Q4 GDP Comes As Expected, Claims Miss Big Two Weeks In A Row
Following last Thursday's weekly claims release we said "Initial Claims Beat Expectations, To Miss Next Week Following Revision"
and sure enough, last week's 348K beat of 350K expectations has been
revised wildly higher, to 364K, meaning the initial beat was not only a
miss, it was wide by a mile relative to the 350K preliminary
expectation. But robots do not care - all they care is the current
print, which however this time also missed, printing at 359K on
expectations of a 350K number. This is the first 4 week increase in the 4
week SMA since September as the weather impact of the record warm
winter starts to fade away, as explained yesterday. Same gimmicks in
the continuing claims number too which like everything out of the BLS
is so meaningless for concurrent data, we will probably just wait until
the next week revision to get a sense of what is truly happening. More
troubling is that 78K people fell of extended and EUC claims as more
and more drop out of the workforce. This means the unemployment rate
just dropped courtesy of even more people giving up on finding work.
Thank heavens for BLS math. In other news, the final Q4 GDP revision came
unchanged at 3.0%, in line with expectations. There were no major
changes to the components, however Personal consumption did decline
modestly from the second revision's 1.52% to 1.47%. It also appears that
the government has been consistently taking away less and less from
"growth", detracting 0.93%, 0.89% and 0.84% with every consecutive
revision. Overall, a wash, meaning March is about to close with about
with 17 misses out of 19 key economic indicators.
Fighting With Spanish Windmills, Or How Spain's Debt/GDP Ratio Is Double What Is Reported
When
I first attempted to find a more realistic debt to GDP ratio for
Spain, Belgium, Italy et al I did it on a stand-alone basis; no
inclusion of their European liabilities. When I approached Germany,
given their size and importance in the EU, I focused upon their
liabilities to the European Union. Several institutions have since asked
me to consider the total liabilities for each country as every nation
in the European Union has national debts as well as debts for their
percentage of ownership for the EU and the European Central Bank. Using
the combination of national liabilities and any nation’s percentage of
EU/ECB liabilities one then could ascertain a final and complete
picture of a real debt to GDP number that, unlike the Eurostat data,
would be inclusive of sovereign guarantees, contingent liabilities and
their responsibilities to the EU and the ECB. This schematic then would
tell each of us what a given country actually owed so the total
reality could be assessed for judgment. Given that Spain is currently
in focus and that nowhere that I have ever seen has there been an
accurate national debt coupled with Spain’s European debt schematic; I
have decided to provide you one. European Stress Getting Progressively Worse As LTRO Boost A Distant Memory
The
sad reality of an austerity induced slowdown in Europe and an ESFS/ESM
as useful as a chocolate fire-guard seems to be creeping into risk
asset premia across Europe (and implicitly the US). GGB2s are all trading back under EUR20
(that is 20% of par), Sovereign yields and spreads are leaking wider
despite the best efforts of their respective banks to back-up-the-truck
in the 'ultimate all-in trade' and the LTRO Stigma has reached record levels as LTRO-encumbered banks' credit spreads are the worst in over two months. Spanish sovereign spreads are back at early January levels and with Italian yields comfortably back over 5%
and the bonds starting to reality-check back towards the much less
sanguine CDS market. It seems apparent that much of the liquidity-fixing
LTRO benefits are now being washed away as investors realize nothing
has changed and in fact things are considerably worse now given
encumbrance and subordination concerns and the increased contagion risk
that the LTRO and the Sarkozy trade has created.Greek Deposit Run Update: Hopeless And Getting Worse
Submitted by Tyler Durden on 03/29/2012 - 09:25 European Central Bank
The Greek central bank - whatever that is: some local subsidiary of the ECB? - released February corporate and household deposit data. The chart below explains it all: back to May 2006 levels and the run shows no sign of abating And remember Venizelos' sage February words of advice? "VENIZELOS SAYS NOW IS THE TIME FOR DEPOSITS TO RETURN TO BANKS"... that didn't work too well.
British Leaders Suggest Panic Buying Of Gasoline To Avoid Panic Buying Of Gasoline
The threat of a gas tanker-driver strike has brought out the best in British political double-speak to calm a fearful nation. Queues
Lines are forming at every and any gas station as fears of an
Easter-break strike has the blokes back in blighty filling up every and
any container they can to stockpile petrol. In response to a
panic-worthy statement by Cabinet Minister Francis Maude who said "People should take precautions, just
in the way the Government has taken precautions doing some sensible
planning," and drivers should keep their tanks at least two-thirds full
in anticipation of a shortage, sales of Jerry cans have risen this week. This pre-emptive stockpile-driven panic-buying to avoid real panic-buying should the strike occur spurred some calming words from Energy secretary Ed Davey "I don't think they (drivers) need to queue,
I don't think they need to change their behavior very much,". Too late
mate! More economically concerning were comments, cited by The Telegraph from the government that "We are under no illusion, the impacts of a tanker strike could be very severe for our economy,
could really disrupt the lives of millions of people." As the head of
the retail motor industry federation noted "I think the government have
mishandled this from the very start" and in the pun-of-the-day, Sky News notes the government "made a crude decision to play politics with petrol without regard for the consequence."
When will the Fed's actions finally lift sales of currency-stockpiling
wheelbarrows we wonder? Or alternatively, a Toilet Paper run based on
the Treasury's relentless "actions"?The Invisible Hand Casts A Shadow
Eric De Groot at Eric De Groot - 1 hour ago
Bearish setups that plague D-wave declines are being unwound within a backdrop of fear. Rising lease spreads, collapsing ETF money flows into the third hook, and a sharp rise in the diffusion index (DI) as price declines illustrate another round of unwinding or what I've come to view as the invisible hand's elusive shadow (see charts 1-4). Do not underestimate it; It's exceptionally skilled at... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]
120329 - Iceland Has Last Laugh from Hyper Report on Vimeo.
Source Links for Today’s Items:
Oh you have to love the this folks.
Officials in the EU had laughed at Iceland for telling the international
banking cabal to go stick it, and now, Iceland has exported its way to
growth and is the envy of the EU. It looks like Iceland is having the
last laugh at the expense of the anemic EU.
Well the blame game has started folks.
Jack Welch, former General Electric CEO, states that the robust economic
recovery has turned lackluster thanks to unexpected surge in gas
prices. No mention of the debasement of the U.S. dollar, just its
in-your-face symptom of rising prices. Of course, you can expect the
majority to fall for this B.S.
The FBI has come out with fliers for
business from Internet Cafes to Beauty suppliers to keep us safe;
however, just reading some of these and you get the feeling that
everyone you ever knew is a terrorist. Yes folks, home of the fearful,
and land of the enslaved.
Attorney General Holder called a Michigan
militia a dangerous organization; however, a federal judge gutted the
government’s case against seven of its members. The judge ruled that
hatred of law enforcement does not amount to a conspiracy to rebel
against the government. In short, the first and second amendments were
written so that the government would be afraid of its citizens, not the
other way around.
Want to be a millionaire, yet cannot
afford to put food on the table? Want to see your hard earned money
losing half of its purchasing power every few hours? Want to see how it
is like to seriously work the land for your next meal? Well, don’t
worry, you may see that when hyperinflation hits you like it did in the
Ukraine.
As many as 27% of all student loan
borrowers are more than 30 days past due. In other words at least $270
billion in student loans are no longer current. On top of that, real
earnings from collage graduates are stagnant. In short, if you are going
to learn something that will be needed, then learn how to be a farmer
because average age of an American farmer is 57 years old.
Although this phrase translator is about
Obama, it could also be used on other big government politicians.
Imagine that when Obama says Revenue Enhancements, he is actually saying
higher taxes. When he says fair share, he is actually saying higher
taxes. Amazing how double-speak works.
USS Enterprise Prepares To Cross Suez Canal, Days Away From Anchor In Arabian Sea
Much noise has been emanating out of Israel vis-a-vis its Iranian intentions, with some opinions suggesting an attack is imminent, while others claiming that Israel will ultimately defer to D.C., and postpone an attack, and the eventual gasoline price shock, until after the election. The truth is nobody but a few select generals, knows: in warfare surprise is the key factor, so outright flashing invasion intentions is usually an indicator of just the opposite. That said, the most recent update that Azerbaijan has granted Israel access to its airbases along the Iran border is hardly encouraging for Nobel peace prize winners and other pacifists. Yet as we have been claiming for the past two weeks, ever since the launch of CVN-65 on its last tour of duty, the true catalyst will be the arrival of the USS Enterprise at what may well be its last place of anchor - somewhere in the Arabian Sea, just off the side of CVN 70 and CVN 72 both of which are patrolling the Straits of Hormuz. And as the map from Stratfor below shows, the Enterprise is about to cross the Suez Canal, from which point it will be at most days from entering its catalyst location, namely supporting the Israel air force. Just because the US has never had 3 concurrent aircraft carriers in proximity to Iran before.
Austerity - Mais, Non. Spending - Nein. PSI - Tal Vez?
Austerity hasn’t worked for countries. So far the austerity path has made situations worse, rather than better. Without stimulus, economies have seen their problems compound. So now virtually everyone is against the idea that austerity is helpful. That takes us back to spending. Maybe it’s just me, but spending is what got us into this mess in the first place. If spending worked so well and was so easy we wouldn’t have a sovereign debt crisis in the first place. Virtually every country was spending, yet deficits grew and economies shrank. Why is there any faith that spending now will work? Are we so good at targeting specific things that will really, truly, work? Not a chance. Spending will ensure debt grows just as fast, make the problem even bigger in the end, but will make people slightly happier in the near term. So if austerity doesn’t work, and spending hasn’t worked, what will? PSI, or Default, or Restructuring.Iran Oil Flow Slows, Price Fears Rise – Risk of War to Support Gold
Iran's oil exports have dropped in March as buyers prepare for sanctions, and shipments are likely to shrink further if Obama determines by Friday that markets can adjust to less Iranian oil and tightens sanctions even further. Sanctions could eventually leave half of Iran's oil output cut off from international markets, according to analysts and officials. Iran is also being excluded from global commerce and the global economy by being locked out of the international payment system – SWIFT. SWIFT, the Brussels based clearing house, announced last week it will cut services to Iranian banks on foot of European sanctions, in order to comply with the EU Council. The service denial includes Iran’s central bank, which processes Iran’s oil revenues. Some 30 Iranian banks will be blocked from doing international business. History suggests that the trade, economic and currency war with Iran may soon degenerate into an actual war. Increasingly, the regime in Iran has little to lose in engaging in a more aggressive foreign policy – including attempting to close the strategically important Straits of Hormuz.Frontrunning: March 29
- Obama budget defeated 414-0 (Washington Times) yes, the Democrats too...
- German Central Banker: ECB Loans Only Buy Time (AP)
- Baku grants Israel use of its air bases (Jerusalem Times)
- Japan May Understate Deflation, Hampering BOJ, Economist Says (Bloomberg)
- BRICS flay West over IMF reform, monetary policy (Reuters)
- Five Portugal Lenders Downgraded by Moody’s (Bloomberg)
- SEC Registration Captures More Hedge Fund Advisers (Bloomberg)
- EU Nears One-Year Boost in Rescue Fund to $1.3 Trillion (Bloomberg)
- Consumers plot emergency oil release as Saudi decries high prices (Reuters)
- Japan Plans to Draft Stopgap Budget for First Time in 14 Years (Bloomberg)
Overnight Sentiment: Lower
After two months of quiet from the old world, Europe is again on the radar, pushing futures in the red, and the EURUSD lower, following a miss in March European Economic and Consumer confidence, printing at 94.4 and -19.1, on expectations of 94.5 and -19.0, as well as an Italian 5 and 10 Year auction which seemingly was weaker than the market had expected, especially at the 10 Year side, confirming the Italian long-end will be a major difficulty as noted here before, and pushing Italian yields higher (more on the market reaction below). The primary driver of bearish European sentiment continues to be a negative Willem Buiter note on Spain, as well as S&P's Kramer saying Greece will need a new restructuring. Lastly, the OECD published its G-7 report and reminded markets that Italian and likely UK GDP will shrink in the short-term. This was offset by better than expected German unemployment data but this is largely being ignored by a prevailing risk off sentiment. In other words, absolutely nothing new, but merely a smokescreen narrative to justify stock declines, which further leads us to believe that next week's NFP will be worse than expected as discussed last night.
RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 29/03/12
Submitted by RANSquawk Video on 03/29/2012 - 06:21 ETC Morning Briefing RANSquawkIsrael Army Cancels Passover Vacation While Korea Begins Fuelling Missile Test Rocket
In a double-whammy of mounting geopolitical tension, Channel News Asia reports that North Korea has started fueling a rocket in preparation for a launch date set for April 12 or 13. The supposed 'satellite launch' is being considered a missile test by the West and in the meantime snubbing Nobel Peace Prize winner Obama for his 'confrontational mindset'. In retaliation Pyonyang will not be receiving food aid (according to a Pentagon official). Meanwhile, Israel National News highlights that the Israeli Defense Forces (IDF) have taken the unprecedented step of canceling the long-customary leave for Passover and will instead remain on full alert. Careful to point out that this action did not stem from any planned military action (though soldiers dismissed that as obfuscation),
IDF chief of staff Benny Gantz said Wednesday he gave the order saying
he "does not accept" the notion of an army-wide vacation during
Passover. A growing cadre of senior security officials and former IDF
chiefs have called for a major Gaza incursion to uproot the terror infrastructure there. Gantz himself has described such an operation as "increasingly inevitable."Our sponsors were chosen to help you prepare for the coming global financial collapse...If you wait until TSHTF (the shi! hits the fan) it will be too late...
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