credit risk has been significant since Fed's Bullard saved the world in mid October. In fact the divergence really began when oil prices peaked and began to accelerate lower but really picked up this week after the Swiss National Bank news. Between energy-sector-based structured notes, massive short Treasury positions, and the potential for contagion from Swissy's massive moves, it would appear - judging by the major decompression in US bank credit risk this week to its worst since Feb 2014 - that counterparty risk is on the rise again.
Following disappointing results from JPM and Wells Fargo yesterday, it was Bank of America's turn to "surprise" investors with its disclosure just how bad its quarter was. And with the bank reporting a 50% collapse in its sales and trading from Q3, down $600 million from a year ago to just $1.7 billion in Q4, it should come as no surprise that the bank just reported Net Income, before the usual spate of amusing addbacks, of $0.25 well below the $0.31 expected. And while one may argue whether ot not BofA's EPS deserve non-GAAP adbacks, it was the Revenue of $18.96 billion, which missed expectations of $21.03 billion by over $2 billion (!) and down $2.7 billion from a year ago, that was truly a showstropper and shows that without the Fed's visible hand manipulating markets every day, banks are a ticking time bomb just waiting to blow.
While earlier today the MBA came out with some absolutely ridiculous numbers namely that there was a 49.1% surge in mortgage applications in the week ended January 9, this was, as Stone McCarthy reported, due largely to seasonals. To wit: "The MBA's broad mortgage application index soared 49.1% last week. While we think much of the increase is a response to lower mortgage rates, we also think the application data are still subject to some holiday-related noise." So what is really going on with that all important metric for the US housing market: mortgage originations? For the answer we go to the biggest mortgage originating bank in the US itself, Wells Fargo. Here is the answer:
- U.S. Index Futures Decline on Commodities Slump, Growth Concerns (BBG)
- Al Qaeda claims French attack, derides Paris rally (Reuters)
- Charlie Hebdo With Muhammad Cover on Sale With Heavy Security Precautions (BBG)
- How an Obscure Tax Loophole Brought Down Obama's Treasury Nominee (BBG)
- ECB’s bond plan is legal ‘in principle’ (FT)
- Charlie Hebdo fallout: Specter of fascist past haunts European nationalism (Reuters)
- DRW to acquire smaller rival Chopper Trading (FT)
- Oil fall could lead to capex collapse: DoubleLine's Gundlach (Reuters)
We see far too much complacency out there when it comes to interest rates, in the same manner that we’ve seen it concerning oil prices. We live in a new world, not a continuation of the old one. That old world died with Fed QE. Just check the price of oil. There have been tectonic shifts since over, let’s say, the holidays, and we wouldn’t wait for the ‘experts’ to catch up with live events. Being 7 weeks or two months late is a lot of time. And they will be late, again. It’s inherent in what they do. And what they represent.