Tag: finance

Perhaps it was his comments today that “a construction boom is coming… tune out the noise and enjoy the bull market” due to lower oil costs and improving weather; but it appears JPMorgan and the permabull are about to part company after 15 years:

• *JPMORGAN U.S. CHIEF EQUITY STRATEGIST THOMAS LEE DEPARTS FIRM
• *JPMORGAN ANNOUNCES LEE’S DEPARTURE IN INTERNAL MEMO

It is unclear if Lee’s next career will be as waterboy for Ben Bernanke on his $250,000/speech global speech tour. What is, however, likely is that in his place JPM will simply unleash an algorithm that keeps raising JPM’s “official” S&P500 price target to 100 points above wherever the S&P may be at any given moment.

 

His last permabull appearance on CNBC as a JPM Talking Head…Enjoy!

“Tune out the noise and enjoy the bull market”

 

The curve becomes inverted in front of recessions, and markets should have plenty of lead time to prepare, Lee said.

 

Investors shouldn’t ignore runaway valuations or bubble-like behavior, but Lee said symptoms of a looming recession remain the “most telling bear sign.”

 

“These are things we can’t ignore,” Lee said. “You don’t want to have a market that becomes speculatively frothy. The most important thing for us [are] the signs of a recession. … Really we should focus on the fact that we’re in a bull market.”

 

Rumors suggest that he is leaving the firm to run corporate relations for Bill Fleckenstein’s new short fund… or not.

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He may not have been a banker or trader, but the just reported passing of one Jeffrey Corzine, 31, son of the infamous Jon Corzine will likely raise more eyebrows than all previous recently reported banker deaths combined.

According to the NY Post, Jeffrey Corzine, who friends said worked as a drug counselor in California, was just 31, when he passed.  Details of his death were not immediately known.

“Mr. Corzine is obviously devastated by this tragic loss,” said his spokesman, Steven Goldberg. “We ask that all respect his family’s privacy during this very difficult time.”

He was a constant by his father’s side in the days after the former governor’s near-fatal car crash in 2007.

The youngest of the former politician’s three children with ex-wife Joanne Corzine, Jeff also had launched a fledgling photography website. The photography site, which features photos of walls, nature, and various semi-nude women, can be found here.

And now let the conspiracy theories surrounding the death of the young Corzine begin.

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With the Sunday Crimean referendum seemingly unstoppable now, its outcome certain, it is set to unleash a chain of events that is not entirely predictable but is at best, ominous, as it will involve the launch of trade, economic and financial sanctions against Russia (despite China’s stern disapproval), which will lead to a “symmetric” response in kind by Moscow. And in a worst case escalation scenario, should game theory completely collapse and everyone starts defecting from a cooperative equilibrium state, the first thing to go will be European gas exports from Russia, anywhere from one day to indefinitely. So which European countries are most exposed to the whims of Gazprom? The following map from the WSJ, shows just how reliant on Russian gas exports most European countries are.

One wonders just how “stern” any sanctions these countries support and enforce against Russia will truly be. Then again, as the WSJ reports, Europe somehow believes that despite its massive reliance on Ukraine for energy, it can weather a storm:

Mr. Oettinger says Europe is now in a stronger position to withstand possible disruptions in supplies, thanks in part to a mild winter, more storage capacity and pipeline infrastructure that allows more gas to flow from west to east.

 

But he has also said that the EU should reach out to other gas exporters and build more terminals for liquefied natural gas, and that countries should also start exploratory work on shale gas.

 

“The Russians are now more dependent on our money than we are on their gas,” said Mr. Wieczorkiewicz, adding that around half of Russia’s revenues are derived from oil and gas sales. “The EU could also explore ties to Norway, Algeria and Qatar as alternative suppliers, increase the use of coal and import LNG.”

 

But in the short term, others argue that the EU is short of options if it wants to use energy as a tool against Moscow. “Russia remains the largest exporter of gas to the EU; there’s no way of [quickly] sourcing those amounts of gas elsewhere,” said Simon Pirani of the Oxford Institute for Energy Studies.

 

“Europe has to ask itself how important is the economic relationship with Russia, which provides that cheap energy, and how important is the political protest that it wants to make” about Crimea, he said.

So who wins in the end: the provider of the commodity, or the buyer who pays with infinitely dilutable fiat, especially if any further escalation by the west against Russia will merely bring China and Russia together even closer. Somehow we think our money is on the KGB spy instead of the clueless and insolvent European bureaucrats.

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

Yesterday, we warned that the Fed was playing a dangerous game with inflation.

Today, we want to take note that the Fed is in fact just one of the Central Banks doing this.

Indeed, in Japan inflation has already begun to take off, driven by the Bank of Japan’s $1.4 trillion QE program.

Bloomberg notes that inflation has weakened the yen by 6.8% in the past 12 months… and the cost of living in Japan is now at a five year high.

We’ve highlighted the critical parts in the below article for your review.

The misery index, which adds the jobless rate to the level of inflation, will climb to 7 percentage points in the three months starting April 1 when Japan raises its sales levy to 8 percent from 5 percent, based on the median estimates of economists in Bloomberg News surveys of unemployment and consumer prices. That would be the highest level for the measure since June 1981 when Japan was emerging out of depression after the oil shocks in the 1970s.

Bank of Japan monetary stimulus designed to spur economic growth and achieve 2 percent inflation has weakened the yen by 6.8 percent in the past 12 months, eroding the value of wages to a record low. Abe, the son of an ex-foreign minister who grew up in a house with servants, is under fire from the opposition party after the cost of living surged to a five-year high.

http://ift.tt/1dOjDTr

Japan’s Prime Minister ran on a platform of creating inflation to drive growth. He’s now finding out that inflation and growth do not go hand in hand (inflation actually eats into growth by debasing the currency).

This is a real problem for Japan… and the rest of the world. Global Central Banks have printed over $10 trillion in the last five years. This money is seeping into the financial system, pushing up the cost of living everywhere.

In Japan, it’s pushed the misery index to a 33 year high. Who knows what it will do for the rest of us.

For a FREE Special Report on how to protect your portfolio from inflation, swing by

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Best Regards

Phoenix Capital Research

 

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Copper's China-credit-contraction-driven crash continues as the metal drops to fresh 5-year lows today (on par with Lehman and the US downgrade collapses). Japanese stocks are down over 1000 points from their post-Putin highs. Russian stocks are plunging, Germany's (and Swiss) bonds are surging (as is gold) and European equity and credit markets are in free-fall. But apart from that… Finally we saw the world's angst spill into Yen-carry trades (USDJPY was spanked today – almost biggest drop in 6 months). US equities plunged tick-for-tick with USDJPY (S&P's biggest drop in 6 weeks and red for 2014); Treasury yields were crushed 9-10bps from intraday highs (biggest drop in 2 months); credit spreads banged wider; gold jumped to six-month highs; and EUR weakness (post-Draghi) ramped the USD back near unchanged on the week. VIX was a one-way street higher all day (biggest low-to-high run in 6 weeks) to 6-week highs.

CNBC clarifies "you can't find any single reason for this selloff" – nope, none at all…

But perhaps this is more realistic (h/t @stalingrad_Poor):

JPY-carry collapse sent stocks reeling:

 

Only Trannies remain green from Putin's press conference (despite a late-day ramp effort) – this is the 4th down-day in a row for the Dow

 

Year-to-date, the S&P joins the Dow in the red once again…

 

Financials (trumpeted as the leader of the next leg higher in stocks) are back to unchanged  YTD with Utes leading the way…

 

VIX was a one-way street higher with 2 efforts to ramp (including the ubiquitous late-day ramp)

 

And bonds recovered most of their post-Putin (and issuance rate-lock biased) losses…

 

Credit markets continue to be ugly here but stocks playing catch down quickly…

 

Demand for safe havens is dominating growth hope this week…

 

FX markets were a mess – AUD spiked on Aussie jobs data (but recovered the move in the US session), JPY rallied dramatically, and EUR dumped on Draghi jawboning…

 

Copper's drop is starting to look a lot like Lehman… (copper intrday clung to yesterday's intrday lows but closed at lowest levels since mid-2009)

 

And Japan is getting spanked… (as JPY drops most in 6 months)

 

 

Charts: Bloomberg

Bonus Chart: The World Stock Market's Equity Price-to-Central Bank Balance Sheet multiple remains very stable (for now)… (h/t @Not_Jim_Cramer)

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Submitted by Simon Black of Sovereign Man blog,

Nearly four thousand years ago, King Hammurabi of Babylon laid out his eponymous “Hammurabi’s Code”, a series of laws that is still famous to this day.

Most people know Hammurabi’s Code as “an eye for an eye, a tooth for a tooth”. Yet what few realize is that the code was actually one of the original attempts at government wage and price controls.

Hammurabi’s Code decreed, for example, that the daily rate of pay for a tailor would be five grains of silver, and a farm laborer would be six grains of silver. The cost of hiring a small animal for field work would be four bushels of corn. Etc.

Of course, Hammurabi’s attempts to control prices didn’t work one bit. In his book The Old Babylonian Merchant: His Business and Social Position (published 1950), historian W.F. Leemans writes:

“Prominent and wealthy tamkaru [merchant traders] were no longer found in Hammurabi’s reign. Moreover, only a few tamkaru are known from Hammurabi’s time and afterwards . . .”

Despite the economic failures of Hammurabi’s experiment, though, wage and price controls have been tried again and again throughout history.

2,000 years later, Emperor Diocletian of the failing Roman Empire issued his Edict on Wages and Prices. The ancient Athenians tried (and failed) to set grain prices, and even had a small army of regulators to oversee the price controls. So did the the Zhou dynasty in ancient China.

Today you can see various forms of wage and price controls all over the world– from the blatant (Argentina) to the subtle.

Major farm subsidies in the United States, for example, are a form of price controls. Monetary policy (especially keeping interest rates at effectively zero) are a form of price controls.

Yet today President Obama is set to lauch another far more obvious form.

The central planner-in-chief is going to sign an Executive Order to require employers to expand overtime pay in the Land of the Free. This, on top of his recent proposal to increase the minimum wage 39% to $10.10 per hour (not that there’s any inflation).

Obviously this ‘decree by executive order’ strategy shows the political system for what it is: there is no republic, there are no checks and balances, there is no adherence to the Constitution.

They do whatever they want, however they want, with total immunity.

The troubling part about this executive order (aside from being yet another soon-to-fail wage control) is that it essentially abrogates millions of work contracts across the country.

Employers and their workers have long since agreed to terms of employment that may or may not include overtime pay.

Today President is unilaterally voiding any specific provisions about overtime pay in existing employment contracts, all in his sole discretion, and all without Congressional oversight.

The rule of law means nothing.

And even though any high school economics student can tell you that wage and price controls don’t work, the government is pressing ahead with vigor, damn the consequences.

Given their continued destruction of the middle class, perhaps it’s time we bring back ‘an eye for an eye, a tooth for a tooth.’

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Shortly after Ukraine found out that financial aid from the US will not be forthcoming (thanks to politicial gridlock); it appears they will be disappointed by the US once again:

• *UKRAINE SAID TO ASK FOR ARMS FROM US, FLY SAYS CITING DJ
• *U.S. SAID TO DENY UKRAINE REQUEST FOR ARMS, FLY SAYS CITING DJ

It would appear that what is good for US-assisted Syrian Al-Qaeda rebels is not good enough for the vastly outmatched and outnumbered Ukrainians.

The UN Security Council does not sound hopeful:

• *DIPLOMATIC SOLUTION TO CRIMEA `ELUSIVE,’ UN OFFICIAL SAYS

As clashes breakout in Dontesk (with a tleast 10 injured):

• *DONETSK CLASHES BETWEEN PRO-RUSSIA, PRO-UKRAINE SIDES: INTERFAX
• *DONETSK CLASHES IN UKRAINE INVOLVE 4,000 PEOPLE, INTERFAX SAYS
• *DONETSK CLASHES IN UKRAINE INVOLVE 4,000 PEOPLE, INTERFAX SAYS

With tear gas and stun grenades being used.

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