Consumer Comfort Plunges To 13 Month Lows

Another day, another collapse in a measure of the 'peoples' confidence. Despite the animal spirits of euphoric dot-com bubble betting that is the new-normal US equity markets, it seems both rich and poor are not loving it. Bloomberg's consumer comfort index dropped to -37.9 – its lowest since October 2012 having dropped for the 6th week in a row. The last time we saw a collapse of this size, the Fed saved us all with QE3… what this time?

 

 

"they" better hope confidence comes back soon…

Via Citi,

Is consumer confidence set to turn?

Consumer Confidence is once again following a dynamic where we see it move higher for 4 years and 4 months before beginning to collapse

  • Moves higher from 1996-2000 with a smaller dip halfway through in October 1998
  • Moves higher from 2003-2007 with a smaller dip hallway through in October 2005
  • Moves higher and so far tops out in June 2013. Also sees a small dip halfway through in October 2011.

 

Higher yields do not help confidence…

 

A sharp rise in mortgage rates has a negative feedback loop to consumer confidence. For those families and individuals that were now looking/able to enter the housing market, the recent spike in rates acts as a headwind.

 

In addition to the economic backdrop, there is plenty of tail risk as we head into the end of the year. Oil prices have been rising since the summer began (and in reality since the Summer of 2012), partially due to geopolitical risks which are very much “top of mind.” A bigger spike due to a supply shock would choke the economic recovery.(In our view)

In the US, the appointment of a new Fed Chairman and the upcoming budget/debt ceiling debates are likely to bring added volatility. Tapering itself can also induce concern as the “Bernanke put” is being removed from markets.

In Europe, many of the structural problems related to the single currency union have not actually been addressed and the peripheral countries could still create turmoil going forward (see Fixed Income section focusing on Italy in particular for more on this). There has also been little concern with both the German elections and the German Court decision on the constitutionality of the OMT program. A surprise in either of these could be cause for concern.

Emerging Markets are still not out of the woods yet as growth has been weak relative to expectations and countries with current account deficits are beginning to feel pressure in their FX and Bond markets. This is an issue we believe is only starting to develop which we will continue to expand on at later dates.(We have also looked at this in our EM FX section this week)

Overall, the weak economic backdrop, poor housing recovery and potential for tail risk events over the next few months suggest that we have topped out in Consumer Confidence, a warning sign for equity markets.

 

The relationship between Consumer Confidence is clear, and IF June did mark the high and Confidence continues to decline, then we would expect to see that translate to weakness in the equity markets. The removal of the “Bernanke put” only adds to this concern.

A major turn has taken place in equity markets on average four months after Consumer Confidence turns, which would point to a decline beginning around September-October. As we have previously expressed, we remain of the bias that a correction in equity markets on the order of 20%+ is likely this year/ into 2014 and the current dynamics support such a move.

Should we see a decline of that magnitude, it is almost certain that yields would move lower in a rush to safe assets.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/CLJf726XtEA/story01.htm Tyler Durden

With Twitter Set To Break Over $40, Banks Tell Employees To Slow Down With Clogging Orders

This is what client-facing desks are seeing at various banks across Wall Street right now. One example below:

PLEASE DO NOT ENTER ANY MARKET ORDERS FOR TWTR UNTIL AFTER THE STOCK STARTS TRADING. THESE ORDERS ARE CAUSING A LARGE NUMBER OF REJECTS WHICH MAY DELAY ENTRY OF YOUR ORDER.

 

THANK YOU FOR YOUR CO-OPERATION

Translation: slow down damn it, there will be more than enough shares sold to satsify all demand. Why is there a scramble? Because of this: TRADING RANGE: TWTR (NYSE): 40.0000-44.0000


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/By1IBQA1tHk/story01.htm Tyler Durden

Before The Break: Twitter vs FaceBook vs LinkedIn In One Chart

“I’m buying coz everyone is talking about it…”

 

 

We note that, according to Reuters, the IPO is 30x oversubscribed, and bear in mind that banks have advised internally to cancel all limit orders that are over 15% below the NBBO. Which means keep a trailing limit order at 14.99% or less below the NBBO in case of ‘market events’.

We are sure, given all these ‘extra’ rules that greed will take a back seat, that the machines will cross their arms and wait patiently, and that TWTR will open just as CNBC’s Bob Pisani hoped – higher with a gentle drift higher all day… </sarc>

 

(h/t @MWellerFX)


    



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The Next Gene Engineering Revolution: Curing Genetic Disease and “Designer Babies” Using Crispr

CrisprToday The Independent has a
fascinating article on a new extremely precise gene editing
technique called Crispr. The enzyme
CAS9 derived from bacteria enables researchers to edit genomes at
will. The technique clearly has major implications for treating
genetic diseases in people. Current techniques can insert new genes
but often they land fairly randomly and disrupt other genes. The
new technique appears to be so accurate and so safe that it could
be used to correct genetic flaws in human embryos. As The
Independent
explains:

A breakthrough in genetics – described as “jaw-dropping” by one
Nobel scientist – has created intense excitement among DNA experts
around the world who believe the discovery will transform their
ability to edit the genomes of all living organisms, including
humans.

The development has been hailed as a milestone in medical
science because it promises to revolutionise the study and
treatment of a range of diseases, from cancer and incurable viruses
to inherited genetic disorders such as sickle-cell anaemia and Down
syndrome.

For the first time, scientists are able to engineer any part of
the human genome with extreme precision using a revolutionary new
technique called Crispr, which has been likened to editing the
individual letters on any chosen page of an encyclopedia without
creating spelling mistakes. The landmark development means it is
now possible to make the most accurate and detailed alterations to
any specific position on the DNA of the 23 pairs of human
chromosomes without introducing unintended mutations or flaws,
scientists said.

The technique is so accurate that scientists believe it will
soon be used in gene-therapy trials on humans to treat incurable
viruses such as HIV or currently untreatable genetic disorders such
as Huntington’s disease. It might also be used controversially to
correct gene defects in human IVF embryos, scientists said….

In addition to engineering the genes of plants and animals,
which could accelerate the development of GM crops and livestock,
the Crispr technique dramatically “lowers the threshold” for
carrying out “germline” gene therapy on human IVF embryos, added
Professor [Craig] Mello [of the University of Massachusetts Medical
School and 2006 Nobelist for his discovery of RNA
interference]….

Germline gene therapy on sperm, eggs or embryos to eliminate
inherited diseases alters the DNA of all subsequent generations,
but fears over its safety, and the prospect of so-called “designer
babies”, has led to it being made illegal in Britain and many other
countries.

The new gene-editing technique could address many of the safety
concerns because it is so accurate. Some scientists now believe it
is only a matter of time before IVF doctors suggest that it could
be used to eliminate genetic diseases from affected families by
changing an embryo’s DNA before implanting it into the womb.

“If this new technique succeeds in allowing perfectly targeted
correction of abnormal genes, eliminating safety concerns, then the
exciting prospect is that treatments could be developed and applied
to the germline, ridding families and all their descendants of
devastating inherited disorders,” said Dagan Wells, an IVF
scientist at Oxford University.

“It would be difficult to argue against using it if it can be
shown to be as safe, reliable and effective as it appears to be.
Who would condemn a child to terrible suffering and perhaps an
early death when a therapy exists, capable of repairing the
problem?” Dr Wells said.

Here’s hoping that the Crispr technique lives up to the hype.
Now if we can only keep the bioethicists (“science is outrunning
our regulations”) from interfering.

The
whole article
is worth reading.

H/T Marian Tupy.

from Hit & Run http://reason.com/blog/2013/11/07/the-next-gene-engineering-revolution-cur
via IFTTT

The Next Gene Engineering Revolution: Curing Genetic Disease and "Designer Babies" Using Crispr

CrisprToday The Independent has a
fascinating article on a new extremely precise gene editing
technique called Crispr. The enzyme
CAS9 derived from bacteria enables researchers to edit genomes at
will. The technique clearly has major implications for treating
genetic diseases in people. Current techniques can insert new genes
but often they land fairly randomly and disrupt other genes. The
new technique appears to be so accurate and so safe that it could
be used to correct genetic flaws in human embryos. As The
Independent
explains:

A breakthrough in genetics – described as “jaw-dropping” by one
Nobel scientist – has created intense excitement among DNA experts
around the world who believe the discovery will transform their
ability to edit the genomes of all living organisms, including
humans.

The development has been hailed as a milestone in medical
science because it promises to revolutionise the study and
treatment of a range of diseases, from cancer and incurable viruses
to inherited genetic disorders such as sickle-cell anaemia and Down
syndrome.

For the first time, scientists are able to engineer any part of
the human genome with extreme precision using a revolutionary new
technique called Crispr, which has been likened to editing the
individual letters on any chosen page of an encyclopedia without
creating spelling mistakes. The landmark development means it is
now possible to make the most accurate and detailed alterations to
any specific position on the DNA of the 23 pairs of human
chromosomes without introducing unintended mutations or flaws,
scientists said.

The technique is so accurate that scientists believe it will
soon be used in gene-therapy trials on humans to treat incurable
viruses such as HIV or currently untreatable genetic disorders such
as Huntington’s disease. It might also be used controversially to
correct gene defects in human IVF embryos, scientists said….

In addition to engineering the genes of plants and animals,
which could accelerate the development of GM crops and livestock,
the Crispr technique dramatically “lowers the threshold” for
carrying out “germline” gene therapy on human IVF embryos, added
Professor [Craig] Mello [of the University of Massachusetts Medical
School and 2006 Nobelist for his discovery of RNA
interference]….

Germline gene therapy on sperm, eggs or embryos to eliminate
inherited diseases alters the DNA of all subsequent generations,
but fears over its safety, and the prospect of so-called “designer
babies”, has led to it being made illegal in Britain and many other
countries.

The new gene-editing technique could address many of the safety
concerns because it is so accurate. Some scientists now believe it
is only a matter of time before IVF doctors suggest that it could
be used to eliminate genetic diseases from affected families by
changing an embryo’s DNA before implanting it into the womb.

“If this new technique succeeds in allowing perfectly targeted
correction of abnormal genes, eliminating safety concerns, then the
exciting prospect is that treatments could be developed and applied
to the germline, ridding families and all their descendants of
devastating inherited disorders,” said Dagan Wells, an IVF
scientist at Oxford University.

“It would be difficult to argue against using it if it can be
shown to be as safe, reliable and effective as it appears to be.
Who would condemn a child to terrible suffering and perhaps an
early death when a therapy exists, capable of repairing the
problem?” Dr Wells said.

Here’s hoping that the Crispr technique lives up to the hype.
Now if we can only keep the bioethicists (“science is outrunning
our regulations”) from interfering.

The
whole article
is worth reading.

H/T Marian Tupy.

from Hit & Run http://reason.com/blog/2013/11/07/the-next-gene-engineering-revolution-cur
via IFTTT

TSA Uses Expensive Criminal Investigators To Fail To Investigate Security Vulnerabilities, Says Report

TSANot that the TSA needs more
trouble, but then again, the rest of us don’t need more TSA. And we
really don’t need overpaid, poorly deployed Transportation Security
Administration criminal investigators sent hither and yon on
expensive, poorly conceived tasks that pretty much anybody could
have done at lower cost. And we don’t expect the agency tasked with
providing transportation security to lack any sort of game plan for
determining if it’s doing its job. But that’s exactly what’s been
happening, according to a report from the DHS Office of Inspector
General.

The report
(PDF) found that the Office of Inspections (OOI), which is largely
staffed by well-paid criminal investigators and tasked with
detecting vulnerabilities in TSA security systems and conduct
internal inspections, doesn’t operate efficiently. Specifically,
the OOI uses criminal investigators receiving “premium pay” to
perform duties that could have been performed by other employees at
lower cost. More troubling for an office detailed to determine if
the Transportation Security Administration is actually providing
some sort of transportation security, “Quality controls were not
sufficient to ensure that inspections, internal reviews, and covert
testing complied with accepted standards.”

OOI did not effectively plan its work, did not adequately
measure its performance, and did not have quality control
procedures to ensure that all divisions complied with standards
that the office had committed to using in its work. OOI also could
not require other TSA offices to respond to its recommendations. In
addition, TSA did not hold OOI accountable for developing and
implementing effective quality controls over its resources,
staffing, and operations. As a result of the issues that we
identified with OOI’s quality controls over its work products, TSA
management may not be able to rely on this work, and the office may
not have accomplished its mission to identify and address
transportation security vulnerabilities.

TSA OOI salariesTop-heavy staffing in terms of criminal
investigators is projected to cost an unnecessary $17.5 million in
Law Enforcement Availability Pay (which is 25 percent higher than
base pay) over five years, the report adds. That doesn’t take into
account additional costs from the ability to retire with full
benefits at age 50 after 20 years of service, and faster accruing
pensions. In fact, criminal investigator salaries account for 68
percent of OOI salary costs, even though the law enforcement-rated
staffers are often used for work that anybody could do.

And then there’s that additional problem of not actually
accomplishing its mission, despite those costs. The report warns
that, without quality control, planning or adequate standards,
“management may not be able to rely on OOI’s work.” And since that
work consists of trying to ensure that the TSA is actually
providing security, the rest of us can’t really rely on the TSA as
a whole.

Not that we ever thought we could.

from Hit & Run http://reason.com/blog/2013/11/07/tsa-uses-expensive-criminal-investigator
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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
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How to Spend $75 Billion to Make the World a Better Place,
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Other speakers on this year’s cruise include author and former
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from Hit & Run http://reason.com/blog/2013/11/07/all-aboard-for-a-sun-filled-intellectual
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A.M. Links: Federal Employees Sue Government for Late Pay, Maine Police Chief Says No to Legal Marijuana, $15 Minimum Wage Initiative Wins in Seattle Suburb

  • Federal employees who worked
    during the government shutdown
    are suing the government
    for damages because they weren’t paid
    on time. It would be so satisfying to watch the government fight
    itself if it weren’t taxpayer dollars it was fighting over.
  • Health and Human Services Secretary Kathleen Sebelius
    acknowledged that enrollment figures for Obamacare for
    October 
    will be “very low.”
     Only six people signed up on the first
    day of enrollment. The government’s top healthcare IT official,

    meanwhile
    , has stepped down and is headed to the private
    sector.
  • Al Gore slammed the NSA’s surveillance program and predicted
    it will be reined in
    . Let’s hope that’s more accurate than his
    weather predictions.
  • Despite the ordinance legalizing marijuana, the police chief of
    Portland, Maine says officers will
    still issue citations
     for possession. On the bright side,
    he also said reprimandning pot smokers is a low priority.
  • Backers have declared an initiative for a
    $15 hourly minimum wage
    at Seattle’s Sea-Tac International
    Airport to be victorious.
  • Twitter Inc
    could face volatile trade
    in its debut Thursday on the New York
    Stock Exchange, but analysts remain enthusiastic after the
    money-losing social media company priced its IPO above the expected
    range.
  • Syrian troops have retaken a
    key rebel-held town
    south of Damascus, according to state-run
    media.

Follow Reason and Reason 24/7 on
Twitter, and like us on Facebook.
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can also get the top stories mailed to
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Have a news tip? Send it to us!

from Hit & Run http://reason.com/blog/2013/11/07/am-links-federal-employees-sue-governmen
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Gold Monkey-Hammered Below $1300

The initial ramp-and-revert in gold (and silver) prices gave way to a $20 price collapse once Draghi began speaking – as if someone decided that Draghi’s speech was somehow ‘credibility-providing’ for the status quo… we assume this move is reflective of Draghi’s ‘dis-inflationary’ warnings (though th einitial move seemed sparked by the better-than-expected GDP print – so Taper on?) What the un-reflexive jerk in precious metals fails to see – it would seem – is the need for the European central bank to reflate by whatever means possible that deflationary trend…(even if the Fed slows, it will be back soon enough). Gold futures saw volume explode as he began speaking (and US GDP pronted) but price plunged and volume legged even higher as Draghi mentioned the ‘d’ word…

 

 


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/1bfUch_Iss0/story01.htm Tyler Durden

Q3 GDP Roars To 2.8% Despite Weakest Consumer In Over Two Years

A day of fireworks that started with the stunner by Goldman’s head of the ECB has just gotten its second wind following the preliminary announcement of Q3 GDP, which roared from 2.5% to 2.84%, far above expectations of a 2.0% annualized number.

On the surface this was a bad number for Taper watchers, as it may mean the Fed will actually have to moderate its monthly flow precisely at the time when the ECB was forced to do “whatever it takes” in its fight with inflation, however a quick look at the internals shows that once again there is much more than meets the eye: because while the headline print was the strongest since Q3 2012, the core driver of economic growth, Personal Consumption, grew 1.5% below the expected 1.6%. Specifically, of the 2.84% number, PCE was just 1.04%, the lowest since Q2 2011!

Elsewhere, fixed investment – an indication of capex –  was just 0.63%, below the 0.96% reported last quarter. So what drove “growth”? Why the traditional hollow component: Inventory, which amounted to 0.83% of the 2.8% print, double the 0.41% in the prior quarter. Net trade added an additional 0.3%, and finally government ticked on a modest 0.04% – the first positive contribution since Q3 2013.

In short: a little in here for everyone, with the market bulls happy to point out that the US consumer is the weakest he has been in over two years, while economist happy to highlight that the US economy is, in fact, growing at a brisk pace.


    



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