another site
Dear Russian Ruble traders, please find a different sandbox, because “evil speculators” will no longer be tolerated, first at Forex Capital Markets and soon, everywhere else.
And now, unless the selloff in US equity futures is immediately halted, expect the first self-help headline in US markets to strike – as usual – within hours.
via Zero Hedge http://ift.tt/138LnzF Tyler Durden
Overnight Media Digest
WSJ
* Google Inc plans to push deeper into online commerce by enhancing its Google Shopping service with features that more directly challenge Amazon.com Inc. (http://on.wsj.com/1uPkFDX)
* NBC is launching a live stream of its broadcast network, part of a broader effort at parent NBCUniversal to make more of its content available online via computers and mobile devices. (http://on.wsj.com/1BRMcMr)
* Two tech startups, Hortonworks Inc and New Relic Inc, have proposed to sell shares to the public at a 25 percent to 50 percent discount to the roughly $1 billion valuations that some venture-capital firms and big mutual funds paid earlier this year. (http://on.wsj.com/1u7sqok)
* U.S. cattle exports have fallen by a third this year, hurting businesses from cattle haulers to the port in Wilmington, Delaware. (http://on.wsj.com/1BO72cJ)
* Repsol SA is preparing an US$8.3 billion bid for Talisman Energy Inc of Canada, a takeover that would roughly double the Spanish company’s oil output. (http://on.wsj.com/1GpQYAC)
* InterContinental Hotels Group Plc has agreed to buy Kimpton Hotels & Restaurants for $430 million in cash. (http://on.wsj.com/1BNmbLu)
* U.S. manufacturing output climbed past its prerecession peak this fall, suggesting the American economy is on solid footing despite growing signs of weakness abroad. (http://on.wsj.com/1Gp6tZq)
* Riverbed Technology Inc agreed to be acquired by private-equity firm Thoma Bravo LLC for about $3.6 billion, following more than a year of pressure from activist investor Elliott Management Corp. (http://on.wsj.com/16ofvcG)
* The South Korean government said it plans to impose penalties on Korean Air Lines Co Ltd in response to a recent incident involving an executive who delayed a flight to eject a crew member in a protest at the way she was served macadamia nuts. (http://on.wsj.com/1sxXsuF)
* Dalian Wanda Commercial Properties Co, which is controlled by Chinese billionaire Wang Jianlin, has raised US$3.7 billion in a Hong Kong initial public offering after pricing the deal near the high end of an indicative price range, according to people familiar with the situation. (http://on.wsj.com/1wAIh3x)
* GT Advanced Technologies Inc has won bankruptcy court approval of a settlement with Apple Inc that wards off the threat of litigation over a failed effort to produce large quantities of scratch-and shatter-resistant smartphone screen materials. (http://on.wsj.com/16oLvND)
* Cement companies Holcim Ltd and Lafarge SA cleared a major hurdle toward their planned $43 billion merger after antitrust authorities in Europe said the deal could go ahead, subject to significant asset sales across the region. (http://on.wsj.com/1wUO7P4)
FT
Youth-focused digital content company Vice Media will go ahead with a “deal spree” in 2015, and if market conditions remain favourable, it may also go ahead with an initial public offering, Chief Executive Shane Smith said.
European regulator Dutch Data Protection Agency may slap Google with a 15 million euro ($18.66 million) fine for usage and storage of personal data. The regulator demanded that the Mountain View headquartered-company ask for unambiguous consent for using users’ personal data between its services like Google Maps and YouTube.
UK-based company Audioboom has struck a deal with Audible, a subsidiary of Amazon, to offer audiobook snippets. Audioboom, which distributes audio content for media organisations like BBC and Reuters, will receive upfront payment for any new users registering with Audible through the platform and a percentage of the online retail sales.
Bank of Cyprus’ shares are set to resume trading, 22 months after the lender was rattled by a financial crisis that struck the mediterranean country.
NYT
* The gunman who seized hostages in downtown Sydney was known as a deeply troubled man with a pending case involving the murder of his former wife. (http://nyti.ms/1wCOhY7)
* Billionaire investor Steven A. Cohen, who managed to fend off a criminal insider trading investigation of himself, if not of his former hedge fund, is looking for a former prosecutor and several agents from the Federal Bureau of Investigation to join his new $10 billion investment firm, Point72 Asset Management, said several people briefed on the matter, who spoke on the condition of anonymity. (http://nyti.ms/1yU3UbZ)
* Risking his political standing, Iran’s president has stressed he was determined to clinch a nuclear deal and take on the conservative forces who would prefer not to see an agreement with the West, even if that means continued economic sanctions on Iran. (http://nyti.ms/1GK3YiQ)
* Russia’s government is in the middle of an all-out fight to preserve the value of the ruble in the face of plummeting oil prices and Western sanctions over the Ukraine crisis. In the boldest move yet to stanch the bleeding, the Central Bank of Russia has announced a stunning interest rate increase. (http://nyti.ms/13ssQ2l)
* The French government has announced that the company’
s lower-priced UberPop service would be banned on Jan. 1, the latest in a number of setbacks for Uber, which is facing bans in several cities worldwide. (http://nyti.ms/1wD7fhd)
* Activity in China’s factory sector contracted in December for the first time in seven months as new orders declined, a preliminary private survey has showed, fuelling expectations that more stimulus will be needed to avert a sharper economic slowdown. (http://nyti.ms/1305Hn3)
* British Telecom, the former telecommunications monopoly in Britain, which spun off its previous mobile carrier unit in 2001, has said that it had entered into exclusive talks to acquire EE, the British mobile phone business of Orange of France and Deutsche Telekom of Germany, for about 12.5 billion pounds ($19.56 billion). (http://nyti.ms/1yWPrkx)
Canada
THE GLOBE AND MAIL
** Export Development Canada is lending British telecom giant Vodafone Group PLC $850 million, the bulk of which will be used to finance the purchase of BlackBerry Ltd handsets and services. The financing package comes at an opportune time for BlackBerry, which is poised this week to unveil its latest smartphone. (http://bit.ly/1Gq7osL)
** Talisman Energy Inc has agreed to be acquired by Spain’s Repsol SA in an $8.3 billion deal that allows Respol to expand in Canada and internationally at a time of weak energy markets. (http://bit.ly/1xoeDzU)
** A report to be released on Tuesday by the Canadian Parks and Wilderness Society says the animals, which roam the northern forests that stretch from British Columbia to Alberta, continue to die off as their ranges are eroded by human activity. (http://bit.ly/1BSDJsv)
NATIONAL POST
** After a year and a half in which the Liberals led in the national polls by six to 10 points, the gap has narrowed appreciably in recent weeks. As of last month, an average of polls compiled by threehundredeight.com put the Grits ahead of the governing Conservatives by just three points, 35-32. The latest Ekos poll has them closer still, just a point apart: effectively, a tie. (http://bit.ly/1svVqFU)
** Canadian heavy crude traded below $40 a barrel for the first time in five years just as a surge of new projects are scheduled to start operation. A total of 14 new oilsands projects are scheduled to start next year, with a combined capacity of 266,240 barrels a day, according to data published by Oilsands Review. That’s 36 percent more than was started in 2014. (http://bit.ly/1zkILMd)
China
CHINA SECURITIES JOURNAL
– China is pushing forward with the development of the new free trade zone in Guangdong province, with a new trade and service agreement with neighbouring Hong Kong and Macau likely to be signed soon, the paper said.
SECURITIES TIMES
– China Securities Regulatory Commision (CSRC) fined Ping An Securities 37 million yuan ($5.98 million) for failing to perform due diligence when underwriting Shenzhen Hirisun Technology Inc’s IPO.
PEOPLE’S DAILY
– Reform, the country’s key task for economic work next year, is also crucial to promote healthy economic development and social harmony, the paper, which acts as a mouthpiece for the ruling Communist Party, said in a commentary.
Britain
The Times
BT IN EXCLUSIVE TALKS TO BUY EE FOR 12.5 BLN STG
The British mobile phone sector is set for its biggest shake-up since the turn of the century after BT Group Plc entered exclusive negotiations to acquire EE for 12.5 billion pounds. (http://thetim.es/1suKoAv)
The Guardian UK FACTORY ORDERS CLIMB TO FOUR-MONTH HIGH, SAYS CBI
Britain’s manufacturers have had a decent end to the year, but a tough global economy is making life difficult for UK exporters, the Confederation of British Industry (CBI) said. (http://bit.ly/1Af4WSi) ALISTAIR DARLING’S 5 AM PLEA TO PM IGNORED AFTER SCOTTISH NO VOTE
David Cameron ignored a 5 am plea from Alistair Darling in the immediate aftermath of the Scottish referendum to avoid throwing the Scottish National party a lifeline by announcing plans to restrict the voting rights of Scottish MPs. (http://bit.ly/1sxedpX)
The Telegraph
BGC BUYS BRITISH BROKER RP MARTIN BGC Partners plans to take over rival brokerage RP Martin’s British assets before buying out its European offices next year for an undisclosed sum. (http://bit.ly/1wbvnsR)
FINANCIAL FUND MANAGER WHO DODGED THOUSANDS IN TRAIN FARES BANNED FROM FINANCIAL INDUSTRY
The former BlackRock Inc fund manager who exploited a loophole to dodge thousands of pounds in train fares has been banned from working in financial services. The Financial Conduct Authority said Jonathan Burrows had been barred “from performing any function in relation to any regulated activities for not being fit and proper”. (http://bit.ly/1GJHluN)
Sky News
EX-JJB SPORTS CEO JAILED OVER 1 MLN STG FRAUD The former boss of JJB Sports Plc has been jailed for four years, after pocketing about 1 million pounds in what was described as a “very greedy fraud”. A court heard that Chris Ronnie owed more than 10 million pounds to an Icelandic bank when he diverted funds from suppliers going to the sportswear firm. (http://bit.ly/12YRTcE)
The Independent
ITV AND SATELLITE RIVALS BUTT HEADS OVER PAY-TV FEES FOR FREE CHANNELS
A war of words broke out between ITV and its cable and satellite rivals over the X Factor broadcaster’s demand that it receive fees from pay-TV platforms for airing its free channels. (http://ind.pn/1yTTdGv)
Fly On The Wall Pre-Market Buzz
ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
Housing starts for November at 8:30–consensus up 3.1% to 1.04M rate
Housing permits for November at 8:30–consensus down 2.5% to 1.06M rate
Markit flash manufacturing PMI for December at 9:45–consensus 55.2
ANALYST RESEARCH
Upgrades
Apollo Global (APO) upgraded to Buy from Neutral at Citigroup
Camden Property (CPT) upgraded to Buy from Neutral at Citigroup
Cirrus Logic (CRUS) upgraded to Perform from Underperform at Oppenheimer
Equity Residential (EQR) upgraded to Buy from Neutral at Citigroup
Flagstar Bancorp (FBC) upgraded to Outperform from Market Perform at Keefe Bruyette
GrubHub (GRUB) upgraded to Buy from Neutral at Goldman
Parkway Properties (PKY) upgraded to Neutral from Sell at Citigroup
Plexus (PLXS) upgraded to Strong Buy from Buy at Needham
RCS Capital (RCAP) upgraded to Buy from Neutral at Citigroup
Range Resources (RRC) upgraded to Equal Weight from Underweight at Barclays
Rite Aid (RAD) upgraded to Buy from Neutral at UBS
SunPower (SPWR) upgraded to Overweight from Equal Weight at Morgan Stanley
Vulcan Materials (VMC) upgraded to Conviction Buy from N
eutral at Goldman
Downgrades
Abraxas Petroleum (AXAS) downgraded to Neutral from Outperform at RW Baird
American Eagle Energy (AMZG) downgraded to Hold from Buy at Wunderlich
Approach Resources (AREX) downgraded to Hold from Buy at Wunderlich
Autodesk (ADSK) downgraded to Underperform from Neutral at BofA/Merrill
Basic Energy (BAS) downgraded to Sell from Hold at Wunderlich
Canadian Oil Sands (COSWF) downgraded to Underweight from Equal Weight at Barclays
Dollar Tree (DLTR) downgraded to Hold from Buy at Deutsche Bank
Douglas Emmett (DEI) downgraded to Neutral from Buy at Citigroup
Eclipse Resources (ECR) downgraded to Equal Weight from Overweight at Barclays
Emerald Oil (EOX) downgraded to Sell from Hold at Wunderlich
Entravision (EVC) downgraded to Hold from Buy at Evercore ISI
Essent Group (ESNT) downgraded to Market Perform from Outperform at Keefe Bruyette
Fifth Street Senior (FSFR) downgraded to Market Perform at JMP Securities
First American (FAF) downgraded to Market Perform from Outperform at Keefe Bruyette
General Motors (GM) downgraded to Sector Perform from Outperform at RBC Capital
Genesee & Wyoming (GWR) downgraded to Neutral from Buy at BofA/Merrill
Jones Energy (JONE) downgraded to Equal Weight from Overweight at Barclays
MGIC Investment (MTG) downgraded to Market Perform from Outperform at Keefe Bruyette
Macerich (MAC) downgraded to Neutral from Buy at Citigroup
Martin Marietta (MLM) downgraded to Buy from Conviction Buy at Goldman
Microsemi (MSCC) downgraded to Perform from Outperform at Oppenheimer
Microsoft (MSFT) downgraded to Underperform from Neutral at BofA/Merrill
Northern Oil and Gas (NOG) downgraded to Hold from Buy at Wunderlich
Oasis Petroleum (OAS) downgraded to Hold from Buy at Wunderlich
Pioneer Energy (PES) downgraded to Hold from Buy at Wunderlich
Priceline (PCLN) downgraded to Buy from Conviction Buy at Goldman
Resolute Energy (REN) downgraded to Hold from Buy at Wunderlich
SandRidge Energy (SD) downgraded to Sell from Hold at Wunderlich
Shutterfly (SFLY) downgraded to Neutral from Buy at Goldman
Tanger Factory (SKT) downgraded to Neutral from Buy at Citigroup
Weingarten Realty (WRI) downgraded to Neutral from Buy at Citigroup
Initiations
Antero Resources (AR) initiated with an Outperform at Oppenheimer
BB&T (BBT) initiated with a Neutral at Guggenheim
Bank of America (BAC) initiated with a Buy at Guggenheim
CIT Group (CIT) initiated with a Buy at Guggenheim
Ciena (CIEN) initiated with a Neutral at Wedbush
Cimarex Energy (XEC) initiated with a Perform at Oppenheimer
Citigroup (C) initiated with a Neutral at Guggenheim
Cooper Companies (COO) initiated with a Perform at Oppenheimer
Coty (COTY) initiated with a Hold at KeyBanc
DURECT (DRRX) initiated with a Hold at Cantor
Escalade (ESCA) initiated with an Outperform at Imperial Capital
Extended Stay America (STAY) initiated with a Market Perform at JMP Securities
F.N.B. (FNB) Corp. initiated with a Neutral at JPMorgan
First Horizon (FHN) initiated with a Buy at Guggenheim
Goldman Sachs (GS) initiated with a Buy at Guggenheim
Green Plains (GPRE) initiated with a Neutral at Goldman
Infinera (INFN) initiated with a Neutral at Wedbush
JPMorgan (JPM) initiated with a Neutral at Guggenheim
Morgan Stanley (MS) initiated with a Buy at Guggenheim
Neff (NEFF) Corporation initiated with a Buy at Jefferies
Neff (NEFF) initiated with an Overweight at Piper Jaffray
Newfield Exploration (NFX) initiated with an Outperform at Oppenheimer
Nike (NKE) initiated with a Market Perform at Cowen
PNC Financial (PNC) initiated with a Neutral at Guggenheim
Peak Resorts (SKIS) initiated with an Outperform at FBR Capital
Peak Resorts (SKIS) initiated with an Outperform at Oppenheimer
Ralph Lauren (RL) initiated with an Outperform at Cowen
Regions Financial (RF) initiated with a Neutral at Guggenheim
Rexnord (RXN) initiated with a Buy at KeyBanc
Santander Consumer (SC) initiated with an Outperform at JMP Securities
ServiceNow (NOW) initiated with a Buy at Goldman
Standex (SXI) initiated with a Buy at Wunderlich
SunTrust (STI) initiated with a Neutral at Guggenheim
Surgical Care Affiliates (SCAI) initiated with a Hold at KeyBanc
U.S. Bancorp (USB) initiated with a Neutral at Guggenheim
Under Armour (UA) initiated with an Outperform at Cowen
Wells Fargo (WFC) initiated with a Neutral at Guggenheim
Whiting Petroleum (WLL) initiated with an Outperform at Oppenheimer
COMPANY NEWS
Repsol (REPYY) to acquire Talisman (TLM) for $8 per share in cash, for a total transaction value of approximately $13B, including debt
Archer Daniels (ADM) to sell global cocoa business to Olam (OLMIY) for $1.3B
Boeing (BA) raised its dividend 25%, authorized $12B share repurchase plan
Sony Pictures Entertainment confirmed a significant system disruption on Monday, November 24. The company believes names, addresses, social security numbers are among the personally identifiable information individuals provided to SPE that potentially may have been obtained by unauthorized individuals
Bank of England said seven of eight banks passed stress test. Royal Bank of Scotland (RBS), Lloyds (LYG) and Co-operative were found to be the most susceptible to a housing crash and spike in unemployment
Prothena (PRTA) received FDA fast track designation for NEOD001
Yamana Gold (AUY) reported new discoveries at Chapada, El Penon
Abraxas Petroleum (AXAS) forecast Q4 volumes 6,700-6,800 Boepd and FY15 production 7,200-7,300 Boepd
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
Fifth Street Asset (FSAM), VeriFone (PAY)
Companies that missed consensus earnings expectations include:
Willbros Group (WG), Willbros Group (WG)
Companies that matched consensus earnings expectations include:
FuelCell (FCEL), PolyMet Mining (PLM)
Coca-Cola (KO) forecast FY14 comparable currency neutral EPS growth of 4%-5% and a currency headwind of 7%. The company sees Q4 comparable currency neutral EPS growth to be even to slightly positive, with a 9 point currency headwind on EPS. The company sees FY15 comparable currency neutral EPS growth similar to FY14
Magellan Health (MGLN) reaffirms FY14 guidance, sees FY 15 adj. EPS $3.28-$3.73, consensus $2.67
3M Company (MMM) backs long-term EPS objective of up 9%-11% per year, sees FY15 EPS $8.00-$8.30, consensus $8.20
Whirlpool (WHR) sees FY14 ongoing EPS $10.90-$11.10, consensus $11.65, sees FY15 ongoing EPS $14.00-$15.00, consensus $14.50
VeriFone (PAY) sees Q1 EPS 40c, consensus 45c, sees FY15 EPS $1.85-$1.90, consensus $1.97
NEWSPAPERS/WEBSITES
Google (GOOG) to step up challenge to Amazon (AMZN) with new shopping features, WSJ reports
Sony (SNE) says film studio’s business remains strong, WSJ reports
Regulator finds deficiencies with Ocwen (OCN), NY Times reports
More companies signing up for Apple Pay (AAPL), NY Times reports
Google (GOOG) facing Dutch privacy fine of up to $19M, WSJ reports
SYNDICATE
Exact Sciences (EXAS) files to sell 4M shares of common stock
Millennial Media (MM) files to sell 30.73M shares for holders
Solar Power (SOPW) enters definitive agreements on up to $140M in private placement
bluebird bio (BLUE) files to sell $150M in common stock
via Zero Hedge http://ift.tt/1IX9YbL Tyler Durden
For those wondering if the CBR’s intervention in the Russian FX market with its shocking emergency rate hike to 17% overnight calmed things, the answer is yes… for about two minutes. The USDRUB indeed tumbled nearly 10% to 59 and then promptly blew right back out, the Ruble crashing in panic selling and seemingly without any CBR market interventions, and at last check was freefalling through 72, and sending the Russian stock market plummeting by over 15%. It is so bad, US equity futures which had jumped earlier on hopes of more Chinese intervention following the latest disastrous Chinese PMI print, as well as a French manufacturing PMI beat (don’t laugh), are back to unchanged.
The latest rout continues to be driven by the relentless plunge in Brent which also continued crashing overnight to fresh 5 year lows, sliding decidedly under $60 as WTI dropped well under $55 as well. And as we previewed over a month ago, it is not just Russia, but every single petroleum exporting country that is suddenly seeing a currency crisis, and spreading to all EMs with the Indian Rupee weakening the most since 2013, Indonesia lowering the Rupiah’s reference rate by the most on record, and so on. Ironically, this happens as the USDJPY is also crashing and dropping moments ago to 116.25, the lowest level since mid-November. At this rate the Fed will have no choice but to intervene, however in the opposite direction, and admit that despite all its best intentions, the US can not decouple from the rest of the world and a rate hike – so very priced in by everyone – is just no going to happen in the coming years (which sadly means that the latest subprime debt driven “recovery” is about to be called off).
A quick look at the oil market where Brent drops for 5th day, falls below $60 for 1st time since July 7, 2009 as the market continues to look for signs that falling prices is crimping production. WTI breaks below $55, drops to lowest since May 6, 2009. “The race to the bottom continues, we are still not seeing any signs of supply disruption,” says Saxo Bank head of commodity strategy Ole Hansen. “There is very big negative momentum in the mkt and the fact people are starting to talk about breakeven levels of $35-$40 has put up a new red flag for mkts to aim at.… Jan. WTI options expire today and there is quite a lot of open interest ~$55 put strikes, that is probably the key level of potential support today.”
Not helping things was Russia’s announcement that it too like the Saudis will not cut production: Russia agrees with OPEC that market will determine crude price, Energy Minister Alexander Novak tells reporters at meeting of Gas Exporting Countries Forum in Doha, Qatar. Novak says that he met with OPEC energy ministers in Vienna; “The participants of that meeting concurred that the situation will be fixed by the market itself in terms of supple and demand balance. Russia is not a country that changes its supply. We will maintain our production unchanged.”
Looking at the Markets, first in Asia, the Nikkei 225 tumbled -2% fell for a 2nd day to breach the key psychological 17,000 level for the first time since the 17th Nov. as the JPY continued to strengthen. In China bad news was good, and the Shanghai Comp surged higher som +2.3% on renewed easing calls following disappointing Chinese data. December HSBC flash Manufacturing PMI printed a contractionary reading for the first time in 7 months (49.5 vs. Exp. 49.8 (Prev. 50.0), with both output and new orders components slipping, the latter contracting for the first time since April. Hang Seng traded down 1.55% weighed on by weakness across energy stocks.
Despite opening higher, European stocks took a turn lower in early trade, with the move to the downside led by energy names after Brent crude futures broke below USD 60/bbl pre-market and WTI broke below USD 54/bbl. Furthermore, the softness in stocks lifted European fixed income products with the Bund tripping stops through 154.73, leading the German 10yr yield to once again print record lows and slip below 0.6%. Overall global sentiment remains relatively negative with Saudi Arabian (-5.5%) and Dubai (-8%) stock indexes also placed under further pressure as the fall in oil prices continue to dent domestic profits. Furthermore, concerns were also placed on Russia as despite the Russian central bank hiking their rate by 650bps, the RUB hit record lows vs the USD and the MICEX was down as much as 7%. This then triggered fears over the ramifications for the Eurozone economy, given the close trade ties to Russia, particularly for Germany.
Nonetheless, European equities then reversed earlier losses, with the move higher led by utility and consumer discretionary names, while Russian asset classes began to stabilise. Additionally, from a data perspective, Eurozone PMIs also painted a less dreary than expected picture with the headline manufacturing and services Eurozone PMIs exceeding expectations. This was then later exacerbated by a particularly strong German ZEW survey (Expectations 34.9 vs. Exp. 20.0), which also subsequently saw Bunds pull away from their best levels.
In Summary:
European stocks rise led by carmakers after German investor expectations increased more than estimated. Shares with exposure to Russia dropped as the ruble continues its decline. Asian stocks fall as Hong Kong shares enter a correction, U.S. stock index futures gain. Brent crude oil price falls through $60 a barrel for the first time in 5 years. Euro rises against the dollar.
M&A
FX/BONDS
COMMODITIES
Bulleting Headline Summary
US Event Calendar
Central Banks
FX
The main focus has been on the RUB as despite the Russian central bank hiking their key rate by 650bps, USD/RUB has erased its opening losses, with RUB printing a record lows vs. USD and breaking above the 66.00 handle. Allied to this, the USD-index has weakened throughout the morning and made a technical break below 88.00 alongside the move lower in US yields as USTs benefited from a flight to quality. This has also benefited JPY and CHF in a safe-haven Bid, while EUR/USD broke above 1.2500 for the 1st time since 1st Dec. UK inflation data came in at 1.0% vs. Exp. 1.2% and printed its lowest reading since 2002. This subsequently saw a fast-money move lower in GBP/USD of around 46 pips. However, this move to the downside was later reversed, as market participants focused on the fact these numbers do not change the course of BoE action. Finally, the SEK has also weakened throughout the session after the Riksbank this morning kept their key rate on hold at 0.0% as expected but warned the repo rate needs to remain at zero for longer than initially forecast and are preparing further measures that can be used to make monetary policy more expansionary. This has also weighed on neighbouring currency NOK, which also falling victim to the slide in oil prices.
COMMODITIES
In the commodity complex, energy prices have once again been a key focus after Brent crude futures broke below USD 60/bbl pre-market and WTI broke below USD 54/bbl. This has been a continuation of the bearish rhetoric we’ve seen for the sector following comments yesterday from the UAE oil minister who said OPEC stands by their decision not to cut output even if oil prices fall as low as USD 40/bbl and will wait at least three months before considering an emergency meeting, while Saudi reiterated they have no plans to cut output. In metals markets, precious metals have been granted some reprieve with spot gold breaking above USD 1,200 following the cautious sentiment throughout the session while copper has remained under pressure following lacklustre Chinese HSBC manufacturing data and comments from Deutsche Bank who said the copper market is moving into surplus and the lagged effects of the weaker Chinese property market will hit copper demand.
* * *
DB’s Jim Reid concludes the overnight recap
We were expecting difficult times before tighter spreads in 2015 but this is already proving to be such a tough December that 2015’s returns across many asset classes are going to be influenced by where we end the year.
For example, as recently as December 5th many equity markets were trading at YTD or multi month highs. 6 business days later and the turmoil is being seen in Greece, Russia, Oil, many areas of EM and in DM equity and credit markets. In Europe virtually all equity markets are comfortably down for the year now. Some markets have lost a few years of normal sized returns in the last few days alone so this has to impact 2015.
Given the mini turmoil, we will truly learn a lot about the Fed tomorrow night as if they become more hawkish we can see that they’re comfortable that financial markets are not the primary concern. If they end up being dovish then it’s probably a sign that they will struggle to have the confidence to upset markets in 2015 and will only raise rates if both the economy merits it and markets are calm. As we state in the outlook we think they will struggle to raise rates but this might not stop them from signalling an intention to do so in advance. So definitely more volatility than the QE3 period we’ve now left far behind.
Oil continues to dominate headlines with further sharp declines yesterday, extending the 5-year lows and pairing an earlier rally. Indeed both WTI (-3.29%) and Brent (-1.28%) declined to $55.91/bbl and $61.06/bbl and have continued to trade some 0.5-0.6% lower overnight. The oil-sensitive Russian Rouble continues to suffer and yesterday it closed 10.22% lower versus the Dollar at 64.24. The move marked the biggest one-day decline since 1998 taking the year to date decline to nearly 96%. The move appears to have sparked the nation’s Central Bank into action who, post the U.S. close, raised benchmark interest rates by 650bps to 17%. The rate rise marks the sixth hike this year and comes just five days since the last rate move with the Central Bank stating that ‘the decision was driven by the need to limit the risks of devaluation and inflation, which have recently significantly increased’. The move also corresponds with an expansion in foreign currency repo auctions of $3.5bn to $5bn as well as further statements from the Central Bank that GDP may shrink 4.5% to 4.7% next year should oil prices average $60/bbl. The MICEX closed 2.38% lower yesterday and 10y benchmark local government bond yields finished 20bps wider at 13.02%. Expect big moves again this morning. The Russian central bank will no doubt be hoping they can repeat the success of the Turkish central bank earlier this year where they raised rates from 7.75% to 12%. If the new rate is sustained for any length of time it will surely have huge implications for the economy though so it’s certainly high risk. Ironically when Russia collapsed in 1998, the Fed slashed rates and arguably started the era of ‘moral hazard’. So it’ll be interesting if the Fed choose to ignore international events this time round. I suspect they’ll find it tough.
Returning to markets, in the US the S&P 500 closed 0.63% lower at the close after a volatile day which saw a near 2% intraday range. Energy stocks continued to weigh on the overall index with the component declining 0.71% although in reality all sectors finished weaker. Credit markets softened, CDX IG closing 2bps and CDX HY around half a point lower and spreads on US HY energy names widening a further 18bps. Pressure on smaller oil and gas producers continues with US-based Apache reporting yesterday that it has agreed to sell its stake in a natural gas project whilst the Canadian oil and gas company Talisman Energy confirmed it’s in talks with va
rious targets over a potential sale of the company.
Macro data was perhaps a bright spot in an otherwise weaker day. An initially weaker December NY Fed manufacturing reading (-3.58 vs. +12.4 expected) was followed up by a stronger November industrial production (+1.3% vs. +0.7% expected) print and capacity utilization (80.1% vs. 79.4%) reading. On the firmer industrial production print in particular, the reading was the highest since May 2010 and our US colleagues note that at its current level, production is growing at a near 8% annualized rate relative to its Q3 average, supporting the case for a strong Q4 GDP number. Just rounding off the data prints in the US yesterday, the NAHB housing market notched down slightly to 57 for December. Treasuries took something of a back seat, the yield on the 10y benchmark bouncing off Friday’s lows to close 1.8bps higher at 2.118%.
Closer to home and with a lack of data releases, risk assets took a sharp leg lower in Europe with the Stoxx 600 closing 2.08% lower – with similar weakness in energy names (-2.95%) – the index now 1.5% in negative territory YTD. There was similar weakness in credit markets with Xover finishing 19bps wider. Whilst core yields closed largely unchanged, supportive comments from ECB officials Visco and Nowotny helped support peripheral bonds with 10y benchmark yields in Spain (-9.1bps), Italy (-6.8bps) and Portugal (-5.6bps) all closing tighter at 1.789%, 1.996% and 2.916% respectively. Recapping the comments, the ECB’s Visco commented in Rome that the central bank could begin large-scale asset purchases ‘rather quickly’ if deflation risks continue citing the threat from oil price declines. This was followed up by Austria’s central bank governor Nowotny who stated that any further QE measures would be the ‘prospect of missing our target on price stability in the longer term’. One of the ECB’s preferred measure of inflation expectations – the EUR 5y5y inflation swap rate – extended declines to close at 1.67% yesterday and mark a 10-year low. With chatter around further ECB broad-based asset purchases likely to attract more headlines in the new-year, a Bloomberg survey yesterday showed that 90% of respondents expect sovereign QE in 2015 from 57% last month.
Interestingly with the large sell off in risk assets in Europe yesterday, Greek equities closed firmer ahead of tomorrow’s election with the ASE ending +1.45% stronger at the end of play. Greek government bonds also recovered somewhat with 3y and 5y yields tightening 87bps and 34bps respectively. DB’s resident expert George Saravelos noted that there is little change in terms of current government support ahead of tomorrow’s first-round presidential election (due 5.00pm GMT) with initial ‘bean-count’ estimates still below the 180 votes required for the final vote.
Turning our attention over to markets this morning, following the disturbing scenes in Sydney yesterday, the ASX 200 is -0.65% and AUD is holding in at 0.82 to the Dollar. With the exception of China, equities are weaker in Asia this morning with the Nikkei, Hang Seng and KOSPI -1.85%, -1.40% and -0.83% respectively. The CSI 300 (+1.03%) and Shanghai Comp (+0.85%) have strengthened despite a weak flash HSBC manufacturing PMI print. The 49.5 reading for December is below the 49.8 consensus and down from 50 last month with the print the first below 50 since May.
Looking ahead to today’s calendar and away from the start of the FOMC meeting, we kick this morning off in Europe with the flash manufacturing and services PMI prints for the Eurozone as well as regionally for both France and Germany. Elsewhere we’ll keep an eye on the BoE statement on the financial stability report due out this morning with Carney speaking shortly after, as well as UK inflation data. We round off the key releases this morning with the ZEW survey out of Germany. Across the Atlantic this afternoon we’ve got housing data to keep an eye on with both building and November housing starts due. This is followed up later in the US with the flash manufacturing PMI print.
via Zero Hedge http://ift.tt/132f8m0 Tyler Durden
On October 23, Sen. Rand Paul (R-Ky.) gave a
major foreign policy address at the Center for the National
Interest in which he declared himself a “conservative realist,”
aligning himself with the tradition of Ronald Reagan and Caspar
Weinberger. As he did in a similar February 2013 speech at the
conservative Heritage Foundation, the libertarian-leaning 2016 GOP
presidential contender attempted to sell his foreign policy vision
to fellow Republicans as a middle path between the near-absolute
anti-intervention of his (unmentioned) father and the
hyper-interventionism of the Washington Republican
establishment.
Reaction to the speech varied widely. Of particular interest to
libertarians looking to probe the senator’s foreign policy
principles was his seemingly dissonant support for U.S. air strikes
against the Islamic State (ISIS) and opposition to intervening in
the ongoing Syrian civil war. Four days after the speech,
Reason Editor in Chief Matt Welch spoke with Sen. Paul
over the telephone to flesh out his notion of realism and probe
some limiting principles on taking the nation to war.
from Hit & Run http://ift.tt/1BT8aP9
via IFTTT
Llanfynydd Primary
in Wales has no students. The last of its 11 pupils departed months
ago. But it is still open and has most of its staff.
Local officials say they don’t expect to close the school until the
end of the school year in 2015. That’s because the Welsh government
requires a formal review before any school can be closed and that
process is expected to take a few more months to complete.
from Hit & Run http://ift.tt/1yXTxsH
via IFTTT
Critics and defenders of the harsh interrogation methods applied to captured terrorists can argue forever over whether those methods were…
via Thomas Sowell’s Townhall.com Column http://ift.tt/1AATj85
By: Chris at http://ift.tt/12YmHT5
I’m going to paraphrase a conversation I had recently with a Venture Capitalist whose focus is on the tech industry:
Me: “Eyeballs, that’s what founders are telling me. How will this company monetize them?”
VC: “Don’t know, they haven’t figured that out yet.”
Me: “Right. Then how do you come up with your current valuation?”
VC: “That’s industry standard.”
Me: “Industry standard?”
VC: “Yeah, it’s based on what other companies are getting funded at presently.”
Me: “Companies are being funded on eyeballs at the moment. So it’s based on eyeballs?”VC: “Yeah. Well, they’re not there yet. It’s projections of eyeballs.”
Me: “Right, projections of eyeballs which they don’t yet know how they’ll monetize?”
VC: “I don’t think they need to monetize them.”Me: “Really? How does the company make money for shareholders?”
VC: “Exit will be a trade sale.”
Me: “Right. Who’s going to buy them?”
This went on for a little while. I say a little while because I don’t have time to waste on deals I’m not interested in.
No offense meant to my VC colleague. This is endemic right now. When you’re a 20-something or maybe early thirties and haven’t been through a business cycle, which is typically roughly 7 years, let alone a major secular cycle which is on average 26 years in length, then “eyeballs” seems like a perfectly valid way to value a business into the billions. This is how we can get an app valued at more than one of the fastest growing countries in the world right now.
This goes deeper than stupid ideas turned into stupid companies, run by stupid people selling equity to other stupid people, with the anticipation that even stupider companies, run by even stupider people, will buy out this stupid company. Following me?
The reason I say it goes deeper is because it’s a reflection of how our world works now!
Technology has drastically changed how we interact with one another. Twenty years ago I couldn’t operate as I do now. I am communicating with you, our lovely readers on a MacBook from a beach resort town in New Zealand. I’ve had conference calls throughout my day with people in Hong Kong, Beijing, Thailand, Los Angeles and New York. This is a normal day for me. My average day doesn’t look distinctly different when I’m in Singapore or anywhere else. Information flows are now near seamless and instant.
At the same time there is a plethora of people fighting for my attention, and the only way I can function is to remain focused. I say this because I don’t loathe or love technology. It is a tool, nothing more. This tool is unlike a shovel however, since a shovel can’t direct you and use you. You control the shovel and use it for your purposes. Technology is different. If you’re not careful you can be used by it or by those who are controlling it.
Remaining focused is how successful people become successful. Focus, determination, perseverance – this is a trait inherent in all the successful people I know. This, in today’s world of incredible stimulation from every digital angle, is more challenging than ever.
There is a relentless drive to attract eyeballs since we are now overwhelmed with information from every angle, and for those who don’t control this flow of information they simply don’t know where to focus attention. Quality information struggles to find it’s way into the headlines, as the newspapers have turned into porn outlets for eyeballs. They sell “news porn” now, with no real information to be gleaned. Tiny snippets of sensationalist soundbites flood the newswires.
It works. Let’s take an egregious example or two shall we..? Pray tell I ask you what Paris Hilton has done for humanity? Why does she get any airtime? Or that Kardashian chic that has, as far as I can tell, become famous for f**king rappers. She’s got to be one of the highest paid hookers in the world. I just Googled it, and according to one source she made $28 million last year. For what?
Paris Hilton, and numerous others like her, are completely outrageous. Intellectual dimwits who, as far as I can tell, are famous for being famous!
That’s what people seem to want though. They can’t keep from clicking on that link about Miley Cyrus groping Paris Hilton in front of her boyfriend. Yeah, I just found it online to prove my point. This garbage is front page news.
These are completely pointless people doing completely pointless things, but they have this figured out. They’re the new kings in an age of instant short-term self-gratification. Every time Paris Hilton drops her knickers dollar bills pour out. It’s like freaking alchemy!
Why? because she has eyeballs.
In an article from the Guardian newspaper I found the excerpt below.
In a world of instant gratification and where an alternative website is just a mouse click away website owners need to find ways to firstly grab the attention of a user, and then keep it for long enough to get your message across. If you don’t, their cursor will be heading to the back button and on to a competitor in the blink of an eye.
Those who make the most outrageous statements, no matter how flawed their logic or how consistently wrong they may happen to be, acquire the limelight. It’s increasingly a world where the idiots, the morons, the hacks, attract eyeballs and eyeballs are the new currency. Social media is where people receive their information now, but in order to get in front of you it’s gotta be catchy, funny and short because remember that attention span is vanishingly thin.
This is why a YouTube video, no longer than 3 minutes in length of some stupid animated bear will receive millions of views, while a thoughtful, valuable presentation on TED about a revolutionary cure for spinal injuries receives a fraction of that.
Smarter phones and dumber people. You’ll see families, groups of friends, husbands and wives, boyfriends and girlfriends going out to dinner together and they don’t even bloody talk to each other. They’re stuck to their phones or tablets right through dinner.
According to the National Center for Biotechnology Information, at the U.S. National Library of Medicine, the average attention span of a human being has dropped from 12 seconds in 2000 to 8 seconds in 2013. This is one second less than the attention span of a goldfish.
Here is the link to the entire article if you’re interested. Shocking!
In the blogosphere fear sells better than common sense, so we find purveyors of “disaster porn” shouting out from the rooftops to beware of this, and beware of that. Not surprisingly they actually do very well. “News porn”, “scare people shitless porn”, “financial porn”, “comedy porn”.
The global advertising market hardly existed in the industrial age. It was a nascent industry. Today it’s morphed into a beast of epic proportions, and we now live in a PR driven world.
I’ll keep the website and the posters name out of this, however I read a column yesterday which had a really outrageous heading to it… It made one think that the world was coming to an end, and when I read through the post I realised very quickly that the authors knowledge of the facts at hand (he was attempting to discuss a move in the forex markets) were flaky at best. What was being said was so unbelievably normal for anyone that knew even the first thing about economics or financial markets that it would not even have made up more than a minutes conversation with any intelligent person versed in the topic. That didn’t stop this guy however, and he’ll likely be able to garner more eyeballs selling fear, apocalypse and BS.
The Math
Here is the math as I see it, and it’s no different than it was before we had the Internet, smart phones, or even print media way back.
Eyeballs can be monetized. Number of Eyeballs x Conversions = Clients and Clients x Goods Sold = Revenues. Revenues – Opex = Profit.
In this entire equation the most difficult thing to do is to get the eyeballs.
The winners in this game will, as always, be those who are able to focus, because those who are constantly distracted will simply be the product. You and your eyeballs are the target. Use them wisely.
– Chris
“The average TV commercial of sixty seconds has one hundred and twenty half-second clips in it, or one-third of a second. We bombard people with sensation. That substitutes for thinking.” – Ray Bradbury
via Zero Hedge http://ift.tt/1zjsMhi Capitalist Exploits
Submitted by Ron Paul via The Ron Paul Institute for Peace & Prosperity,
The political class breathed a sigh of relief Saturday when the US Senate averted a government shutdown by passing the $1.1 trillion omnibus spending bill. This year’s omnibus resembles omnibuses of Christmas past in that it was drafted in secret, was full of special interest deals and disguised spending increases, and was voted on before most members could read it.
The debate over the omnibus may have made for entertaining political theater, but the outcome was never in doubt. Most House and Senate members are so terrified of another government shutdown that they would rather vote for a 1,774-page bill they have not read than risk even a one or two-day government shutdown.
Those who voted for the omnibus to avoid a shutdown fail to grasp that the consequences of blindly expanding government are far worse than the consequences of a temporary government shutdown. A short or even long-term government shutdown is a small price to pay to avoid an economic calamity caused by Congress’ failure to reduce spending and debt.
The political class’ shutdown phobia is particularly puzzling because a shutdown only closes 20 percent of the federal government. As the American people learned during the government shutdown of 2013, the country can survive with 20 percent less government.
Instead of panicking over a limited shutdown, a true pro-liberty Congress would be eagerly drawing up plans to permanently close most of the federal government, starting with the Federal Reserve. The Federal Reserve’s inflationary policies not only degrade the average American’s standard of living, they also allow Congress to run up huge deficits. Congress should take the first step toward restoring a sound monetary policy by passing the Audit the Fed bill, so the American people can finally learn the truth about the Fed’s operations.
Second on the chopping block should be the Internal Revenue Service. The federal government is perfectly capable of performing its constitutional functions without imposing a tyrannical income tax system on the American people.
America’s militaristic foreign policy should certainly be high on the shutdown list. The troops should be brought home, all foreign aid should be ended, and America should pursue a policy of peace and free trade with all nations. Ending the foreign policy of hyper-interventionism that causes so many to resent and even hate America will increase our national security.
All programs that spy on or otherwise interfere with the private lives of American citizens should be shutdown. This means no more TSA, NSA, or CIA, as well as an end to all federal programs that promote police militarization. The unconstitutional war on drugs should also end, along with the war on raw milk.
All forms of welfare should be shut down, starting with those welfare programs that benefit the wealthy and the politically well connected. Corporate welfare, including welfare for the military-industrial complex that masquerades as “defense spending,” should be first on the chopping block. Welfare for those with lower incomes could be more slowly phased out to protect those who have become dependent on those programs.
The Department of Education should be permanently padlocked. This would free American schoolchildren from the dumbed-down education imposed by Common Core and No Child Left Behind. Of course, Obamacare, and similar programs, must be shut down so we can finally have free-market health care.
Congress could not have picked a worse Christmas gift for the American people than the 1,774-page omnibus spending bill. Unfortunately, we cannot return this gift. But hopefully someday Congress will give us the gift of peace, prosperity, and liberty by shutting down the welfare-warfare state.
via Zero Hedge http://ift.tt/1zqhyq2 Tyler Durden
The 16th of September 1992 will go down in infamy as the day intervention failed and the British government lost control. By the end of Black Wednesday, George Soros had made a billion dollars and the UK Treasury, Bank of England had blown through taxpayer money in a manner never before seen.
“We planned to intervene on a scale that would ensure the market knew we were intervening, ” but as the government intervened one trader notes, “it was incredible, you could hear wave after wave of selling being met by resistance from the Bank of England.”
As the Treasury waited for news, fear began to spread, “we waited minute by minute on updates from the market and then we learned that the billion or so [of taxpayer money] we had put aside Tuesday to defend the pound up to the weekend had gone in a few minutes on Wednesday morning,” shattering the myth of government omnipotence.
Ironically the recent collapse in the Ruble is significantly worse than the collapse in the pound at the time…
Full BBC Black Wednesday documentary:
via Zero Hedge http://ift.tt/1vU0Z0N Tyler Durden
Submitted by James E Miller via Mises Canada,
“
The proletarians have nothing to lose but their chains. They have a world to win. Working Men of All Countries, Unite!” – Karl Marx
In our dire era of increasing economic inequality, we need a symbol for the oppression of the masses. Imagery is a powerful source for inciting change. If we, as the suffering collective, are to attain the glory of perfectly equal distribution, we must find a culprit for our misery. Billionaires like Sheldon Adelson and the George Soros are not popular enough to play public villains. No, what the people need is someone of prominence. They need someone well-known who represents the pure evil of unfettered capitalism.
I think I found the answer to the desperate prayers of the poor and blighted. They want a villain to join in solidarity against. Well, I shall meet their demand. For any egalitarian warrior that wants to stick a pitchfork deep into the injustice of massive wealth accumulation, there exists a target so heinous and diabolical, it begs to be destroyed.
The sole cause of human suffering in the world exists in one entity: Grumpy Cat.
That’s right; the internet sensation “Grumpy Cat” embodies the worst aspects of the nouveau riche. The crotchety feline is a disgrace to American ingenuity. She is ungrateful and undeserving of the riches she has unjustly acquired. Her talent consists of allowing pictures to be taken of her dour countenance. Surely, this is a mockery of all working class Americans.
Grumpy Cat has done nothing to advance human wisdom or goodness. Instead, the mongrel, whose real name is Tardar Sauce, earned her wealth through sheer laziness. Worst of all, Grumpy Cat has the privilege of not being a human. There are poor children in Africa who will never have the chance to experience cat privilege. How dare she strut around in comfort and luxury without doing a thing to help her fellow citizens of the world! What kind of world do we live in where a pet can earn a better living than a bank executive? Not a fair one, that’s for sure.
For all these crimes and more, it’s time we make an example out of Grumpy Cat. There are reports that the sourpussed kitten has earned close to $100 million in just two years. The owner of Ms. Sauce alleges those figures are inaccurate. But why should we believe someone who can afford a life of opulence? The rich overclass can’t be trusted. We know from Marxist dialectics that so-called “facts” are used to keep the common people in chains.
We workers aren’t privy to the true extent of how much Grumpy Cat has earned from us. We must not lose sight of the truth that the cat is not just a harmless mascot who is looked upon fondly on the internet. She’s a veritable multimedia empire. Her face is plastered upon an immeasurable array of products. She is the star of a Lifetime Christmas movie and has hosted an episode of the masculine pageant known as WWE Raw. There’s no telling how much revenue the snobbish cat has earned. Such a gross injustice calls for action.
Everyone knows income inequality threatens the stability of Western countries. Former Federal Reserve chairman Alan Greenspan, whose brilliant foresight and financial acumen did nothing to prevent the financial crisis, considers “income inequality the most dangerous part of what’s going on in the United States.” Economist Thomas Picketty, whose famed calculations on worldwide capital are without flaw, also says inequality poses a threat to Western civilization. Surely, these two brilliant minds can’t be wrong!
There are those who will say that Grumpy Cat poses no threat to societal tranquility. They will say that she is a harmless feline whose natural gifts provide endless amounts of joy for many. They will claim that our worries are childish, and that a household pet should be free to earn its owner as much money as possible, provided the animal is kept away from harm. We must not be swayed by this bourgeoise logic. Reason is the enemy of the human spirit. Our envy and emotions are our greatest weapons against the entrenched inequities in this country. We must not allow the forces of rationality to interfere with our mission of eating the rich.
Now is the time for hasty thought and even hastier action. Tearing down our capitalist overseers requires a firm commitment to take no prisoners. Grumpy Cat, whose wealth is far beyond the reach of the unwashed masses, must be punished. She must be used as a symbol to rile the middle and lower classes out of their stupor. With a small push, we can convince the hoi polloi that their interests are at the heart of our sacred battle.
Let no apprehension toward chaotic revolution fool you. The wisdom of tradition must be cast off if we’re to achieve progress. Edmund Burke was a member of the white aristocracy; his words do not pertain to the struggle against the capitalist order. We must allow the moral arc of history to be our guide. When the French revolutionaries tore down the noble class, the only victims were those who deserved it. When the Bolshevik Revolution occurred, it ushered in a communist harmony devoid of human suffering. The same goes for Mao’s Great Leap Forward – another achievement in mankind’s flourishing.
Now is time for a new revolution. All the talk of the American entrepreneur is bullcockey. Warnings about human complexity and the need for peaceful cooperation is just a smokescreen for tyranny. Our freedom lies in tearing down those better and more well-off than us. We are the glorious heirs to the brave candlemakers who sought to block out the sun. Where our French brethren fought for freedom from natural competition, we fight for the liberty of not feeling inadequate next to an adorable feline. It is the most noble of causes. For if inequality is a crime, then Tarder “Grumpy Cat” Sauce is hostis humani generis.
There is only one solution that will begin the process of establishing a more equitable and more just social system: we must send Grumpy Cat to the guillotine. Her obscene amount of wealth is proof enough of guilt. Off with her head!
via Zero Hedge http://ift.tt/1vTVaAy Tyler Durden