Comment by phil

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phil
March 31st, 2014 at 4:19 am

Good morning!

Futures looking bright but not as bright as it was last night – up about 0.3-0.5%.  Oil $101.61, Gold $1,293, Dollar 80.35.  

/NKD at 14,845 but was all the way back to 14,775 at about 2:30 before jamming back up into the close – looks fake to me.  The Nikkei was up 0.9% for the day but, as I said last night – it was only reflecting the gains made in the Futures on Friday, the actual action of the day was a forced flatline into EOQ.  Hang Seng finished up 0.3% but that also fails to tell the story or an index that opened at 22,244 and fell to 22,044 (interesting exactness) before recovering to 22,128.  Shanghai was down 0.25% and also fell from the open on.  India finished up half a point and Singapore up 0.3%.

Abe Bliss Broken as Foreigners Flee Topix in Biggest Drop. In just one quarter, the developed world’s biggest stock rally has given way to its worst slump. Japan’s Topix index, up 51 percent last year, has fallen 8.9 percent in the three months since, almost twice as much as the next-worst market, Hong Kong. The retreat is emboldening short sellers, whose trades made up as much as 36 percent of daily Tokyo Stock Exchange volume this month. Foreign investors sold 975 billion yen ($9.5 billion) of Japanese shares in one week in March, the most since the crash of 1987. ?

In Less Than Two Days, Japan Will Walk Headfirst Into An Economic Buzzsaw

Unlike America, Japan Has Been A Giant Capital Destruction Machine [CHARTS]

Bad loan writedowns soar at China banks. The five biggest Chinese banks, which account for more than half of all loans in the country, removed Rmb59bn ($9.5bn) from their books in debts that could not be collected, according to their 2013 results. That was up 127 per cent from 2012, and the highest since the banks were rescued from insolvency, recapitalised and publicly listed over the past decade. The sharp acceleration in write-offs is the latest indication of the turbulence now buffeting China’s financial system.

Global banks issue alerts on China carry trade as Fed tightens, yuan falls. Citigroup tells clients to brace for second phase of the "taper tantrum" that rocked emerging markets last year, but this time with China at the eye of the storm.

 

China Defaults Sow Property Cash Crunch Concern: Distressed Debt. The specter of default in China's trust loans market is deepening the distress of property developers that also borrowed in dollars. Eighteen companies owning $15.2 billion, from behemoth China Vanke Co. to junk-rated Glorious Property Holdings Ltd., have "material exposure" in excess of 10% to trust financing, a form of non-bank lending that's helped homebuilders proliferate in China, Moody's Investors Service said. This year alone, the number of bonds from Chinese developers considered distressed based on their yields has almost doubled to 18. Part of China's $7.5 trillion shadow-banking system, trust financing has been key to fueling the nation's 10% annual growth rate in the past decade by providing easy credit to companies considered too risky by banks. After trust loans to the property, solar, coal and other industries tripled in the past three years to 10.9 trillion yuan($1.8 trillion).

Minister Says China Faces Downward Economic Pressure. Industry Minister Miao Wei said China still faces strong downward economic pressure in an interview with Caixin's New Century magazine. Some reforms will be good in the long term while they may affect current economic growth, Miao said.

 

China’s Bills Are Coming Due



Investors beware: The hidden risks of Chinese IPOs

China Confiscates Billions In "Ugliest Corruption Scandal" In History

Copper Set for Biggest Quarterly Drop Since June on China. Copper fell, extending a quarterly loss on concern that an economic slowdown in China, the biggest metals consumer, will lower demand. The metal for delivery in three months on the London Metal Exchange retreated 0.5 percent to $6,640 a metric ton by 10:05 a.m. in Hong Kong. Prices are down 9.8 percent since the start of the year, poised for the biggest quarterly drop since June.

The Government Inflation Scam

Ebola Death Toll in Guinea Rises to 70 as Senegal Closes Border. The deadliest outbreak of the Ebola virus in seven years has killed 70 people and infected as many as 111 in Guinea, causing neighboring Senegal to close its border with the country.

Europe is up about the same as us, 0.3-0.5% in their first hour.  

Russia’s Sovereign Bond Rating May Be Cut, Moody’s Says. Russia’s government bond rating was put on review for downgrade by Moody’s Investors Service, which cited a weakening economy amid the conflict with Ukraine. The ratings company said if the review leads to a downgrade, the most likely outcome would be a one-level adjustment. Russia’s Baa1 rating is the third-lowest investment grade.

 

Warmongering:  Rogers: Troop movement, 'covert operation' suggests Putin not finished in Ukraine. Russian President Vladimir Putin is showing telltale signs that he intends to extend his control over Ukraine and perhaps elsewhere in Eastern Europe, House Intelligence Committee Chairman Rep. Mike Rogers said Sunday. Beyond assembling military armor and tens of thousands of troops along the Russia-Ukraine border, Putin is moving troops in northern Georgia and planting intelligence officers in Ukraine, the Michigan Republican told “Fox News Sunday.” He said Russian troops in the northern region of Georgia, known as South Ossetia, are on the move, perhaps to go into Armenia or toward the Baltic Sea. “There’s no way I’d take this as any other way than [Putin] is working for a land bridge,” Rogers said.

The White House And Kremlin Had Comically Different Accounts Of The Big Call Between Putin And Obama

Ukraine Shocks Population With Staggered 100% Heating Price Increase While Restricting Cash Use

Investors Breathe Life Into European Banks' Bad Loans. Lack of Restructuring in U.S. Has Driven Up Demand. Hedge funds and private-equity investors are bidding up prices of some troubled assets in Europe, sparking a surge in sales by banks seeking to rid themselves of soured corporate loans.

Our Futures at 4 am are 16,300, 1,857, 3,578 and 1,153 and I would play bearish on crosses below 16,300, 1,855, 3,575 and 1,150 but it's EOQ AND a Monday, so I'd rather just watch and wait today.  

5 Things To Ponder: Words Of Caution

Small Caps Plunge To Worst Week In 22 Months

Janet Yellen Is Caught Between A Rock And A Hard Place

Michael Lewis 60 Minutes Interview On HFT [VIDEO]. Stock market rigged, says Michael Lewis in new book and in an interview on 60 Minutes

 

2014: A Brave New Dystopian "1984" World

U.S. judge rules banks must face lawsuit over alleged rate rigging. A federal judge in Manhattan has ruled that a group of international banks must face complaints that they violated the U.S. Commodity Exchange Act by manipulating yen-denominated interest rate benchmarks between 2006 and 2010.

GM(GM) Widens Ignition Recall by 971,000 to 2.59 Million Cars. General Motors Co. (GM) is expanding the recall of small-car ignition switches by 971,000 vehicles worldwide to cover 2008 to 2011 vehicles that were built with safe parts yet may have received faulty replacements. It also increased the death toll linked to the switches.

Regulators Twice Failed to Open GM Probes. Internal Email at Agency Asked Why Airbags Weren't Deploying. ?