Liberty Links 4/29/16

10 links today. Enjoy.

Vox’s Puff Piece on Goldman Sachs Doesn’t Reveal Goldman Sponsors Vox (Must read, Fairness & Accounting In Reporting)

Trump and Clinton Tied Nationwide in Latest Rasmussen Survey (Rasmussen)

‘Clinton Cash’ Has Been Made Into a Movie (Bloomberg)

Las Vegas Review-Journal Columnist Resigns After Being Told He Can’t Write About Adelson (Capital New York)

Seymour Hersh on Sanders and Clinton: ‘Something … Amazing Is Happening in This Country’ (TruthDig)

See More Links »

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Movie Review: High-Rise:—New at Reason

High RiseJ.G. Ballard’s 1975 novel High-Rise is a grim exercise in deadpan dystopian fantasy, and director Ben Wheatley’s new movie is an ambitious attempt to bring it to life on the screen. The cast is certainly game—especially Tom Hiddleston, who’s supported by Sienna Miller, Jeremy Irons, and a feral Luke Evans. But Ballard’s story is so schematic that it starves us of surprise: we can see where it’s going, and we’re even shown where it will ultimately end, right at the beginning. The picture is all incident—this happens, that happens, more things happen. It’s chilly and brutal and increasingly, over the course of two long hours, monotonous, writes Kurt Loder.

View this article.

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The Full Story Behind Bloomberg’s Attempt To “Unmask” Zero Hedge

Over the years, Zero Hedge has proven to be a magnet for media attention.

It started years ago with a NY Magazine article published in September 2009 which first “unmasked” the people behind Zero Hedge with the “The Dow Zero Insurgency: The nothing-can-be-believed chaos of the financial crisis created a golden opportunity for a blog run by a mysterious ex-hedge-funder with a dodgy past and conspiracy theories to burn” in which we were presented as a bunch of “conspiracy theory” tin foil hat paranoid loons.

We are ok with being typecast as “conspiracy theorists” as these “theories” tend to become “conspiracy fact” months to years later.

Others, such as “academics who defend Wall Street to reap rewards” had taken on a different approach, accusing the website of being a “Russian information operation”, supporting pro-Russian interests, which allegedly involved KGB and even Putin ties, simply because we refused to follow the pro-US script. We are certainly ok with being the object of other’s conspiracy theories, in this case completely false ones since we have never been in contact with anyone in Russia, or the US, or any government for that matter. We have also never accepted a dollar of outside funding from either public or private organization – we have prided ourselves in our financial independence because we have been profitable since inception.

Which brings us to the latest “outing” of Zero Hedge, this time from none other than Bloomberg which this morning leads with “Unmasking the Men Behind Zero Hedge, Wall Street’s Renegade Blog” in which it makes the tacit admission that “Bloomberg LP competes with Zero Hedge in providing financial news and information.”

To an extent we were surprised, because while much of the “information” Bloomberg claims it reveals could have been discovered by anyone with a cursory 30 second google search, this time the accusation lobbed at Zero Hedge by Bloomberg was a new one: that we are capitalists who seek generate profits and who have expectations from our employees.

This comes from a media organization which caters to Wall Street and is run by one of the wealthiest people in the world.

Underlying the entire Bloomberg article is disclosure based on a former employee at Zero Hedge.

Traditionally we don’t reply to such media stories but in this case we’ll make an exception as there is a substantial amount of information Bloomberg has purposefully failed to add.

* * *

Zero Hedge hired Colin when he approached us over a year ago begging for a job after he was fired with cause from Seeking Alpha following a fight with a coworker. This should have set off alarm flags but we ignored it.

Colin was a good writer, covering topics ranging from finance to economic to politics. More importantly, and unfortunately, Colin also was revealed to be an emotionally unstable, psychologically troubled alcoholic with a drug dealer past, as per his own disclosures.

All of these revelations were made clear to us long after we hired Colin, and unfortunately they were the catalyst that precipitated his full emotional collapse and ultimately led to his abrupt departure. All of these fact were also made clear to Bloomberg as part of its source “fact-checking.”

Colin’s departure, triggered by what readers will see was a near psychological breakdown, is also the basis for the Bloomberg article: as Colin made it clear to us, in his latest emotional outburst, he meant to “destroy” the website and has used Bloomberg as a platform in his attempt to discredit it.

Which is ironic because as recently as two months ago Colin was thanking us for “saving his life” and that ZH is the most important thing in his life. The last thing he wanted to do was “fuck it up” as he admitted in a text message.

 

* * *

Alas, as often happens, the reality is different from what is being presented in the mainstream media, as readers will shortly find out.

But first, we would like to address a key false claim that Bloomberg makes, namely the following:

Lokey, who said he wrote much of the site’s political content, claimed there was pressure to frame issues in a way he felt was disingenuous. “I tried to inject as much truth as I could into my posts, but there’s no room for it. “Russia=good. Obama=idiot. Bashar al-Assad=benevolent leader. John Kerry= dunce. Vladimir Putin=greatest leader in the history of statecraft,” Lokey wrote, describing his take on the website’s politics. Ivandjiiski countered that Lokey could write “anything and everything he wanted directly without anyone writing over it.”

He adds: “I can’t be a 24-hour cheerleader for Hezbollah, Moscow, Tehran, Beijing, and Trump anymore. It’ s wrong. Period.

He is absolutely correct: nobody ever asked Colin to be that, and Zero Hedge is most certainly not that – what it is, is the other side of the story which may not be reported and the one that will make readers think.

To be sure, not only was Colin never told how or what to write when covering any given topic, he was never editorialized. Any topic, subject and story he wanted to write about was his entirely own, and he was never pressured with an “angle” which is much more than we can say for most of our competitors.  What is amusing is that at first Lokey accused Zero Hedge of having a pro-Trump agenda, which then mysteriously morphed just days later into the old “pro-Putin” fallback. However, as he admits, he was never actually told how or what to write, he merely “thought” this was the case.

 

Another false allegation was that “Lokey says he’s “scared to even ask for an hour off,” while Ivandjiiski replies that “if you ever need time off for whatever reason, never hesitate to just ask.” In February, Lokey says, “I love this company and this website,” and tells Ivandjiiski “you saved my life,” expressing thanks for the job.”

Indeed he did, as recently a two months ago, or just a month before his departure. And more to the point, we repeatedly asked Colin if he needs “time off”. Yet somehow Bloomberg is reporting as if he was afraid to “even ask for an hour off.”

 

Unfortunately, this is the pattern of lies that emerged in recent months and culminated with today’s Bloomberg hitpiece.

* * *

Below we will provide factual examples that corroborate that what Bloomberg’s article is nothing more than a disgruntled employee seeking media attention in his attempt to “destroy” his former employer.

First, some insight into Colin’s repeated alcohol abuse, the underlying reason for his what until recently were inexplicable to us mood swings, and sadly, the steady deterioration of his work product.

He said that in February. He failed to “banish it” as his drinking not only got worse, it nearly led to Colin committing himself. The drinking continued.

 

Conveniently Bloomberg ignored to add that its source was an alcoholic. It also ignored to add that its source had and still has deep psychological problems. In fact, as he himself admitted his problem is like “some physical sickness.” It got so bad, he first resigned two months ago as a result of his most recent emotional collapse.

… Only to beg for his job back just hours later.

 

We decided to give him another chance: after all he was certainly a good writer which is why, incidentally, nobody ever edited, pressured or adjusted his writing contrary to his allegations.

Alas, it continued, and Colin had another major relapse promptly thereafter.

We wanted to help Colin, but not even he had any idea how to help himself. Sadly, his drinking would continue, as would his trips to get hospitalized in order to get help.

 

Colin admitted that his emotional trouble were so bad he had to be given a therapist and given Ativan.

Once again, he begged for forgiveness, and once again we granted it.

This was followed by more hospital trips, and more excuses about his steadily deteriorating work product.

 

Ultimately what was going on with Colin’s mental state was something that he himself dubbed “incomprehensible and frightening.”

 

And then it was finally revealed the reason for his recurring mental problems: they were a remnant from his drug dealing days, a fact he presented to us for the first time just weeks ago.

 

All of this went on for weeks and months, and culminated with yet another promise that Colin will “fix this.”

 

A few days later Colin had his final mental breakdown, which culminated with his explicit desire to “shut it down”, for which he would use a very willing “competitor” Bloomberg…

… Coupled with a death threat.

 

This is the objective source that “competitor” Bloomberg used for their piece.

* * *

Regarding, the actual content of Bloomberg’s platform giving voice to a disturbed individual, former drug dealer and alcoholic, we find it particularly amusing as it “accuse” Zero Hedge of being intent on generating profits.

Coming from Bloomberg we find this not only entertaining but somewhat hypocritical.

Yes, Zero Hedge does and needs to generate a profit as nobody else would provide the funding needed to us, especially since our message is a simple one: the one the mainstream media will usually refuse to touch or discuss. We find it particularly amusing that Bloomberg quotes quotes Lokey as saying “he was irked by what he saw as the hypocrisy of Zero Hedge and how it runs counter to its antiestablishment image.”

This may have been the underlying problem confusing Colin because it is not an “antiestablishment image” – it is a website whose mission is clearly stated in our manifesto:

our mission:

  • to widen the scope of financial, economic and political information available to the professional investing public.
  • to skeptically examine and, where necessary, attack the flaccid institution that financial journalism has become.
  • to liberate oppressed knowledge.
  • to provide analysis uninhibited by political constraint.
  • to facilitate information’s unending quest for freedom

our method: pseudonymous speech…

 

anonymity is a shield from the tyranny of the majority. it thus exemplifies the purpose behind the bill of rights, and of the first amendment in particular: to protect unpopular individuals from retaliation– and their ideas from suppression– at the hand of an intolerant society. 

 

…responsibly used.

 

the right to remain anonymous may be abused when it shields fraudulent conduct. but political speech by its nature will sometimes have unpalatable consequences, and, in general, our society accords greater weight to the value of free speech than to the dangers of its misuse.

– mcintyre v. ohio elections commission 514 u.s. 334 (1995) justice stevens writing for the majority

 

though often maligned (typically by those frustrated by an inability to engage in ad hominem attacks) anonymous speech has a long and storied history in the united states. used by the likes of mark twain (aka samuel langhorne clemens) to criticize common ignorance, and perhaps most famously by alexander hamilton, james madison and john jay (aka publius) to write the federalist papers, we think ourselves in good company in using one or another nom de plume. particularly in light of an emerging trend against vocalizing public dissent in the united states, we believe in the critical importance of anonymity and its role in dissident speech. like the economist magazine, we also believe that keeping authorship anonymous moves the focus of discussion to the content of speech and away from the speaker- as it should be. we believe not only that you should be comfortable with anonymous speech in such an environment, but that you should be suspicious of any speech that isn’t.

* * *

As for what we actually do, we find it surprising that someone needs an explanation: after all all our content hits the website as soon as it is published and is immediately vetted by all our readers. Indeed, as we have said from day one, the content should speak for itself, disintermediated from the messenger, which ultimately is the whole point. We believe that our readers agree with us.

Incidentally, the chart above may explain why none other than our “competitor” Bloomberg decided it was its mission to voice a grievance of a disgruntled former employee who admitted it was his intention to “destroy” Zero Hedge.

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“You’ve Lost Their Confidence” Tom Coburn Exhorts Congress “America Doesn’t Trust You Anymore”

"America doesn’t trust you anymore. That’s the truth… and that’s not one party, that’s both" raged former Senator Tom Coburn during a hearing before the Senate Committee on Homeland Security and Governmental Affairs this week. As FreeBeacon reports, Coburn, making his first appearance before the Senate since his farewell speech when he retired in late 2014, pleaded with Congress to take action to reform government, quoting de Tocqueville, that an ever more centralized control reduces its citizenry "to nothing better than a flock of timid and industrious animals, of which the government is the shepherd."

 

 

As FreeBeacon.com's Elizabeth Harrington reports, Coburn is leading a movement of more than 1 million activists working to hold a Convention of the States, allowed by Article V of the Constitution, to force Congress to balance the budget. He said 10 of 34 states needed have passed resolutions so far.

“I would just tell you a little of my background this last year in 2015 I spent my time in 21 different states,” Coburn told the committee. “And America doesn’t trust you anymore. That’s the truth. Because they don’t see the actions coming out of Congress that should be coming out.”

 

“And that doesn’t mean that they’re right all the time, but you’ve lost their confidence,” he said. “And that’s not one party, that’s both. And so when you have hundreds of billions of dollars that could be saved and aren’t, and they know it. You know, they actually read your reports. People online, and then they use social media, pass it around.”

 

“The important thing is to restore the confidence in the country what you’re doing, and why you’re doing it and how you’re doing it,” Coburn said.

 

“The unfunded liabilities of this country, with its debt, is $142 trillion,” he said. “That’s $1 million per family, or that’s $1 million per taxpayer. Nobody knows what a trillion is but when you’re telling a young family with small kids, ‘Oh, by the way, here’s the debt burden that’s coming to you over the next 25 years, you better be prepared for it.’”

 

Read more here…

Coburn said “too much government” and “too intrusive a government” is to blame for median family incomes being the same size as in 1988. Throughout Coburn said Congress needs to stop focusing on fixing the symptoms but focus on fixing the disease. He called for a more simple and fairer tax code, which he said could eliminate 90,000 IRS agents, who make 77 percent more than the average American.

He pointed to Alexis de Tocqueville, quoting at length the French political philosopher’s Democracy in America, to explain the current upheaval in American politics and the presidential race.

“Some of you may have read it, some of you may not have, but it tells me where we are today in our country,” Coburn said. “And having been in 21 states the last year, and 15 already this year, and what I’m hearing, I’m hearing what Tocqueville described back in the late 1700s.”

 

Coburn cited Tocqueville observations that centralized power of “small, complicated rules, minute and uniform” leads to the “will of man … not shattered, but softened, bent, and guided.”

 

“Such a power does not destroy, but it prevents existence; it does not tyrannize, but it compresses, enervates, extinguishes, and stupefies a people, till each nation is reduced to nothing better than a flock of timid and industrious animals, of which the government is the shepherd,” Coburn said, quoting Tocqueville.

“That to me in my experience, my opinion, is where we are today in our country,” Coburn concluded. “I think that’s why you see the presidential race that we’re seeing.”

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Building Out of a Housing Shortage: New at Reason

Californians talk a lot about affordable housing but don’t necessarily understand how supply and demand work.

Steven Greenhut writes:

City councils and county boards of supervisors love to control housing growth. But often, they merely succumb to public pressure. The Register reported this past week that a judge ordered Huntington Beach to “immediately comply” with a previous ruling requiring it to permit more low-income units as part of a high-density housing project.

The city, which has vowed to appeal, has been at odds with housing advocates “since last May, when the council, reacting to public outcry, eliminated more than 2,400 units of potential high-density housing from plans along portions of Beach and Edinger,” according to the report. Focus on the phrase, “reacting to public outcry.” Try to find any development project that doesn’t spark a backlash from neighbors, environmentalists and slow-growth activists.

Affordable-housing activists miss the big picture, of course. They believe the solution to the housing-affordability crisis is to subsidize (or mandate) the development of below-market-price “affordable” units. That’s a drop in the bucket; traditionally, “affordable” housing is best found in the “used” housing market. There’s no constitutional right to a subsidized new condo. They are right that localities need to permit more infill housing, but they need to green-light every type of new housing. If you feed supply into the system, it will help at every price point.

https://twitter.com/marcorandazzaCa

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USDJPY Plunges As Dollar Drops To 11 Month Lows, Commodities Rise

Following yesterday’s Yen surge in the aftermath of the disappointing BOJ announcement, the pain for USDJPY long continued, with the key carry pair tumbling as low as 106, the lowest level since October 2014 before stabilizing around 107, and is now headed for its biggest weekly gain since 2008, which in turn has pushed the US dollar to to its lowest close in almost a year as signs of slowing growth in the U.S. dimmed prospects for a Federal Reserve interest-rate increase. As a result, global stocks fell and commodities extended gains in their best month since 2010.

The yen strengthened against all 16 major peers for the second day in a row, climbing as much as 1.1 percent to 106.91 a dollar, the strongest level since October 2014. It surged 4.3 percent this week as the Bank of Japan defied economists’ expectations that stimulus would be stepped up.

The sliding dollar is proving beneficial for raw materials, helping lift gold and silver to 15-month highs. Crude oil has jumped 21 percent this month to more than $46 a barrel in New York. European equities trimmed their biggest monthly advance since November.

As Bloomberg writes, the dollar’s third straight monthly drop and the prospects for the Fed moving gradually on interest rates are spurring the outlook for inflation, with the 10-year U.S. break-even rate at the highest since July. Reports today on consumer confidence and personal spending will provide clues on the trajectory of the world’s largest economy after data on Thursday showed the slowest pace of expansion in two years.

 

Looking at regional markets, Asia traded mixed amid holiday thinned trade and a cautious tone following Wall St. losses, where an Apple sell-off and weak US GDP dampened sentiment. However, ASX 200 (+0.4%) edged higher underpinned by commodity strength in which WTI broke above USD 46/bbl. Elsewhere, the Shanghai Comp (-0.3%) was subdued after further discouraging earnings in which PetroChina posted its first ever quarterly loss and ICBC reported lacklustre growth as well as an increase in NPL’s, while the PBoC also conducted a net CNY 290b1n drain. Finally, Japanese markets were shut for Showa Day public holiday.

In Europe, despite the upside in the energy complex today, sentiment is firmly dampened after the soft close in the US yesterday and the risk off trading seen overnight. Although Asia saw thin trade due to the Japanese holiday, the upside seen in both JPY and precious metals illustrated the uncertainty felt across asset classes, with this filtering through to Europe. Equities have traded in the red throughout the morning, with Euro Stoxx lower by 1.2%, although with the downside in equities failing to filter through to any significant price action in fixed income. Bunds are flat on the day and continue to trade in the tight range between 162.50 and 162.25.

In Fx, it has been a mixed session in FX, but one which again is to the detriment of the USD as the index is pressed down to fresh 6 month+ lows on the back of another down-leg in USD/JPY. Losses in London saw 107.00 taken out, but ahead of 106.50, exotic protective bids are helping contain the sell-off, albeit temporarily so as yet. EUR/USD has been propelled higher accordingly, having adopted a strong bid tone in recent sessions. Earlier gains extended through the pre 1.1400 top seen over the ECB press conference last week, and despite running into strong offers above here, the pullback is contained ahead of 1.1350, with better than expected Q1 GDP in the Euro zone now aiding the bid. This has also helped EUR/GBP recover a little, with Cable now only managing to match the early Feb high at 1.4667 before retracing back through 1.4600. Bids in the mid 1.4550’s supporting for now. Commodities still recovering amid the backdrop of recent jitters in equity markets. Oil continues to power north to help maintain USD/CAD pressure on 1.2500. Strong bids coming in ahead of this but sellers keen ahead of 1.2550.

Heading into the North American crossover, energy prices have seen upside for much of the morning with Brent crude futures above USD 48/bbl, while WTI is trading at levels last seen since October. Newsflow for the energy has been somewhat light, with only reports out of Saudi Arabia that they may potentially boost oil production in the summer to around 10.5mln bpd. Elsewhere, Gold rose nearly 1% as a cautious tone spurred a flight-to-safety reaching USD 1280.00/oz eyeing the highs of USD 1284.8/oz seen on the 11th Mar’16, Elsewhere Silver broke the recent highs of USD 17.66/oz reaching USD 17.84/oz with the next level up at USD 18.44/oz. Copper and iron ore prices also benefited from the USD’s demise to 8-month lows, with Dalian iron ore futures hitting limit up in early trade.

Bulletin headline summary from Bloomberg and RanSquawk

  • An uninspiring lead from US and Asian bourses filters into Europe despite the upside in the energy complex
  • USD-index continues its persistent softness with USD/JPY briefly breaking below 107.00.
  • Looking ahead, highlights include US Core PCE and Personal Spending, as
    well as comments from Fed’s Kaplan, and BoE’s Cunliffe
  • Treasuries slip during overnight trading, lower with global equities as Japan closed today and May 3-5 for Golden Week; volumes light with 10Y Treasury futures trading around 147k contracts.
  • Federal Reserve Bank of Dallas President Robert Kaplan says estimates of first-quarter growth have been disappointing, but that output should improve over the remainder of the year
  • Mario Draghi’s policy challenge was highlighted once again on Friday, with the fastest economic growth in a year overshadowed by a renewed drop in consumer prices as euro- area inflation rate fell to minus 0.2 percent in April
  • Commerzbank AG downgraded bonds from Poland, Hungary and Croatia this week, saying the countries are most vulnerable to Brexit risks
  • Spanish banks are gobbling up a growing slice of Portugal’s financial industry, taking advantage of the country’s halting recovery from Europe’s debt crisis
  • China’s central bank responded to an overnight tumble in the dollar by strengthening its currency fixing the most since a peg was dismantled in July 2005.
  • Chinese authorities are considering convening a top-level finance work conference this summer, a year ahead of schedule, to map out a sweeping consolidation of the country’s financial regulatory system in a move to reduce risks
  • Vice President Michel Temer is playing down expectations that he can achieve a quick fix for Brazil’s economic troubles should his boss, Dilma Rousseff, be impeached
  • Sovereign 10Y bond yields mixed; European, Asian markets lower; U.S. equity-index futures rise. WTI crude oil, metals higher

US Event Calendar

  • 8:30am: Personal Income, March, est. 0.3% (prior 0.2%)
  • 8:30am: Personal Spending, March, est. 0.2% (prior 0.1%)
  • 9:00am: ISM Milwaukee, April (prior 57.78)
  • 10:00am: Retail Sales benchmark revisions
  • 10:00am: U. of Mich. Sentiment, April F, est. 90 (prior 89.7)
  • 1pm: Baker Hughes rig count

DB’s Jim reid concludes the overnight wrap

So a busy period of Central Bank policy meetings comes to an end giving investors a chance to take stock and assess where we go from here. In the last week and a bit we’ve heard from the ECB, Fed and now the BoJ. Much of the focus on the former was on the details around the corporate bond purchasing program with the general feeling that it largely exceeded expectations. The Fed made some subtle changes to its language, but ultimately markets remain unconvinced that we’re any closer to the next tightening move. Finally it was the turn of the BoJ yesterday and while investors had been fairly 50/50 going into the meeting for some sort of action, the immediate reaction from markets was one of obvious disappointment. Kuroda’s press conference yesterday seems to have left the market in a bit of a haze of confusion and the BoJ will have be careful not to mismanage expectations and so damage their credibility in the future. All of a sudden it might be worth checking your summer holiday dates versus the next two BoJ dates on June 16th and July 29th.

It’s interesting to take a look at how markets have performed through this busy period of monetary policy meetings, and corporate earnings results for that matter. Ultimately the conclusion is that there’s actually not been that much change for asset prices in the period since the close of play prior to the ECB. Looking at equity markets the S&P 500 is -1.2% with much of that decline a result of yesterdays late selloff, while the Nikkei is -1.4% (again plagued by yesterdays performance), the Stoxx 600 -0.3% and the DAX -1.0%, while European Banks (+2.5%) have actually bounced. Sovereign bond markets are more mixed. 10y Treasury yields are 2bps lower, while similar maturity Bunds and JGB’s are 10bps and 6bps higher respectively. The iTraxx Main index is actually unchanged which may come as a surprise while in FX land the Yen is 1.6% stronger and the Euro is up about half a percent.

Post the BoJ yesterday the main focus was on the US data and specifically the Q1 GDP print. Growth disappointed at +0.5% qoq (vs. +0.7% expected) as net exports contributed negatively while business fixed investment was also down sharply. Inventories also dragged as expected and the data confirmed that Q1 was the weakest quarterly performance for growth since Q1 2014. Interestingly though the US Dollar bounced off its lows and Treasury yields moved higher as the inflation data released alongside actually surprised to the upside. The Q1 Core PCE print came in at +2.1% qoq (vs. +1.9% expected) which is the highest level in four years. We’ll get some idea of the intra-quarter pattern with this afternoon’s March PCE data.

Before we get there though, flicking over to Asia where markets are closing out the week on a bit of a mixed note. After the steep leg lower yesterday, equity markets in Japan are closed for a public holiday, however the Yen has continued to strengthen and is another 1% firmer this morning around 107.20 which is an 18-month high. That means it has rallied over 4% since pre-BoJ yesterday. Meanwhile the Hang Seng has dropped -1.35% this morning, bourses in China are little changed, the Kospi is -0.55% however the ASX is +0.41%. The Chinese Yuan is generating headlines this morning too after the PBoC raised the fix by the most since 2005. The reference rate was set +0.56% stronger however that appears to be more of a reflection of the big weakness in the USD yesterday rather than any policy intention.

Elsewhere US equity index futures are little moved despite Amazon reporting a big beat for Q1 earnings after the closing bell yesterday which sent shares up over 10% in extended trading. The company reported an EPS of $1.07 a share for the quarter after expectations were for 57c. Even if we use the peak in consensus for Q1 EPS this year back in January of 87c, the beat is still impressive.

Back to yesterday. After European equity markets had wiped out the early BoJ-led selloff from the Nikkei into the close (Stoxx 600 closing +0.17%), US equities did look like they were on course for a broadly flattish day before a sharp leg lower for Apple took the rest of the tech sector with it meaning the S&P 500 (-0.92%) and Dow (-1.17%) both ended the session heavily in the red. Apple ended just over 3% lower and it appears that the cause of that was the CNBC interview with Carl Icahn confirming that the investor has sold his stake in the company with concerns about issues in China. US credit indices ended up being hard hit too with CDX IG nearly 3bps wider by the end of play.

Meanwhile the Yen rally yesterday saw the US Dollar index end -0.66% lower and so continuing the theme of dropping every day this week. 10y Treasury yields ended nearly 3bps lower at 1.825% after at one stage touching 1.87% post the inflation data. Oil markets took more of a backseat but the weakness in the Dollar did help to extend the YTD high for WTI after rallying +1.54% to close a smidgen above $46/bbl. Precious metals were the bigger winner on the day however in true risk off fashion. Gold ended up +1.64% at $1266/oz while Silver rallied to the tune of nearly 2% meaning it is an impressive 18% up from the lows of earlier this month.

In terms of the rest of the data yesterday, there were few surprises from the flash CPI numbers out of Germany where the April headline number printed at -0.2% mom as expected. German unemployment was also noted as falling 16k last month. The rest of the data in Europe was reserved for Euro area confidence indicators. Consumer confidence was confirmed this month at -9.3, while economic confidence rose 0.9pts to 103.9 (vs. 103.4 expected). Both services and business climate indicator readings were reported as rising this month too. Meanwhile in the US the only other data of note was a slight increase in initial jobless claims last month by 9k to 257k although albeit still at historically low levels, while the Kansas City Fed’s manufacturing survey was reported as rising 2pts this month to -4.

Looking at today’s calendar, we’ve got a busy end to a busy week for data today. This morning in Europe and shortly after this hits your emails the French Q1 GDP print will be released. Following that will be German retail sales for March before we’re back to France again with the first snapshot of the April inflation numbers. We then turn to the UK for money and credit aggregates data before its all eyes on the Euro area CPI report for April (headline expected at -0.1% mom) and Q1 GDP report (expected to be +0.4% qoq). Across the pond this afternoon we’ll get the Q1 employment cost index, March personal income and spending data and that PCE deflator and core data for last month. There’s more regional manufacturing data in the form of the ISM Milwaukee and the Chicago PMI before we get the final revision to the April reading for the University of Michigan consumer sentiment survey. Meanwhile 22 S&P 500 corporates will be out with their latest quarterly earnings today including Exxon Mobil and Chevron so it’s well worth keeping an eye on those results.

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ZARpocalypse Now? BofAML Warns “Summer Of Shocks” Looms

The mysterious ZARJPY indicator of global turmoil is flashing red once again as BofAML's Michael Hartnett warns of soaring sentiment into a potential "summer of shocks."

 

 

With BofAML Bull & Bear index (from 0.1 in Feb to 5.0) sentiment at 11-month highs, Hartnett sees the world split into the next few months…

"Summer of Stocks" (boring macro/trading range/grind higher) plausible… cash still high, US/EU credit underpinned, breadth improving

 

"Summer of Shocks" (buy vol) more plausibleH1 policy "panic" ended this week, BofAML say Fed hikes June, bears getting "stopped in", Japan yen surge, China bond vigilantes, ISM<50, BREXIT all risk-off shocks

Wall Street/Fed continues to play "cat and mouse" (risk rallies end when Fed hike expectations imminent, and start when Fed hike expectations postponed).

And (hedge fund) redemption, (central bank) repression, (market) regulation risks remain very high as the flash crash/pain trade era to continue.

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Gold & Silver Surge To New Cycle Highs After China Strengthens Yuan By Most In 11 Years

With Japan closed, and unable for now to do more damage (or damage control), China stepped in with some modest turmoil of its own by strengthening the Yuan fix by the most since 2005, pressuring the USD weaker for the 5th day in a row. Commodities have tended to push higher on the back of this with Crude above $46.50 but Gold and Silver have surged to fresh 15 month highs (over $1275 and near $18 respectively).

The biggest strengthenig in Yuan fix (implicitly pressuring the USD weaker) since 2005…

 

Sent PMs higher overnight…

 

 

And lifted crude (June) to the highest sionce Thanksgiving…up 4 days in a row

 

As it appears crude is playing catch up with gold post-BoJ…

via http://ift.tt/1r1kKZK Tyler Durden