BofAML Warns Bond Bears: “These Levels Are Not Going To Give Way Without A Fight”

While BofAML's Macneil Curry remains a longer-term Treasury bear, in the near-term (and potentially medium-term) the evidence for a pause and corrective yield pull-back is too much to ignore. Given the momentum conditions, he notes, these levels are not going to give way without a fight – Treasur bears beware. He also fears a correction lower in EURUSD and USDJPY (JPY strength) but worries that gold has further to fall.

 

Via BofAML's Macneil Curry,

US 5s & 30s at MASSIVE, LONG TERM SUPPORT. Bears beware

We are long term Treasury bears, with 5s targeting the Feb’11 highs at 2.42%, 10s targeting 3.45%/3.50% and 30s targeting 4.23%/4.25%.

However, in the near term (and potentially medium term) the evidence for a pause and corrective yield pullback is too difficult to ignore. While momentum has not confirmed this most recent yield advance from the Oct lows, it is the SIGNIFICANT LONG TERM SUPPORT LEVELS, particularly in 5s and 30s, that have our attention. Indeed, 5s are right on 4.5yr trendline/channel support at 1.756%/1.775%, while 30s are just shy of 20 year channel support and the 100m average at 4.05%. Indeed, monthly momentum in 30s has reached oversold for the 1st time since 2000.

Given the momentum conditions, THESE LEVELS ARE NOT GOING TO GIVE WAY WITHOUT A FIGHT. TREASURY BEARS BEWARE.

Key resistance for each point on the curve is varied. For 5s, a correction could come in the form of a 1.775%/1.659% range, but if 1.659% goes, we risk a 11bp decline. In 10s, stops are likely below 2.935%, through which confirms a top and turn lower to 2.88% and below, while in The Bond bulls need a break of 3.762% to confirm a top, exposing a push to 3.563%/3.461%.

Turning to the curve (5s30s) we hold a near term neutral bias within the 230.9bps/204.9bps, preferring to fade the range extremes. However, on a long term basis, the trend is for FLATTENING, with a break of 205bps/195.1bps opening retracement support at 146bps and below.

€/$ in trouble, but $/¥ is at risk as well.

Ahead of event risk, evidence continues to build for a lower €/$. A daily close below 1.3581/1.3548 (6m trendline & 100d average) confirms a turn lower, exposing the 200d (now 1.3335) and below.

Meanwhile, we remain very cautious on $/¥, as the 3m uptrend is increasingly vulnerable to a top and reversal. The bearish daily momentum divergences and completing 5 wave advance from both Feb’12 and Oct’13 says that additional strength is limited before a top and turn.

Given the strong correlation between $/¥ and US 10yr yields; a break down in yields could be the catalyst for such a reversal. 103.74 (May’13 high) is key support. A sustained break below confirms the turn, exposing the 200d at 99.70 and likely below.

Gold remains in trouble

Despite the rally in the US $, gold has proven to be very resilient. However, stay bearish against 1251/1270. Against here, the downtrend remains on firm footing for a test and break of the Jun lows at 1180, opening LONG-TERM PIVOTAL SUPPORT BETWEEN 1127/1087


    



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

BofAML Warns Bond Bears: "These Levels Are Not Going To Give Way Without A Fight"

While BofAML's Macneil Curry remains a longer-term Treasury bear, in the near-term (and potentially medium-term) the evidence for a pause and corrective yield pull-back is too much to ignore. Given the momentum conditions, he notes, these levels are not going to give way without a fight – Treasur bears beware. He also fears a correction lower in EURUSD and USDJPY (JPY strength) but worries that gold has further to fall.

 

Via BofAML's Macneil Curry,

US 5s & 30s at MASSIVE, LONG TERM SUPPORT. Bears beware

We are long term Treasury bears, with 5s targeting the Feb’11 highs at 2.42%, 10s targeting 3.45%/3.50% and 30s targeting 4.23%/4.25%.

However, in the near term (and potentially medium term) the evidence for a pause and corrective yield pullback is too difficult to ignore. While momentum has not confirmed this most recent yield advance from the Oct lows, it is the SIGNIFICANT LONG TERM SUPPORT LEVELS, particularly in 5s and 30s, that have our attention. Indeed, 5s are right on 4.5yr trendline/channel support at 1.756%/1.775%, while 30s are just shy of 20 year channel support and the 100m average at 4.05%. Indeed, monthly momentum in 30s has reached oversold for the 1st time since 2000.

Given the momentum conditions, THESE LEVELS ARE NOT GOING TO GIVE WAY WITHOUT A FIGHT. TREASURY BEARS BEWARE.

Key resistance for each point on the curve is varied. For 5s, a correction could come in the form of a 1.775%/1.659% range, but if 1.659% goes, we risk a 11bp decline. In 10s, stops are likely below 2.935%, through which confirms a top and turn lower to 2.88% and below, while in The Bond bulls need a break of 3.762% to confirm a top, exposing a push to 3.563%/3.461%.

Turning to the curve (5s30s) we hold a near term neutral bias within the 230.9bps/204.9bps, preferring to fade the range extremes. However, on a long term basis, the trend is for FLATTENING, with a break of 205bps/195.1bps opening retracement support at 146bps and below.

€/$ in trouble, but $/¥ is at risk as well.

Ahead of event risk, evidence continues to build for a lower €/$. A daily close below 1.3581/1.3548 (6m trendline & 100d average) confirms a turn lower, exposing the 200d (now 1.3335) and below.

Meanwhile, we remain very cautious on $/¥, as the 3m uptrend is increasingly vulnerable to a top and reversal. The bearish daily momentum divergences and completing 5 wave advance from both Feb’12 and Oct’13 says that additional strength is limited before a top and turn.

Given the strong correlation between $/¥ and US 10yr yields; a break down in yields could be the catalyst for such a reversal. 103.74 (May’13 high) is key support. A sustained break below confirms the turn, exposing the 200d at 99.70 and likely below.

Gold remains in trouble

Despite the rally in the US $, gold has proven to be very resilient. However, stay bearish against 1251/1270. Against here, the downtrend remains on firm footing for a test and break of the Jun lows at 1180, opening LONG-TERM PIVOTAL SUPPORT BETWEEN 1127/1087


    



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

$292 Million Down The Drain: White House Fires Main Obamacare IT Contractor

Proving once again that if you want something done wrong, and preferably at massive cost overruns, then just leave it to the government, moments ago news broke that the main IT contractor behind the embarrassment that is healthcare.gov – CGI Federal – has been fired. Who could possibly foresee this? Well, anyone who had actually done some diligence on the clusterfuck that is CGI Federal, and which as WaPo profiled some time ago, “is filled with executives from a company that mishandled at least 20 other government IT projects, including a flawed effort to automate retirement benefits for millions of federal workers, documents and interviews show.” Make that 21. “A year before CGI Group acquired AMS in 2004, AMS settled a lawsuit brought by the head of the Federal Retirement Thrift Investment Board, which had hired the company to upgrade the agency’s computer system. AMS had gone $60 million over budget and virtually all of the computer code it wrote turned out to be useless, according to a report by a U.S. Senate committee.” Sounds like the perfect people to hire in order to make a complete disaster out of the Obamacare portal – almost as if by design.

But the best news? Obama’s little tryst with CGI Federal cost US taxpayers only $292 million. As Vanity Fair revealed recently, “According to congressional testimony, CGI stands to be paid $292 million for its work on healthcare.gov.” And since the CGI replacement will eventually redo everything from scratch, this is $292 million that Obama may have as well burned.

We jest, but the incest between the Obama administration and CGI will one day be probed. According to recent revelations the ties run deep:

That lack of expertise explains why in building healthcare.gov, the government turned to industry contractors; in particular, to CGI Federal, a subsidiary of CGI Group, a Canadian company. To those uninitiated in the dark art of government contracting, it seems scandalous that CGI, a company most Americans had never heard of, a company that is not located in Silicon Valley (where President Obama has plenty of Internet superstar friends who could have formed a dazzling brain trust to implement his signature legislation) but rather in Montreal, could be chosen as the lead contractor for the administration’s most important initiative. While right-wing news outlets have focused on the possible relationship between Toni Townes-Whitley, senior vice president for civilian-agency programs at CGI Federal, and Michelle Obama, both of whom were 1985 Princeton graduates, CGI’s selection is probably more an example of a dysfunctional system than it is a scandal. “A lot of the companies in Silicon Valley don’t do business with the government at that level [the level required for federal contracting],” explains Soloway. “It is very burdensome, and the rules make it very unattractive.” Indeed, government contractors have to meet a whole host of requirements contained in a foot-thick book, including cost accounting and excessive auditing, to prove that they are not profiting too much off the American taxpayer. Hence, there tends to be a relatively small, specialized group of companies that compete for this work, even on such critical matters as healthcare.gov.

Actually it is a scandal. And it is a bigger scandal that at least $292 million in taxpayer cash was literally flushed down the drain and all we have to show for it is a website that crashes when the seemingly impossible happens, and more than a few hundred people try to log in at the same time. Then again perhaps, since it’s no longer 1993, someone in the administration should take responsibility for this? Or maybe it was just Bush’s fault again (and it snowed in December).

Keep in mind, CGI’s coding disaster was so epic, there actually is a flowchart indicating just how many errors in healthcare.gov there are.

So with CGI out of the picture, who will take over administration of the Obamacare portal? WaPo has the answer: “Federal health officials are preparing to sign a 12-month contract worth roughly $90 million, probably early next week, with a different company, Accenture, after concluding that CGI has not been effective enough in fixing the intricate computer system underpinning the federal Web site, HealthCare.gov, the individual said.”

And this pearl: “Because of time constraints, CMS is awarding the Accenture contract on a sole-source basis, according to the person familiar with the decision.”

So is that what kickbacks to Michelle Obama are called now?

We can be sure of one thing: this replacement will be an even more epic disaster and will ultimately result in over a billion taxpayer dollars being spent on a program that was doomed to failure from the beginnin regardless.

Accenture, which is one of the world’s largest consulting firms, has extensive experience with computer systems on the state level, and it built California’s new health insurance exchange. But it has not done substantial work on any federal health-care program.

There is a small chance Accenture won’t be as much of a debacle as CGI. Keep in mind that the government is very familiar with the consulting company’s skill se: after all the DOJ itself sued it!

The decision to turn to Accenture puts the project in the hands of a government contractor that has significant technological expertise but also signed a high-profile legal settlement with the Justice Department less than three years ago over its contracting practices.  Accenture had one contracting dispute with the federal government that ended up in court, agreeing in September 2011 to pay $63 million to settle a Justice Department lawsuit alleging that it improperly benefitted from recommending specific hardware and software as part of government contracts, as well as inflating prices on contracts and distorting the federal bidding process.

In retrospect who are we kidding: Accenture is certainly the best replacement to CGI…  if the intention is to keep bleeding the government’s taxpayer funded coffers dry. And why not: if said coffers run out of money, the Fed can just print some moar.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/hS5kiJjZprA/story01.htm Tyler Durden

Union Jobs Are The New iPads As 1500 New Yorkers Camp Out Three Freezing Days For A $17.20/Hour Job

While this morning’s dismal jobs data is being blamed on the weather (despite no other recent indicator reflecting the same effect), it seems New Yorkers are not afraid of the cold. In fact, as FoxNY reports, it seems there is a new ‘must-have’ for the New Year – a Union Job. 1,500 people have been on line since 1pm on Tuesday for a ‘coveted’ union job that pays $17.20 per hour (for painting and decorating apprenticeships) and could lead to a full-time union position. Forget the iPhone5S, union jobs is where it’s at…

 

New York News

 

Via FoxNY,

The line wrapped nearly around an entire city block on Friday as approximately 1,500 people waited in Queens for a chance to apply for a coveted union job.

 

The first few people on line had been there since 1 p.m. on Tuesday when the temperature in New York City was in the single digits.

 

District Council 9 is accepting 500 applications in Long Island City for painting and decorating apprenticeships.

 

The hired will receive a salary of $17.20 an hour during the first year.

 

The apprenticeship could lead to a full time union position.

 

Maybe Apple (or Microsoft or Sony) should consider offering a union-job with the next release of their products? Given today’s jobs data, we suspect the demand for the latter may outstrip demand for the former very very soon…


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/5cLHXo4K_Bk/story01.htm Tyler Durden

The Grand SCOTUS Facade

The Grand SCOTUS Facade

By

Cognitive Dissonance

 

There is a widely held and increasingly difficult to believe myth that the three branches of the United States government operate independently from each other, thus acting as checks and balances upon each other. And the reality is that as long as it suits The Empire’s self interest those three branches of government will outwardly appear to operate as directed by the constitution.

But if the supremacy of The Empire is threatened by external or internal forces those very same three governmental branches, either separately or in unison, will act to protect The Empire and its special interests………and the Constitution be damned if it gets in the way. Let me repeat that. The Empire will protect itself from itself, from its own greed, corruption, malfeasance, incompetence and especially from its oppressed and enslaved citizens. It is then that the facade of separation of powers begins to slip and fade away.

For example in decades past the Supreme Court of the United States (SCOTUS) affirmed slavery in America and then approved by abstention Abraham Lincoln’s blatantly unconstitutional power grab from the states, only to rule against it after the Civil War had ended and the damage had been done. Incredibly they even ratified the corralling of US citizens of Japanese descent during WW2 and the taking of their property without compensation.

And just recently The SCOTUS confirmed that the Affordable Care Act, aka Obamacare, was constitutional because it’s just a little tax after all. Some said this was a surprising decision, but we knew it was a slam dunk because it supported the teetering Empire with additional tax revenue and control of its ‘citizens’. And this doesn’t even begin to cover the actual list of Empire ass covering rulings by The SCOTUS nor does it mention the long list of legislative or executive affronts to ‘We the People’.

Similarly, as long as it suited The Empire the myth was widely propagated that the USA was the land of milk and honey and egalitarianism ran riot in the streets. As long as productivity increases outpaced the cost of gruel and there was still plenty of financial leverage to exploit, the slaves of the nation were fed a steady propaganda diet of shared prosperity for their share of the elbow grease.

This comforting myth was helped along by switching from one wage earner households to two under the guise of equal rights for women and upward mobility for all. In addition, plenty of cool gadgets and baubles were produced and sold (at double the cost plus profit of course, this being the birth place of [crony] capitalism) in order to entertain the debt and wage slaves while carefully disguised, but none-the-less much higher than advertised, inflation ate them alive.

Now that it is no longer in the best interest of the now bloated and corrupt Empire to maintain the facade, the pretty red velvet curtain at the back of the stage is slowly being removed and the crumbling brick wall is exposed for all to see. It’s time to tighten our belts my fellow peons because the elite are having trouble maintaining their year over year double digit increases in wealth.   

As many are beginning to realize, the dismantling of the middle class has begun in earnest and the various branches of government are now obviously and blatantly rallying to protect and serve The Empire. This is accomplished using many brilliantly applied techniques such as bait and switch social programs, bread and circuses for the masses, fear mongering for the weak willed and impressionable, nationalistic propaganda, manufactured left/right ideological conflicts and that old standby, good old fashioned subterfuge. Who doesn’t love it when they slop more lipstick on the pig and slap another coat of wet paint on the dry rot?

It was with this firmly in mind that I stumbled across a photo essay in Politico Magazine entitled 18 Photographs That Will Change Your View of Washington”. This was not my fault; I clicked on a link, then another link, then another when suddenly I found myself in the cesspool of Politico Magazine. Upon arriving and realizing I was already knee deep in DC excrement I plunged ahead and clicked away.

What I found after the third or fourth click took my breath away and shocked me in a way I had never quit experienced. I was so startled that I just stared at the image open mouth and mesmerized, not quite believing my eyes, stunned that ‘they’ would do such a thing. At one point I turned to Mrs. Cog in disbelief and begged her to look at my screen and confirm that what I was seeing wasn’t really what I was seeing. Alas, Mrs. Cog verified that while I may be old and senile, my cataracts had not blurred my vision to such an extent that what I thought I was seeing was not.

It seems that the exterior of the Supreme Court building is undergoing what was described as renovations and some scaffolding needed to go up. While it didn’t mention why they do so, it is common practice to place tarps over the exterior of the scaffolding to catch stray dirt and debris. In fact I believe that somewhere in the constitution there is a passage about keeping the Supreme Court Justice’s black robes clean at all costs during remodeling, so the tarps were completely understandable.

SCOTUS Facade

What was so alarming to me was the image that had been printed on the tarp which covered the entire depth and breadth of the SCOTUS building. A life size (and anatomically correct) picture of the SCOTUS building facade had been painted on the tarp, which was in turn covering the actual SCOTUS building facade, which itself is just an architectural fantasy and placed there only to project an image of strength, integrity and justice for all. I was staring at a simulation of a simulation of a lie if you will, and at taxpayers’ expense no less. Simply amazing the size balls these guys and gals have.

Personally I suspect they’re looting the place under cover of tarp and when the wraps come off martial law will go up and the ugly brick wall will be fully exposed for all to see. Of course this is precisely when the SCOTUS will spring into action and rule that the final nail driven into the constitution is in fact constitutional precisely because it serves to support The Empire.

It is my understanding that something similar was done to the Washington Monument while they repaired the damage done by God’s wrath, also known as an earthquake. And now I read that the Dome of the U.S. Capital Building is currently undergoing a two year restoration because that too is falling apart at the seams. No word yet on if they will paint a picture of the dome on the Dome, but personally I vote for an image of the Three Stooges instead. It’s so apropos.

 

01-10-2014

Cognitive Dissonance

 

P.S. – Don’t you just love this image of some tourists taking a picture of the picture of the SCOTUS facade? It speaks volumes about your average American.

SCOTUS Facade Tourists

Then again, the above picture is a picture of tourists taking pictures of a picture of the SCOTUS facade. Just where this all ends is anybody’s guess. Cue the hall of mirrors.

<Please, someone take a screenshot of this image and pass it on. It’s the patriotic thing to do. >


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/J2VPMg0OzOg/story01.htm Cognitive Dissonance

Fed Hints At Reason For QE5: Obamacare

While excess risk-taking and broken markets likely dominate their thinking, the ‘real economic recovery’ meme the Fed is using to enable them to ‘taper’ their excesses. However, investors remain assured that if things get worse once again then the Fed will crank the presses and save the assets. It seems they have found their new excuse – no matter what…

  • *LACKER EXPECTS ‘A LOT OF TURMOIL’ IN HEALTH CARE INDUSTRY
  • *LACKER SAYS FED WILL BE WATCHING HEALTHCARE CLOSELY IN NEXT FEW YEARS

So, despite admitting asset-bubbles, fears over stock-multiples and excessively easy lending; the Fed will launch QE5 when Obamacare drags the US economy into trouble

  • LACKER SAYS HEALTHCARE ACT COULD HAVE SUBSTANTIAL ECONOMIC IMPACT, SMALL BUSINESS LOOKING FOR HOW BEST TO HANDLE

But – that’s not what Obama said!


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/BlcX_ymPRm8/story01.htm Tyler Durden

Druckenmiller On Chris Christie: “Once In A Generation Leader”

With the FBI joining investigations into the New Jersey Governor's Bridge-Gate scandal (and David Wildstein 'pleading da fif'), it would appear Chris Christie is calling in some favors. Bloomberg TV's Stephanie Ruhle reports this moring that the billionaire money manager Stan Druckenmiller proclaimed, "Governor Christie's actions yesterday reinforces my admiration for him," as he (rightly) pointed out that "the country thirsts for a great leader. A leader's actions in crisis are revealing." Druckenmiller went on to explain in his statement that he "believes Chris Christie is a once-in-a-generation leader… and he is showing essential executive skills as a manager: ensuring accountability and taking responsibility."

 


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/1EoaLBRaXfw/story01.htm Tyler Durden

Druckenmiller On Chris Christie: "Once In A Generation Leader"

With the FBI joining investigations into the New Jersey Governor's Bridge-Gate scandal (and David Wildstein 'pleading da fif'), it would appear Chris Christie is calling in some favors. Bloomberg TV's Stephanie Ruhle reports this moring that the billionaire money manager Stan Druckenmiller proclaimed, "Governor Christie's actions yesterday reinforces my admiration for him," as he (rightly) pointed out that "the country thirsts for a great leader. A leader's actions in crisis are revealing." Druckenmiller went on to explain in his statement that he "believes Chris Christie is a once-in-a-generation leader… and he is showing essential executive skills as a manager: ensuring accountability and taking responsibility."

 


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/1EoaLBRaXfw/story01.htm Tyler Durden

And The Market Breaks

If one has no access to a market pricing service, perhaps the simplest and easiest way of testing if the market is down, is to check the NASDAQ market system status page. Usually, on down days, the NASDAQ just, well, breaks. As it did moments ago when it announced that trading in options with a symbol range A through M has been halted.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Y4BXX1TqqNY/story01.htm Tyler Durden

European Peripheral Stocks Exploded Higher This Week

Even Draghi proclaimed anyone calling the crisis over as ‘premature’ but that was ignored by the fast-money momo chasers looking for where to rotate their cash on the sidelines as US momentum fades. Greece, Portugal, and Spain stocks literally exploded higher this week:

  • Greece +7.7% – best week in 8 months
  • Portugal +4.7% – best week in 9 months
  • Spain +4.98% – best week in 16 months

Sounds right?! Efficient markets, indeed…


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/4ZQoXHFKlmw/story01.htm Tyler Durden