Comment by phil

View Single Comment

phil
December 8th, 2014 at 5:50 am

Good morning!

Futures off a bit this morning, didn't like Japan economic news and /NKD is down to 17,955 already from opening at 18,190 last night which, unfortunately, I missed (though just as fortunately I didn't leave my 18,050 shorts on over the weekend or that move would have freaked me out).  

Nikkei Slides Back Below 18,000 On Deeper-Than-Expected Recession, Record Bankruptcies

Like us, Europe is down about 0.35% with oil failing $65 line.  Dollar is 89.50, still very strong, gold $1,196, silver $16.35, copper $2.89 (very weak), nat gas $3.74 and gasoline failed $1.75, now $1.74.  How can people believe we have a strong economy with collapsing commodities?  Oil, on the whole, is working it's way back to the low it spiked to on Thanksgiving (OPEC meeting):



Energy Bond Crash Contagion Suggests Oil Will Stay Lower For Longer



Japan's GDP was revised DOWN to NEGATIVE 1.9% for Q3:

In recent days, though, many economists had predicted that the third-quarter contraction would actually turn out to be smaller than initially estimated—or perhaps be revised to flat or a slight expansion—after the Ministry of Finance reported late last month that according to its survey capital spending by businesses rose 3.1% during the quarter, compared with a previous estimate of a 0.2% decline. Business investment accounts for around 14% of GDP.

But capital spending turned out to be weaker than the ministry’s estimate when taking into account smaller businesses, declining 0.4%, indicating that even as Japan Inc. reports record profits and the stock market hits multi-year highs, the benefits of Abenomics haven’t reached everyone.

Financial-services firms, for example, haven’t followed through with investments in retail services after a tax-free investment account for individuals was launched in January. Many individual investors remain inactive as the Nikkei Stock Average has hit a series of seven-year highs.

The economy will likely expand in the fourth quarter, helped by a sharp decline in oil prices, said Kenji Yumoto, an economist with the Japan Research Institute. Still, consumers’ wages aren’t keeping pace with inflation, he noted.

“Declining real income amid a weaker yen suggests the recovery will likely lack strength,” he said.

• The revised data confirms Japan slipping into recession less than a week prior to general elections that Prime Minister Shinzo Abe has framed as a referendum on his economic policies.
• Previously: Surprise contraction in Japanese GDP (Nov. 16 2014)

China A-Shares ETF Slumps as Regulator Urges Caution. The largest U.S. exchange-traded fund that tracks mainland stocks fell after China’s securities regulator urged caution as a rally in Shanghai shares pushed their premium over Hong Kong companies to a 30-month high.

China Securities Journal: China Faces Rising Debt Ratio, Local Govt Debt. The Chinese economy faces a rising debt ratio, swelling local government debt and a possible property market correction, citing Li Yang, vice president of the government-backed Chinese Academy of Social Sciences.

 

Citi(C) Faces $270 Million Loss; "In Panic" Over Chinese Port Commodity Fraud

China Fixes Yuan At Strongest Since March As Trade Surplus Hits Record Highs

 

Emerging Markets Masking Corporate Foreign-Debt Levels, BIS Says. Foreign-debt levels of companies in emerging markets from China to India and Brazil are underestimated, threatening financial stability, the Bank for International Settlements said. Companies are raising more foreign funds through their offshore affiliates and accounting practices understate the currency risk in such transactions, the Basel, Switzerland-based institution said in its quarterly report. Almost half of the $554 billion that the firms raised in the five years through 2013 came from the affiliates, the BIS said. ?

Meanwhile, German Industrial Output is weaker than expected too.

ECB Loans Seen as Underwhelming Banks to Stoke Draghi’s Resolve. Mario Draghi is about to get an idea of how far reality falls short of his intentions. A round of long-term loans by the European Central Bank to lenders this week won’t even cover the repayments they owe from a previous program, according to a Bloomberg News survey of analysts. The operation could show that stimulus measures the ECB president says are “intended” to add as much as 1 trillion euros ($1.23 trillion) to the financial system won’t suffice without large-scale buying of assets such as government bonds. 

Russia Contagion Spreads to Former Soviet States Amid Rout. Russia’s currency and bond rout is spreading to former Soviet states. Currencies are tumbling after holding steady since President Vladimir Putin annexed Crimea in March. Russia’s deepening crisis and the ruble’s 34 percent slump over the past six months hurt economies that rely on remittances and imports from the country. Georgia’s lari lost 10 percent against the dollar last week, surpassing the 6.5 percent decline in the ruble as the biggest loser among 169 currencies tracked by Bloomberg. The Armenian dram slumped 2.8 percent, the sixth weekly drop, the longest slump since March 2010. Kazakhstan’s dollar-denominated notes due in 2024 slid, sending yields up 57 basis points, or 0.57 percentage point, to 4.76 percent.

5 Ways Russia's Demise Could Spread Around The World

Exactly what I've been saying:  Something Stinks Inside The BLS Jobs Data

Even The BIS Is Shocked At How Broken Markets Have Become

There's A Troubling Level Of Fragility Hidden Beneath Market Bouyancy

Citi(C): "The Limits Of Investors' Faith That Central Banks Can Push Up Asset Prices, Are Increasingly On Display"

When Goldman(GS) Writes The New York Fed's Press Releases, Then All Is Lost

Consumer Credit Growth Misses For 3rd Month, Credit Card Debt Trickles To A Halt

IceCap Asset Management: The Third Law Of 'Stock Market' Motion

Here's one I predicted last week (still playable):

U.S. Sugar Soars Above World Prices


Sugar is getting dearer in the U.S. even as it is getting cheaper in most other places, putting pressure on candy manufacturers to raise prices.

Merck(MRK) in Talks to Buy Cubist(CBST) for $7 Billion, NYT Reports. Merck & Co. (MRK) is in talks to acquire Cubist Pharmaceuticals Inc. (CBST), a maker of antibiotics, in a deal valued at more than $7 billion, the New York Times reported, citing people briefed on the matter. Merck would pay about $100 a share, and an agreement could be announced as early as next week, the newspaper said. An offer in that range would represent a 34 percent premium over Cubist’s closing share price yesterday. ?

Yay!  Apple(AAPL) May Be Reintroducing The 4-inch iPhone

Wall Street Moves To Put Taxpayers On The Hook For Derivatives Trades

Caught On Tape – State Department Spokesperson Admits Her Own Propaganda Is "Ridiculous"