Sign In »
Register Now!
Help
Foreign Treasury holdings at Fed are back to April 2011 levels: $2.66 trillion. China End-Dec. FX Reserves at $3.18t vs Est. $3.2t. Seems like China’s trade is swooning, capital is leaving, or they are using FX reserves for banks, or all three. The plunge in the Baltic Dry Index is a wonder to behold. And US rail traffic in the first week of January has also collapsed. US exports to Europe are plunging, and China is hard at work reexporting inflation back to the US. So much for decoupling. Although much is made of declining western demand, don’t overlook the inability of China’s exporters to be profitable because of the impact of the Lewis turning point.
source: Bloomberg
http://www.bloomberg...Y%3AIND&img=png
The embargo against Iran potentially been delayed six months. I never thought this would be effective, and in my book this increases the prospect of an early strike against Iran’s nuclear facilities. Iran mostly exports oil to China, India, and Japan. The first two can go overland, so an embargo screws Japan, what’s the point? Turkey is defiant on sanctions.
Fed 2006 clown circus minutes were released, and are a travesty. So glad these buffoons are still running the show.
Zero Hedge points out that Sears is starting to have the look of a pretty substantial default situation. That’s a lot of empty retail space.
John Hussman is noted (at least by me) for his straightforward, lucid commentary. His remarks on European bailouts is no exception. I would simply add that trying to run ZIRP into perpetuity also prevents corrective action and brings on massive distortions.
The attempt to rescue distressed European debt by imposing heavy austerity on European people is largely driven by the desire to rescue bank bondholders from losses. Had banks not taken on spectacular amounts of leverage (encouraged by a misguided regulatory environment that required zero capital to be held against sovereign debt), European budget imbalances would have bit far sooner, and would have provoked corrective action years ago.
As we go into the open, comes a story that an imminent downgrade of European sovereigns is coming as soon as today. Looks like the bank rally may be over: JPM EPS $0.90, Est. $0.90; Revenue miss: $21.47 bn vs Est. $22.56. Zero Hedge tweet says it all: Long weekend is great to go through thousands of indentures and find which have springing liens and collateral triggers on FrAAAnce cut. Trading this morning in Italian 10 year:
On actionable please note that I purchased an assortment of puts late yesterday. They are in Thursday’s comments.
View the full article
