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The greatest short-squeeze on record is over and now the great global oil glut in history, largest inventories since The Great Depression, and global growth demand collapsing fundamentals are being priced back in. WTI Crude is now down 10% from its highs a week ago, back to near 2-week lows and near a $37 handle.
Can we just get another random ‘Doha’ meeting headline…
via Zero Hedge http://ift.tt/1MPF0lJ Tyler Durden
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
Always remember who's selling whom, and who's in charge.
Everyone who isn't willfully blind knows that the Corporate (mainstream) Media doesn't give the same coverage to Bernie Sanders as it does to his opponent, Hillary Clinton. Bernie's rallies go unmentioned, his victories are given short shrift and his personal narrative–practically ideal for media glorification–is mentioned in passing, if at all.
A media professional clued me into why the Corporate Media hates Bernie and will move Heaven and Earth to defeat him: Sanders is the only candidate who is seriously promoting campaign finance reform.
When a Super-PAC raises $100 million for Hillary, Jeb, et al., where does 90% of that money go? To the Corporate Media. Corporate Media gorges on political media buys every two years, and increasingly depends on this feasting on Super-PAC money for its outsized profits.
As more and more advertising dollars flow to digital media (online search, Facebook, etc.), traditional media dominated by a handful of corporate giants needs the massive influx of campaign dollars to offset its stagnating revenue model.
My source notes that there are rarely any discounts for campaign media buys–the super-PACs and candidate's campaigns pay full pop, and typically pay in cash: no 90 days receivables for campaigns.
Political campaign buys are almost pure profit, as there is minimal sales effort required and the campaign/super-PAC is paying full freight.
Real campaign finance reform would gut Corporate Media's profits. No wonder the Corporate Media downplays Sanders' campaign, his personal integrity and his chances to become president.
As for the firewall that supposedly divides editorial from advertising: it's there for show, of course, and everyone in the business solemnly declares it's a Great Wall that is never breached, but the reality is the editorial staff know very well who butters their bread–and it sure isn't the folks getting free media coverage when their competitors are buying tens of millions of dollars in advertising.
Nobody has to openly state that big advertisers are not going to get negative coverage; editorial staff know better than to even propose such a self-destructive notion. Stories are either buried ("this one needs more research") or they are never proposed due to self-censorship by editorial staff worried that their head will roll in the next downsizing.
The Corporate Media has a love/hate thing going with Trump: the editorial side (i.e. the newsroom) loves Trump, because readers /viewers /listeners will tune in just to see what new outrageous, offensive verbiage Trump has blurted in the last 12 hours, but the advert-revenue side hates him with a passion because thanks to his non-stop media coverage, he doesn't need to advertise much in the Corporate Media.
According to this estimate, Trump spent $10 million on advertising and received $1.89 billion in free coverage. Deep State Darling Hillary Clinton spent $28 million (is that all?) on adverts and skimmed $746 million in free coverage; Bernie Sanders also spent $28 million and received less than half of Hillary's free coverage ($321 million)–no bias here, folks, everything is fair and unbiased–and drop-out Jeb Bush spent $82 million and scored $214 million in free coverage.
Measuring Donald Trump’s Mammoth Advantage in Free Media
So the editorial side concerned with attracting eyeballs loves loose-cannon Trump, but the real ruler of the media, the revenue side, hates him most passionately: this skinflint spends almost nothing and gets more free coverage than the rest of the candidates put together.
As you consume the coverage and the advertising this election cycle, always remember that 1) the mainstream media in the U.S. is all corporate-owned, 2) corporations exist to maximize profits, 3) profits flow from advertising, not free coverage, and 4) real campaign finance reform will negatively impact Corporate Media profits.
Always remember who's selling whom, and who's in charge: who is the Deep State selling? Who is the Corporate Media selling? Recall that the the Deep State gives the Corporate Media its marching orders: Hillary regains the momentum (New York Times, et al.)
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Just as we warned was likely, the once infamous hedge fund hotel US solar company SunEdison unit TerraForm Global said on Tuesday there was "substantial risk" that SunEdison would soon seek bankruptcy protection given liquidity difficulties, noting that "such an action would have a material adverse effect” on TerraForm Global.
In 2016 alone, SUNE has collapsed from a hope-strewn $6 price to just 73c this morning…
As we detailed last week, the sun is about to set for this solar company…
The Beginning of the End?
Debtwire (“DW”) Report Suggests SUNE in Debtor-in-Possession (“DIP”) Negotiations with $725mn LIBOR +1,000bps A-1 & A-2 2018 Second Lien Term Loan Holders. Yesterday, DW (link) reported that SUNE, after talks failed to reach an out-of-court solution with second lien holders around resolving liquidity/leverage problems, entered into DIP discussions with creditors. By way of background, in general, we remind our readers that DIP financing is typically “put into play” after out-of-court resolutions fall apart. That is, if a company needs a loan, but a potential lender is unwilling to make it (due, mainly, to concerns around legal challenges), the Bankruptcy Code offers a way in which the lender can circumvent legal challenges from other creditors. This is typically done via a Chapter 11 Bankruptcy, whereby the lender(s) is granted a first priority security interest, a market/premium interest rate, approved budget, and other lender protections. Stated differently, via a Chapter 11 Bankruptcy filing, a distressed company who is unable to obtain a new loan outside of bankruptcy, may use DIP financing to get the liquidity necessary to run a sale process or finance a formal Chapter 11 restructuring. In our view, assuming SUNE is successful in acquiring DIP funding, we believe this likely shifts lower the priority of the majority of their capital structure (with equity holders the least likely to be made whole); it also suggests, as we’ve warned extensively, that SUNE’s current cash position is dire, if not completely compromised. We maintain our SELL rating and adjust our price target lower.
SUNE “Mum” when Asked for Comment, But Impact to US Solar Market Could Prove “Debilitating”. We reached out to SUNE regarding the validity of DW’s report, yet did not hear back. However, should SUNE be forced to liquidate projects out of its 5.5GW backlog in a Bankruptcy, the impact to US solar market project fundamentals (incl. rooftop) could be detrimental. Finally, according to DW, SUNE is seeking $300mn in new post-petition DIP liquidity.
Valuation. Using our sum-of-the-parts, where the key point of differentiation is our view that SUNE will develop just 1.95GW of projects in 2016 (vs. guidance of 3.3-3.7GW), our 2016 year-end price target adjusts lower to $0.22/shr (85% downside from yesterday’s closing price) vs. $0.39/shr prior – due to lower TERP/GLBL shr prices.
Not pretty…
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About a decade ago, Christian Leone’s Luxor Capital was one of the biggest brand names in the industry, and alongside Harbinger and DB Zwirn, every trader and analyst on Wall Street wanted to work there. Since then things have changed. According to Reuters, Luxor, which had $3.8 billion under management at last check, “has been losing money for months” and on Monday it surprised investors when it announced it would “not be returning exiting investors cash in full, keeping a portion locked up until some illiquid investments can be sold.”
Call it the latest hedge fund “gate”, only unlike some prominent debt focused names, this one is only partial: “instead of returning all exiting clients’ assets in cash, investors will receive 88 percent of their money back while 12 percent of the investments will be held in a so-called special purpose vehicle, Luxor’s founder, Christian Leone, wrote in a letter.”
The announcement comes before a critical March 31 redemption deadline and aims to treat all investors “fairly,” the letter said.
“For those investors in the Fund that have submitted withdrawal requests for March 31, 2016 and for subsequent withdrawal dates, we will transfer a pro rata share of the applicable assets into a special purpose vehicle (SPV),” Leone wrote.
Client subject to the partial gate will be those who asked to get their money out on April 1 and July 1 and as a result; instead of getting all cash they will see a portion of their money put into the SPV and the fund will not charge any fees on these assets.
As Reuters reminds us (for those who have forgotten the gating junk bond funds of late 2015), “special purpose vehicles and side pockets are permitted at hedge funds but they are often viewed as a last resort that sour investors, and they have not been widely used since the 2008 financial crisis when many hedge funds posted heavy losses. But consultants have said that if illiquid positions become large, then it is prudent to segregate them and not charge fees until gains are realized.”
More form Reuters:
After sending the letter, Leone held a brief conference call with investors where he identified the four illiquid securities being put into the special purpose vehicle. Together they make up 12 percent of the portfolio, he said.
They include food delivery service Delivery Hero, which Leone said makes up more than half of the exposure and has seen a “multifold appreciation since we initially made the investment.” Additionally private equity investments in online food ordering service Foodpanda and drilling company Ascent Resources are in the SPV as well as preferred stock of Altisource Asset Management.
And while we are happy that these investments appear to have appreciated, they are rather useless if they are completely illiquid.
Leone told investors that clients have redeemed roughly 10 percent of their money in the first quarter and that redemptions requests are expected to be similar in the second quarter.
Last year, the fund saw investors redeem roughly 8 percent of their money from Luxor, a number that is roughly in line with what investors have done every year.
This year it is taking preemptive measures against what it knows will be even more redemptions and gating in advance.
As noted above, Luxor had been a popular fund in the hedge fund industry, gaining recommendations from such influential industry consultants as Cliffwater LLC, which advises on $56 billion in alternative assets invested by public and private pension funds as well as endowments and other big investors. But in 2015 it lost 19.2 percent when the average fund lost about 1 percent and it started 2016 with a 5.2 percent loss in January. This unnerved some clients, including Rhode Island’s state pension fund, which gave Luxor $50 million to invest in 2014, to exit. Last week its investment committee voted to pull its money out at the end of June and the fund told Reuters that it expected to receive $35 million back.
Luxor did not say when it expects to return the rest, saying only “We will continue to actively manage the assets held by the SPV until we can liquidate them in an orderly manner.”
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Overnight Media Digest
WSJ
– The U.S. government said Monday it had cracked a terrorist’s iPhone without Apple Inc’s help and is seeking to drop its legal case to force the tech giant to unlock the device. (http://on.wsj.com/1RCcaK2)
– Prosecutors charged former Blackstone Group LP executive Andrew Caspersen, most recently an executive at Park Hill, with stealing $25 million from investors and scheming to defraud investors of $70 million more.(http://on.wsj.com/1UqsfGc)
– Low-fare startup Virgin America Inc may soon have a new owner. Takeover offers from two other U.S. airlines – JetBlue Airways Corp and Alaska Air Group Inc – are due by the end of the week, according to a person familiar with the matter, in what could signal the latest wave of consolidation in the industry. (http://on.wsj.com/1UrgAqw)
– A study by researchers at the Icahn School of Medicine at Mount Sinai showed that results for cholesterol tests done by Theranos Inc differed enough from the two largest laboratory companies in the U.S. that they could throw off doctors’ medical decisions. (http://on.wsj.com/1UxKrxU)
– Yahoo Inc has given potential suitors two weeks to submit preliminary bids for its core Web business and Asian assets, according to people familiar with the matter. (http://on.wsj.com/1VQGCDh)
FT
*I Squared Capital is buying Irish energy firm Viridian Group Plc in a transaction worth 1 billion euros ($1.12 billion), to gain entry as a contender into the dynamic UK energy market.(http://bit.ly/1XZerQZ)
*Education Secretary Nicky Morgan, a supporter of the campaign for Britain to remain in the EU, will say in a speech that young people should speak out in favour of the EU and convince their elders against Britain’s exit. (http://bit.ly/1VQDg2R)
*The FBI has abandoned its bid to force access Apple Inc’s to help it break into the San Bernardino shooter’s iPhone after it found a way to access the device’s data without the company’s help. (http://bit.ly/1XZdvvU)
*The Ministry of Defence on Monday awarded contracts of service to BAE Systems Plc, Rolls-Royce Holdings Plc and Babcock International Group Plc worth 372 million pounds to maintain and upgrade the Hawk jets used by the Royal Air Force and Royal Navy. (http://bit.ly/1VQDoPV)
NYT
– The Justice Department said on Monday that it had found a way to unlock an iPhone without help from Apple, allowing the agency to withdraw its legal effort to compel the tech company to assist in a mass-shooting investigation. (http://nyti.ms/25t5IvW)
– A federal judge in San Juan on Monday threw out a new tax that Puerto Rico had tried to impose on the American retailing giant Walmart, calling it unlawful. (http://nyti.ms/1UytSBU)
– On Monday, federal prosecutors charged Andrew Caspersen, a Wall Street executive, in a criminal complaint with securities and wire fraud in what they called a “brazen” scheme to defraud investors – including a foundation affiliated with a major New York hedge fund – of up to $95 million. (http://nyti.ms/1LVPyot)
– Pandora Media replaced Chief Executive Brian McAndrews with Tim Westergren, a co-founder of Pandora and its former chief strategy officer. (http://nyti.ms/25tvmkp)
– Dell has agreed to sell its Perot Systems subsidiary, which provides information technology services to hospitals and governments, to the Japanese technology company NTT Data for almost $3.1 billion. (http://nyti.ms/1qcJVIQ)
Canada
THE GLOBE AND MAIL
** Gareth Joyce, president of Mercedes-Benz Canada Inc, has resigned after less than three months on the job. (http://bit.ly/1pHazsM)
** Canadian Craigslist rival VarageSale’s Chief executive, Carl Mercier, said on Monday that he was promoting Andrew Sider to CEO, while he would take on the job of chief product officer. (http://bit.ly/1pHb4CY)
** Sick days are costing Ontario school boards C$1 billion ($758.90 million) a year, according to a report by School Boards’ Co-operative Inc. (http://bit.ly/1pHbjho)
NATIONAL POST
** Canadian miner Columbus Gold Corp launched a proxy fight against Eastmain Resources Inc on Monday. (http://bit.ly/1pHbNEn)
** In his zeal to investigate reports of rampant harassment in the workplace, RCMP Commissioner Bob Paulson was formally accused of being a bully. The 2012 allegation prompted the then public safety minister Steven Blaney to probe Paulson’s conduct and force the commissioner to apologize for exercising “bad judgment.” (http://bit.ly/1UStrlq)
Britain
The Times
– ConocoPhillips is drawing up plans to shut down one of the North Sea’s biggest gas pipeline systems in a move that threatens to knock out 10 percent of the UK’s gas capacity and a string of active fields. (http://thetim.es/1Si9DlE)
– A multimillion-pound Revenue & Customs publicity campaign to stamp out tax evasion and avoidance used an advertising agency ultimately controlled in an offshore haven. HMRC spent more than 6 million pounds($8.55 million)on the campaigns, including 300,000 pounds specifically on offshore evasion. (http://thetim.es/1SiaSRG)
The Guardian
– The cost of a first class stamp will rise to 64p this week, taking the price increase to 100 percent over the past decade. First class stamp prices are rising by 1p, while a second class stamp will rise by the same amount to 55p. (http://bit.ly/1Si9wX9)
– Britain’s manufacturers are struggling to recruit skilled workers and keep pace with global technology, according to business group EEF’s report that criticises the government for lack of support. (http://bit.ly/1SiaIdg)
The Telegraph
– CEO of the takeover target Premier Foods Plc, Gavin Darby, has claimed a rival bidder could challenge its American suitor McCormick, as he defended the company’s heavily criticised decision to reject a 60p per share offer. (http://bit.ly/1Si9Mpd)
– More than 9000 jobs in Port Talbot hang in the balance as crunch talks begin at Tata Steel Ltd in India over the Welsh site’s future. Fears are rife among workers that the Indian multinational may pull the plug on the loss-making plant. (http://bit.ly/1Siai6x)
Sky News
– Notonthehighstreet, an online marketplace, has been approached by a number of new investors about injecting funds into the business to allow it to accelerate its expansion. (http://bit.ly/1Si9m22)
The Independent
– UK think tank Smith Institute, found that two-thirds of employees say they are working longer than two years ago, but only 10 percent believe they are more productive. A quarter of staff believed their productivity had declined over the period. (http://ind.pn/1Si9QW3)
via Zero Hedge http://ift.tt/1REfq7v Tyler Durden
Donald Trump has long taunted the media – and specifically Fox’s “crazy Megyn” Kelly – for failing to understand “math.”
The problem, Trump says, is that it isn’t fair to criticize him for not polling higher than 50% when the GOP field is so crowded. In fact, the billionaire has said, it’s a small miracle he’s been able to garner the amount of support he has over the past nine months given that at one point, there were 17 Republican candidates. Implicit in that argument is the contention that once the field narrows, Trump will command an even larger lead in the polls.
As we head into the Wisconsin primary on April 5, it would appear that Trump was indeed correct. The latest NBC/SurveyMonkey weekly tracking poll shows Trump nearing the 50% threshold as the preferred candidate among registered Republicans nationwide.
“With just three candidates left in the Republican primary race, Donald Trump now holds 48 percent support of registered Republicans and Republican-leaners,” NBC writes. “This is more than 20 points higher than his second-place competitor, Ted Cruz — who now enjoys 27 percent support. John Kasich got a boost of 2 points this week and holds third place with 18 percent support.”
As those who have followed the GOP circus are no doubt aware, the Republican establishment effectively exited the race with Marco Rubio. There’s some begrudging, lukewarm support for Ted Cruz, but make no mistake, were it not for Trump, the GOP would sooner not run a candidate at all then support Cruz. That is, he’s just about the furthest thing from “mainstream” you can get without going … well, without going full-Donald.
Indeed, it’s not even clear that the establishment is prepared to accept Cruz as the nominee even if he somehow manages to steal the nomination from Trump at the convention in July. “If we don’t have a nominee who can win on the first ballot, I’m for none of the above,” former House Speaker John Boehner said. “They all had a chance to win. None of them won. So I’m for none of the above.” In other words, the powers that be in the party may well try to install Paul Ryan or Mitt Romney and send the “outsiders” home with nothing but fond memories of the campaign trail.
In any event, NBC also polled registered Republicans and Republican-leaners on the contested convention. Here’s what they said:
There you have it. Nearly 90% of Trump supporters say he shouldn’t have to abide by the rules that govern the nomination. Unfortunately, as we reported on Monday, they won’t be able to bring their guns to Cleveland to demand the GOP nod.
via Zero Hedge http://ift.tt/1Uzal4t Tyler Durden
With Europe back from Easter break, we are seeing a modest continuation of the dollar strength witnessed every day last week, which in turn is pressuring oil and the commodity complex, and leading to some selling in US equity futures (down 0.2% to 2024) ahead of today’s main event which is Janet Yellen’s speech as the Economic Club of New York at 12:20pm, an event which judging by risk assets so far is expected to be far more hawkish than dovish: after all the S&P 500 is north of 2,000 for now.
Crude slid below $39 a barrel in New York in a fourth day of losses while commodity currencies such as Russia’s ruble and the Norwegian krone weakened. Euro-area sovereign securities climbed as lower energy prices dimmed the outlook for inflation and the European Central Bank prepared to increase its asset-purchase plan by 20 billion euros ($22 billion) a month in April. Treasuries advanced and U.S. equity-index futures dropped before a speech from Federal Reserve Chair Janet Yellen and several key pieces of economic data this week culminating in payrolls figures.
The shaky sentiment was summarized by Pedro Ricardo Santos, a broker at X-Trade Brokers DM SA in Lisbon. who told Bloomberg that “the correction in oil prices is outweighing any optimism about the economy in the markets. Investors will also expect a little more hawkishness from Yellen’s speech today. Although the likelihood of a rate increase in April is practically zero, many are looking for two more hikes by the end of the year.”
Market Snapshot:
Global Top News:
Looking at regional markets, we start in Asia stocks traded mostly negative following a subdued lead from Wall St. where discouraging data and a lack of EU participants kept risk-sentiment in check. ASX 200 (-0.77%) returned from its prolonged weekend to extend on last week’s financials weakness, while Nikkei 225 (-0.25%) was heavily pressured from the open following the largest decline in retail sales since 2014 and mass ex. dividends in Japan which totalled over 75% of Topix shares. Chinese markets (Shanghai Comp. -1.3%) conformed to the downbeat tone in the region and continued its recent declining trend with participants cautious ahead of several large named earnings reports and key PM! releases this week. 10yr JGBs traded lower with participants side-lined ahead of fiscal year-end, while the BoJ also refrained from entering the market with its bond purchase program.
Asia Top News
European participants return from their long weekends today to see equities firmly in the green (Eurostoxx: +0.3%). Stocks have benefitted from upside in financials, with this the best performing sector in Europe. Material names underperform amid downside in the commodity complex, with a bid in USD weighing on the likes of WTI, which resides around the USD 39/bbl level, and base metals which are broadly in the red.
European Top News
In FX, markets are back to full strength today, but with USD sentiment hanging on the word(s) of Fed chair Yellen — due to speak in NY just after the London close – trading has been mixed, with very little sense of direction as yet. We saw some early selling in Cable and EUR/USD, but this proved short lived, though the highs seen in thin trade Monday have yet to be matched. That said, a softer tone in EUR/GBP is giving Cable better support than that seen last week.
The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, rose less than 0.1 percent. While it pared its monthly drop to 2.5 percent, that’s still biggest since April. “The dollar is really not your best bet right now,” Vassili Serebriakov, a foreign-exchange strategist at BNP Paribas SA in New York, said in an interview on Bloomberg Television. “Every time you have the dollar rising, concerns about China devaluation, concerns about emerging-market growth, concerns about commodity markets – those start to resurface.”
Odds of the Fed raising rates at its June meeting have fallen to 38 percent, from 42 percent a week ago, according to Fed funds futures data compiled by Bloomberg. The Japanese yen weakened 0.1 percent at 113.56 per dollar, falling for an eighth day. Norway’s krone and Australia’s dollar were the worst performing major currencies.
In commodities, amid the continued appreciation in the USD-index, the energy complex has subsequently been pressured with WTI crude futures residing near session lows having broken below yesterday’s low at USD 38.86 and is now eyeing last week’s low at USD 38.33. West Texas Intermediate crude dropped further after sliding 5 percent over the past three sessions amid ongoing concern over a global glut in the commodity. Weekly U.S. government data is forecast to show another increase in crude stockpiles. Brent futures in London lost 2.1 percent to $39.42. Indonesia will attend a meeting of major oil exporters in Doha next month to consider an output freeze, according to Energy and Mineral Resources Minister Sudirman Said.
Spot gold fell 0.2 percent to $1,218.90 an ounce, pressured by the aforementioned recovery in the greenback, with the precious metal relatively range bound for much of the European morning.
In the base metals complex, copper and iron ore prices were also pressured amid the widespread cautious tone, with the latter falling by as much as 5% to a 3-week low alongside weakness in steel. Zinc and tin also declined, while aluminum rose as the London Metal Exchange reopened after two days of public holidays.
On today’s calendar we get the January Case-Shiller, the latest Consumer Confidence print and the API weekly inventory number, but the key highlight will be Janet Yellen’s speech at 12:20pm at the Economic Club of New York, while former Goldmanite and current Dallas Fed president Steven Kaplan will speak in Austun at 4pm.
Bulletin Headline Summary from RanSquawk and Bloomberg
US Event Calendar
DB’s Jim Reid completes the overnight wrap
So as we approach the final few days of what’s been one of the more volatile Q1’s in memory, the month of March has certainly been far kinder to risk assets relative to what we saw in January and February. A big rally across commodity markets and notably Oil has more than played its part, as has improving US economic data, a more dovish than expected Fed and of course the ECB bazooka. Over the holiday break newsflow has been fairly light and instead we’re looking ahead to a couple of events this week which will see the focus switch back once again to the Fed. The first of those will come this afternoon when we are due to hear from Fed Chair Yellen, speaking at the Economic Club of New York (scheduled for 4.20pm GMT). The speech looks set to take on slightly more importance than normal in light of what’s been a chorus of relatively hawkish Fedspeak over the past ten days or so. In that time we’ve heard Bullard, Lacker, Lockhart and Williams all hint at the possibility of a hike as soon as April or June, with Bullard the latest to suggest that ‘the Fed forecasts suggest that the next hike may not be far off’. This contrasts to the overall dovish view that we got from the Fed at the FOMC meeting earlier this month. Despite the comments in recent days, our US economists are still of the view that they doubt Yellen will sound overtly hawkish this afternoon and while she may reiterate that April remains a ‘live meeting’, they doubt that she will send a strong hike signal for next month. Markets are still yet to be convinced that the Fed will move next quarter, with the odds of an April hike a lowly 6% and a June hike just 38%, which is more or less where it has been since the FOMC meeting.
The other big event this week and another hurdle for the Fed is the March employment report which we’ll get this Friday. We’ll give a preview of this later in the week but the early market expectations are for a 210k print (after the 242k February number), a modest tick up in earnings and no change in the unemployment rate. As usual we’ve got the full run down of the week ahead at the end.
Taking a look at the latest in Asia this morning, it’s been a softer start on the whole with the bulk of bourses currently in the red. In China the Shanghai Comp is currently down -1.14%, while the tech-heavy Shenzhen is down a sharper -2.01%. The Nikkei (-0.49%) and Hang Seng (-0.26%) have seen more modest losses and are off their lows, although in Australia the ASX has tumbled -1.49% (with financials weighing the index down). Only the Kospi (+0.37%) is trading in positive territory as we go to print. Oil markets are reflecting the slightly damper tone this morning with WTI down close to half a percent, while credit markets are close to unchanged. Some mixed employment and retail sales data out of Japan this morning has seen the Yen trade in a fairly choppy manner meanwhile.
Moving on. In the period we’ve been off much of the newsflow has centered around a number of economic releases out of the US. Recapping the prints from yesterday firstly, on the inflation front we saw the core PCE print for February rise a less than expected +0.1% mom (vs. +0.2% expected) which has had the result of keeping the YoY rate unchanged at +1.7% (and a tenth above the Fed’s forecast for this year). The deflator was down -0.1% and in line with the consensus estimate. Away from this we saw personal spending rise +0.1% mom as expected last month, but more telling was the four-tenths of a percent downward revision to the January print. Personal income was a modest beat at +0.2% mom (vs. +0.1% expected). It’s worth noting that post yesterday’s PCE data the Atlanta Fed has now significantly downgraded their Q1 GDP forecast to 0.6% from 1.4% previously after revising down their real consumer spending growth forecasts.
Elsewhere yesterday, housing market data was reserved for the latest pending home sales data which revealed a bumper +3.5% mom rise for the month of February (vs. +1.2% expected) which was the biggest monthly gain in 12 months. Meanwhile the advance goods trade balance last month revealed a slightly wider than expected deficit ($62.9bn vs. $62.2bn expected) which is the widest in six months. The other notable release yesterday was further evidence of improvement in the manufacturing sector in the US. The Dallas Fed manufacturing survey bounced 18.2pts this month and although at a still lowly -13.6, is now at the highest level since November.
There was some notable data for us to highlight on Friday too, with an unexpected upward revision to the third estimate of Q4 GDP in the US to 1.4% qoq (from 1.0%). An upward revision to final sales boosted the number, as did a less negative contribution from inventories. Concerning in the details however was the first estimate of corporate profits in the quarter, with the data revealing a -7.8% qoq decline which is the biggest fall since Q1 2011. The -11.5% yoy decline for profits is now the worst since Q4 2008.
Quickly recapping the price action yesterday, with the bulk of markets shut in Europe for holidays it was an unsurprisingly quiet session in the US (with one eye on the events this week too) although both the S&P 500 (+0.05%) and Dow (+0.11%) did manage to eke out small gains with the former bringing to an end three consecutive days of (albeit modest) losses. The rally in the US Dollar, which had coincided with that run of hawkish rhetoric sputtered however with the Dollar index closing -0.34% for its first loss since the 17th of March.
Commodity markets were fairly subdued also with WTI closing out the day with a -0.18% loss and just below $40/bbl. Credit markets were near enough unchanged. Away from the US there was no negative reaction in Sterling (in fact closed up +0.86%) after Reuters ran a story on the weekend suggesting of some notable support for the pro-Brexit camp. According to the article, the report highlighted that 250 business leaders have backed the pro-Brexit campaign according to the Vote Leave group, although the Sunday Times did suggest that there were some notable omissions from the list which had some questioning the overall reliability of the headlines.
Over in the US this afternoon the notable release will be the March consumer confidence reading (where expectations are for a 1.8pt rise to 94.0), while the January S&P/Case-Shiller house price index for January is also due out. We’ll also hear from Fed Chair Yellen this afternoon when she is due to speak at the economic club of New York, while we’ll also hear from Williams and Kaplan today, Evans on Wednesday, Dudley on Thursday and finally Mester on Friday.
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The 81 passengers aboard EgyptAir flight MS181 got quite a scare on Tuesday when the Airbus 320 en route from Alexandria to Cairo was hijacked by a man who claimed to be wearing an explosive belt. Here’s the tweet that hit earlier this morning:
Our flight MS181 is officially hijacked. we’ll publish an official statement now. #Egyptair
— EGYPTAIR (@EGYPTAIR) March 29, 2016
Given recent events, it was only logical to suspect that we might soon be talking about #Egyptair as the latest in a string of tragic terror attacks perpetrated by ISIS militants. Indeed it was just five months ago that Islamic State’s Egyptian affiliate brought down a Russian passenger jet over Sinai killing more than 200 people.
Fortunately, the hijacker onboard MS181 turned out to be nothing more than a disgruntled man wanting to see his ex-wife. In Cyprus.
@SkyHindHassan and when Cypriot Pres was asked whether ‘a woman was involved’ he *reportedly* replied: “There is always a woman involved.”
— Zein Ja’far (@skyzein) March 29, 2016
I saw it. This definitely happened. #EgyptAir https://t.co/FtApH3KWa2
— Hind (@SkyHindHassan) March 29, 2016
The man has been identified as one Seif El Din Mistafa. Initially, the media fingered the wrong guy, blaming Ibrahim Samaha, a professor of veterinary medicine at Alexandria University.
At first, media identified the wrong Ibrahim Samaha and then realized that the hijacker’s name is not Ibrahim Samaha either. Priceless.
— Yannis Koutsomitis (@YanniKouts) March 29, 2016
Mistafa was sitting in seat K38 and apparently, he threatened the pilot (Omar Al-Gammal) with an explosives belt. Egyptian authorities were immediately skeptical.
“I doubt that he had explosives because security has been heightened across all Egyptian airports. But we will be able to confirm later,” Aviation Ministry spokesman Ehab Raslan said.
Still, the pilot followed the man’s demands and landed at Larnaca airport in Cyprus where all passangers save the crew and a handful of foreigners were released. “He’s not a terrorist, he’s an idiot,” The Egyptian foreign ministry said, in a statement. “Terrorists are crazy but they aren’t stupid. This guy is.”
Apparently, the ex-wife is being brought to the airport for negotiations. Meanwhile, the man has now decided that in addition to seeing his ex and securing asylum for himself in Cyprus, he also wants 63 women imprisoned in Egypt freed.
#Cyprus state TV now says #EgyptAir ? #MS181 hijacker wants also release of a number of political prisoners in #Egypt.
Plot thickens.— Yannis Koutsomitis (@YanniKouts) March 29, 2016
Pending those demands, the pilot, co-pilot, and 3 passengers are still being held on the plane, Cypriot media reports.
?? ??????? ?? ?????? ?????????????? ??? ???????.?? ?????? ????.https://t.co/ajuWuH2vbn#EgyptAirhijack_Cyprus http://pic.twitter.com/0bb9wUfYUR
— ant1iwo (@ANT1iwo) March 29, 2016
Photos from #Larnaca RT @ANT1iwo: ?? ??????? ?? ?????? ??????????????https://t.co/eP3PimxnEg#EgyptAir #Cyprus http://pic.twitter.com/U5A9WPpN6h
— Janine Louloudi (@janinel83) March 29, 2016
Watching @EGYPTAIR #hijacking unfold. http://pic.twitter.com/UG5aasrEGd
— Ollie Michael (@OllieMichael15) March 29, 2016
Egypt Plane Hijack: First visuals of Cyprus TV. https://t.co/pLHiIiTxcY
— NewsX (@NewsX) March 29, 2016
via Zero Hedge http://ift.tt/22Xc8Bl Tyler Durden
Hold your real assets outside of the banking system in one of many private international facilities –> http://ift.tt/1M1FiG5
Posted with permission and written by Gary Christenson, The Deviant Investor (CLICK FOR ORIGINAL)
In 1980 Ronald Reagan spoke about the Misery Index. An economist had added the inflation rate to the unemployment rate, called it the Misery Index, and used it to indicate the social costs and economic difficulty for the middle class.
Today the Misery Index is much smaller than in 1980, thanks to … intelligent fiscal management, economically beneficial monetary policy from the Federal Reserve, and wise political policy from the White House. If you believe any of those, read no further.
Most people will agree that the Misery Index is much smaller today because the numbers have been gimmicked. Does anyone believe a few percent for inflation or around 5% unemployment? Massage(torture) the numbers and the Misery Index declines, incumbent politicians are re-elected, while far too many people remain out of work, earning practically nothing on their savings, and paying too much for food, clothing, drugs, medical care, college, transportation and so on.
What we need for this decade, instead of a Misery Index, is an Insanity Index based on measures than indicate how out of balance, crazy, unsustainable, and dangerous our current fiscal and monetary world has become. Consider a few examples:
An index could be created – but what is the point? The United States fiscal and monetary policies passed “crazy” long ago, and now are pushing deeper into insanity with negative interest rates, a war on cash, out of touch Federal Reserve policy, insane debt, QE, uncontrolled deficit spending, and a “what could go wrong” attitude. Clearly the “paper game” has a limited life expectancy, Wall Street is due for a reset, government spending programs and pension plans are on life support, food stamps and student loans are two of many programs aggressively pushing the U.S. government into insolvency – and the solution is … negative interest rates, more QE, and a war on cash! Desperate and delusional!
Bubbles always pop. Delusions can persist for years or decades, but they eventually crash on the rocky shores of reality. Gold and silver were valuable 3,000 years before the first central bank and I submit they will be valuable 3,000 after the world regains monetary sanity.
Given the insanity of endless borrow and spend programs, ever increasing debt, overpriced stocks and bonds, desperation and delusions, and … so much more … have you stacked physical gold in preparation for the inevitable consequences of all the above?
Posted with permission and written by Gary Christenson, The Deviant Investor (CLICK FOR ORIGINAL)
GE Christenson is the owner and writer for the popular and contrarian investment site Deviant Investor and the author of the book, “Gold Value and Gold Prices 1971 – 2021.” He is a retired accountant and business manager with 30 years of experience studying markets, investing, and trading. He writes about investing, gold, silver, the economy, and central banking. His articles are published on Deviant Investor as well as other popular sites.
via Zero Hedge http://ift.tt/1RHmqO3 Sprott Money
With the increasing propaganda wars, we thought a reminder of just how naive many Westerners are when it comes to their news-feed. As Arjun Walia, of GlobalResearch.ca, notes, Dr. Ulfakatte went on public television stating that he was forced to publish the works of intelligence agents under his own name, also adding that noncompliance with these orders would result in him losing his job.
He recently made an appearance on RT news to share these facts:
I’ve been a journalist for about 25 years, and I was educated to lie, to betray, and not to tell the truth to the public.
But seeing right now within the last months how the German and American media tries to bring war to the people in Europe, to bring war to Russia — this is a point of no return and I’m going to stand up and say it is not right what I have done in the past, to manipulate people, to make propaganda against Russia, and it is not right what my colleagues do and have done in the past because they are bribed to betray the people, not only in Germany, all over Europe.
It’s important to keep in mind that Dr. Ulfakatte is not the only person making these claims; multiple reporters have done the same and this kind of truthfulness is something the world needs more of.
One (out of many) great examples of a whistleblowing reporter is investigative journalist and former CBC News reporter Sharyl Attkisson.
She delivered a hard-hitting TEDx talk showing how fake grassroots movements funded by political, corporate, or other special interests very effectively manipulate and distort media messages.
Another great example is Amber Lyon, a three-time Emmy award winning journalist at CC, who said that they are routinely paid by the US government and foreign governments to selectively report and even distort information on certain events. She has also indicated that the government has editorial control over content.
Ever since Operation Mockingbird, a CIA-based initiative to control mainstream media, more and more people are expressing their concern that what we see in the media is nothing short of brainwashing.
This is also evident by blatant lies that continue to spam the TV screen, especially when it comes to topics such as health, food, war (‘terrorism‘), poverty, and more.
Things have not changed, in fact, when in comes to mainstream media distorting information and telling lies. They have gotten much worse in recent years, in fact, so it is highly encouraging that more people are starting to see through these lies, even without the help of whistleblowers like Dr. Ulfakatte.
One great example is the supposed ‘war on terror,’ or ‘false flag terrorism.’ There are evenWikileaks documents alluding to the fact that the United States government planned to “retaliate and cause pain” to countries refusing GMOs.
Mainstream media’s continual support of GMOs rages on, despite the fact that a number of countries are now banning these products.
The list of lies goes on and on. It’s time to turn off your T.V. and do your own research if you are curious about what is happening on our planet. It’s time to wake up.
via Zero Hedge http://ift.tt/1SiqK6X Tyler Durden