But It’s Tuesday!!
by Zero Hedge - May 21st, 2013 10:31 am
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
Whether it is algos looking for a better entry point for the inevitable green close, a market reacting to Saks disappointment, or a realization (ahead of Bernanke tomorrow) that the hawkish jawboning recently is an attempt at a soft-landing is unclear. One thing is becoming clear: the Dow Jones track record of being up 19 out of 19 consecutive weekly Tuesdays is suddenly in jeopardy…
Stocks are not happy…
and bonds are selling off too (suggesting the hawkishness)…
and the USD strengthening…
Charts: Bloomberg
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Two Issues for the Fed: When and How
by Zero Hedge - May 21st, 2013 10:27 am
Courtesy of ZeroHedge. View original post here.
Submitted by Marc To Market.
Federal Reserve Chairman Bernanke testifies before the Joint Economic Committee of Congress tomorrow. The market is anxious for the Chairman to weigh in on the recent comments suggesting that even some like-minded regional presidents like Chicago’s Evans seems to be warming to the idea of tapering off purchases.
It is one thing for the more hawkish members, several of whom have never felt comfortable with the latest iteration of quantitative easing, to talk of slowing purchases, but it is another thing for some of the more dovish members to talk in this vein. Yet we suspect there is less than meets the eye. With the stock market extending its advancing streak to near 200 days without a 5% pullback and what Bernanke has called “the reach for yield” has driven the industry index of below investment grade yields below 5% for the first time; it is incumbent on Fed officials to demonstrate their vigilance.
To this end, the leadership needs discuss the conditions that would allow it to taper off its purchases. The Fed has been reluctant to provide much guidance in this regard, unlike the inflation and unemployment thresholds cited for interest rates. How the Fed exits from QE3+ is generally understood to be a slowing of purchases, probably of the mortgage-backed securities first. In a recent much-vaunted Wall Street Journal article, how the Fed exists QE3 was said to be “careful” with “potentially halting steps”.
Arguably the more important issue is when and here the Wall Street Journal article was even less revealing, noting that it is still being debated. Although one non-voting Fed president talked about tapering off purchases as early as next month’s meeting, this does not appear to be consensus. Instead, there is a consensus to wait for more economic data. More data seems to mean another quarter or so.
Some officials, including Chicago Fed’s Evans, who was among the most dovish members, noted that the economy is “improving quite a lot”, but wants to see if the economy sustains its momentum after having experienced other episodes of growth that proved temporary. Employment growth is understood to be among the most important real economy measures.
It is true that the 3-month and 6-month average non-farm payroll growth is just about the 200k threshold that Evans, among others, has…
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Bill Gross On The Alpha And The Beta
by Zero Hedge - May 21st, 2013 10:19 am
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
We are now used to the daily dispensation of deep twitsight by Pimco’s head. Today’s installment does not disappoint: in under 140 characters, the bond kind breaks down the now thoroughly dis-proven Efficient Market Hypothesis for the “new normal” in which both alpha and beta are purely functions of virtual central bank printers. However, his view on what happens when said virtual ink runs out (or rather if) is well-known by all at this point. The only question is when.
Gross:Alpha is gr8ly a function of beta &the levered structurs that domin8 credit mkts. No beta? Skinnier alpha ahed 4 unsuspecting investrs
— PIMCO (@PIMCO) May 21, 2013
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China Fakes Trade Surplus…
by Zero Hedge - May 21st, 2013 10:17 am
Courtesy of ZeroHedge. View original post here.
Submitted by Pivotfarm.
Latest research figures carried out by the Bank of America Corp. are set to rock the economies around the world once again. Has China been hiding the real state of its economic data? It would seem that the PRC hasn’t been quite as honest as it might have us all believe! According to the Bank of America Corp., the Chinese trade surplus that was meant to stand at some $61 billion turns out to be a meager mere tenth of that so far this year.
The true figure amounts to only $6 billion and that means it will be the smallest Q1 figure posted since the $10.8-billion deficit in 2004. Research on calculations carried out by the head of BoA’s Greater China Division, Lu Ting, suggests that the supposed tripling of China’s surplus was nothing more than fake, and that China has been cooking the books to appear to be better off than the rest of the world. True figures point to the fact that China’s growth rate is slowing down and that the economy is being restrained rather surging ahead. There’s being growing cause for concern since January this year as it turns out that China has been fibbing about its unemployment figures as well as GDP. Growing skepticism amongst analysts has led to worldwide concern as to the ability to provide real trade data.
Some are saying that the export situation can be likened to 2008 at the very moment when the financial crisis hit the world. China too was plunged into a difficult time as exports decreased back then. Shipments plummeted and out of that panic grew illegal practices in a bid to make money. Irregularities in export data have emerged and allowed for hot-money flows.
True figures seem to highlight that we have had the wool pulled over our eyes as figures show that there is a real growth of just 5% in exports, whereas the PRC has issued figures as high as 17.4%. Similarly, imports have increased by 7.6%, rather than the official government line figure of 10.6%. In a recent Bloomberg poll, investors believe that the Chinese economy is set to deteriorate in the coming year, despite what the official government figures might be stating.
But, it’s no consolation that China’s economy has also taken a downtown like the rest…
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Gold And Silver Roundtrip To Friday’s Close
by Zero Hedge - May 21st, 2013 10:03 am
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
It’s been a wild ride in gold ($60 range) and silver ($2.50 range) in the last 2 days but for now, the precious metals have dropped back to unchanged from Friday’s close.
Charts: Bloomberg
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IRS Hearings II: The Steve Miller Band Plays On – Live Stream
by Zero Hedge - May 21st, 2013 9:59 am
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
He’s back to reprise his role as stoic ‘I know nuffin’ scapegoat. Former IRS boss Steve Miller faces a second round of truth-seeking, grand-standing, and extended questioning at today’s Senate hearing on the IRS debacle. Scheduled to start at 10ET, Miller will be joined by Russell George (the IRS IG – full report here) and former IRS commissioner Doug Shulman. Grab the popcorn…
Witnesses:
Mr. Steven T. Miller, Acting Commissioner, Internal Revenue Service, Washington, DC
The Honorable J. Russell George, Treasury Inspector General for Tax Administration, United States Department of the Treasury, Washington, DC
The Honorable Douglas Shulman, Former IRS Commissioner, Washington, DC
Click image for live stream via CSPAN-3
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Following 20% Move Higher In Two Days, Herbalife Shorts Are Sweating
by Zero Hedge - May 21st, 2013 9:52 am
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
Back in December, when HLF was trading in the mid-$20s, and long before Icahn’s involvement in the situation was even remotely public, we laid out the case for what we thought would be a major short squeeze in the name upon Ackman’s public announcement that he had shorted 20 million share of HLF stock. Well, judging by the 20% jump in the stock in the past two days, which has manifested in a nearly $200 million paper loss for Ackman, and which has sent the stock some 100% higher from our base level, has the time finally come for the massive 40% of the float that is short, to start to panic? Judging by the rapid move, we may be approaching that imminent moment when none other than Bill Ackman gets the infamous tap on the shoulder around 3 pm with a polite but firm request that the time to cover has come, leading to yet another crushing victory for the Icahnator.
Recent HLF stock move: oops.
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South African Strike Season Is Back As Ten Workers Are Shot By Rubber Bullets
by Zero Hedge - May 21st, 2013 9:40 am
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
It was a year ago that escalating labor tensions in the country of South Africa ground its mining sector to a halt, when demands from striking workers for wage hikes were met with aggressive retaliation in the form of rubber bullets first and then very real ones, leading to a tragic collapse in the already tenuous relationship between foreign corporations and domestic labor unions. Also notably, back then collapse in production of such commodities as platinum and gold was not all that confusing for the market, and led to price surges on the realization what far lower supply means for equilibrium prices. Yet while the days of violent labor escalation appear to be back, this time the Newer Normal has established itself by representing that a drop in industrial and precious metal production is somehow price negative. In fact when it comes to commodities, everything has become a negative catalyst, very much the way every update in the equity world is positive for “values.”
So since Bernanke is intent on representing the complete collapse between physical supply dynamics and spot paper prices as bearish, we anticipate a major takedown in all metals once the algos grasp that the South African violence is back on the radar screen. Reuters reports that following news that the South African gold mining union demands a wage hike up to 60%, “ten striking South African miners were taken to hospital on Tuesday after being hit by rubber bullets, police said, as labor strife swells in mines and factories ahead of mid-year pay negotiations.”
So much for calm negotiations.
Auto maker Mercedes-Benz said a two-day wildcat stoppage at its East London plant had ended but the National Union of Metal Workers of South Africa (NUMSA) squashed any relief with an immediate demand for a 20 percent pay rise.
“If our demands are not met we will have no option but to go to the streets,” NUMSA national treasurer Mphumzi Maqungo told Reuters.
The currency extended its two-week slide after police confirmed that security guards had fired rubber bullets at stone-throwing wildcat strikers at a chrome mine near the platinum belt town of Rustenburg, 120 km (70 miles) northwest of Johannesburg.
The mining firm, Germany’s Laxness, said the guards
…
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When A Money-Printing Butterfly Flaps Its Wings In Japan, This Is What Happens In Greece
by Zero Hedge - May 21st, 2013 9:25 am
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
Since the BoJ enunciated its actions on April 4th, the world has decided that consuming risk assets (the riskier the better) is the path to salvation. While it makes perfect sense that some level of inspiration for a global recovery makes sense (though hardly) given Japan’s actions, it beggars belief that the most broke of broke peripheral European nations would see equity moves of such magnitude. On the 50th anniversary of Chaos Theory (more on this later today), it is perhaps worth remembering its central lesson – that complex interrelated systems create unexpected outcomes from seemingly benign inputs. It appears the complex inter-related world in which we live is becoming more and more chaotically unstable at the margin and this current euphoria does not approximately determine the future. There are more than enough variables out there – the butterflies flapping away – which can change outcomes in an instant.
Chart: Bloomberg Briefs
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Forecasting Today’s Closing Print
by Zero Hedge - May 21st, 2013 8:56 am
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
In a world in which everything is scientific and algorithmic, here is today’s calculation-based, and thus 100% accurate, prediction of where the S&P will close.
h/t @Not_Jim_Cramer
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