Carl Icahn Pimpco Slaps Bill Gross As Billionaire Tweet-fight Escalates

A week ago, completely out of the blue, Bill Gross took a swipe at Carl Icahn, tweeting “Icahn should leave #Apple alone & spend more time like Bill Gates. If #Icahn’s so smart, use it to help people not yourself.” Today, Carl Icahn retaliates.

We can’t wait as this cage match between a 69 and a 77 year-old escalates and culminates with the inevitable (Im)Mor(t)al Combat fatality.

For now, our money is on the Icahnator.

More impotantly: as the bored billionaires seek Twitter exposure, it is once again popcorn time.


via Zero Hedge Tyler Durden

What Spanish Recovery?

One of the prevailing themes in recent weeks has been that Spain has transformed out of Europe’s economic basket case into a success story. This was further exemplified today by the following quote by DieselBOOM:


It could, if one listens to bureaucrats peddling snake oily hope, but certainly not based on actual dynamics in its housing market, where mortgage apps have tumbled 90% from all time highs, pocket change investment by Bill Gates notwithstanding, and where even the YoY change has now trippled dipped.


… and certainly not based on loan to companies or households, which continue to be the worst in the Eurogroup.

So one wonders: with a housing market deader than ever, and with loan creation that is the worst in the Eurozone, will the modest bounce in employment, which as we explained last week was all driven by a seasonal jump in temp and self-employed workers, just where is Mr. DieselBOOM and the endless ranks of Eurotopians seeing this mythical Spanish recovery? Aside from the IBEX of course, which like every other liquidity-bubble dependent indicator is merely reflecting the roughly $3 trillion in annual global liquidity injections by the world’s central banks?


via Zero Hedge Tyler Durden

Dallas Fed Dumps From 19-Month High; Misses By Most In 6 Months

Last month was all ponies and unicorns as hope was extrapolated that a 19-month high in the Dallas Fed meant this time was different and not entirely cyclical as we have pointed out again and again. Once again it seems the government-budget-based hope has collapsed as even optimism for the future dropped to its lowest in 4 months. This is the biggest miss of expectations on six months and the lowest print in 5 months. Reflecting the margin pressures that we discussed previously, prices received dropped dramatically as price paid soared.





and it appears margins will remain under pressure in the futures:

Looking ahead, 39 percent of respondents anticipate further increases in raw materials prices over the next six months, while 34 percent expect higher finished goods prices.


via Zero Hedge Tyler Durden

Home Sales Collapse At Fastest Rate In 40 Months; Stocks Spike

Despite Joe Lavorgna's seemingly gigantic cognitive dissonance in the face of this report, the pending home sales data collapsed in September (and remember this is before the shutdown and was heralded at the time as buyers rushing to buy before the risk of the shutdown slowed acceptances). Affordability, argued by some serial extrapolators as still being 'relatively' positive – has drastically weighed on housing at the margin just as we argued previously. This is the first annual drop in 29 months, the biggest drop in 40 months, and the biggest miss against expectations in 40 months. Even the typically full of spin, NAR Chief economist had to admit "this tells us to expect lower home sales for the fourth quarter, with a flat trend going into 2014." Apparently, if one is to believe the spin, overheard everywhere in September: "Hmm, government may shut down next month – let's not buy a house."

Of course, NAR Chief Economist seems to have found an excuse by time-shifting his narrative…

NAR chief economist, said concerns over the government shutdown also played a role. “Declining housing affordability conditions are likely responsible for the bulk of reduced contract activity,” he said. “In addition, government and contract workers were on the sidelines with growing insecurity over lawmakers’ inability to agree on a budget. A broader hit on consumer confidence from general uncertainty also curbs major expenditures such as home purchases.”

Umm no Larry… because in our world September is before October and no one was talking about shutdown's impact then OR even pricing it in any way…



none of this should be a surprise given the impact on mortgage activity that higher rates have had…


Despite all the chatter that rates are still 'near' generational lows….

Of course – the market loves this crappy data is rallying handsomely as Taper is pushed off once again.


via Zero Hedge Tyler Durden

Guest Post: The Gathering Storm

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Doing more of what failed spectacularly will not save the day a second time, as the scale required to create yet more phantom collateral and more asset bubbles will collapse the system.

The financial storm clouds are gathering, ominously darkening the horizon. Though the financial media and the organs of state propaganda continue forecasting blue skies of recovery and rising corporate profits, the factual evidence belies this rosy forecast: internal measures of financial and economic activity are weakening across the globe as the state-central bank solutions to all ills–massive increases in credit creation, leverage and deficit spending–have failed to address any of the structural causes of the 2008 Global Financial Meltdown.

This failure to address the causes of 2008 Global Financial Meltdown is disastrous in and of itself–but the status quo has magnified the coming disaster by scaling up the very causes of the 2008 Global Financial Meltdown: excessive credit expansion, misallocation of capital on a grand scale, an opaque shadow banking system constructed of excessive leverage and a dependence on phantom collateral, i.e. risks and assets that are systemically mispriced to skim stupendous profits for financiers, bankers and their political enablers.

This is what I have called doing more of what has failed spectacularly.

Extremes inevitably lead to collapse, but even the most distorted system has some feedback mechanisms that attempt to counter the momentum toward disaster. Just as the body will try to mitigate the negative consequences of a diet of greasy fast food, our grossly distorted financial and political systems still retain some modest feedback loops that attempt to mitigate rising risks.

These interactive forces make it impossible to predict the moment of collapse, even as systemic failure remains inevitable. Precisely when the heart of an obese, unfit person who eats nothing but fast food will give out cannot be predicted, but what can be predicted is the odds of systemic failure rise with every passing day.

Doing more of what has failed spectacularly–inflating new asset bubbles in housing, stocks and bonds via quantitative easing, obfuscating financial skimming operations with thousands of pages of new regulations, and so on–is the equivalent of pushing an obese, unfit person to run uphill. Rather than repair the system, doing more of what has failed further stresses the system.

But even if the financial system were cleansed of bad debt and phantom collateral, the status quo would remain only partially repaired. For it's not just the financial system that has reached the point of negative return: the entire economic foundation of the developed world–credit-dependent consumerism–is as bankrupt and broken as the financial system that fuels it.

The state's response to this economic endgame is depersonalized welfare, both corporate and individual. When favored sectors can't succeed in the open market, the state enforces cartel-capitalism that enriches the corporations at the expense of the citizenry. When the cartel-state economy no longer creates paying work for the citizenry, the state issues social welfare benefits, in effect paying people to stay home and amuse themselves.

This destroys both free enterprise on the corporate level and the source of individual and social meaning, i.e. the opportunity to contribute in a meaningful way to one's community, family and trade/skill.

The status quo is thus not just financially bankrupt–it is morally bankrupt as well.

The status quo is as intellectually bankrupt as it is financially bankrupt. Our leadership cannot conceive of any course of action other than central bank credit creation and expanding state control of the economy and social benefits, paid for with money borrowed from future generations.

Let's take a wild guess that the obese, unfit person won't make it up the second hill, never mind the third or fourth one. The status quo responded to the financial heart attack of 2008 by doing more of what had failed spectacularly. That injection of trillions of dollars, euros, yen, renminbi, quatloos, etc. revived the global financial system in the same way a shot of nitroglycerin resolves a life-threatening crisis: it doesn't fix the causes of the crisis, it simply gives the system some additional time.

The next global financial storm is already gathering on the horizon. Doing more of what failed spectacularly will not save the day a second time, as the scale required to create yet more phantom collateral and more asset bubbles will collapse the system.

Intellectual, moral and financial bankruptcy all go hand in hand. There isn't just one storm gathering on the horizon–there are three, each adding force and fury to the other two.


via Zero Hedge Tyler Durden

Manufacturing Production Disappoints As Utilization Rises To 5-Year High

Industrial Production data for September rose by 0.6%, beating expectations by the most in 11 months as pre-government shutdown data was ‘helped’ by a revision lower in August (from 0.4% to 0.2% growth). Manufacturing production rose only 0.1% (missing expectations of +0.3%) as gains in car makers’ output was offset by declines in comptures, furniture, and applicances. Capacity Utilization surged to 5 year highs with its biggest beat of expectations since Dec 2010. All-in-all, a strangely mixzed bag of great and dismal data once again… Good enough ‘trend’ to warrant ‘taper’? who knows… but we posit the cyclical trend remains and the government shutdown likely renegs some of this better-than-expected data when we see it.




via Zero Hedge Tyler Durden

McDonalds Drops Heinz Ketchup Due To Executive Rivalry

It was as if a million Warren Buffetts cried out in terror and were suddenly silenced. That is an artist’s impression of what happened overnight following news that McDonalds would, after 40 years of serving the red tomato paste in its global restaurants, drop the use of Heinz ketchup from its stores. The reason: executive bad blood due to the appointment of Bernardo Hees, the former CEO of biggest rival Burger King, as the current head of Heinz following the Berkshire purchase of the company in February, in the process making the John Kerry estate even richer. “As a result of recent management changes at Heinz, we have decided to transition our business to other suppliers over time,” McDonald’s said in a statement. The Oak Brook, Illinois-based restaurant chain did not disclose the value of their business relationship.

From BBC News:

The world’s biggest fast-food chain said it would drop the ketchup after Bernardo Hees, the former head of rival Burger King, took over as Heinz’s chief executive. “We have decided to transition our business to other suppliers over time,” McDonald’s said.


In February, Heinz was purchased in a $28bn (£17.3bn) takeover.


McDonald’s said that it would work with Heinz “to ensure a smooth and orderly transition of the McDonald’s restaurant business”, which has 34,000 restaurants around the world.


Mr Hees took over after Heinz was bought by Warren Buffett’s Berkshire Hathaway and Brazilian investment fund 3G Capital. Burger King is controlled by 3G Capital.


McDonald’s uses the ketchup at many stores around the world, though only in Pittsburgh and Minneapolis inside the US.


“As a matter of policy, Heinz does not comment on relationships with customers,” the ketchup-maker said.


As a result of recent management changes at Heinz, we have decided to transition our business to other suppliers over time,” McDonald’s said in a statement. The Oak Brook, Illinois-based restaurant chain did not disclose the value of their business relationship.


The Pittsburgh company, which also makes baked beans, vinegar and other foods, is now led by Bernardo Hees. He still serves as vice chairman of Burger King’s board and is also a partner at 3G Capital.


The 43-year-old Brazilian had become CEO of Burger King after 3G bought the struggling hamburger chain in 2010. He subsequently slashed costs, revamped the chain’s menu and launched a major marketing campaign to help make it a more formidable threat to long-time rival McDonald’s.

Coincidentally, it is all those international McDonalds restaurants which have the unpleasant habit of charging extra for ketchup portions. It remains to be seen just what the cash flow impact to Heinz (and benefit to alternatives) will be as a result.


via Zero Hedge Tyler Durden

Superstorm Pounds UK: Leads To Deaths, Black Outs, Traffic Suspensions And Flight Cancelations

Almost exactly one year after Superstorm Sandy crushed the eastern seaboard of the USA, and 26 years after the last devastating storm to hit the south of England, the so-called St.Jude's Day storm – among the worst in recent memory – is battering the UK (and some of Europe) with winds up to 99 mph. So far there are 2 reported deaths, 220,000 homes without power, all SouthWest trains halted, and over 130 flights cancelled at Heathrow airport. Two nuclear plants have been shutdown and hundreds of trees have fallen blocking roads and rail links across as the storm begins to shift into mainland Europe…


Satellite image of the storm…

Via Reuters,

A teenage girl was killed when a tree fell onto her home while she slept during a fierce storm that battered southern Britain, police said on Monday.Police said they were called to the scene at 0718 GMT in Hever in Kent following a report the 17-year old was severely injured."Sadly the 17-year old died," police said in a statement. "The incident is not being treated as suspicious."Britain's strongest storm in a decade battered southern regions on Monday, forcing hundreds of flight cancellations, cutting power lines and disrupting the travel plans of millions of commuters.

Via ANP,

Amsterdam Fire Brigade Says Stay Inside as Storm Kills 2

BBC News reports a double-decker bus blown over…


Hundreds of trees have fallen…




A large crane fell on the Prime Minister's home at 10 Downing Street…



Power firm EDF say that have partially shut down two nuclear reactors in Kent due to the storm. We are trying to get more information on this.

"The shutdown was weather-related. The plant reacted as it should and shut down safely," an EDF Energy spokeswoman said.


and destruction is rife…



But there remains hope for recovery…





via Zero Hedge Tyler Durden

USD Strength Stuns US Stocks Into Morning Nosedive

Across the board the USD is rallying against the majors (having once again tested 17 month low resistance in the USD index). Much of the strength is coming from EUR weakness as excess liquidity in the eurozone drops to a fresh two-year low (prompting talk of renewed liquidity injections or LTROs). This has knocked US and European stocks notably lower from overnight highs leaving S&P futures an odd shade of red in the pre-open. Treasury yields are also pressing higher in the last few hours along with Commodities.


USD Index bounces off 17 month lows as EUR weakness dominates…


and US equity ftures have dropped over 10 points from overnight highs…


Charts: Bloomberg


via Zero Hedge Tyler Durden

The Humiliation Is Complete: China Complains NSA Phone Taps "Violate Leaders' Privacy"

Following the latest Snowden revelations this time exposing the NSA’s spying practices in Spain, which apparently included spending billions in taxpayer funds to spy on 60 million Spanish phone calls, it was only a matter of time before Spain had an official response. Sure enough it came moments ago:

  • Spain Asks U.S. to Disclose All Information on Phone Taps

Good luck with that. However, the US response was quick:

  • U.S. Ambassador to Spain Says NSA Programs Protected U.S. Allies.

In other words, it was all for the greater good. Oddly enough, Rajoy has not yet summoned the US ambassador: one would think he would at least ask for all the NSA intercepted text message to Barcenas…

However, while the “indignation” by America’s allies will come and go, the punchline in the overnight response to NSA’s ongoing reputational hammering came not from Europe, but from China.


Because when even China makes fun of your spying practices, it’s probably time to call it a ballgame.


via Zero Hedge Tyler Durden