Trannies Melt-Up For 15th Of Last 19 Days On Lowest Non-Holiday Volume In Years

The Dow Transports continue their entirely sensible march to infinity as they have no risen over 11% in the last 19 days with only 4 marginally lower days in that period. The S&P tested lower around the open but that ‘dip’ was mandatorily bid and lifted the index back towards the highs (with a 330 Ramp off VWAP for good measure). Volumes in futures, options, and stocks were absolutely abysmal (S&P futures lowest non-holiday in a couple years). The USD decided to limp lower (led by EUR strength), gold and oil ended unch (silver and copper -1%), Treasury yields very modestly lower, and VIX was banged back under 13%. Credit remains un-impressed (though rallied modestly in the day).


With volume absent, the machines were running the show again – leverage tool of choice was VIX as the ramp off VWAP from 330 proved infallible once again…lifting ES 5 points on no news at all – just for the shits and giggles… 950,000 contracts at the cash close vs 1.4 mm average…


The major indices continue to rise… with Trannies topping the pack today was the Transports best day in 3 weeks!!!!


With Discretionary and Industrials leading (and asdide from Utes, Financials lagging)…


Gold and Oil faded back to unchanged as Silver and Copper lost ground…


Despite USD weakness…


But credit remains unimpressed…


Treasuries sold off for much of the day as stocks went higher – bucking the but it all trend from the EU session…


Dec VIX futures dropped to their lows…



Charts: Bloomberg


via Zero Hedge Tyler Durden

Treasury Scrambles To Raise $60 Billion Extra Cash Ahead Of Next Debt Ceiling Fight

By now everyone is aware that due to the pick up in tax revenues coupled with a cut in spending, US funding needs have been decreasing over the past year at least until the demographic inflection point hits in 2015 and the old trend reverts. That this is happening to the chagrin of the Fed, which is unable to trim its montly monetization of securities, i.e., taper, without crashing the market and is therefore forced to monetize more than the entire 10 Year equivalent net monthly issuance is also known to all except for the Fed it seems, which instead is forced to gobble up increasingly more high quality collateral.

Which is precisely what the moments ago released marketable borrowing estimates by the Treasury for Fiscal Q1 and Q2 revealed: funding needs for the October-December quarter declined from the prior $230 billion estimate to $204 billion, while the Q1 funding needs were set at $356 billion, in line with last year’s number. And yet, the Treasury also announced that despite a lower funding need in the current quarter, it would proceed with issuing $32 billion more in net Treasurys, or $266 billion, than previously estimated. Why? To push the quarter end cash balance from $80 billion to $140 billion at December 31, 2013. This is the highest quarter-ending cash balance since 2010.

Why is the Treasury scrambling to build up cash ahead of calendar 2014? Simple: as is well-known, the debt ceiling drama comes back with a vengeance in late January and early February, and this one promises to be just as theatrical and protracted as all prior ones. Which means that in order to push back the ultimate day of reckoning, the infamous X-Date, beyond which the Treasury truly has no cash, it is now stocking up on as much cash as it can get its hands on.

Based on rough estimates, the additional $60 billion in cash means the Treasury may have just bought itself at least 1 month of additional wiggle room before it runs out of emergency measures. And since the Treasury is indicating it will have that much extra cash going into 2014, it virtually assures that the theatrics surrounding this latest upcoming debt target hike, when Boehner again huffs and puffs before folding in a lawn chair of epic humiliation, will be on par with all prior such soap opera episodes.


via Zero Hedge Tyler Durden

Monday Humor: Forget Jimmy Kimmel; Meet “The Undying Chinese”

Following Jimmy Kimmel’s infamous kids roundtable where the solution proferred by one young chap was to “kill all the Chinese people” since they are the ones we owe money to, the Chinese people decided enough was enough and put together this brief tutorial on China, and how many ‘peoples’ have tried to kill them in the past… meet “The Undying Chinese”


Jimmy Kimmel’s “Kill everyone in China” skit:



And The Chinese response… (if nothing else, it’s a great introduction to the way they see themselves in under 4 minutes)…


via Zero Hedge Tyler Durden

Monday Humor: Forget Jimmy Kimmel; Meet "The Undying Chinese"

Following Jimmy Kimmel’s infamous kids roundtable where the solution proferred by one young chap was to “kill all the Chinese people” since they are the ones we owe money to, the Chinese people decided enough was enough and put together this brief tutorial on China, and how many ‘peoples’ have tried to kill them in the past… meet “The Undying Chinese”


Jimmy Kimmel’s “Kill everyone in China” skit:



And The Chinese response… (if nothing else, it’s a great introduction to the way they see themselves in under 4 minutes)…


via Zero Hedge Tyler Durden

Las Vegas Cites Public Safety in Bid To Ban News Racks

The commission of Clark County,
Nevada is expected to make a decision about a proposed ban on news
racks on and around Las Vegas Boulevard. Although the government
says the racks are a safety issue, people are fighting back,
calling the proposal an affront to local businesses and First
Amendment-protected rights.

There are an estimated 311 news racks along the Las Vegas Strip,
as well as on cross streets, that could be eliminated. They feature
everything from magazines and tourist information to advertisements
for call girls. If the county commission has its way in a battle it
has been waging
for years
, the businesses that operate the racks would have to
remove them by Jan. 1.

Now, people are pushing back in defense of free speech, business
freedom, and common sense.

The Las Vegas Sun quotes one rack owner, Kathryn
Gentile, who
, “I don’t think it’s a secret that adult-oriented
businesses and advertisements have always been disfavored. I
believe this is simply another attempt to ban that and circumvent
the First Amendment.”

The ACLU is taking sides with Gentile. Allen Lichtenstein, the
general counsel of the ACLU’s Nevada branch
, “The biggest problem with the proposal is that it
completely does away with a particular mode of communication, not
just within a small area, but within a much wider area — the resort
corridor. They don’t really have a justification for getting rid of
this First Amendment outlet.” Lichtenstein also pointed out that
eliminating news racks will not eliminate sidewalk congestion.
Instead, the problem could be exacerbated by an influx of people
handing out ads to replace the stationary bins.

Erik Pappa, a county spokesperson
, insisting that the issue was over safety. “We did
this pedestrian study… We had these guys look at pedestrian flow
up and down the Strip, and they found a bunch of bottlenecks. They
need to remove the obstructions.” He assured, “It’s strictly based
on the need to improve traffic flow because of the safety issues
involved,” he said.

“This is my livelihood. I was going to hand this down to my
kids. It’s a family-owned business,” explained another rack owner,
Eddie Munoz. He
the Las Vegas Review-Journal that he plans to
file a lawsuit if the commission approves the ban.

One could also question if this is the best allocation of time
and resources for the government to improve safety on the streets
of Las Vegas. After all, the city has nearly
the national median violent crime rate, and experiences
more than four times the number of crimes per mile as the national

from Hit & Run

Stand Together Now Or You Will End Up Facing the Police State Alone …

Preface: German pastor Martin Niemöller initially supported Hitler. But he later opposed him, and was imprisoned in the Dachau concentration camp for years.

Niemöller learned the hard way that keep your head down doesn’t keep one out of trouble … in the long run, it increases the danger to all of us.

Niemöller wrote a brilliant poem – First They Came – about the manner in which Germans allowed Nazi abuses by failing to protest the abuse of “others” … first gypsies, gays, communists, and Jews, then Catholics … and eventually everyone.

This is my modern interpretation of Niemöller’s poem …


First they tortured a U.S. citizen and gang member
I remained silent;
I wasn’t a criminal

Then they tortured a U.S. citizen, whistleblower and navy veteran
I remained silent;
I wasn’t a whistleblower

Then they locked up an attorney for representing accused criminals …
I remained silent;
I wasn’t a defense attorney

Then they arrested a young father walking with his son simply because he told Dick Cheney that he disagreed with his policies
I remained silent;
I’ve never talked to an important politician

Then they said an entertainer should be killed because she questioned the government’s version of an important historical event
I remained silent;
I wasn’t an entertainer

Then they arrested people for demanding that Congress hold the President to the Constitution
I did not speak out;
I’ve never protested in Washington

Then they arrested a man for holding a sign
I held my tongue;
I’ve never held that kind of sign

Then they broke a minister’s leg because he wanted to speak at a public event …
I said nothing;
I wasn’t a religious leader

Then they shot a student with a taser gun and arrested him for asking a question of a politician at a public event …
I remained silent;
I wasn’t a student

Then they started labeling virtually every innocent and normal behavior as marking Americans as “potential terrorists”
I remained silent;
I didn’t want to be called a terrorist

Then they threw political dissenters in psychiatric wards
I remained silent;
I didn’t want to be seen as crazy

Then they declared that they could label U.S. citizens living on U.S. soil as “unlawful enemy combatants” and imprison them indefinitely without access to any attorney …
I remained silent;
I didn’t want to be labeled an enemy

Then they assassinated an American citizen without any court trial
And they killed his son because he should have had a “far more responsible father”
I remained silent;
I live on American soil

Then they declared that they could assassinate U.S. citizens living on U.S. soil without any due process of law (update) …
I remained silent;
I didn’t want to be on the list

Then they forced down the airplane carrying the president of a sovereign nation, because they were looking for a whistleblower
I remained silent;
I’m not a foreign leader

Then they called for the founder of an independent publisher to be killed by drone
I remained silent;
I don’t want to worry about drone strikes against me

Then they started spying on all Americans, even though top experts say that doesn’t protect us from terrorism
I remained silent;
I didn’t want to call even more attention to myself from the spies

Then they charged the partner of an investigative journalist with terrorism for transporting whistleblowing documents to the journalist regarding illegal NSA spying
I remained silent;
My wife isn’t a journalist

When they came for me,
Everyone was silent;
there was no one left to speak out.

Postscript: I originally wrote this poem in 2007. I have updated it with additional verses as current events have unfolded.


Legal Expert: “Under [the Government's] Definition, The Pentagon Papers Could Be Treated As The Same Act As The 9-11 Bombings”


via Zero Hedge George Washington

Spot The European Economic Recovery

As we recently exclaimed, European macro data is deteriorating rapidly (even as talking-head after talking-head simply ignore this ‘fact’ and steer investors into EU stocks because, well, they are going up). That “Europe is recovering” meme appears an unarguable truth – except when you look at the truth of the following chart.



and bottom-up.

There is a silver lining: as nobody can afford cars, more and more Europeans will ride bikes. Oh wait, it was America that had an obesity epidemic. Oh well.

Source: Natixis, Goldman and @Not_Jim_Cramer


via Zero Hedge Tyler Durden

Guest Post: 10 Factors In The Timing Of The Next Crisis

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Here are ten possible factors in why it's so difficult to predict the timing of crisis/reset.

Doom-and-gloomers (myself included) have been wrong for four years. The financial markets continue higher, and the excesses of the status quo continue expanding with little ill effect (so far).

Why is it so difficult to predict the timing of the onset of crisis/collapse? The question is equally valid for both bears and bulls; how could all the boosters of housing be so wrong in 2008 when they asserted that "housing is not a bubble"?

I've assembled ten possible factors in why it's so difficult to predict when the next crisis/reset will occur:

1. Everyone in the status quo has a stake in its survival. Every one of us wants to get our social security, our disability, maintain the freedom of a personal vehicle, have access to clean water and all the other goodies, and those becoming (or maintaining) wealthy and powerful in the current system want to retain their wealth and power.

There are titanic forces that will bend whatever needs to be bent to keep their share of the swag flowing to them. This is just as true of the welfare recipient as it is the global corporation or politico. We shouldn't underestimate the power of this desire to maintain the status quo and bend perceptions to make that appear as if it is not just possible but inevitable.

Consider the housing bubble and bust. Look at the forces benefiting from the bubble: the 2/3 of all U.S. households that owned homes, the entire financial/mortgage/Wall Street investment bank complex, mortgage brokers, realtors, the media that profited from housing/mortgage-related adverts, and last but not least the government, which reaped huge gains in property and income taxes as a direct result of the bubble.

On the other side of the bubble: a handful of marginalized analysts and bloggers, virtually none of whom would profit from the bubble's implosion. Guess which side had the momentum to inflate the bubble for years after it became obvious that a vast credit/real estate bubble was already in place?

2. Self-referential systems with numerous feedbacks are inherently difficult to predict because the forces we extrapolate into the future are adapting under various selective pressures that feed back into each other. Innovations that seem small can trigger outsized consequences (for example, the web, fracking, etc.).

In this context, it's worth recalling an anecdote about Bertrand Russell. A young critic detailed a previous position Russell had taken and noted an inconsistency with his current position. Russell declared, "Young man, I changed my mind." We're allowed to do that as new dynamics emerge and what we extrapolated as critical turns out to be less critical than some other factor we dismissed as minor.

3. Systems feed on the herd instinct of humanity. Real estate was visibly in a bubble in 2004, at least in key markets, yet the bubble continued expanding for 3 more years as the herd drew in skeptics. Those of us who declared the bubble in 2004 were wrong for three long years. The dynamics of the herd overpowered rationality and prudence. Humans will thunder over the cliff just like other herding animals. Just keeping the ability to make independent judgments and sort data without ideological filters should be a key goal.

4. There is a body of sociological study that looks at how what we perceive as risks defines our ideological/sociological world view. Risk assessment by groupthink is very powerful: we are moved by what we perceive to threaten our world view. Hierarchical types see different risks than egalitarian types, for example. This line of analysis goes by the academic name of "cultural cognition of risk."

5. The status quo is a dynamic system with many players. As I have often noted, just for one example, the US military/national security state does not necessarily share the same world view and priorities as other chunks of the empire. Various conspiracy theories neatly tie up the entire system with a bow, but I don't think it's that static and simple. If it was, it would be easier to predict. If we look at systems with few feedbacks, i.e. the sort of systems dominated by small cliques of the sort that all conspiracy theories require, we find systems like the former USSR. It imploded because it lacked the intrinsic ability to reform/adapt for systemic reasons.

6. As a result of #1, alternative systems have very little leverage. Why bust our behinds getting a local farmer's market going when every supermarket is bulging with produce and products engineered to satisfy our reward centers? Everything is an uphill battle to reach the critical 4% threshold of influence in terms of establishing alternative systems. Our own personal resilience only goes so far, but getting people to invest in systems beyond themselves is difficult for any number of reasons, including active suppression by those benefiting from the status quo. The need for real alternatives just isn't strong enough to change world views.

These systems are still nascent. We're still feeling our way forward in revolutionary alternatives (such as "accredit yourself" as an alternative to $100K college degrees in theater studies).

7. Nobody fully understands these complex systems such as the reserve currency, even though the systems have been functioning for decades. If we add up certain dynamics, we would feel very confident in saying this system should not exist–it should implode right now. Yet it continues on year after year. It is not just being perverse–it's very difficult to understand these systems because of the self-referential feedbacks and the motivations of the players to keep it going by whatever means are at hand.

I have been looking at the USD reserve currency for years and am humbled to realize nobody really has a firm grasp of all its dynamics. (At least I haven't found any such source.) There are widely disparate descriptions of its mechanisms and costs/problems, none of which totally accounts for its continued resilience.

8. I tend to think John Michael Greer's concept of catabolic collapse is likely to be the most correct in terms of predicting future dynamics. Things keep following the same vectors for all the reasons stated above until something gives
and they reset at a lower level of complexity/energy consumption. Everyone with a stake in the current system takes a hit to their desires but they still retain a meaningful share of the swag. Those who lose their share are too marginalized to threaten the majority who still gain by participating in the status quo.

This stairstep-down process can continue for quite some time, Rome being a pretty good example and various corporate/nation-state failures being more recent examples.

9. It is fairly self-evident that we are in an unprecedented era–just looking at energy, debt and the Internet is enough to reach that conclusion. This means the past is not a very reliable guide. As a result, many people look to behavioral models of economics to explain everything in terms of human emotions and cognitive deficiencies. This also has limits, as systems include forces that may originate in human psychology but psychology and cognitive flaws do not account for the system's full dynamics.

10. New models of doing things are emergent, but that is not a passive process. Some individuals actually have to make this happen by thinking things out, proposing systems, setting up a network of like-minded people, etc. etc. etc. My goal is to part of the process of building alternative structures at least conceptually so people who are completely wedded to the status quo have some alternative framework to grasp when the stairstep down finally breaches their confidence/faith that the system is eternally sustainable as-is.

This occurs when they discover the status quo has deemed them inconsequential enough that their share of the swag can be reduced with no negative consequences to those still at the trough.


via Zero Hedge Tyler Durden

Thorstein Heins Mangles BlackBerry, Walks Away With $16 Million Severance

The last time we looked at Thorsten Heins’ potential “golden parachute” farewell gift from Blackberry for, well, completing the destruction of the company started by former Co-CEOs Mike Lazaridis and Jim Balsille when he took over in early 2002, the amount could have been as gargantuan as $55 million. This number has subsequently been revised modestly lower, and while nobody is precisely sure just what Heins is entitled to, according to the Globe and Mail’s latest calculation, the golden parachute in question could be as large as $16 million. Then again, considering RIMM stock back then was $18/share and by the time Heins left BBRY will be just over $6, one wonders if instead of any bonus Heins shouldn’t instead be paying the company’s long suffering shareholders for virtually destroying what was once the world’s dominant smartphone brand.

From Globe and Mail:

Outgoing BlackBerry Ltd. chief executive officer Thorsten Heins could leave the company with about $16-million (U.S.) in severance payments and shares under the terms of a new employment agreement he signed with the company in April, regulatory filings show.


The company’s latest shareholder proxy circular, filed in May, says Mr. Heins would have been eligible to receive as much as $55.6-million in severance if the company was sold and he was dismissed. But he is also eligible for a large severance payout – as much as $22-million based on March figures – if he is simply terminated with no sale of the company.


However, his final severance amount will vary from the March calculation included in the proxy circular because much of the pay comes from equity holdings, which have changed since the chart was done in March.


BlackBerry announced Monday it has ended takeover talks with Fairfax Financial Holdings Ltd., and said Mr. Heins is leaving the company. A company spokeswoman said BlackBerry could not comment on Mr. Heins’s severance payments “at this time.”


Under the terms of the severance agreement, Mr. Heins is eligible to receive two times his base salary – worth $3-million in total – as well as a portion of his annual bonus for the current year, based on his standard corporate and individual performance factors. As of March, that was estimated to be worth $2.8-million, but it is unknown what his bonus payout is currently worth.


The equity components of his severance are the largest piece, however, estimated at $16-million as of March.

His current equity holdings in BBRY, aside from incentive option grants, amount to a tiny 180k shares of stock.

Mr. Heins also has share units acquired previously, which are currently worth about $4-million based on BlackBerry’s share price of $7.10 on Monday morning, and has 813,000 stock options, which are underwater and not exercisable based on the company’s current share price.


Both the old share units and his stock options will continue to vest for 24 months, which means the final payout under his severance agreement will not be determined for two years.


He also owns 179,504 common shares, worth about $1.3-million based on Monday’s share price.


Based on the current value of his common shares and share units, along with the $5-million payout for his new share units and his eligible salary and bonus payments, Mr. Heins could leave BlackBerry with about $16-million.


That total is not the final payout value, however, because his options and share units will not fully vest for two years and the final bonus amount payable is not yet known.

It is known: it is too high. And the poetic irony? If Heins ends up being hired as a bankruptcy advisor by a company that may one day advise BBRY on its potential chapter 11 or 7 filing. That would be the definition of true “full lifecycle” service coverage.


via Zero Hedge Tyler Durden

SAC Confirms It’s Not Guilty Of Being Guilty Of The Things For Which It Admitted Guilt

Via an emailed statement, the soon to be jailed SAC logo (since nobody else is actually going to jail) proudly proclaims:

We take responsibility for the handful of men who pleaded guilty and whose conduct gave rise to SAC’s liability.


The tiny fraction of wrongdoers does not represent the 3,000 honest men and women who have worked at the firm during the past 21 years.”

aka the textbook definition of “just us” justice.


via Zero Hedge Tyler Durden