Month: October 2014

When it comes to asset returns, September, and the entire third quarter for that matter, belonged to Asia.

Technically, it belonged to Asian central banks, because while the rest of the world generated weak returns in the past month, the two best performing asset classes were the Nikkei (+5.4%) and the Shanghai Composite (+6.8%), both of which soared on speculation that the local central banks would promptly conduct even more monetary easing. This was most obvious in the Nikkei where while in local currency terms the market is soaring, as is the one in Argentina and Venezuela, denominated in USD, the Nikkei is still down in 2014, performing worse than gold.

In USD terms however, those long the Nikkei have lost in purchasing power everything they have gained in capital appreciation.

On the other side, however, the biggest losers so far at least are clear: Corn, Silver, and Wheat. In terms of fiat-denominated assets, the Russian stock market is the worst performing in 2014, with Greece breathing down its next.

Some more color from DB:

September turned out to be a fairly weak month for most asset classes even if equities and fixed income are still generally in positive territory for the year. Indeed screening our usual monthly performance review charts, the Nikkei (+5.4%) and the Shanghai Composite (+6.8%) were the only standout performers in September. Japanese equities benefitted from a weaker JPY with the Dollar enjoying its best quarterly performance since Q2 2008. The strength.

 

Staying on equities, the S&P 500 was down over 1% in September despite a landmark 2,000 crossing during the month. Across DM equities, the S&P 500 (+8.3%) is still a relative outperformer against Stoxx 600 (+7.6%) and the FTSE 100 (+1.2%). Turning to EM, the MSCI EM index was down -7.4% during the month. Greece and Bovespa were the other key underperformers in equities. The former was impacted by renewed political uncertainties around Greece’s aid package plans whilst the latter saw a completed unwind of its outperformance in August as election polls suggested diminished hopes of leadership change in the country. Elsewhere the Heng Seng was down 6.9% in September to post its worst month since May 2012 as sell flows  intensified on the back of the pro-democracy protests at the end of the month.

 

Fixed income didn’t quite benefit from the broader risk off with Treasuries and Bunds down -0.6% and -0.2% on the month. Credit markets also had a bad month from a total return standpoint with HY underperforming IG across the board. Following a brief reprieve in August, US HY actually lost more in September (-2.6%) than it did in July (-1.7%) and went on to post its worst quarter since Q3 2011 when the USA was stripped off  its AAA rating and European Sovereign were struggling. September was second worst month for EM bonds this year largely led by weakness in Latam whilst Asia outperformed on a relative basis. YTD Asian bonds have outperformed Latam and EEMEA bonds by around 400bps and 800bps respectively.

And visually, September:

Third Quarter

 

2014 YTD:

 

via Zero Hedge http://ift.tt/1v52Npn Tyler Durden

Dallas County Health Officials earlier noted at least one person who had been in contact with the first US ebola patient was also being tested for the deasdly virus. They subsequently backed off that statement (oddly). Governor Rick Perry will be holding a press conference later today to calm the public we are sure, but in the meantime, the CDC has issued a helpful Q&A to ensure Americans continued to fly, spend, and consume at their leisure and don’t worry about the plague…

 

Rumors conmtinue to swirl of a 2nd case…

 

And The CDC issues a Q&A on Ebola in America… (via AP)

U.S. health officials have warned for months that someone infected with Ebola could unknowingly carry the virus to this country, and there is word now that it has happened: A traveler in a Dallas hospital became the first patient diagnosed in the U.S.

Texas health officials said there were no other suspected cases in the state, and the Centers for Disease Control and Prevention immediately sought to calm fears that one case would spread widely.

“Ebola can be scary. But there’s all the difference in the world between the U.S. and parts of Africa where Ebola is spreading,” CDC Director Dr. Tom Frieden said, stressing that U.S. health workers know how to control the virus.

“There is no doubt in my mind that we will stop it here,” he told a news conference in Atlanta on Tuesday.

Some questions and answers about the case:

Q: Where did the traveler come from?

A: Liberia, the hardest-hit country in the West African epidemic. The patient left on Sept. 19 and arrived in the U.S. on Sept. 20 to visit family. Frieden wouldn’t release the man’s nationality or other identifying information, and didn’t know how he became infected.

Q: When did the patient get sick?

A: Last Wednesday, and he initially sought care two days later. He was released but returned Sunday when his condition worsened and Texas Health Presbyterian Hospital discovered the West Africa connection, admitting him under strict isolation. Tests confirmed Ebola on Tuesday.

Q: How does Ebola spread?

A: Only through close contact with the bodily fluids of someone who has symptoms, such as fever, vomiting and diarrhea. People aren’t contagious until symptoms begin. And Ebola cannot spread through the air.

Q: So who’s at risk?

A: Texas health officials already have begun tracking down those close contacts, believed to be mostly the relatives the man stayed with. Officials will check them for symptoms every day for 21 days. Frieden said only about a handful of people are believed to have been exposed.

Q: Could Ebola have spread on the airplane?

A: No, Frieden said, because the man wasn’t sick then. The CDC said there is no need to monitor anyone else on those flights and didn’t reveal flight information.

Q: Will the patient stay in Dallas?

A: Frieden said there’s no need to transfer the man to one of those special isolation units that have gotten so much attention for treating four American aid workers who caught Ebola while volunteering in West Africa. Most hospitals can follow the necessary infection control for Ebola, Frieden said, and the Dallas hospital said it was “well prepared” to safely treat this newest case.

As for those other patients, three have recovered; the fourth remains hospitalized in Atlanta.

Q: How will this patient be treated?

A: Good hydration and IV nutrition have proven to be key for those other patients. Frieden said the hospital was discussing experimental treatments. A Tekmira Pharmaceuticals drug called TKM-Ebola and blood transfusions from an Ebola survivor were given to one of the recently infected U.S. aid workers.

Q: Could there be more travelers with Ebola?

A: No one’s ruling it out. People boarding planes in the outbreak zone are checked for fever, but that does not guarantee that an infected person won’t get through.

Airlines are required to report any deaths on a flight or ill travelers meeting certain criteria to the CDC before arriving in the U.S. If a traveler is infectious or exhibiting symptoms during or after a flight, the CDC will conduct an investigation of exposed travelers and take any necessary public health action.

Q: What if I’m worried about exposure?

A: Call the CDC for more information at 800-CDC-INFO (800-232-4636).

*  *  *
So continue about your business… nothing to see here…

via Zero Hedge http://ift.tt/1rFMLlu Tyler Durden

Dallas County Health Officials earlier noted at least one person who had been in contact with the first US ebola patient was also being tested for the deasdly virus. They subsequently backed off that statement (oddly). Governor Rick Perry will be holding a press conference later today to calm the public we are sure, but in the meantime, the CDC has issued a helpful Q&A to ensure Americans continued to fly, spend, and consume at their leisure and don’t worry about the plague…

 

Rumors conmtinue to swirl of a 2nd case…

 

And The CDC issues a Q&A on Ebola in America… (via AP)

U.S. health officials have warned for months that someone infected with Ebola could unknowingly carry the virus to this country, and there is word now that it has happened: A traveler in a Dallas hospital became the first patient diagnosed in the U.S.

Texas health officials said there were no other suspected cases in the state, and the Centers for Disease Control and Prevention immediately sought to calm fears that one case would spread widely.

“Ebola can be scary. But there’s all the difference in the world between the U.S. and parts of Africa where Ebola is spreading,” CDC Director Dr. Tom Frieden said, stressing that U.S. health workers know how to control the virus.

“There is no doubt in my mind that we will stop it here,” he told a news conference in Atlanta on Tuesday.

Some questions and answers about the case:

Q: Where did the traveler come from?

A: Liberia, the hardest-hit country in the West African epidemic. The patient left on Sept. 19 and arrived in the U.S. on Sept. 20 to visit family. Frieden wouldn’t release the man’s nationality or other identifying information, and didn’t know how he became infected.

Q: When did the patient get sick?

A: Last Wednesday, and he initially sought care two days later. He was released but returned Sunday when his condition worsened and Texas Health Presbyterian Hospital discovered the West Africa connection, admitting him under strict isolation. Tests confirmed Ebola on Tuesday.

Q: How does Ebola spread?

A: Only through close contact with the bodily fluids of someone who has symptoms, such as fever, vomiting and diarrhea. People aren’t contagious until symptoms begin. And Ebola cannot spread through the air.

Q: So who’s at risk?

A: Texas health officials already have begun tracking down those close contacts, believed to be mostly the relatives the man stayed with. Officials will check them for symptoms every day for 21 days. Frieden said only about a handful of people are believed to have been exposed.

Q: Could Ebola have spread on the airplane?

A: No, Frieden said, because the man wasn’t sick then. The CDC said there is no need to monitor anyone else on those flights and didn’t reveal flight information.

Q: Will the patient stay in Dallas?

A: Frieden said there’s no need to transfer the man to one of those special isolation units that have gotten so much attention for treating four American aid workers who caught Ebola while volunteering in West Africa. Most hospitals can follow the necessary infection control for Ebola, Frieden said, and the Dallas hospital said it was “well prepared” to safely treat this newest case.

As for those other patients, three have recovered; the fourth remains hospitalized in Atlanta.

Q: How will this patient be treated?

A: Good hydration and IV nutrition have proven to be key for those other patients. Frieden said the hospital was discussing experimental treatments. A Tekmira Pharmaceuticals drug called TKM-Ebola and blood transfusions from an Ebola survivor were given to one of the recently infected U.S. aid workers.

Q: Could there be more travelers with Ebola?

A: No one’s ruling it out. People boarding planes in the outbreak zone are checked for fever, but that does not guarantee that an infected person won’t get through.

Airlines are required to report any deaths on a flight or ill travelers meeting certain criteria to the CDC before arriving in the U.S. If a traveler is infectious or exhibiting symptoms during or after a flight, the CDC will conduct an investigation of exposed travelers and take any necessary public health action.

Q: What if I’m worried about exposure?

A: Call the CDC for more information at 800-CDC-INFO (800-232-4636).

*  *  *
So continue about your business… nothing to see here…

via Zero Hedge http://ift.tt/1rFMLlu Tyler Durden

It is not a good morning for Bill Ackman’s Pershing Square or Bruce Berkowitz’s Fairholme Capital, or the US government for that matter, of course, which happen to be the three largest investors in Fannie Mae:

 

The reason: FNM stock, which at last check, was crashing by nearly 60%.

 

So why is FNM plunging? Perhaps a better question is why they soared as much as they did in the first place. 

For the answer we go to Bill Ackman and his jolly copycat groupies. As Bloomberg reminds us, Ackman, speaking at the 19th annual Sohn Investment Conference in New York, said Fannie Mae could be worth $23 to $47 a share over time, where he referred to a 110-slide presentation on the mortgage companies. 

More:

Pershing Square has about 11 percent economic exposure to Fannie Mae and Freddie Mac shares based on common stock outstanding, a stake first disclosed last year. While lawmakers are weighing methods to wind down the companies, Ackman said mortgage rates would jump without the government-sponsored enterprises.

 

“There is no viable alternative,” to Fannie Mae and Freddie Mac, Ackman said today in a Bloomberg Television interview with Stephanie Ruhle after the Sohn presentation. “Preserving the 30-year prepayable fixed-rate mortgage — it’s like the bedrock of the housing system — is critical.

We think the only way to do it is by preserving Fannie and Freddie.”

$23 to $47… or zero. Because while there may be no viable alternative, Ackman forgot one key thing: his adversary is the US government, a place where making trillionaires out of billionaires is not exactly in fashion right now. And that is precisely what would have happened if the Ackmanites had gotten their way in litigation that would assure that private stakeholders would get all the benefits of the GSE bailout with none of the downside risk (because after all these were, are and always will be guaranteed by the US government).

Then this happened.

As AP reports, late yesterday a federal judge on Tuesday ruled against investors who are trying to collect billions of dollars in profits of government-chartered mortgage companies Fannie Mae and Freddie Mac. The decision by U.S. District Judge Royce Lamberth to dismiss the investors’ lawsuits was a victory for the government. It was also a huge hit to the litigants case, and is the reason why as of right now, Pershing Square is worth a few hundred million less (and it will be worth far less if and when the SEC cracks down on Ackman’s illegal purchase of Allergan calls).

More from AP:

“There can be no doubt” that the investors understood the risks involved in investments in closely regulated companies such as Fannie Mae and Freddie Mac, Lamberth wrote, and therefore have no reasonable expectation of profiting.

 

During the recent mortgage crisis, the government pumped $187 billion into the troubled companies, which have since recovered and now have quarterly profits running into the billions.

 

Recovering money for itself, the government is collecting a dividend amounting to nearly every dollar of the companies’ net worth. That leaves nothing for private investors who had put money into the companies when they faced collapse.

 

Investors had hoped lawmakers or the courts would force the government to give up rights to the earnings. Among those suing the government are hedge fund firm Perry Capital LLC and mutual fund company Fairholme Capital Management LLC.

And while we don’t feel bad for billionaires Ackman, Perry, Fairholme et al, we do commisserate with all those piggybackers who thought that Ackman’s 110 slides on the matter were enough. Clearly, they weren’t.

via Zero Hedge http://ift.tt/1ozjy8u Tyler Durden

While yesterday’s CDC press conference was factual, it was clearly very much designed to avoid panic as time and again the US public was reassured that Ebola in America was ‘contained’, ‘hard to contract’, and would ‘stop here’. However, as Bloomberg reports, the man with Ebola in Dallas was initially sent home from the hospital with antibiotics after seeking treatment for an unknown illness, officials said. We know CDC has stated the need for the US to be prepared but the fact that after the patient sought medical care on Sept. 26 and was sent home with antibiotics, he returned in an ambulance to Texas Health Presbyterian two days later and was admitted, suggests US healthcare workers are not prepared for the possibilities that Ebola is here in America (as this is the 13th possible case in the US).

 

As Bloomberg reports,

A man with Ebola in Dallas was initially sent home from the hospital with antibiotics after seeking treatment for an unknown illness, officials said.

 

…

 

The man is being kept in isolation in an intensive care unit. He had no symptoms when he left Liberia and began to show signs of the disease on Sept. 24, the CDC said. He sought care on Sept. 26, was hospitalized two days later at Texas Health Presbyterian Hospital and is critically ill, said CDC Director Thomas Frieden.

Do not worry though…

“There is no doubt in my mind that we will stop it here,” Frieden said at a press conference in Atlanta.

 

The man was traveling to the U.S. to visit family and was staying with them. He was exposed to only a “handful” of people during the time when he had symptoms, including family members and possibly some community members, according to Frieden, who said there was little risk to anyone on his flight.

 

“Ebola doesn’t spread before someone gets sick, and he didn’t get sick until four days until after he got off the airplane,” Frieden said. “So we don’t believe there was any risk to anyone on the flight at that time.”

 

…

 

“It’s not a potential of Ebola spreading widely in the U.S.,” Frieden said on a July 31 conference call with reporters. “That is not in the cards.”

 

…

 

“There shouldn’t be any new infections from this point on,” Osterholm said. “We are going to shut this down.”

Finally…

Another suspected Ebola case is being evaluated at a National Institutes of Health facility, U.S. officials said, the 13th such possible infection in the U.S. All others have tested negative.

*  *  *
Contained?

via Zero Hedge http://ift.tt/1DZGec2 Tyler Durden