Tag: finance

Treasuries Tumble Most In 6 Months As Trannies Soar To New Highs

The world and their pet rabbit was convinced yesterday that today's jobs number was both the most-important-number-in-the-world and didn't matter (because whether it beat or missed it was bullish for stocks). Seconds after the release that appeared to be true as JPY instantly dragged stocks to record highs (and the USD up and bonds and gold down). However, trumped by confirmation that the taper is continuing, Gazprom warnings, Lavrov threats, and finally reports of a Russian invasion, stocks leaked lower to Tuesday's ramp-day closing levels. Thanks to some last-minute JPY and VIX banging, S&P closed green for the 15th of last 16 NFPs. Despite intraday volatility, the USD ended the week unchanged, gold +1%, silver -1.5% and Treasuries +14bps or so (its worst week in 6 months!). Credit markets continue to be non-believers (with the high-yield bond ETF plunging this week). Critically, after last night's default in China, Iron Ore and Copper futures were crushed and we suspect Sunday night's Asia open could see more fireworks.

So some see today's jobs data as good news (NFP beat) which is bad news as it encourages moar taper… sell bonds, sell gold, buy USD and it took a little for stocks to catch up that in fact this is dismal job growth and hoping that we have reached escape velocity is a dream… and this print won't allow the Fed to save the day if we tumble on the back of some exogenous event…

 

Only one thing mattered today to keep the "common knowledge" meme alive – a green close on a payrolls Friday no matter waht was critical… JPY was tired having been abused all week… so VIX, the old-whipping-boy of market-manipulating muppets, was smashed lower into the close just perfectly to get the S&P 500 cash index to close green by the smallest margin…

 

Now tell us this – some talking head claimed that everyone is hedged? and that's the ammo for a rmap higher… if everyone is hedged then who the fuck was selling the crap out of vol into the close today?

 

For 2014, Gold and Silver remain the winners, The USD and HY Credit the losers…

 

High-beta has had a tough couple of days…the S&P has closed higher on a jobs Friday 15 of the last 16 times… as we were saved in th elast few minutes…

 

And the MoMo names suffered the last 2 days…

 

But Trannies just were on fire on the week…

 

Healthcare (well Biotechs) continues to lead the year but Financials were th ebig winners this week (up over 3%)…

 

Treasuries were banged higher in yield all week…

 

and even as stocks fell on Friday to end the worst week in 6 months…

 

Credit markets are not as exuberant as stocks…

 

While the USDollar ended the week unchanged (ramping back on the NFP print) – it is clear from the chart below what currenies were in charge this week (AUD up, JPY down)…

 

And so AUDJPY ran the show in stocks…

 

Commodities were a mixed bag despite the UNCH of the dollar… copper crushed on China and gold bid as fear remains about Ukraine…

 

Interestingly, "Most shorted" stocks ended the week -0.6% as the massive squeze at the start of the week gave way as "most shorted" stocks sold off dramatically more than the broad market…

 

Charts: Bloomberg

Bonus Chart: Iron Ore and Copper collapsing as credit fears unwind in China…

 

Bonus Bonus Chart: Seems like the NFIB "promises" to raise compensation were worthless…


    



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Has This Chart “Reached A Permanently High Plateau”?

Despite stocks being at record highs, sell-side strategists proclaiming today’s jobs report as great, and the Fed comfortable tapering in the face of transitory weather-related macro weakness, the following chart suggests all is not well… Echoing Irving Fisher, it appears we have reached a permanently high plateau in the duration of unemployment in America…

 

 

h/t @Not_Jim_Cramer


    



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Fed’s Dudley “US Dollar Wins”; Bitcoin “Not a Good Store Of Value”

While the volatility of Bitcoin has been considerable, perhaps merely reflective of the early days of a revolution, the fact that the “value experts” at the Fed have pronounced:

  • *DUDLEY SAYS BITCOIN ‘IS NOT VERY GOOD STORE OF VALUE’
  • *DUDLEY SAYS ‘U.S. DOLLAR WINS’ OVER BITCOIN ACROSS MANY METRICS

..raised an eyebrow or two on our furrowed brows. We thought a look at the following two charts since the inception of Bitcoin and the inception of the Fed would help clarify “value” stability…

 

Bitcoin since inception…

 

And the USDollar since the Fed’s inception…

 

You decide?


    



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How the Repo Industry is Collecting Data on Virtually Every Car in America

Privacy is being violated from all angles. The government, private corporations, the list is seemingly endless. While there have been many reports of government agencies using license plate scanners under questionable legality, the role of private corporations and the repo industry has received considerably less coverage. Until now.

Beta Boston (part of the Boston Globe) has published an excellent report into this very disturbing trend. Excepts below:

Few notice the “spotter car” from Manny Sousa’s repo company as it scours Massachusetts parking lots, looking for vehicles whose owners have defaulted on their loans. Sousa’s unmarked car is part of a technological revolution that goes well beyond the repossession business, transforming any ­industry that wants to check on the whereabouts of ordinary people.

An automated reader attached to the spotter car takes a picture of every license plate it passes and sends it to a company in Texas that already has more than 1.8 billion plate scans from vehicles across the country.

These scans mean big money for Sousa — typically $200 to $400 every time the spotter finds a vehicle that’s stolen or in default — so he runs his spotter around the clock, typically adding 8,000 plate scans to the database in Texas each day.

“Honestly, we’ve found random apartment complexes and shopping ­plazas that are sweet spots” where the company can impound multiple vehicles, explains Sousa, the president of New England Associates Inc. in Bridgewater. 

But the most significant impact of Sousa’s business is far bigger than locating cars whose owners have defaulted on loans: It is the growing database of snapshots showing where Americans were at specific times, information that everyone from private detectives to ­insurers are willing to pay for.

While public debate about the license reading technology has centered on how police should use it, business has eagerly adopted the $10,000 to $17,000 scanners with remarkably few limits.

At least 10 repossession companies in Massachusetts say they mount the scanners on spotter cars or tow trucks, and Digital Recognition Network of Fort Worth, Texas, claims to collect plate scans of 40 percent of all US vehicles annually.

continue reading

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Student And Car Loans Account For 102% Of All New February Consumer Credit

Another month down, another month in which US consumers deleveraged by paying down their credit cards. Although that is not exactly correct: as we showed recently, the New Normal source of credit has nothing to do with revolving debt, or credit cards, or any other old normal notions, and everything to do with student debt, which is used for everything except paying for tuition. That, and car loans of course. Sure enough, in February, of the $13.7 billion in new loans created, $13.9 billion, or 102% of all, was there to fund student and car loans.

 

And looking further back at the data over the past year, of the $172 billion in new consumer debt, a stunning 96% has gone to new student and car loans.

 

So there it is in a nutshell: the deleveraging consumer continues to delever, except when it comes to purchasing Government Motors cars courtesy of government subprime NINJA loans, and of course, student loans, which as we profiled recently, are never getting repaid, and will be yet another taxpayer-funded bail out in a few short years.


    



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Can The United States Rule The (Energy) World?

Submitted by Daniel J. Graeber of OilPrice.com,

Geopolitical crises in Eastern Europe have been met with calls in the United States to use energy as a foreign policy tool. With U.S. Energy Secretary Ernest Moniz asking the industry to make a stronger case, however, it's domestic policies that may inhibit energy hegemony.

"The industry could do a lot better job talking about the drivers for, and what the implications would be, of exports," Moniz told an audience at the IHS CERAWeek energy conference in Houston.

The Energy Information Administration said in its weekly report that gross exports of petroleum products from the Unites States reached 4.3 million barrels per day in December, the first time such exports topped the 4 million bpd mark in a single month.

EIA said the United States is a net exporter of most petroleum products, but crude oil exports are restricted by legislation enacted in response to the Arab oil embargo in the 1970s.

In January, Kyle Isakower, vice president of economic policy at the American Petroleum Institute, said reversing the ban would help stimulate the U.S. economy and lead to an increase in domestic oil production by as much as 500,000 bpd. Current export polices, he said, are "obsolete."

This week in Houston, Sen. Lisa Murkowski, R-Alaska, ranking member of the Senate Energy Committee, said oil could help reposition the United States as the premier superpower.

"Lifting the oil export ban will send a powerful message that America has the resources and the resolve to be the preeminent power in the world," she said.

President Obama can show "true American grit" if he acts quickly and according to precedent. If the ban is reversed, it will be for the benefit of the international community, she said.

Moniz, who said in December the export ban deserves some "examination," said he wasn't yet convinced the case had been made to open the U.S. spigot, however.

For natural gas, House Energy and Commerce Committee Fred Upton, R-Mich., said expanding U.S. liquefied natural gas exports could be used to contain Russia, which dominates much of the Eastern European gas market.

Russia caused a stir with its military response to the Ukrainian situation and Upton said Monday foot-dragging at the Energy Department on LNG exports was putting U.S. allies in Eastern Europe "at the mercy of Vladimir Putin."

The U.S. federal government needs to determine that LNG exports to countries without a free-trade agreement are in the public's interest. The United States doesn't have a free trade agreement with any European country and the current transatlantic agreement up for debate has been stymied by EU concerns over the National Security Administration's cyberespionage campaign.

A January report from the Center for a New American Security said the economic connection that would come from oil exports could manifest itself as "coercive political influence" in foreign affairs. Domestic policy, however, needs to be honed first before the U.S. tries once again to tip the balance of power overseas.


    



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“No inflation” Friday: the dollar has lost 83.3% against…

no inflation 150x150 No inflation Friday: the dollar has lost 83.3% against...

March 7, 2014
Dallas, Texas

I needed a caffeine jolt late this morning after the long journey up from South America.

And while I’m generally averse to aspartame, high fructose corn syrup, and other government-sanctioned poisons, I did briefly consider a hit of Coca Cola as I walked past a vending machine on my way out of a grocery store.

Then I saw the price.

To give you some quick background, this was the same grocery store my mother used to shop at when I was a kid. And if I was really lucky, we’d stop for a can of coke on the way out– 25 cents back then.

Fast forward to today–. I’m a grown man of 35 now instead of a 9-year old kid. And while the store has changed hands a few times, there’s still vending machine near the entrance.

Same coke, same 12 ounces (though now in a plastic bottle instead of an aluminium can).

Price today? $1.50. [note, this is the vending machine price, not grocery store price.]

Put another way, $1 would have bought me 48 ounces of Coca Cola 26 years ago. Today that same dollar buys me just 8 ounces.

This means that the dollar has lost 83.3% of its value against Coca Cola over the past three decades, averaging roughly 6.6% inflation per year.

Some readers may remember the price of Coca Cola being just 5c back in the early 1950s (for a 6.5oz glass)… meaning the US dollar has lost 93.8% against Coca Cola over the past six decades.

Now, we are taught from the time we are children that ‘a little inflation is good…’

And when central bankers tell us they’re targeting an inflation rate of 2% to 3%, that certainly doesn’t seem so bad. 2% is practically just a rounding error. But bear in mind a few things–

1) An inflation rate of 2% is not price stability.

As Jim Rickards frequently points out, even with just 2% inflation, a currency loses over 75% of its value during an average lifespan. This can hardly be considered monetary stablilty.

And this practice of gradually plundering people’s purchasing power over time is incredibly deceitful.

2) Even if, they rarely meet their target.

As this case shows, 6.6% certainly ain’t 2%. The official statistics and research papers may say 2%. Reality is much different.

3) Wages often don’t keep up.

According to the US Labor Department, the median weekly wage back in 1988 was $382… or roughly 18,336 ounces of Coca Cola.

Today the median weekly wage is $831.40… or just 6,651.20 ounces.

So as measured in Coca Cola, the average wage in the Land of the Free has declined by 11,684 ounces per week– a 63.7% decline over the last three decades.

You can make a similar calculation denominated in Snickers bars, gallons of gas, etc.

If you have a big picture, long-term view, it’s clear that standard of living is falling.

Some readers may remember decades ago– a single parent could go out and, even with a blue collar job, comfortably support a growing family.

Today, dual income households struggle to keep their heads above water. This is the long-term plunder of inflation.

And just to give you a reminder of what things used to cost, I’ve pulled a page from the March 7, 1988 edition of the Bryan Times of Bryan, OH: 26-years ago today.

inflation federal reserve No inflation Friday: the dollar has lost 83.3% against...

You can scroll through the paper and note the prices:

25c for a dozen eggs. 69c for a loaf of bread. 49c for a pound of Chicken. A brand new Mustang LX for just $9203.

That’s the Federal Reserve for you. 100 years of monetary destruction and counting.

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Pesident Obama Explains How He Will Blow The Student Loan Bubble Even Bigger – Live Feed

Despite warnings from various members of the Fed that Student Loans are becoming troublesome, we suspect President Obama’s address this afternoon on expanding opportunities to go to college will be nothing but more pumping free money into a hyper-inflating (and increasingly worthless) higher education system…

 

 

As we previously noted,

What’s worse, while the 90+ day student debt delinquency rate did
post a tiny decline from 11.8% to 11.5% in Q4, on a total notional basis
due to the increase in outstanding balances, as of this moment
the amount of heavily delinquent student loans has just hit a fresh
record high of $124.3 billion, up from $121.5 billion in the prior
quarter.

So: when does the Fed finally admit i) there is a student loan
problem and ii) the only way to solve said problem is to promptly
monetize it?

Finally, putting new “debt” creation in perspective, in 2013 just student and car loans alone represented 108% (that’s right, more than all) of total household debt created.

 

That won’t end well..


    



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Russian Troops Storming Ukraine Air Force Base In Crimea, Time Reports Citing Crimea TV

More lies, propaganda, or for once, the truth? Just out from Time’s Simon Shuster:

Then again, considering the source is disinformation central Ukraine Pravda, take it with a huge grain of salt. More as we see it.


    



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Caption Contest: Napoleon Complex Edition

Hiding behind the big boys (literally) appears to be the m.o. of France’s President Hollande who declared today that “there will be no referendum in Crimea without Ukraine’s agreement,” and added that it is a necessity for Russia to “accept the solution.” We suspect Vladimir Putin will have something to say about that but who is going to argue with Hollande given the following image…

 


    



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