Friday, February 26, 2016

This Is The Data Revision Which Just Made A Rate Hike Much More Likely

Janet Yellen's last "data-dependent" loophole to delay a rate hike in the coming months was just revised away.

G-20 Needs To "Man Up" Or Risk Sparking Market Chaos, Citi Warns

“Keeping the previous language would be very disappointing and would be viewed as either complacent or reflecting policy paralysis. [They need to] man up and tell member countries that monetary policy should be accompanied by fiscal expansion.”

BofA Is Still Not Buying It: "Everyone (Including Ourselves) Is A Seller Into Strength"

"Everyone (including  ourselves) a "seller into strength" which means risk can squeeze higher short-term into policy events.... policy meetings increasingly seen as selling (not buying) catalyst, so selling pressure resumes if policy disappoints."

Economic Recovery? 13 Of The Biggest Retailers In America Are Closing Down Stores

by Michael Snyder, The Economic Collapse Blog:

Barack Obama recently stated that anyone that is claiming that America’s economy is in decline is “peddling fiction“.  Well, if the economy is in such great shape, why are major retailers shutting down hundreds of stores all over the country?  Last month, I wrote about the “retail apocalypse” that is sweeping the nation, but since then it has gotten even worse.  Closing stores has become the “hot new trend” in the retail world, and “space available” signs are going up in mall windows all over the United States.  Barack Obama can continue huffing and puffing about how well the middle class is doing all he wants, but the truth is that the cold, hard numbers that retailers are reporting tell an entirely different story.
Earlier today, Sears Chairman Eddie Lampert released a letter to shareholders that was filled with all kinds of bad news.  In this letter, he blamed the horrible results that Sears has been experiencing lately on “tectonic shifts” in consumer spending
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Rate Hike Odds Rise As January Income, Spending Surge Most Since May

Amid the collapse of PMIs, regional Fed surveys, and surging inventories, personal income and spending both surged 0.5% MoM in January  - both better than expected. This is the best monthly gain since May 2015 as a drastically-revised data series notches the savings rate lower historically, but rose MoM. It seems Mester's comments this morning that a March hike is still on the table just got further support... time for another market crash to nsure that doesn't happen.

VIX Capitulation?

VIX mini 'flash-crashed' this morning to test its 200-day-moving-average to the lowest level since Dec 31st 2015. For now, it appears to have marked a low...

Essential history: ‘Forever debt’ Federal Reserve system invented to pay interest without ever ever ever repaying debt – definition of ‘Ponzi scheme’

from Washington’s Blog:

Ponzi scheme: criminal fraud of paying existing “investors” only and always from new “investors.” Collapse occurs without new “investors” and/or existing “investors” panic to cash-in.
The US Federal Reserve is based on the 1694-created Bank of England because this model allows government finance with debt that is never meant to be repaid. It is an “investment” model that pays interest guaranteed through tax collection. Its invention was to finance England’s government and military in a history of continuous centuries of war.
It’s cleverness allowed British finance to fund a short-term empire over rival European powers.
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The Problem With Free Trade: There Are Always Losers

from Economy and Markets:

If you join a poker game and can’t identify the “mark,” then chances are, you’re it! The “mark” is the person at the game who is less experienced, or perhaps is given to reckless betting. By including this player in the game, everyone else has an opportunity to walk away a winner.
But don’t lose sight of the bigger picture. Not everyone is a winner, and typically someone ends up the big loser!
The same principle works when countries get together for free or open trade. Everyone talks about how great it will be, how much their economies will grow, about efficiencies and new opportunities. But they almost never talk about the people who will lose.
Read More…

Copper & Crude Are Soaring On China Hype

Amid hype hope that China will suddenly change course and unleash all new fiscal stimulus - because just what the nation needs is more ghost cities, ghost bridges to nowhere, and ghost infrastructure - has sparked panic-buying in crude and copper this morning...

Get Back To Work Mr.Draghi - Deflation "Monster" Spreads Across Europe

Today's current inflation data dump from across the European nations appears to confirm forward inflation expectations trend (plumbing new record lows). With a considerably bigger than expected decline in prices , pushing Germany, Spain, and France back into deflation, pressure is mounting on Mr.Draghi. As one EU economist exclaimed, "the data send a clear message to the ECB and the only question that remains now is how bold action would be." Save us Mario from spending less on the things we need...

Cable Gets Pounded

Amid the biggest weekly drop in GBPUSD (cable) in 7 years, a surge in UK credit risk, and a spike in cable volatility, Brexit risk has never been higher, but, as Citi notes, is only 30% priced in at current levels (while polls are more 50-50) even as The British Pound is plumbing 30-year lows versus the U.S. Dollar.

Q4 GDP Revised Higher To 1.0% Thanks To Less Inventory Liquidation; Personal Consumption Falls

With Wall Street consensus expecting the poor first Q4 GDP estimate of 0.7% to be revised even lower to 0.4%, and with Wall Street's biggest former permabull Joe LaVorgna expecting a number as low as 0.1%, instead it received a surprising jolt to the upside when the BEA reported that instead of a decline, Q4 GDP was actually revised higher to 1.0%. But, as usual, the devil is in the details, because instead of actual consumption growth providing the much needed upside boost, consumption was actually revised lower, and all the upside was the result of less than expected inventory liquidation.

Rally In Jeopardy: Gartman Covers His Shorts, Goes Long Oil

"... Rather than waiting to be stopped out of our position some 3+% higher we wish to cover the position immediately upon receipt of this commentary, taking a very small profit and refraining from taking a loss and living to fight another day and in the end succeed."

About That "Oil Freeze": Russian Crude Production Sets New Post-Soviet Record In February

According to calculations by Bloomberg's Julian Lee, released moments ago, Russian crude and condensate production just set new post-Soviet daily record of 10.92m bbl yesterday. This it means that Russia took the production "freeze" seriously: by freezing at a new record high level of production.

Bailed Out RBS Faces Shareholder Revolt As Capital Return Plans Delayed Indefinitely

"People are disappointed" with RBS. The bailed out UK lender that's logged some £50 billion in losses since 2008 just reported its eighth consecutive annual loss, and investors are not happy. As one analyst put it, “I haven’t found any nuggets of good news.”

Global Stocks, Oil Continue Streamrolling Shorts On Last Minute Hopes For G-20 Stimulus Announcement

With the conclusion of this weekend's G-20 unknown, and many still expecting a major stimulus, the squeeze will likely continue into the close of trading ahead of the  weekend when nobody will want to be caught short into what may end up being another global coordinated intervention to prop up markets. “With a lot of policy events coming there is a fair chance of more stimulus plans so the markets can squeeze higher,” said Benno Galliker, a trader at Luzerner Kantonalbank AG. "The big reversal shows that there is some expectation building up into those events."

Gold's Largest Inflows Since June 2009 Unleash Bullish "Golden Cross" Pattern

For the first time since Gold suffered a "death cross" in 2014, the largest 3-week inflows into gold funds since June 2009 have set up a so-called bullish "golden cross" pattern in the precious metal.

A Teachable Moment: The Young Person Complaining About Her Job At Yelp Discovers Real Minimum Wage Is $0

This open letter from a young customer support employee of Yelp in San Francisco to her CEO has garnered a variety of comments that display a common bifurcation: some are sympathetic to her struggle to get by in a very costly region on a modest salary, while others wonder if the letter is an Onion parody of clueless entitlement: An Open Letter To My CEO.

‘No Plan B for Syrian settlement’ – Russian Foreign Ministry

from RT:

Moscow is not discussing alternative plans for a political settlement in Syria, Deputy Foreign Minister Mikhail Bogdanov has said. The Russian-American peace initiative is going to be formalized through a UN Security Council resolution.
“We’re perplexed by our Western partners, the US included, mentioning the existence of some kind of ‘Plan B,’ Nothing is known on that one, we are considering no alternative plans,” Bognanov told the ‘Middle East: From violence to security’ conference in Moscow.
On February 22, Russian and American presidents simultaneously announced that an agreement on peaceful plan for Syria had been reached, coming into force on February 27, at midnight Damascus time.
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It Starts: Subprime Auto Loans Implode (in Your Bond Fund)

from Wolf Street:

“Fears of an impending liquidity crunch in that asset class.”
“What is happening in this space today reminds me of what happened in mortgage-backed securities in the run-up to the crisis,” U.S. Comptroller of the Currency Thomas Curry warned in October about the auto loan bubble.
And his warning is now becoming reality.
Subprime auto loans aren’t big enough to take down our megabanks, the way subprime mortgages had done. But they’re big enough to take down specialized auto lenders and cause a lot of tears among investors that bought the highly rated structured securities backed by subprime and deep-subprime auto loans that are now defaulting at a rate last seen during the days of the Financial Crisis.
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TV Pundits Praise Hillary Clinton On Air, Fail to Disclose Financial Ties to Her Campaign

by Lee Fang, The Intercept:
Tune into television coverage of the presidential campaign and undoubtedly you will hear from various pundits described as “former campaign strategists” and “political contributors” explaining the latest developments of the race. But in many cases, these pundits — though introduced as neutral experts on campaigns or party politics — in fact have financial ties to the candidates they praise on the air.
Several consultants who work at firms retained by Hillary Clinton’s campaign and her affiliated Super PACs appear regularly on the major television networks, frequently touting Clinton.
A review of pundits on the major networks and cable news also found one prominent pundit who often praised Jeb Bush, without the network revealing her relationship with his campaign.
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Top Secret: New WikiLeaks Release Exposes Most Highly Classified Intel Yet

from Sputnik:
In what they are calling “the most classified documents ever released by a news organization,” WikiLeaks announced the publication of cables marked “Top Secret” on Tuesday, detailing National Security Agency surveillance of foreign leaders.
The document dump revealed the interception of climate talks between UN Secretary Ban-ki Moon and German Chancellor Angela Merkel before the 2009 Copenhagen Conference, as well as the long-term interception of the phone of Johann Human, the Director of the Rules Division of the World Trade Organisation (WTO), and five other top EU economic officials.
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