New York Fed
In what has been described as "a sophisticated, coordinated fraud incident," more than 100 people withdrew $13 million from 1400 ATMs across Japan in less than three hours. The coordinated heist involved forged credit cards, and data stolen from South Africa's Standard Bank.
After yesterday's algo-driven mad dash to close the S&P green both for the day and for the year following Fed minutes that came in shocking hawkish, the selling has continued overnight, led by the commodity complex as rate hike fears have pushed oil back down some 2% from yesterday's 7 month highs, which in turn has dragged global stocks lower to a six-week low, while pushing bond yields higher across developed nations as the market suddenly reprices the probability of a June/July rate hike.
After last week's key event, the retail sales number, which the market discounted as being too unrealistic (and overly seasonally adjusted) after printing at a 13 month high and attempting to refute the reality observed by countless retailers, this week has a quiet start today with no data of note due out of Europe and just Empire manufacturing (which moments ago missed badly) and the NAHB housing market index of note in the US session this morning.
"My fear is that central banks are now taking this too far through negative interest rates in particular and that they’re going to literally destroy their own banking systems. If they’re actually successful in generating higher inflation, then they’re going to destroy their own bond markets... our government officials, and I will include the Federal Reserve in that, have failed the American people."
Goldman Warns Central Banks May Unleash "Financial Turbulence, Rate Shock" As It Cuts Yield ForecastsSubmitted by Tyler Durden on 05/10/2016 15:10 -0400
"On the policy front, all three major central banks can create financial turbulence if not careful in managing investors expectations. The Fed is tightening with very few hikes priced - a historical anomaly - increasing the odds of a 'rate shock'. The ECB and the BoJ are distorting the price of duration (and in Europe, sovereign credit) through their asset purchase programs. Any unanticipated shift in their behaviour could have magnified effects on asset prices."
“What this means for the Fed’s reaction function isn’t clear,” Pozsar concludes. “But our instinct tells us that we will deal with a Fed inherently more sensitive to global financial conditions, inherently more sensitive to global growth and inherently more dovish than in the past…” Far be it from yours truly to worry. Still, it’s hard to take comfort in the knowledge that the Drano we’ve all come to know, though maybe not love, is now off the market.
If the NY Fed is right, what does this mean in practical terms? Simple: assuming no revisions to Q1 GDP, and assuming Q2 GDP of 0.8%, then the US would have to grow at 3.8% to hit the Fed's central tendency forecast of 2.2% GDP growth as per its latest forecast.
Days After Wells Fargo Admits Defrauding The Government, NY Fed Rewards It With Primary Dealer StatusSubmitted by Tyler Durden on 04/18/2016 21:00 -0400
Ten days ago, in the latest example of how criminal Wall Street behavior leads to zero prison time, Wells Fargo admitted that it deceived and defrauded the U.S. government. Its punishment: a $1.2 billion settlement, one which will ultimately be paid by the bank's shareholders as no executives go to prison. And now, less than two weeks later it's time for Wells to get its reward: the NY Fed just announced it would grant Wells Fargo the much coveted Primary Dealer status.
US nonfinancial debt rose 3.5 times faster than GDP last year. Simply put - "We’re digging a great big hole that is likely to cave in on us before we manage to claw our way back out of it."
Prices are actually falling faster than the official CPI number indicates, and have not picked up as oil has stabilized. In fact, the US has been in deflation for the past five months. So it’s no surprise that people who are actually buying the stuff that’s falling in price would register this fact and answer surveys with deflationary sentiments. It’s also no surprise that central banks, which presumably see the same data, would be looking for ways to ease even further (Japan and Europe) or walk back their previous threats to tighten (the US Fed) - apparently in the hope that increasing the dose will cure the credit addiction.
It’s Fed vs. Fed in the Nowcasting business. The New York Fed has decided to issue a FRBNY Nowcast, clearly in competition with the Atlanta Fed GDPNow forecast. The Atlanta Fed has the name GDPNow trademarked. The Atlanta Fed provides its updates following major economic reports. In contrast, the New York Fed will deliver its version every Friday starting April 15.
While the market is still enjoying the post-NFP weekly data lull, economic data starts to pick up again in the coming days, alongside the start of the reporting season. Below are this week's key events.
it has been a rather quiet session, which saw Japan modestly lower dragged again by a lower USDJPY which hit fresh 17 month lows around 170.6 before staging another modest rebound and halting a six-day run of gains; China bounced after a slightly disappointing CPI print gave hope there is more space for the PBOC to ease; European equities rose, led by Italian banks which surged ahead of a meeting to discuss the rescue of various insolvent Italian banks, while mining stocks jumped buoyed by rising metal prices with signs of a pick-up in Chinese industrial demand.
Key economic releases for the coming week include the ISM non-manufacturing report on Wednesday. There are several scheduled speeches from Fed officials this week. Fed Chair Yellen will take part in a discussion with former Fed Chairs on Thursday.
In recent weeks, Goldman Sachs has gained prominence by being the only bank left standing in its confidence that the Fed's forecast of 2 rate hikes in 2016 is wrong, and instead is sticking with its hawkish prediction of at least 3 rate hikes for 2016. This also explains why Goldman has been pounding the table on long US dollar bets, which incidentally have led to major losses in the past three major central bank announcements, two from Mario Draghi and one from Yellen. why we were curious how Goldman would reconcile the latest "dovish" shocker from Yellen which has unleashed a dramatic buying spree of all risk assets (as of this moments the S&P500 is trading at a 23x LTM GAAP P/E), with Goldman's hawkish bias.