Case Shiller Misses Expectations, Unadjusted Home Prices Lowest In A Decade
The
February Case Shiller number is out and represents the latest high
frequency economic miss, with the 20 City Seasonally Adjusted number
printing up 0.15% on expectations of 0.20%. The good news, of course, is
that this is the first improvement in the Seasonally Adjusted Top 20
MSA Series since April 2011. The bad news is that this was all warm
weather driven, and courtesy of seasonal adjustments: unadjusted the February data declined once again, this time by 0.8%, the 6th consecutive decline in a row, and the lowest number in a decade.
Furthermore, the data would be uglier if it were not for prior period
downward revisions in what seems to be a page right out of the BLS
propaganda playbook. Needless to say, since this data is two months
delayed, as many will recall in February the market was soaring on hopes
that this time, just once, the "recovery" will be self-sustaining.
Then the LTRO aftereffects fizzled, and everything went to hell again.
Finally putting it all into perspective, the February data puts the Top
20 City data back on par with price levels last seen in early 2003.
But hey - at least we have a very brief and transitory seasonally
adjusted upswing.Russia And Mexico Both Buy Nearly $1 Billion Worth of Gold in March
While gold demand from the western investors and store of wealth buyers has fallen in recent months, central bank demand continues to be very robust and this is providing strong support to gold above the $1,600/oz level. IMF data released overnight shows that Mexico added 16.8 metric tons of gold valued at about $906.4 million to its reserves in March. Russia continued to diversify its foreign exchange reserves and increased its gold reserves by about 16.5 tons according to a statement by its central bank on April 20. Other creditor nations with large foreign exchange reserves and exposure to the dollar and the euro including Turkey and Kazakhstan also increased their holdings of gold according to the International Monetary Fund data.Mexico raised its reserves to 122.6 tons last month when gold averaged $1,676.67 an ounce.Turkey added 11.5 tons, Kazakhstan 4.3 tons, Ukraine 1.2 tons, Tajikistan 0.4 ton, and Belarus 0.1 tonnes, according to the IMF. Ukraine, Czech Republic and Belarus also had modest increases in their gold reserves. Central banks are expanding reserves due to concerns about the dollar, euro, sterling and all fiat currencies.Apple Angst As Expectations Remain Extreme
UPDATE: Apple -2.4% at lows of yesterday now
Apple is down 1.5% pre-market and comfortably back below its 50DMA on a top-line (and notably activations) miss from AT&T among other anxiety-inducing sentiment this morning. Perhaps what is really providing all the performance anxiety is the extreme expectations that are piled upon this greater-than-bellwether stock that has become the market. As Bloomberg's chart-of-the-day notes, Apple needs to surpass estimates by a wider margin than most of its peers in the S&P 500 in order to satisfy investors - if history is any guide. On an adjusted per-share basis, profits have beaten estimates by about 19% on average over the past seven years - a true under-promise over-deliver strategy. As Colin Gillis of BGC Partners notes, "Apple will need to smash records to keep momentum" as surpassing the $9.98/share by 20% is an impressive feat indeed as they point out that seven of the nine times Apple's shares have fallen the day after earnings has been when earnings beat by less than 20%. Performance anxiety indeed.
Today’s Items:
Yes folks, the dominoes keep falling, now
it is Holland that is on the road to insolvency as the Dutch government
falls. In Holland, the budget gap is five, not three, percent and
political parties do not have the will to reverse this. In addition, the
European Central Bank will be forced to print because austerity is not
an acceptable solution to the people.
Next…
Italy Police Seize $5 Billion of U.S. Securities
http://www.reuters.com
http://www.nationalterroralert.com
Italy Police Seize $5 Billion of U.S. Securities
http://www.reuters.com
http://www.nationalterroralert.com
Remember when 134 Billion dollars in
bonds were seized in Italy in 2009. Well, it would appear that the
Italian police are really good at identifying financial scams involving
U.S. securities. This is because they have found another $5 billion in
bonds as they were most likely heading toward Switzerland. But a
question is… Are these bonds fake or real?
Discouraged investors must be asking what
it will take for precious metals shares to break out of their extended
funk. Three changes in the macro climate are becoming evident… Rising
interest rates, rising inflation, and a slowdown in China. Let’s not
forget the debt to GDP ratio and that the printing by the Central Banks.
As the situation becomes worse in these areas, gold and silver will
escape their funk; therefore, have patience and keep stacking. Think of
this as a prolonged buying opportunity.
They say that a picture says a thousand
words and the Exter Inverted Pyramid is not an exception. The fact that
gold is at the bottom of this pyramid while derivatives are at its
bloated top, speaks volumes on how everything is going to collapse. Keep
stacking.
Knowing that they played a decisive hand,
by being on their knees before the anointed one during the 2008
election, the New York Times has decided to play damage control by going
after Obama now. What a joke. Yes folks, the blood is in the water and
it does not matter how many shows Obama and Michelle go on because Obama
is out and the Obama clone, Romney, is scheduled to be in.
With 450 million human shredding .40
caliber rounds, the Department of Homeland of Insecurity is preparing
for a seven year war with the American people. This is calculated using
the 5.5 million rounds per month that were used during active battle
operations in Iraq. Most U.S. soldiers would refuse to participate in
the tyranny; however, the scum that make of the ranks of the SS err… the
TSA will be armed and ready to rape, pillage, and murder Americans. But
look on the bright side…. At least we can count on the U.N. to step in
and save us.
It would appear that Marijuana can cure
some forms of cancer; in that, when canavoids connect with cancer CD2
receptors, it tells the cancer cell to commit suicide. In lab results,
25-30% of mice rejected the tumors. So, looks like marijuana now has a
medical value.
Concentrated Money Flows & The Role of The Invisible Hand
Eric De Groot at Eric De Groot - 18 minutes ago
Volatile D-wave bottoms, search website for further discussion of the gold
and silver A-B-C-D cycle, tend to follow 1-2-3 money flow extremes in the
precious metals ETFs. I talked about this setup as far back as January
2011. The paper ETFs (SLV and GLD) born under the guise of convenience have
become potent weapons in the game of control often characterized by the
actions of the invisible...
[[ This is a content summary only. Visit my website for full links, other
content, and more! ]]
1-2-3 Setup in Gold Turned Green Yesterday
Eric De Groot at Eric De Groot - 2 hours ago
The third hook in the 1-2-3 setup turned green yesterday. Green shadings, illustrated in the chart below, represent statistically concentrated outflows in the largest gold ETF (GLD). Extreme outflows are rare and tend to precede significant intermediate-term gold rallies. Chart: London PM Fixed Gold and GLD (ETF) Total Assets WA... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]
The US Has Finally Done It: Mexican Immigrants Become Emigrants
You know its bad when...the net
flow of Mexicans into the US has fallen so much that there is a high
probability that it is now in reverse ending around forty years of
inward migration. The Pew Hispanic Center
notes that the standstill - after more than 12 million current
immigrants have entered the US - more than half of whom are illegal -
appears to be the result of many factors including a weakened US job and
construction market, tougher border enforcement, a rise in
deportations, growing dangers associated with border crossing, a
long-term decline in Mexico's birth rate, and changing (read perhaps
more opportunistic) economic conditions in Mexico (especially if you
work at WalMex). This sharp downward trend in net migration has
led to the first significant decrease in at least two decades in the
number of unauthorized Mexican immigrants living in the U.S. - to 6.1 million in 2011, down from a peak of nearly 7 million in 2007. In
the five years from 2005 to 2010, about 1.4m Mexicans immigrated to
the US – exactly the same number of Mexican immigrants and their
US-born children who quit the US and moved back or were deported to
Mexico. By contrast, in the previous five years to 2000 some 3m
Mexicans came to the US and fewer than 700,000 left it. It will be
interesting to see the spin that the Obama and Romney camps put on this
hot-button topic as the 'Dream Act' turns into a nightmare and
hardline anti-illegal immigration stances become, well, less relevant
as Mexicans become Mexican'ts.Economic Data Dump Round Up
Quite a data dump took place at 10 am. Here are the highlights:It's The FX Repatriation, Stupid
Two weeks ago we were the first to explain that the mysterious Euro levitation observed, as newsflow out of Europe had just turned very ugly, was due solely to another iteration of a very disturbing phenomenon: EUR repatriation, as domestic banks were forced to shore up capital ahead of what they perceived as major liquidity needs such as bond auctions, and the other usual fare - insolvent banks, deposit outflow replacement, etc. As a reminder, the last time such aggressive repatriation was observed was back in October, just before the Fed was forced to ease the terms of its FX swaps, the ECB was forced to announced the LTROs and China was forced to announce an interest rate hike - in other words, the central planner were in bailout mode. Today, the first to address directly our "explanation" is Citi and specifically Stephen Englander, who notes the repatriation is likely a key driver to such inexplicable moves in the EURUSD. Of course, since Englander understands all too well the true implication of such a move (very, very negative as it means liquidity is once again becoming non-existent), he tries to mitigate it: "we find that in the recent past the repatriation theory has some support but that foreign portfolio flows are probably the dominant EUR driver": alas, that is what he said last time too. And it ended up being the other way around, in the process almost resulting in Europe's getting destroyed. Hopefully this time it is different.The Day Austerity Died
Austerity is dead! Long live Spending! Futures are up, Italian and Spanish bonds are up, CDS spreads on them are at least 10 bps tighter, and MAIN is 3 bps tighter on the day (though I have this feeling I better type fast as we are starting to fade off the best levels). Lots of little things seem to be contributing to the strength, TXU earnings, no economic data, auctions that raised the required money, etc., but there does also seem to be a belief that Germany finally “gets it”. That Germany is finally going to relent on their demands for austerity. So “Austerity Now” may be over, but killing something that didn’t work, isn’t the same as solving the problem. Going back to the norm that caused the problem in the first place, hardly seems like a solution either. Currency reversion and/or debt restructuring will be the ultimate end-game.Frontrunning: April 24
- China’s Biggest Banks Are Squeezed for Capital (NYT)
- Greeks detect hypocrisy as Dutch coalition stumbles (Reuters)
- Hollande Blames Europe’s Austerity Plan for Le Pen’s Rise (Bloomberg)
- In a Change, Mexico Reins In Its Oil Monopoly (NYT)
- China Tire Demand Slows as Economy Decelerates, Bridgestone Says (Bloomberg)
- Social Security’s financial forecast gets darker; Medicare’s outlook unchanged (WaPo)
- Fed’s 17 Rate Forecasts May Confuse More Than Clarify (Bloomberg)
- Senate to vote on array of Postal Service overhaul proposals (WaPo)
- Weidmann Says Bundesbank Is Preserving Euro Stability (Bloomberg)
How Much Bigger Can TARGET2 Imbalances Grow? Goldman Answers: "A Lot"
Back in December, Goldman Sachs entered the fray of what has since become the most sensitive topic for Germans (courtesy of this particular exponentially rising chart), namely the German funding of Europe's current account via the TARGET2 balance. Since then much has been said, up to and including a letter that Jens Weidmann sent to Mario Draghi expressing a concern about the "net receivable" status of the German central bank vis-a-vis the periphery. Unfortunately, since then the Bundesbank added another nearly EUR100 billion in net deficit balance, which has hardly helped the German people sleep better at night. So in the meantime, one question has arisen: "how much more can the TARGET2 imbalances increase?" The scientific and, non-scientific answer, comes from Goldman Sachs: "a lot."
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