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There was a time – roughly between May 2010 and the spring fall of 2011 – when all the world had to worry about was Greece. Then the realization finally dawned that since a Grexit from the Eurozone would kill the EUR and the European integration dream with so much “political capital” invested, crush Deutsche Bank, and bring back the much dreaded (by German exporters) Deutsche Mark, it became clear that there is no fear that Greece, which is now a decrepit shell of a country with a collapsed economy and society in shambles, has now become a slave state to European bureaucrats, business and banks (in Nigel Farage’s words), will never be formally kicked out of Europe and only an internal coup would allow it to finally break free from the clutches of unelected European tyrants. And then the world moved on to more important things: like Japan, China Emerging Markets and how they are all enjoying the Fed’s taper. Sadly, we have to report, that Greece is once again baaaaack.

According to the WSJ, “top officials peeled away from colleagues after a euro-zone finance ministers meeting in Brussels Monday evening for a secret meeting to discuss mounting concerns over Greece’s bailout.

WSJ adds:

High-level officials from the International Monetary Fund, the European Commission, the European Central Bank, senior euro-zone officials and the German and French finance ministers were present, according to people with direct knowledge of the situation. They spoke on condition of anonymity because they aren’t authorized to talk to the press.

 

They were trying to figure out how to tackle two issues threatening to unsettle the fragile economic recovery in Greece and the broader euro zone.

 

They discussed how to press the Greek government to forge ahead with unpopular structural reforms; and second, how to scramble together extra cash to cover a shortfall in the country’s financing for the second half of the year, estimated at €5 billion-€6 billion ($6.81 billion-$8.17 billion).

Of course, this being Europe, nothing was decided: “The meeting was inconclusive, the people familiar with the situation said. Talks with the Greek authorities continue remotely—though representatives of the three institutions, known as the troika, have put on hold their plans to travel to Athens. Concerns are growing because Greece faces a large maturity of government bonds in May of €11 billion. The IMF hasn’t disbursed any aid to Greece since July and is €3.8 billion behind in scheduled aid payments. The IMF insists on having a clear view of the country’s finances 12 months ahead, and this condition hasn’t been met.”

And so the posturing resumes, with the Troika pretending it won’t hand over the funds unless Greece “reforms”, and Greece promising the “reform” as soon as it gets the funds. Nothing new here. What is new, is that finally the facade of Greek sovereignty and independence was stripped away as decisions regarding Greece took place… without
Greece: “Greek Finance Minister Yiannis Stournaras, who was briefing the
press in the same building at the time, wasn’t invited.”

Which is right – after all when a nation is enslaved and has no sovereignty, it doesn’t deserve to have a voice in its future.

via Zero Hedge http://ift.tt/1hXVkT3 Tyler Durden

If the stock market were already crashing then it would be simple to blame the dismally sad rash of dead bankers in the last week on that – certainly that was reflected in 1929. However, for the third time in the last week, a senior financial executive has died in what appears to be a suicide. As Bloomberg reports, following the deaths of a JPMorgan senior manager (Tuesday) and a Deutsche Bank executive (Sunday), Russell Investments’ Chief Economist (and former Fed economist) Mike Dueker was found dead at the side of a highway in Washington State. Police said the death appeared to be a suicide.

 

Via Bloomberg,

Mike Dueker, the chief economist at Russell Investments, was found dead at the side of a highway that leads to the Tacoma Narrows Bridge in Washington state, according to the Pierce County Sheriff’s Department. He was 50.

 

He may have jumped over a 4-foot (1.2-meter) fence before falling down a 40- to 50-foot embankment, Pierce County Detective Ed Troyer said yesterday. He said the death appeared to be a suicide.

 

Dueker was reported missing on Jan. 29, and a group of friends had been searching for him along with law enforcement. Troyer said Dueker was having problems at work, without elaborating.

 

Dueker was in good standing at Russell, said Jennifer Tice, a company spokeswoman. She declined to comment on Troyer’s statement about Dueker’s work issues.

But as Michael Snyder noted recently, if the stock market was already crashing, it would be easy to blame the suicides on that.  The world certainly remembers what happened during the crash of 1929…

Historically, bankers have been stereotyped as the most likely to commit suicide. This has a lot to do with the famous 1929 stock market crash, which resulted in 1,616 banks failing and more than 20,000 businesses going bankrupt.

 

The number of bankers committing suicide directly after the crash is thought to have been only around 20, with another 100 people connected to the financial industry dying at their own hand within the year.

Dueker had also been a research economist at the St. Louis Fed:

He published dozens of research papers over the past two decades, many on monetary policy, according to the St. Louis Fed’s website, which ranks him among the top 5 percent of economists by number of works published. His most-cited work was a 1997 paper titled “Strengthening the case for the yield curve as a predictor of U.S. recessions,” published by the reserve bank while he was a researcher there.

So, with stocks a mere 4% off their highs, are so many high ranking and well respected bankers committing suicide?

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

If the stock market were already crashing then it would be simple to blame the dismally sad rash of dead bankers in the last week on that – certainly that was reflected in 1929. However, for the third time in the last week, a senior financial executive has died in what appears to be a suicide. As Bloomberg reports, following the deaths of a JPMorgan senior manager (Tuesday) and a Deutsche Bank executive (Sunday), Russell Investments’ Chief Economist (and former Fed economist) Mike Dueker was found dead at the side of a highway in Washington State. Police said the death appeared to be a suicide.

 

Via Bloomberg,

Mike Dueker, the chief economist at Russell Investments, was found dead at the side of a highway that leads to the Tacoma Narrows Bridge in Washington state, according to the Pierce County Sheriff’s Department. He was 50.

 

He may have jumped over a 4-foot (1.2-meter) fence before falling down a 40- to 50-foot embankment, Pierce County Detective Ed Troyer said yesterday. He said the death appeared to be a suicide.

 

Dueker was reported missing on Jan. 29, and a group of friends had been searching for him along with law enforcement. Troyer said Dueker was having problems at work, without elaborating.

 

Dueker was in good standing at Russell, said Jennifer Tice, a company spokeswoman. She declined to comment on Troyer’s statement about Dueker’s work issues.

But as Michael Snyder noted recently, if the stock market was already crashing, it would be easy to blame the suicides on that.  The world certainly remembers what happened during the crash of 1929…

Historically, bankers have been stereotyped as the most likely to commit suicide. This has a lot to do with the famous 1929 stock market crash, which resulted in 1,616 banks failing and more than 20,000 businesses going bankrupt.

 

The number of bankers committing suicide directly after the crash is thought to have been only around 20, with another 100 people connected to the financial industry dying at their own hand within the year.

Dueker had also been a research economist at the St. Louis Fed:

He published dozens of research papers over the past two decades, many on monetary policy, according to the St. Louis Fed’s website, which ranks him among the top 5 percent of economists by number of works published. His most-cited work was a 1997 paper titled “Strengthening the case for the yield curve as a predictor of U.S. recessions,” published by the reserve bank while he was a researcher there.

So, with stocks a mere 4% off their highs, are so many high ranking and well respected bankers committing suicide?

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

Previous month's epic miss and hurriedly revised expectations from UMich confidence was 'baffled with schizophrenic bullshit' when the Conference Board printed at near record post-crisis highs earlier in the week. It is perhaps not unexpected that despite a drop MoM, following the huge miss last month that UMich confidence would very modestly beat expectations. As in the last 2 cycles, we saw an echo surge in confidence and that has now (just as in the last two cycles of confidence) begun to fade. Both current conditions and economic outlook fell MoM.

 

The cycle is once again echoing – 4year 4 month rise, echo bounce and now fade…

 

Of course, confidence remains crucial in the reflation of market multiples and hope-fueled exuberance but – as we reiterate below – the cycle once again appears to have peaked…

 

As a gentle reminder, as we have noted previouslyUMich Confide – this move in confidence is key…

But, it's all about confidence… investors will not be willing to pay increasing multiples unless they are confident that the future streams of earnings are sustainable and forecastable… And simply put, the current levels of Consumer Sentiment need to almost double for the US equity market tp approach historical multiple valuation levels…

 

 

[18]

 

and the cycle appears to be shifting…

Via Citi,

Is consumer confidence set to turn?

[19]

Consumer Confidence is once again following a dynamic where we see it move higher for 4 years and 4 months before beginning to collapse

• Moves higher from 1996-2000 with a smaller dip halfway through in October 1998
• Moves higher from 2003-2007 with a smaller dip hallway through in October 2005
• Moves higher and so far tops out in June 2013. Also sees a small dip halfway through in October 2011.

 

Higher yields do not help confidence…

[20]

 

A sharp rise in mortgage rates has a negative feedback loop to consumer confidence. For those families and individuals that were now looking/able to enter the housing market, the recent spike in rates acts as a headwind.

 

In addition to the economic backdrop, there is plenty of tail risk as we head into the end of the year. Oil prices have been rising since the summer began (and in reality since the Summer of 2012), partially due to geopolitical risks which are very much “top of mind.” A bigger spike due to a supply shock would choke the economic recovery.(In our view)

In the US, the appointment of a new Fed Chairman and the upcoming budget/debt ceiling debates are likely to bring added volatility. Tapering itself can also induce concern as the “Bernanke put” is being removed from markets.

In Europe, many of the structural problems related to the single currency union have not actually been addressed and the peripheral countries could still create turmoil going forward (see Fixed Income section focusing on Italy in particular for more on this). There has also been little concern with both the German elections and the German Court decision on the constitutionality of the OMT program. A surprise in either of these could be cause for concern.

Emerging Markets are still not out of the woods yet as growth has been weak relative to expectations and countries with current account deficits are beginning to feel pressure in their FX and Bond markets. This is an issue we believe is only starting to develop which we will continue to expand on at later dates.(We have also looked at this in our EM FX section this week)

Overall, the weak economic backdrop, poor housing recovery and potential for tail risk events over the next few months suggest that we have topped out in Consumer Confidence, a warning sign for equity markets.

[21]

 

The relationship between Consumer Confidence is clear, and IF June did mark the high and Confidence continues to decline, then we would expect to see that translate to weakness in the equity markets. The removal of the “Bernanke put” only adds to this concern.

A major turn has taken place in equity markets on average four months after Consumer Confidence turns, which would point to a decline beginning around September-October. As we have previously expressed, we remain of the bias that a correction in equity markets on the order of 20%+ is likely this year/ into 2014 and the current dynamics support such a move.

Should we see a decline of that magnitude, it is almost certain that yields would move lower in a rush to safe assets.

 

For now the mid-year highs are holding as confidence cannot escape its secular downturn.

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

The worst news that could happen for stocks today was a Chicago PMI beat – after all it is becoming all too clear that the market is begging for a tapering of the tapering, and any and every bad news will be welcome. Alas, the Purchasing Managers Institute did not get the memo, and moments ago MNI-Deutsche Boerse reported (to subscribers first), that the January print was 59.6, below the revised December print of 60.8 but above the expected 59.0. This was thje third consecutive monthly fall following October’s jump to the highest since March 2011.  The only silver lining for stocks was that the Employment component slipped into contraction for the first time in nine months, printing at 49.2, down from 51.6. Must have been the fault of that horrible polar vortex in January then.. Or Bush of course.

According to the report, “the Employment component fell sharply for the second consecutive month to the lowest since April 2013. The majority of companies said their workforce was unchanged with some of them reporting higher productivity of their employees.” And now we look forward to more baffling with bullshit from both ADP and the BLS, which are sure to also contradict each other in an economy where every print is now certifiably made up by goalseek-o-trons.

The other components of note: price paid modestly higher at 64.9 from 63.3, as well as Production, New Orders and Order Backlogs which also increased slightly, having fallen for the past two months.

Prices Paid rose to the highest level in more than a year as suppliers continued to request price increases.
Commenting on the MNI Chicago Report, Philip Uglow, Chief Economist at MNI Indicators said, “Business activity continued to ease in January but remained at a relatively high level. Production and New Orders remained firm, and while Employment fell back into contraction, this doesn‘t appear to be indicative of current demand conditions.”

“There have been concerns that putting the brakes on monetary easing could damage business. Most respondents, though, thought that the Federal Reserve’s decision to begin tapering their bond purchases in December would not have a significant impact on their business”, he added.

Let’s refresh that in a month or so…

via Zero Hedge http://ift.tt/1kkEi35 Tyler Durden