Bonds Bid & Stocks Skid Ahead Of Payrolls

Another day or 'spot the difference' between AUDJPY and the S&P 500 saw an odd overnight spike in stocks fade soon after the US open, bounce higher (again) at the European close then oscillate around VWAP (with the ever-ready-to-please 330 RAMP). Stocks remain red for the year and still the worst start since 2008. "Most Shorted" names continue to outperform. Copper and WTI crude were notable underperformers (both ending an oddly similar -1.75% on the week so far) with oil rebounding modestly off 8-month lows into the close. VIX and credit markets were quiet – ending practically unch ahead of tomorrow's NFP. CAD weakness continues (-2% on the week) but the USD leaked lower to unch on the week. Treasuries rallied 2-3bps (and the curve flattened very modestly) with 2Y unch and 10Y -3bps.

 

Spot The Difference

 

Stocks remain red for the year…

 

But on the week, "most shorted" names are significantly outperforming…. (squeezed each morning as usual)

 

Copper and oil have recoupled on the week (coincidentally) as gold ans silver limped higher on the day…

 

Credit markets have been flat for the last few days but hedgers were clearly worried early on…

 

Treasuries rallied all afternoon from the European close…

USD ended the week so far Unch – even after the vol today around Draghi's comments… CAD continues to get hammered…

 

Charts: Bloomberg

Bonus Chart: What is it with 5 oz of Silver for a barrel of oil?

 

Bonus Bonus Chart: The Baltic Dry is down over 25% in the last 2 weeks…

 

The worst post-Christmas Eve performance in over a decade!


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/7g29TxnFFNw/story01.htm Tyler Durden

Goodbye Greenspan/Bernanke Put, Welcome Bernanke/Yellen Collar

"Remember the Greenspan/Bernanke put?" BNP's Julia Coronoado asks, well "welcome to the Bernanke/Yellen collar." As some expected, Coronada notes that there was substantial discussion in the December FOMC minutes about concerns about financial stability stemming from QE, and the role it plays alongside progress on their dual mandates in making monetary policy decisions.

As we noted, a number of participants stated concerns over small-cap multiples and cov-lite loans – and that shift to comprehending the costs of QE – as opposed to simply the 'apparent' benefits implies a regime change in the reaction function from a put under the market to a collar around the market – capping what was, until this point, thought an endless upside by many.

Via BNP's Julia Coronado,

The staff conducted a survey of the 17 FOMC participants over the inter-meeting period on the marginal costs and benefits of QE. The results suggested that "a majority of participants judged that the marginal efficacy of purchases was likely declining as purchases continue."

 

Among their financial market concerns, "several participants commented on the rise in forward price-to earnings ratios for some small-cap stocks, the increased level of equity repurchases, or the rise in margin credit."

 

In general "participants were most concerned about the marginal costs of additional asset purchases…pointing out that a highly accommodative stance of monetary policy could provide an incentive for excessive risk taking" and that "the risks to financial stability could be somewhat larger in the case of asset purchases than in the case of interest rate policy".

 

The Committee is not so concerned that they are not patient and data dependent, but in December the data were going in the right direction and "many commented that progress [in the labor market] to date has been meaningful, and some expressed the view that the criterion of substantial improvement in the outlook was…likely to be met in the coming year if the economy evolved as expected."

 

The baseline case seems to be tapering in measured steps completing QE around year-end if growth is in the vicinity of 3%, hiring continues or accelerates, inflation doesn't decline further, and financial markets stay reasonably well behaved.

Simply put – the Fed will react to falling asset values that destabilize economy, "and" asset values that rise too far and too fast or are fueled by leverage that may put economy at risk.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/TMYYB1dHFv8/story01.htm Tyler Durden

Video: The Dumbest New Ban in 2014: Incandescent Light Bulbs

The Dumbest New Ban in 2014: Incandescent Light
Bulbs
 is the latest video from
ReasonTV. Watch above or click on the link below for video, full
text, supporting links, downloadable versions, and more Reason TV
clips.

View this article.

from Hit & Run http://reason.com/blog/2014/01/09/video-the-dumbest-new-ban-in-2014-incand
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All Aboard for a Sun-Filled, Intellectually Stimulating Week at Sea! You Won’t Want to Miss Fixing the World: Reason Seminar Cruise 2014!

Register today at www.reasoncruise.com

Bjorn LomborgTIME Magazine calls him one of
the 100 most influential people in the world, and the Guardian
says that he’s one of the 50 people who could save the planet—but
Bjorn Lomborg is best known as The Skeptical
Environmentalist.  As the author of Cool It and
How to Spend $75 Billion to Make the World a Better Place,
Lomborg is an expert on the unreasonably high cost
of current environmental policy and common sense alternatives.

Other speakers on this year’s cruise include author and former
Reason Editor in Chief Virginia Postrel, author
and historian Johan Norberg, Reason Editor in
Chief Matt Welch, Reason TV Editor in Chief
Nick Gillespie, Reason Science Correspondent
Ron Bailey, and Reason Senior Editor Jacob
Sullum
.

We’ll be traveling in style on the Celebrity Silhouette, and
all-inclusive accommodations start at just $1,650 per person (and
range up to deluxe cabins with incredible ocean views and private
verandas).

Find out more and register today at www.reasoncruise.com

from Hit & Run http://reason.com/blog/2014/01/09/all-aboard-for-a-sun-filled-intellectual
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And The Most Popular Political Party In America Is…

Submitted by Michael Krieger of Liberty Blitzkrieg blog,

The following poll results from Gallup represent the most significant domestic news story I have come across in 2014 to-date. Gallup polling in 2013 showed that the highest number of Americans now identify as Independents since it starting asking the question 25 years ago. Specifically, 42% identify as Independents, versus 31% as Democrats and 25% as Republicans. Even more interesting, the trend accelerated as the year progressed. If we look at quarterly results, in 4Q13 46% identified as Independents, versus 29% Democrat and 22% Republican.

This is huge, huge news and it seems that my long held belief that both the Democrat and Republican parties are set to completely disintegrate during this current 4th Turning. Earlier in 2012, wrote a piece titled, The Seventy Percent, in which I predicted that no matter who would go on to win the Presidential election, 70% of the public would be disappointed.

This sets up huge opportunities for non-conventional candidates to gain control of local and national office in 2014 and beyond. While I hold out limited hope for traditional politics, we must fight on all fronts for secular reform and the window right now is wide open.

From Gallup.

Forty-two percent of Americans, on average, identified as political independents in 2013, the highest Gallup has measured since it began conducting interviews by telephone 25 years ago. Meanwhile, Republican identification fell to 25%, the lowest over that time span. At 31%, Democratic identification is unchanged from the last four years but down from 36% in 2008.

The results are based on more than 18,000 interviews with Americans from 13 separate Gallup multiple-day polls conducted in 2013.

Screen Shot 2014-01-08 at 3.01.26 PM

In each of the last three years, at least 40% of Americans have identified as independents. These are also the only years in Gallup’s records that the percentage of independents has reached that level.

Democratic identification has also declined in recent years, falling five points from its recent high of 36% in 2008, the year President Barack Obama was elected. The current 31% of Americans identifying as Democrats matches the lowest annual average in the last 25 years.

The percentage of Americans identifying as independents grew over the course of 2013, surging to 46% in the fourth quarter. That coincided with the partial government shutdown in October and the problematic rollout of major provisions of the healthcare law, commonly known as “Obamacare.”

Screen Shot 2014-01-08 at 3.03.12 PM

Americans are increasingly declaring independence from the political parties. It is not uncommon for the percentage of independents to rise in a non-election year, as 2013 was. Still, the general trend in recent years, including the 2012 election year, has been toward greater percentages of Americans identifying with neither the Republican Party nor the Democratic Party, although most still admit to leaning toward one of the parties.

The increased independence adds a greater level of unpredictability to this year’s congressional midterm elections. Because U.S. voters are less anchored to the parties than ever before, it’s not clear what kind of appeals may be most effective to winning votes. But with Americans increasingly eschewing party labels for themselves, candidates who are less closely aligned to their party or its prevailing doctrine may benefit.

Full article here.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Dkp0P4v1eyw/story01.htm Tyler Durden

Head Of Recently Bankrupt FX Concepts Wants You To Know He Is Back, With A Newsletter And A Bloomberg Terminal

2013 may have been a bad year for Bill Gross, but nobody had it worse than John Taylor. The former head of FX concepts saw his hedge fund – once an FX trading behemoth and the largest in the world with $14 billion in AUM in 2007 – crash, burn, and file for bankruptcy as we reported previously. But the cherry on top was the revelation that a year before its filing, Taylor personally guaranteed some $5 million of the FX Concepts’ debt owed to Asset Management Finance, a unit of Credit Suisse. Surely, such a sequence of events would be enough to turn even the staunchest financial addict away from the markets for ever. But not John Taylor – the former FX guru has a message for all of you: he is not only back, but is launching a newsletter…. oh and he has a Bloomberg terminal too.

From Reuters:

Three months after FX Concepts filed for bankruptcy protection, its founder John Taylor said he will manage funds again and focus on technical and quantitative research for the company that once ranked as the world’s largest currency hedge fund.

 

“The market is my home, not administration; I am back,” Taylor said in a letter to clients dated Jan. 9.

 

“The newsletter business will be the primary business asset and livelihood of John R. Taylor as it was years ago.”

 

In his letter, Taylor addressed FX Concepts’ troubles for the first time since it filed for bankruptcy protection on Oct. 17. He has not responded to requests for interviews and sources said he is currently in the midst of negotiations with banks.

 

“Things have changed and are still changin’ at FX Concepts where it is fair to say the world has been turned upside down,” said Taylor. “FX Concepts filed Chapter 11 in October, an ignominious end for our company.”

It sure was, but onward and upward to the best news:

“It is difficult to operate without phones, e-mail addresses, or even business cards, but I have rented an office and we have Bloomberg, CQG (market data provider), and friends in the banking world giving us information galore,” said Taylor.

Well in that case, where does one sign up for the $29.95 monthly newsletter. As for the newsletter’s contents: “a new series of updated medium-term and intra-day models have been created and will be launched as soon as Credit Suisse gives FX Concepts the approval.

Will Credit Suisse also be a news letter client? Because there is nothing quite as liberating as paying someone with a virtual portfolio to tell you when to buy or sell based on sophisticated proprietary model that send out an alert anytime the 50 DMA trendline is crossed.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/98jhR8mbBPo/story01.htm Tyler Durden

Pentagon Report You Can't Read Claims Snowden's Leaks Have Helped Terrorists

According to a classified report from
the Pentagon, NSA whistle-blower Edward Snowden’s leaks have put
American military personnel at risk and helped terrorists.

From
The Hill
:

Edward Snowden’s leaks about National Security Agency programs
have put U.S. troops at risk and prompted terrorists to change
their tactics, according to a classified Pentagon report.

House Intelligence Committee Chairman Mike Rogers (R-Mich.) and
ranking member Rep. Dutch Ruppersberger (D-Mich.) said that the
Pentagon report found a significant portion of the 1.7 million
documents Snowden took were related to current U.S. military
operations.

Given that the report is classified it is impossible for anyone
to independently examine its claims.

Rep. Rogers stressed the severity of the report’s finds, saying,
“Snowden handed over great insight to our adversaries, endangering
each and every American. Make no mistake, Snowden is no patriot and
there is no way to excuse the irreparable harm he caused to America
and her allies, and continues to cause.”

Glenn Greenwald, who has been reporting on Snowden’s
revelations, tweeted a reminder that this sort of rhetoric is
nothing new:

Alan Rusbridger, the editor of The Guardian, has
defended the newspapers’ reporting on the documents leaked by
Snowden. Last month, Rusbridger told the British Parliament’s Home
Affairs Select Committee claims that reporting on Snowden’s leaks
have endangered national security “tend to be very vague and not
rooted in specific stories.” According to
The Guardian

Rusbridger then quoted senior officials from the UK and the US
who “have told me personally that there has been no damage. A
member of the Senate intelligence committee said to us: ‘I have
been incredibly impressed by what you have done … I have seen
nothing that you have done that has caused damage.”

It wouldn’t be surprising if some current critics of the NSA
were to change their minds if it was definitively shown that
Snowden’s revelations had helped terrorists or put the lives of
American troops at risk. It would be in the interest of those
lawmakers who support the NSA’s behavior exposed by Snowden to make
some, if not all, of the Pentagon report public, assuming its
findings are what they claim they are. Until then, we are going to
be left with members of Congress making extraordinary statements
based on a report only they and a limited number of other people
are allowed to read.

from Hit & Run http://reason.com/blog/2014/01/09/pentagon-report-you-cant-read-claims-sno
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Pentagon Report You Can’t Read Claims Snowden’s Leaks Have Helped Terrorists

According to a classified report from
the Pentagon, NSA whistle-blower Edward Snowden’s leaks have put
American military personnel at risk and helped terrorists.

From
The Hill
:

Edward Snowden’s leaks about National Security Agency programs
have put U.S. troops at risk and prompted terrorists to change
their tactics, according to a classified Pentagon report.

House Intelligence Committee Chairman Mike Rogers (R-Mich.) and
ranking member Rep. Dutch Ruppersberger (D-Mich.) said that the
Pentagon report found a significant portion of the 1.7 million
documents Snowden took were related to current U.S. military
operations.

Given that the report is classified it is impossible for anyone
to independently examine its claims.

Rep. Rogers stressed the severity of the report’s finds, saying,
“Snowden handed over great insight to our adversaries, endangering
each and every American. Make no mistake, Snowden is no patriot and
there is no way to excuse the irreparable harm he caused to America
and her allies, and continues to cause.”

Glenn Greenwald, who has been reporting on Snowden’s
revelations, tweeted a reminder that this sort of rhetoric is
nothing new:

Alan Rusbridger, the editor of The Guardian, has
defended the newspapers’ reporting on the documents leaked by
Snowden. Last month, Rusbridger told the British Parliament’s Home
Affairs Select Committee claims that reporting on Snowden’s leaks
have endangered national security “tend to be very vague and not
rooted in specific stories.” According to
The Guardian

Rusbridger then quoted senior officials from the UK and the US
who “have told me personally that there has been no damage. A
member of the Senate intelligence committee said to us: ‘I have
been incredibly impressed by what you have done … I have seen
nothing that you have done that has caused damage.”

It wouldn’t be surprising if some current critics of the NSA
were to change their minds if it was definitively shown that
Snowden’s revelations had helped terrorists or put the lives of
American troops at risk. It would be in the interest of those
lawmakers who support the NSA’s behavior exposed by Snowden to make
some, if not all, of the Pentagon report public, assuming its
findings are what they claim they are. Until then, we are going to
be left with members of Congress making extraordinary statements
based on a report only they and a limited number of other people
are allowed to read.

from Hit & Run http://reason.com/blog/2014/01/09/pentagon-report-you-cant-read-claims-sno
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President Obama Unveils Poverty-Beating "Promise Zones" – Live Feed

In the first step towards President Obama's income inequality fight, he is unveiling "Promise Zones" today… we can't wait to hear this one…"Promise Zones are a new way of doing business,” the administration official said. “They will be led by local community leadership working toward a common goal … supported by the federal government.” Participants will get priority for federal grants and help applying from an array of agencies. Wonderful, sounds great – how are we paying for that again?

Via Reuters,

President Barack Obama is set to speak on Thursday about how he will target job creation, housing, law enforcement and education in the poorest U.S. communities, part of his pledge to narrow the gap between rich and poor in America.

 

Obama signaled last month that he plans a new focus this year on income inequality, which he called “the defining challenge of our time”, pushing to raise the minimum wage and find new ways to help poor children break out of the cycle of poverty.

 

As part of this effort, Obama will create “promise zones” in San Antonio, Philadelphia, Los Angeles, southeastern Kentucky, and the Choctaw Nation of Oklahoma, the White House said on Wednesday.

 

The announcement came on the 50th anniversary of a pledge by former President Lyndon Johnson to wage a “war on poverty” which led to government programs like Medicare, Medicaid, food stamps, and Head Start preschool education programs.

 

 

The designation is designed to help communities navigate programs that already exist, said Megan Martin, a policy analyst at the Center for the Study of Social Policy in Washington.

 

“A lot of what they’re offering is in fact not funding – they’re offering direct contact with the federal government, high-quality technical assistance, up-to-date tools and resources for sites to use,” Martin said in an interview.

 

http://www.whitehouse.gov/sites/default/themes/whitehouse/img/facebook_b…) no-repeat; padding-top: 13px; height: 30px; float: left;”>JOIN THE LIVE CHAT


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/GQ0urpyHmAk/story01.htm Tyler Durden