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GM has named Mary Barra to succeed Dan Akerson as CEO, making her the first female CEO in global auto industry:

• *GM SAID TO NAME BARRA AS FIRST FEMALE CEO, SUCCEEDING AKERSON
• *GM’S AKERSON SAID TO STEP DOWN IN JANUARY

 

 

 

 

Mary Barra was named Senior Vice President, Global Product Development effective February 1, 2011, responsible for the design, engineering, program management and quality of General Motors vehicles around the world. On August 1, 2013, she assumed responsibility for GM’s Global Purchasing and Supply Chain organization and was named Executive Vice President, Global Product Development & Global Purchasing and Supply Chain. She is a member of the GM Executive Operations Committee and serves on the Adam Opel AG Supervisory Board.

Barra had previously been Vice President, Global Human Resources.

She has also served as GM Vice President, Global Manufacturing Engineering; Plant Manager, Detroit Hamtramck Assembly; Executive Director of Competitive Operations Engineering; and has held several engineering and staff positions.
 
In 1990, Barra graduated with a Masters in Business Administration from the Stanford Graduate School of Business after receiving a GM fellowship in 1988.

Barra began her career with GM in 1980 as a General Motors Institute (Kettering University) co-op student at the Pontiac Motor Division. She graduated with a Bachelor of Science degree in electrical engineering.

She serves on the General Dynamics and Barbara Ann Karmanos Cancer Institute Board of Directors.  Barra is also a member of the Kettering University Board of Trustees and is GM’s Key Executive for Stanford University and University of California-Berkeley.

Barra is married with two children and was born December 24, 1961.

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Yesterday, we pointed out that according to the latest Bloomberg survey of economists, roughly 70% of respondents now believe that a taper is coming in either December or January, further accentuated by the recent flipflopping of Fed “bellwether” James Bullard who after holding out for a much delayed reduction in the Fed’s monthly flow, admitted that the “probability of a taper had risen “. Today, some additional thoughts on what now seems the consensus from Credit Suisse: “With the labor market looking to be on a more sustained recovery trend following a late summer set-back we think tapering is now virtually inevitable with the decision between a Dec or Jan taper a virtual toss-up that may come down to Fed perceptions of market liquidity in the latter part of December.” And just to add fuel to the flame here comes CNBC’s own staff “Fed expert” Steve Liesman with “get ready, here it comes: A December taper.“

It increasingly appears that tapering is coming at the Fed’s meeting next week.

 

While forecasting the central bank’s moves has been an uncertain proposition for most of the past several months—with the conventional wisdom having it wrong in June and September—several of the Fed’s own financial tests for reducing its asset purchases look to have been met as it heads into the Dec. 17 meeting. Those include confidence in the outlook, an easing of fiscal drag and uncertainty, and what the Fed sees as more appropriate interest rates.

And while the market has been beyond complacent, and is confident that “this time is different”, all it will take for a “tightening of financial conditions” is for one big seller to decide the time has come to take profits, and to ruin the Fed’s latest carefully laid plan to make it seem that Tapering (which the Fed will not tire of repeating is not tightening even though even the Fed has now admitted it is the Flow and not the Stock) is priced in, and make a mockery of all “consensus” forecasts yet again.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Lm46ntJ1NTg/story01.htm Tyler Durden

Yesterday, we pointed out that according to the latest Bloomberg survey of economists, roughly 70% of respondents now believe that a taper is coming in either December or January, further accentuated by the recent flipflopping of Fed “bellwether” James Bullard who after holding out for a much delayed reduction in the Fed’s monthly flow, admitted that the “probability of a taper had risen “. Today, some additional thoughts on what now seems the consensus from Credit Suisse: “With the labor market looking to be on a more sustained recovery trend following a late summer set-back we think tapering is now virtually inevitable with the decision between a Dec or Jan taper a virtual toss-up that may come down to Fed perceptions of market liquidity in the latter part of December.” And just to add fuel to the flame here comes CNBC’s own staff “Fed expert” Steve Liesman with “get ready, here it comes: A December taper.“

It increasingly appears that tapering is coming at the Fed’s meeting next week.

 

While forecasting the central bank’s moves has been an uncertain proposition for most of the past several months—with the conventional wisdom having it wrong in June and September—several of the Fed’s own financial tests for reducing its asset purchases look to have been met as it heads into the Dec. 17 meeting. Those include confidence in the outlook, an easing of fiscal drag and uncertainty, and what the Fed sees as more appropriate interest rates.

And while the market has been beyond complacent, and is confident that “this time is different”, all it will take for a “tightening of financial conditions” is for one big seller to decide the time has come to take profits, and to ruin the Fed’s latest carefully laid plan to make it seem that Tapering (which the Fed will not tire of repeating is not tightening even though even the Fed has now admitted it is the Flow and not the Stock) is priced in, and make a mockery of all “consensus” forecasts yet again.

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Today’s AM fix was USD 1,245.75, EUR 906.13 and GBP 757.76 per ounce.
Yesterday’s AM fix was USD 1,228.50, EUR 895.60 and GBP 749.95 per ounce.

Gold rose $11.90 or 0.97% yesterday, closing at $1,240.60/oz. Silver soared $0.39 or 2% closing at $19.87/oz. Platinum climbed $19.49, or 1.4%, to $1,372.74/oz and palladium edged up $2 or 0.3%, to $733.50/oz.

Gold in U.S. Dollars, 5 Day – (Bloomberg)

Gold edged up to a near one week high today as the dollar weakened and technical support held again prompting funds and investors to allocate funds togold. Given the poor fiscal and monetary state of the U.S., we expect the dollar to weaken in 2014 which should contribute to higher gold prices.

Trading was subdued on the COMEX yesterday as hedge funds and banks turned their attention to the Fed’s policy meeting next week. Volumes in the futures market and the physical market are thin due to little price movement, a lack of news and the wind down in the run up to Christmas.

COMEX Net Long Position – Jan 2006 to Dec, 2013 – (Bloomberg)

There is a risk of a sizeable short covering squeeze after last Friday’s U.S. Commodity Futures Trading Commission (CFTC) data showed hedge funds had cut their bullish bets on gold to the lowest since July 2007. This means that the speculative hot money is the least bullish on gold since 2007.

This suggests that recent heavy selling in gold might have run its course and that speculators and weak hand investors have liquidated their positions which are now being held by stronger hands.

The CFTC data showed that hedge funds also raised their bearish bets in gold to near a 7 and a 1/2 year high. This heightens the risk of a short covering rally. The majority of hedge funds are momentum and trend driven and therefore they tend to often get market bottoms and tops wrong.

They frequently go long at market tops and go short at market bottoms and are therefore considered a good contrarian signal.

Where Are Bail-Ins Likely To Take Place
Bail-ins are likely to happen at banks that are close to failure in countries that have adopted the FSB bail-in conventions and or do not have financial resources to bail-out their banks. Thus, deposits in failing banks in G20 nations may be subject to bail-ins.

The total debt to GDP ratios, household, corporate, financial and sovereign debt, in Japan, the UK and the U.S. are all at very high levels. All three countries have banks whose outlook is far from positive.

Many analysts warn that many Wall Street and City of London banks are bigger now than they were prior to the collapse of Lehman.

The Eurozone debt crisis has abated in recent months but many analysts and economists are concerned that it is only a matter of time before the debt crisis returns with Greece, Spain, Portugal, Italy and Ireland all remaining vulnerable.

 

European banks have been recapitalised but should the sovereign debt crisis return or a new global systemic crisis happen, à la Lehman Brothers, individual banks may again face capital shortages.

Greece, Cyprus, Spain, Italy, Portugal and Ireland all remain vulnerable. However, other countries in the EU also have risks, including the UK, the Netherlands, Switzerland, Denmark & France.

A recent paper by Eric Dor of the IESEG School of Management in France, warned how most European governments remain very exposed to their banks, especially France.

The paper computes the total recapitalisation needs of the banking sector of each European country in case of a new systemic financial crisis. It looks at ratios that would represent the increase of public debt, in percentage of GDP, that would result from a recapitalisation of the big national banks by each country.

 

France which would incur the highest cost in percentage of GDP, if the big banks in France had to be recapitalised with public monies. After France, Cyprus, the Netherlands Greece, the United Kingdom and Switzerland are the most vulnerable.

The research highlighted the vulnerability of many large European banks and the capital shortages of these banks in the event of a systemic crisis. Particularly vulnerable banks in each country, according to data compiled by the Center for Risk Management of Lausanne (CRML) and the VLAB of Stern Business School at New York University were (in no particular order):

Stor and his colleagues concluded that:
“The potential capital shortages of the banking sectors of many European countries in the event of a new systemic crisis are very high.”

When Could Bail-Ins Take Place?
The readiness for the bailin regime depends on how quickly each participating jurisdiction implements supporting legislation. Given the recent updates (see below) from a number of regulators and central banks, it appears that they are well positioned to have the necessary legal framework in place to support resolution authorities by about 2015, if not before.

The Financial Stability Board released an updated report in November 2012, titled “Recovery and Resolution Planning: Making the Key Attributes Requirements Operational” requesting input from regulators, supervisory authorities and banking institutions, in which it stated that:

“Reforms are now underway in many jurisdictions to align national resolution regimes and institutional frameworks more closely with the Key Attributes”.

In March 2013, the Reserve Bank of New Zealand stated that it had “been working closely with registered banks for the last two years to put (bail-in) functionality in place”, and intended for the pre-positioning requirements to be in place by 30 June 2013.

The FSB has a Standards Implementation Committee which is currently “reviewing progress on legislating the Key Attributes” and was expected to produce a report by the second quarter of 2013.

EU leaders plan to agree on the ‘Single Resolution Mechanism’ by the end of 2013, for adoption by the European Parliament in 2014, and implementation in January 2015.

The UK and U.S. appear to already have the supporting powers and legislation in place for bail-ins, based on powers granted in the UK Banking Act of 2009 and the Dodd Frank Act of 2010, respectively.

The exact timing of any bank rescue involving a bail-in obviously would then depend on the need for the bank to be rescued.

Emergency resolutions and legislation would be likely in many countries in the event of another Lehman Brothers collapse and another global credit and financial crisis.

Download our Bail-In Guide: Protectin
g your Savings In The Coming Bail-In Era(11 pages)

Download our Bail-In Research: From Bail-Outs to Bail-Ins: Risks and Ramifications –
Including 60 Safest Banks In The World List  (51 pages) 

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Gold (>$1260) and silver (>$20) are extending yesterday's gains as US markets awake this morning. The crack higher at around 8:07ET caused the futures market to be halted after 3,000 Gold Futures contracts traded in one second at 08:07:45 on December 10, 2013 sending the price up $10 and tripping circuit breakers for 10 seconds. Silver is now +4% on the week and gold +2.5% as Treasuries are also bid. Stocks are stumbling overnight, driven by the "fundamentals" of a drop in EURJPY after it tagged 142 overnight and fell back.

PMs spiking again at the US open…

And halted at 8:07 – as Nanex shows,

About 3,000 Gold Futures contracts traded in one second at 08:07:45 on December 10, 2013 sending the price up $10 and tripping circuit breakers which halted trading for 10 seconds. This sort of thing is happening far too often: see also the drops on April 12, 2013,  September 12, 2013, October 11, 2013, November 20, 2013 and November 25, 2013 which also resulted in trading halts.

1. February 2014 Gold (GC) Futures Trades.

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2. February 2014 Gold (GC) Futures Trades – Zoom.

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3. February 2014 Gold (GC) Futures Depth of Book (how to read).

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and stocks tumbling to play catch up to JPY carry…

 

and Treasuries are bid…

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As opposition party offices are raided and streets continue to fill with protesters, the “precarious” funding sitaution in the nation is beginning to flash red as interbank lending rates spike to 20%. Banks, clearly concerned about their own and each other’s liquidity in the face of potential deposit runs (and the accompanying counterparty risk) and huge demand for liquidity. The hryvnia is falling and bond yields are rising but it is the spike in KievPrime overnight rates that is most concerning – and policy-makers have little room to help.

 

 

Chart: Bloomberg

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With a title like “Are we nearly there yet?: A macro roadmap from Hope to Growth“, the “analysis” could only come from Goldman Sachs. Then again, one can see why 5 years of Fed balance sheet expansionist, central-planning, leading to record stock market highs and virtually no pick up in the economy, would be considered Hope for the 99%, even if the tiny balance of the population, such as Goldman’s CEO, uses the “Hope” period to get in line for multi-million condos in Miami.

This period, which is now running on its fourth year in the US, is called “reality” by those who are the happy recipients of leverageable $2.5 trillion in excess reserves/deposits, which can then be used to circumvent all prop trading rules and ramp risk higher. And yes, 4 years of “Hope” would be enough to make even the most staunch defender of central-planning ask themselves just what is going on? It would, however, explain why virtually all the growth in the past several years has been on the back of multiple expansion, and as the “Despair, Hope, Growth, Optimism” chart below summarizes, the US economy better roll over into growth or very soon someone, somewhere may finally realize what we have been saying since 2009: the Fed has broken the business cycle.

The corollary – after the hope phase, the centrally-planned economy may skip growth and optimism and proceed straight to Despair…

But back to the report, where according to Goldman, we are still in the Hope phase, where we have been for the past 4 years, even though the average length of duration in this part of the cycle is traditionally 10 months. That’s some serious hope going on.

We believe that the equity market is currently transitioning from a multiple expansion driven Hope phase, where the market pays for the anticipation of future improvements to a Growth phase, where these improvements materialize and earnings become the driver of returns at the index level.

 

Whereas the phases can be identified quite clearly when looking at long term histories they are much harder to identify in real time. Here we outline the signs we are seeing of this transition taking place and its investment implications.

 

Our market forecasts for the coming years are consistent with the transition from Hope to Growth. We forecast both 14% earnings growth and 14% price return from current levels for 2014. When we look at our longer term forecasts we expect earnings growth to outpace the price return for the market in both 2015 and 2016, consistent with our view that the current growth phase is likely to be substantially longer than the historical average of 33 months, due to the slow pace of economic recovery.

 

We also expect valuation to hold up better than what is typically the case in the Growth phase. We expect the valuation to be supported by still very high risk premia in equities in an environment where growth improves, yields are low and macro risks are likely to be lower than what we saw in 2011 and 2012. Indeed, we see upside risk that valuation could end up exceeding our forecasts given these factors and limited return opportunities in other asset classes. In the US we have seen the multiple expand in the last couple of years alongside growing earnings.

In other words, valuation currently is not supported by reality, but there is hope this will change soon. And if not, Goldman can just run this “analysis” again in 1 year, when the hope phase will be 1 year longer, and the S&P will be at 2100 or wherever the Fed’s balance sheet is at that moment..

And to really cement it is a Goldman report, the following sentence slams it shut:

Assuming that we do move into the Growth phase, what would history suggest in terms of the macro environment and the performance of assets?

As an aside, if we don’t move in the growth phase, that would be perfectly acceptable for Goldman: that’s where the bulk of equity returns continue to be made.

And the full Goldman investment matrix:

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