Tag: news

The last 2 days have seen enormous volatility in the Saudi Riyal exchange rate, purportedly oil-related FX hedging programs as the SAR dropped to its lowest sicne Dec 2008, but the most extreme ‘moves’ were left to The Kingdon’s top Muslim cleric. As The BBC reports, Sheikh Abdul Aziz al-Sheikh, the Grand Mufti of Saudi Arabia, exclaimed that Twitter is “the source of all evil and devastation”. As the 12th most influential Muslim in the world, it perhaps matters that he says users were using Twitter to “promote lies, backbite and gossip and to slander Islam,” but citizens of Saudi Arabia, who are some of the heaviest users of Twitter, did not appreciate his remarks, summe dup by one tweet, “People need an outlet to express themselves, to start to disclose what’s hidden and drop the masks, without fear or commands, or censorship from anyone.”

 

Handsome chap…

 

As The BBC reports,

according to Saudi Arabia’s top Muslim cleric, Twitter is “the source of all evil and devastation”.

 

Sheikh Abdul Aziz al-Sheikh, the Grand Mufti of Saudi Arabia, made the comments on his Fatwa television show earlier this week.

 

“If it were used correctly, it could be of real benefit, but unfortunately it’s exploited for trivial matters,” he said about the social networking site.

 

“People are rushing to it thinking, ‘It’s a source of credible information’ but it’s a source of lies and falsehood.”

 

As the highest religious authority in the country, Sheikh Abdul Aziz al-Sheikh holds a senior government position, advising on the law and social affairs.

 

He was also voted the 12th most influential Muslim in the world in a recent poll.

 

According to Gulf News, he said: “These are not the high morals that Muslims should have and I call upon all people to contemplate seriously what they write before they post their tweets.”

However, citizens of Saudi Arabia, who are some of the heaviest users of Twitter, did not appreciate his remarks.

One of the reasons Saudis say they like using Twitter is because it allows them to discuss what they really feel.

 

The hashtag #WhydidTwittersucceedinSaudiArabia began trending in January, with users sharing their reasons they liked the site.

 

One user tweeted: “People need an outlet to express themselves, to start to disclose what’s hidden and drop the masks, without fear or commands, or censorship from anyone.”

 

Another posted: “The reason is that none of the newspapers are concerned with your worries nor do any officials care about you.”

As the Riyal slides notably away from  its peg to the USD – to the weakest since Dec 2008…

 

Though we are sure Twitter had nothing to do with that.

As Bloomberg notes,

the biggest jump in long-dated USD/SAR forwards in more than three years was partly driven by increased FX hedging trades after oil prices fell, two FX and rates traders in London said.

 

Given Saudi Arabia’s large FX reserves, traders see no fundamental justification for these moves, and instead are seizing the opportunity to sell the forwards at elevated levels.

*  *  *

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

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Those who actually create value as opposed to chasing yield with nearly-free money will actually have some traction once the swamp of excess liquidity drains.

Answer: none. The saver can leverage his cash at best 4-to-1: a 20% down payment leverages a mortgage of 80% borrowed money. The financier can borrow as much he wants for next to nothing.

"A worthy subject for your attention and treatment is how the collapse of credit liquidity is actually a very helpful thing for individuals who are real creators of real value– as they now get to compete on a much more level playing field. I see this phenomenon unfolding all around us as overvalued assets and professions go on the chopping block to maintain the status quo. It's actually a very good thing."

via Zero Hedge http://ift.tt/1uGtS0F Tyler Durden

“If you like your broken markets,” it would appear you can keep them… but this time in bond futures. June 2015 30Y Futures prices are surging today (up a stunningly fat-finger-esque 7.4% (or 10 points)). This, however, is being traded… there is volume being exchanged… and at 151-19/32, it implies 30Y Bond yields will be below 2.4% by the middle of next year (from 2.99% today).

30Y Futs (June 2015) are up over 10 points today…

 

which implies a collapse in 30Y yields to 2.4%…

 

A) Fat Finger? (doesn’t look like it)

B) Short-Squeeze?

C) Hedge at Any Cost…

D) Exchange Error

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/kLpoClDrj0s/story01.htm Tyler Durden

There was a time when one couldn’t get Bernanke to shut up: whether it was swearing to Congress how the Fed is not monetizing debt, explaining to Ron Paul that gold is nothing but “tradition”, or otherwise issuing one after another after another debt monetizing quantitative easing program in hopes that “this time” the trickle down from the record high stock market would finally unleash central-planning utopia, Bernanke’s verbal insight was in a state of constant deflation. However, ever since his departure from the marble halls of the Marriner Eccles building, suddenly Bernanke’s insight has hyperinflated to the tune of some $250,000 per hour of Bernanke’s time (time during which he says such profound insights as “No Rate Normalization During My Lifetime“).

But why pay this ridiculous amount to hear what is nothing but more of the same? Bragging rights or a chairsatan autograph? Ok, but for everyone else who is not insane there is an option. Here, courtesy of Drobny Global, is a brief, and certainly far less cheaper than $250,000, summary of what the former Fed Chairman said said at the first Drobny/BNP Paribas IMF Forum held on October 9 in Washington D.C.

So without further ado, and without having to fork over a ridiculous quarter of a million dollars, here is what the Chairsatan really said…

Dr Ben S Bernanke kicked off the first session. We started with historical parallels to today; the Chairman is widely regarded as a scholar of the 1930s, and an expert on the liquidity trap. Surprising to some, he suggested the run on commercial paper and repo markets in 2008 is more reminiscent of the 19th century financial panics with corporate bonds, and not so comparable to the run on the banks as in 1929-32. Moreover, he pointed out, the 1929 crash was the direct result of a policy designed to prick an asset bubble. That wasn’t the case this time. And, what happened in the 1930’s, when financial panic turned to depression because of tight money and fiscal austerity policies pursued by the authorities, was not repeated this time around.

 

Avoiding policy mistakes is one of the well known lessons from the 1930’s. But, the former Chairman noted, there are other lessons here as well: (1) low interest rates are not sufficient to insure an easy monetary policy, other tools might be needed (eg, getting off the gold standard in 1933 or QE and forward guidance today); and (2) financial crises are very destructive to an economy so you want to preempt them and minimize their effects as much as possible.

 

And, there was the premature tightening of policy in 1937, which derailed the recovery from the big crash. This came up as an analogy for current times on several occasions during the proceedings. The US recovery seems to have survived through both the tax hike at the start of 2013 and the ‘taper tantrum’ later in the spring. But will the Japanese recovery be sustained through a second tax hike next year? Especially since, as Bernanke pointed out, Japanese inflation is virtually all imported; so far, home grown inflation hasn’t really emerged. And, doesn’t the policy regime in the Eurozone look a lot like the US policy regime of the early 1930s? How can QE succeed in generating a sustained rebound in the Eurozone given a gold-type currency regime and a policy of fiscal rectitude? Dr Bernanke, who suggested that QE probably succeeded but seems to work largely through signaling effects, was not at all confident that it would be effective in the Eurozone. More generally, he suggested that foreign developments could become a reason to delay US rate hikes.

 

And, that was generally a theme. The former Chairman seemed surprisingly dovish, and much less even handed than when he was at the FED. He has to be more circumspect in that job, it seems. Dr Bernanke talked about the benefits of slow and late tightening, and letting inflation initially overshoot. He also emphasized the importance of fiscal stimulus in ensuring that the rebound from the financial crash is sustained. He certainly couldn’t say much about that when he was at the FED!

 

Perhaps most intriguing was his suggestion that a 2% inflation target may be too low. Such a target, he pointed out, was premised on the notion that the zero bound would be hit maybe 5% of the time. It’s been hit much more than that. Bernanke suggested a 3% target, as he thought 4% was a bit high. What a contrast with how the BUBA seem to think about policy! More on this in a post-event comment at the end of this Review.

 

Wouldn’t a policy of persistently low interest rates naturally lead to asset bubbles?, Bernanke was asked. The best predictor of bubbles, he responded, is rapid credit growth. But, that isn’t the same as low nominal rates. Regulatory changes can be a driver of rapid credit growth, with the last decade in the US a good example. Low rates can contribute to bubbles, but typically there are other variables in play as well. And, right now, credit growth is not at all rapid.

 

The former Chairman raised another important point that regarding wages and inflation. It is widely recognized that a missing link in the recovery thus far has been muted wage inflation. But, he noted, less widely recognized is that mark ups are unusually high. That’s part of this environment where the distribution of factor incomes has moved strongly in favor of profits. With markups and profits so high, firms can absorb higher wages for a while before they have to raise prices. That is, accelerated wage inflation might result in a redistribution in favor of labor and, at least initially, may not place much upward pressure on price inflation. Most of us know the likely impact effect on rates markets when higher wage numbers are released. But, the chairman’s comments suggest that such an effect may not be sustained if price inflation does not accelerate commensurately.

And there it is. Now, was that really worth the down payment on a new house?

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

 

via Zero Hedge http://ift.tt/1ouFfMz Reggie Middleton

via Zero Hedge http://ift.tt/1x9MmsG williambanzai7

It appears some of the ‘fundamental’ legs of the face-ripping ramp in stocks are fading. Broken Markets – nope; Fed Speakers – nope (blackout period); Crude rising – nope (WTI back under $81)

 

 

But wait – there is a “broken” market – June 2015 Long Bond Futures… fat-fingered, short squeeze, or hedge at any costs?

 

Paging Jon Hilsenrath…

via Zero Hedge http://ift.tt/1x9MoRx Tyler Durden

From Tepper’s “Short The Euro,” call (which he hopes does better than his “bond bull is over” call) to Icahn’s “HY credit is in a bubble… and I am short” warning, The 2-day Robin Hood conference in NYC had something for everyone. Paul Tudor Jones thinks US equities will outperform the rest of the world this year but “the piper will be paid one day,” and Larry Fink says “equities are health” after last week’s correction… and Whitney Tilson is short Lumber Liquidators (trade accordingly).

Day 1:

Greenlight’s Einhorn: reiterates long SunEdison, says long TerraForm; says he owns warrants on Greek banks Alpha Bank, Piraeus Bank SA; betting on declines in French sovereign debt

Axel Capital’s Nikolayevsky: recommends long Ezcorp (whose products include pawn and payday loans)

Kynikos’ Chanos: recommends shorting Petrobras (“The economics are just so poor at Petrobras, that we
really have called it a scheme, not a stock,”)

Tudor Jones: Paul Tudor Jones Said to See U.S. Stocks Beating Globe in 2014, Bubble in global credit, Rally in USD is over, Short JPY – “The piper will be paid one day.” Jones has been a longtime critic of the U.S. Federal Reserve’s policy of buying bonds. “If we maintain the status quo, what will be the probable outcome a decade from now? Look no further than Greece for the answer,” Jones told investors in 2010. He reiterated the reference to Greece yesterday by saying the U.S. is headed toward that country’s level of debt within the next 15 years.

Astenbeck’s Hall: Astenbeck’s Hall Said to Forecast Oil Prices Remaining Depressed

Knighthead’s Wagner: American Airlines ‘Attractive Investment,’ Wagner Says

Day 2:

Third Point’s Loeb: likes Amgen, urges breakup, says may be worth $249 per share in breakup; Third Point exited Sony stake in quarter; took stakes in EBAY, BABA in 3Q

Appaloosa’s Tepper: recommends shorting the Euro (based on ECB QE policy)

Icahn (Icahn sat on conference panel; made comments to Bloomberg after presentation) Says EBay Should Pursue PayPal Sale Now in Spin Dual Track; Icahn Had Dinner With EBay CEO John Donahoe Two Nights Ago; Says Buffett Sometimes Too Easy on Companies He Invests In; Says Bubble in HY – long HY CDX.

Glenview’s Robbins: likes Realogy, FNF Group, Community Health Systems, VCA Inc.

Eminence’s Sandler: likes Vivendi, EBay, GNC; sees EBAY climbing 40%; sees GNC up 45% in 6 mos.; likes Wolseley

Corvex’s Meister: recommends Crown Castle long; sees shrs hitting $120 next yr

Whitney Tilson: likes Micron, SodaStream; recommends shorting Exact Sciences, Lumber Liquidators

BlackRock’s Fink spoke in Bloomberg TV interview: Says Equities Are Healthy After Market Turmoil

Chesapeake Partners’ Traci Lerner: likes American Airlines, Barnes & Noble, GenCorp, Eagle Materials

Mangrove’s Nathaniel August: recommends shorting Australia’s Mesoblast; recommending short World Wrestling, going long Fortress Investment in CNBC interview

SQN’s Amish Mehta: likes Blucora long

EcoR1’s Oleg Nodelman: likes Clovis Oncology

Tiger Ratan’s Nehal Chopra: likes Charter Communications

Three Bays’ Matthew Sidman: likes Churchill Downs

via Zero Hedge http://ift.tt/1x9MoRo Tyler Durden