Monday, February 29, 2016

Trump Storms To Incredible 33 Point Lead Ahead Of Super Tuesday

There’s every reason to be afraid of Trump, but he’s managed to make voters even more afraid of where the country is headed if he’s not the next president.

Chicago PMI Collapses From 'Mysterious' January Bounce As Employment Crashes To 7 Year Lows

Following the biggest beat on record in January jumping to 55.6, Chicago PMI collapsed in February to a stunning 47.6 - below the lowest estimate from economists. The entire report is a disaster with New orders tumbling, production sharply lower, and employment contracting for the 5th month in a row - to its lowest since March 2009. As one respondent warned, business was just "limping along at the moment with little promise in sight."

The Three Charts That No Small Cap Asset Manager Wants You To See

A funny thing happens to an index's valuation when you choose not to entirely ignore the companies that have negative earnings (i.e. losses). Ever wondered what the P/E ratio of the Russell 2000 was given that it is full of companies where the 'E' is negative? The answer is simple - and ugly - as The Wall Street Journal exposes, the aggregate P/E of the Russell 2000 is over 200x which perhaps explains the gaping chasm between bond and equity valuations for this highly credit-sensitive cohort.

A Coherent Explanation of Obama's Foreign Policy

Obama has been carrying out a bipartisan Republican-and-Democratic foreign policy; it’s the policy of America’s aristocracy. Its results have been horrible for the world, but they’ll be even worse if it succeeds.

Caught On Tape: 500 Syrians Storm Greek Border Fence With Homemade Battering Ram

What If There Are No More Googles, Facebooks, Or AirBnBs?

If you think Tinder for dogs and talking fridges are poised to reap billions in profits, by all means invest your own capital in these ideas. But don't expect any of the current batch of wanna-be's to ever scale up and generate billions in profit. Put another way: if tech no longer powers the stock market's central narrative, then we've run out of bubble-engines. And if we run out of bubble-engines, the system can no longer depend on "the wealth effect" to power consumption, fund property taxes, and everything else the current arrangement depends on for its financial survival.

USDJPY Spike Sparks Panic-Buying In Stocks; S&P Green

And - as if by magic - stocks are green.

Key Events In The Coming "Payrolls" Week

The week was supposed to start off quiet on the macro news front, but the PBOC spoiled that with an unprecedented Monday, Feb 29 RRR cut, its fifth since the start of 2015. In any case, it slowly builds up to the week's biggest event on Friday, when the BLS reports February payrolls and will be hard pressed to find all the seasonal adjustments it needs to cover for not only the lost jobs in the devastated energy sector but, as we reported over the weekend, the sudden dramatic air pocket in Silicon Valley jobs.

Lumber Liquidators Liquidates Guidance

Just when you thought it was safe to buy the dip and pile into this "value" stock, Lumber Liquidators does it again. On a conference call this morning, and hot on the heels of Valeant doing the same, the embattled firm just removed guidance for 2016 (due to "too much uncertainty" and having discovered "material weakness" in FY15 financials). The stock is re-crashing over 8% in the pre-market, to its lowest since March 2009.

Small Caps At Crucial Resistance - Beware Shenanigans

Amid a recent exuberant short-squeeze-driven bounce, the 'real' valuation of the Russell 2000 remains at insanely high levels (and gravely decoupled from credit markets). But as Dana Lyons' explains the market likes to do whatever will fool the most people. So while this level should at least be an interesting one in producing a battle between the Russell 2000 bulls and the bears, it would also be an ideal spot for the market to unleash its shenanigans.

"The Liquidity Just Dries Up In A Stressed Market" - How HFT Killed FX Trading

Collin Crownover, head of currency management at State Street Global Advisors Inc., which oversees about $2.4 trillion,  who during a panel presentation said that "we are concerned. During volatile periods, market participants are backing away until conditions settle down, making it harder to complete large orders."“A lot of the electronification of the market, which by and large is a good thing, has led to kill switches on a lot of that algorithmic-provided liquidity,” Crownover said. “The liquidity just dries up in a stressed market.”

China's Panicked RRR Cut Leads To Feeble Stock Rebound; Gold Resumes Climb

After the G-20 ended in a wave of global disappointment, leading to the biggest Yuan devaluation in 8 weeks, and sending Chinese stocks into a tailspin on concerns the PBOC has forsaken its stock market as well as speculation the housing bubble is now sucking up excess liquidity which in turn pushed global market deep in the red to start the week, it was the PBOC's turn to scramble in a panicked reaction to sliding risk exactly one month after Japan unveiled its own desperation NIRP, and as reported before unexpectedly cut its Reserve Requirement Ratio by 0.5% to 17.0%, the first such cut in 2016 and the 5th since the start of 2015.

After €670 Billion In QE, European Inflation Plunges To -0.2%: Lowest In One Year

A little under one year after the ECB launched its own QE of €60 Billion/month in bond purchases in early March 2015, a process which has resulted in the ECB monetizing over €670 billion in European - mostly German - sovereign paper, moments ago Eurostat reported European February inflation (even though the month is not over yet), and it was a shock, with headline inflation tumbling form +0.3% Y/Y in January to a depressing -0.2% in February, the worst print since January 2015. It was expected to drop to "only" 0.0%.

China Cuts Reserve Ratio One Day After G20

In the “uninspiring” communique delivered following the G20 in Shanghai, officials pledged to “consult closely” on FX markets. We’re not sure whether there was any “close consulting” between the PBoC and its counterparts around the world on Monday, but China just announced another RRR cut (50 bps), the fifth such move since early last year.

The Empire Will Strike Back

The populist revolt fueling non-mainstream political movements in both Europe and the US flows from a single source: you can not fool all the people all the time. The central lie of our time is that governments can and should forcibly assume control of individuals’ lives, in the name of vague and always shifting greater goods. The Command and Control Futility Principle holds that governments and central banks can control one, but not all variables in a multi-variable system. The number of variables global governments and central banks have arrogated to their purported control has grown beyond measure. Breakdowns are visible everywhere, and as those failures exact their ever-increasing toll on the masses, the masses are pushing back.

The Global Run On Physical Cash Has Begun: Why It Pays To Panic First

If, and when, a run on physical cash begins, there will be roughly $1 dollar in physical to satisfy $10 dollars in savers' claims, a ratio which drops to 20 cents of "deliverable" cash if the $100 bill is taken out of circulation.

Central Banks Shiny New Tool: Cash-Escape-Inhibitors

Negative interests rates are the shiny new thing that everyone wants to talk about. We hate to ruin a good plot line, but they're actually kind of boring; just conventional monetary policy except in negative rate space. Same old tool, different sign. No, the novel tool that has been created is what we're going to call a cash escape inhibitor.

Cities Of Refuge: Why Are People Creating Hundreds Of Places Of Refuge All Over America?

by Michael Snyder, The Economic Collapse Blog:

All over the United States, cities of refuge are being created. Now when I say “cities”, I don’t mean vast areas of land that can hold hundreds of thousands or millions of people. Rather, I am talking about much smaller places of refuge that can accommodate dozens or hundreds of people. In a few cases, I know of places of refuge that will be able to take in thousands of people, but that is about as big as they get. There are individuals all across America that have specifically felt called to build communities where large numbers of people will be able to gather when society totally collapses. So why is this happening? Why do so many people feel such an urgency to create cities of refuge that would presumably never be used if we don’t ever see full-blown societal breakdown?
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The Global ‘War on Cash’: a Country by Country Guide

from Zen Gardner:

The war has been waged through mainstream propaganda outletsTV advertisements and even children’s games.
We’ve heard cash is dirtied by drug dealingtarnished by terrorismtainted by tax evasion(heaven forbid!) and just plain dirty. Not to mention sooooo outdated.
Just this week Norway has jumped aboard the cashless society agenda with DNB, the country’s largest bank, calling for a total end to cash. The story only sounds shocking only to people who haven’t heard the similar stories from Sweden or Denmark or India or Israel or any of the dozens of other countries whose banksters and (bankster-controlled) governments have openly lusted after a world of completely trackable, completely bank-controlled transactions.
Read More…

Now It’s Even Worse Than it Was When Lehman Collapsed, But It’s “Contained”

from Wolf Street:

“Distress” in Bonds Spirals into Financial Crisis Conditions
The pile of toxic corporate bonds in the US, euphemistically called “distressed” debt, ballooned 15% in the single month of February to $327.8 billion, up 265% from a year ago, according to S&P Capital IQ. The number of S&P rated US companies with distressed debt rose 9% in February to 353, up 128% from a year ago.
The last time the pile of distressed debt had soared to this level was in November 2008, and the last time the number of distressed issuers had shot up to these levels was in October 2008; Lehman had declared bankruptcy in September.
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2 Extra Cups of Coffee a Day can Help Prevent Organ Damage – Here’s How

by Julie Fidler, Natural Society:
According to a long-standing myth (and it IS a myth), drinking lots of coffee can sober you up if you’re drunk. While coffee can’t bring you back to reality or fix a sick liver, it may protect the organ against damage.
Researchers at Southampton University (SU) in the UK conducted a meta-analysis of 9 studies covering data on 430,000 people. They found that people who drink 2 extra cups of coffee a day have a 44% decreased risk of developing liver cirrhosis, a condition associated with long-term heavy drinking that kills more than 1 million people worldwide each year. Liver cirrhosis can also be caused by hepatitis, immune disorders, and a buildup of fat in the liver, known as fatty liver disease.
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Obama to Expand Surveillance State Powers by Signing a 21 Page Memo

from Liberty Blitzkrieg:
As the Apple vs. FBI battle rages in the court system and throughout the halls of Congress, Obama decides to do what he does best. Using “his pen” to make consequential decisions unilaterally.
Just another day in the American banana republic.
The New York Times reports:
WASHINGTON — The Obama administration is on the verge of permitting the National Security Agency to share more of the private communications it intercepts with other American intelligence agencies without first applying any privacy protections to them, according to officials familiar with the deliberations.
The change would relax longstanding restrictions on access to the contents of the phone calls and email the security agency vacuums up around the world, including bulk collection of satellite transmissions, communications between foreigners as they cross network switches in the United States, and messages acquired overseas or provided by allies.
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