Jueves 25/02/16 Ordenes bienes duraderos, manufactura Kansas

[Fenix]

Intraday Market Rescue Team Most Active Since 2011
Submitted by Tyler D.
02/25/2016 14:55 -0500

It appears that whenever downsides to The Fed's "wealth creation" mandate begin to appear, something strange happens in the stock market...

The frequency of v-shaped recoveris intraday in recent weeks has risen significantly. In an effort to quantify this, we measure the average rise from intraday lows to the cash close on the S&P 500...

h/t MacroMan

This admittedly raw indicator does seem to peak every time we get a crisis occurrence - and is currently at its highest since the US downgrade in 2011 as it appears 'someone' is more than willing to lift stocks off the lows each and every day.

Of course, this is just crazy conspirascy talk.. correlation of events is not causation, but where there is manipulative smoke, we just there is NYFed (via Citadel) buying fire.


Albert Edwards Is In Love With This Asset That Hasn't Had A Losing Year Since 2007
Submitted by Tyler D.
02/25/2016 - 16:39

"Name me a major asset that has not seen one single yoy decline since the start of 2007? Clearly not equities or commodities. What about bonds? Again clearly not corporate bonds. What about 10y government bonds? I?ll give you a clue. It?s not the US, UK or Germany, all which saw negative yoy returns, most notably in 2013."


Why It Was So Important For The S&P To Close Above 1950
Submitted by Tyler D.
02/25/2016 17:45 -0500

Today's OMFG face-ripping, short-squeezing, broken-bond-market-buying ramp was crucial for many chart-watchers.

The S&P 500's close above 1950 (or more accurately, above recent highs and back above the all-important 50-day moving-average) provides hopeful confirmation that the uptrend off the Dimon Bottom will continue (as BofA's Stephen Suttmeier recently noted) following the same 'W' shape recovery seen in Q3/4 2015.

For many, hope is that we extend higher after today's all important break of the 50DMA...


However, we have seen this pattern on a bigger scale before... and it did not end well.

What happens next?


"Hope" is a strategy in today's new normal... especially if The NY Fed can break the bond market again tomorrow.

* * *

As we noted earlier, there are a few reasons to be question this bounce in stocks...

Capital Structure says "No" US FINL vs Credit...

Carry Trade says "No" - US Stocks vs Yuan...

Inflation Expectations says "No" - EU Stoxx vs Inflation...


Bonds say no "No" - US Stocks vs TSY Curve...

[Fenix]

The Curious Case Of "Strong" January Durable Goods: It Was All In The Seasonal Adjustment
Submitted by Tyler D.
02/25/2016 - 18:12

According to a report by Mitsubishi UFJ's John Hermann, one of the most important, if volatile, series in the overall monthly update, that of commercial aircraft orders made absolutely no sense. As he notes, in January Boeing reported a 70% drop in actual aircraft unit orders (the same in dollar terms), and yet according to the Department of Commerce, the matched series of nondefense aircraft orders soared by 54% in January. How could this be? Simple: seasonal adjustments.


Here Is The Reason For The Sudden Buying Spree
Submitted by Tyler D.
02/25/2016 - 14:09

Deja vu all over again. Just as we saw after yesterday's "glitch" in POMO unleashed a huge short-squeeze buying rampage, so today's "technical issue"-delayed 7Y Auction has sparked panic-buying in stocks...


And It's Gone: Chinese CFO Corzines 1 Billion Yuan From His Own Company
Submitted by Tyler D.
02/25/2016 - 14:06

"On 2 November 2015 (an account closing day of the Group), upon enquiries with the bank, the Company was informed that the balance of the two Long-term Deposits was zero."


Where Negative Interest Rates Will Lead Us
Submitted by Tyler D.
02/25/2016 - 13:35

The real pity is that the busts and crackups could all have been avoided if central bankers recognized that falling prices eventually create the conditions for a normal economic revival. Deflation is not a death spiral as the Keynesians believe. Nevertheless, expect more central banks to follow the early leaders — Switzerland, Sweden, Denmark, and even the European Central Bank itself — into negative interest rate territory. The crying shame is that it will not work and will cause great harm to hundreds of millions of people.


First POMO, Now This: 7-Year Treasury Auction Rescheduled Due To A "Technical Issue"
Submitted by Tyler D.
02/25/2016 - 13:00

"The close of the auction has been rescheduled due to a technical issue. The settlement date and all other aspects of the auction remain unchanged from the original announcement. Competitive and noncompetitive bids that have been submitted will still stand, but bidders may review and update bids until the auction closes."

[Fenix]

NatGas Tumbles To 16-Year Lows
Submitted by Tyler D.
02/25/2016 10:38 -0500

More "unequivocally good" news. On the heels of a smaller than expected drawdown in natural gas inventories (-117 vs -135bcf), Nattie futures have tumbled to their lowest intraday level since 1999...

And while the oil market is "glutted," some are arguing the NatGas market is even more so...

OilPrice.com's Nick Cunningham warns, while the glut in oil is expected to continue for the next year or so before balancing in late 2016, the pain for liquefied natural gas (LNG) could be just beginning...

Building LNG export terminals is a long-term proposition. It can take years to develop a greenfield project, bringing a lump of new capacity online long after the project was initially planned, exposing developers to the possibility that market conditions could change in the interim. It is not unlike a conventional oil project, such as an offshore well, which also can take years (as opposed to a much shorter lead time for shale drilling).

But there is a major difference between oil and LNG: the market for LNG is much smaller and less liquid (no pun intended). In other words, a handful of new LNG export terminals can significantly alter the supply/demand balance.

That is exactly what is currently unfolding. Several years ago, spot prices in Asia for LNG spiked, particularly following Fukushima nuclear meltdown. Japan’s demand for LNG skyrocketed. At the same time, the shale gas revolution was unfolding in the U.S., and rock bottom prices opened up a window of opportunity to ship American gas to Asia. But it wasn’t just the U.S. – LNG export terminals proliferated around the world, particularly in Australia.

There were so many projects planned at the same time, and the first batch started to come online this year, with many more nearing completion in 2016 and 2017.

The rush of new supply is hitting the market all at the same time. Not only would such a rush in supply have pushed down prices on their own, the timing is actually really unfortunate for LNG exporters. Economies in East Asia are slowing, leaving a shortfall in demand. Japan, the largest LNG importer, is seeing its economy stagnate. China’s growth has slowed significantly.

As a result, JKM spot prices – the LNG marker for East Asia – are trading at $7.28 per million Btu (MMBtu) for December delivery, down nearly two-thirds from early 2014 prices.

Many LNG exporters have their cargoes signed up under long-term contracts on fixed prices. But usually not all of a given supplier’s capacity has secured buyers. The leftovers are sold on the spot market. With prices so low, spot sales are garnering much lower revenue.

Next year may be worse than this year, and 2017 could be yet even worse. "From having been an import basin, Asia will next year be going to have excess supplies and worse so in 2017," David Hewitt of Credit Suisse told Reuters.

New export terminals will add 14 to 15 million tonnes of annual LNG capacity (mtpa) to the spot market over the next year. But that extra supply is running into a wall of stagnating demand. Japan’s LNG imports dropped by 12.8 percent in November, year-on-year. South Korea’s level of imports are at their lowest levels in six years.

Credit Suisse’s David Hewitt says that spot prices could drop to $5/MMBtu over the next few months, and even dip to an “eye-watering low” of $4/MMBtu at some point in 2016.

Again, oil markets are expected to see the supply overhang come into balance on a much shorter time horizon, perhaps by late 2016 or 2017. But the LNG market, with a much smaller demand base around the world, has much bigger problems. New regasification terminals will add new demand for LNG over the next few years, and demand is expected to jump by 50 mtpa by 2020. That is a substantial increase in expected consumption. The problem? New supplies will add 120 mtpa in LNG export capacity over the same timeframe, dwarfing even the most bullish cases for demand.

The excess supplies are beginning to change the LNG trade. The spot market is growing dramatically, as extra cargoes are resold to willing buyers. This is undermining long-term contracts, and also starting to change the practice of linking prices to crude oil prices. Singapore is launching an LNG futures market, which will accelerate these forces and bring more transparency to the trade. The market is becoming more liquid, offering more opportunities for buyers, at lower prices. That is great for the LNG consumer.

But the glut, set to worsen next year and the year after that, is terrible for gas producers or LNG exporters.

[Fenix]

U.S. Unable To Halt ISIS March Towards Libyan Oil
Submitted by Tyler D.
02/25/2016 - 10:21

The Islamic State (ISIS) is taking on recruits faster than anyone can keep up with, and it’s heading towards Libya’s oil crescent, eyeing billions of barrels that a country at war with itself cannot protect - even with U.S. air strikes.



Oil Tumbles Amid Storage Concerns As Genscape Reports Cushing Build
Submitted by Tyler D.
02/25/2016 10:08 -0500

What goes up on nothing but a short-squeeze, must come down on fundamentals. Following yesterday's DOE report of a nother build at Cushing (which followed API's report of another build at Cushing), Genscape has just reported another large build at Cushing (+503k barrels)... the storage wars are back.

And the result...

As we detailed previously, Genscape joins the ever louder chorus that the US is approaching the capacity tipping point:

Further, Genscape adds that when looking specifically at Cushing, the storage facility is virtually operationally full (or at 80%) with just 4-5 more months at current inventory build left until the choke point is breached, and as we have reported previously, storage requests for specific grades being denied however the silver lining is that there is a lot of open pipeline space from Cushing to gulf coast.

[Fenix]

John Kerry Threatens US Banks Over Russia Bond Sale
Submitted by Tyler D.
02/25/2016 - 09:25

Russia wants to sell $3 billion in international bonds and Washington isn't happy about it. In response to the prospect that Wall Street could underwrite Moscow's first international issuance since the imposition of sanctions, the State Department is warning banks of "reputational risk."


If Initial Jobless Claims Are So Awesome, Explain This
Submitted by Tyler D.
02/25/2016 - 08:40

With the Services economy now joining the manufacturing sector in recession - with both employment components collapsing - one may be surprised to see initial jobless claims hovering back near 42-year lows...


The WSJ's Modest Proposal: The Bank Of Japan Should Buy Oil
Submitted by Tyler D.
02/25/2016 - 08:39

"We have come to the point in Japanese monetary policy—and soon perhaps in the West—where it is hard to tell sense from nonsense."


Foxconn Ices Sharp Deal After Seeing How Bad The Books Are
Submitted by Tyler D.
02/25/2016 - 07:44

For a minute, the century old, Japanese consumer electronics maker was saved. And then Terry Gou got a look at the books.



In Biggest Victory For Saudi Arabia, North Dakota's Largest Oil Producer Suspends All Fracking
Submitted by Tyler D.
02/24/2016 - 21:48

Yesterday Saudi oil minister Ali al-Naimi made it explicitly clear that Saudi Arabia would not cut production, instead saying that it is high-cost producers that would need to either "lower costs, borrow cash or liquidate” adding that there is "no need for cuts as marginal barrel will get out of the market." He was right. Today his wish is slowly coming true after news that North Dakota's largest producer, Whiting Petroleum, would suspend all fracking, and that Continental Resources has effectively done the same after reporting that it no longer has any fracking crews working in the Bakken shale.


"Credit Risk Is Growing," FDIC Warns As Loss Provisions Jump $3.8 Billion In 3 Months
Submitted by Tyler D.
02/24/2016 - 20:35

After finding out that JPMorgan is set to put aside an extra $500 million in Q1 to provision against losses on its $44 billion energy book, we learn on Wednesday that when we look out across 6,182 FDIC-insured institutions, banks' loan loss provisions increased by nearly $4 billion in Q4. That's the sixth consecutive quarter of higher loan loss reserves.


Canary, Meet Coal Mine: These Are The Tranches Where The CLO 2.0 Meltdown Begins
Submitted by Tyler D.
02/24/2016 - 19:45

It was just three days ago when we brought you what we called “the next shoe to drop:” CLOs. Just hours after our warning, Moody's followed in S&P's footsteps and delivered their first downgrade of post-crisis US CLOs. In the crosshairs: Silvermine Capital or, more specifically, Silvermore CLO and Silver Spring CLO where exposure to junk debt and the increasingly toxic O&G space is worryingly high.


According To Morgan Stanley This Is The Biggest Threat To Deutsche Bank's Survival
Submitted by Tyler D.
02/24/2016 - 19:16

According to Morgan Stanley the biggest threat to the profibatility, viability and outright existence of the most leveraged commercial bank in the world, is none other than ECB president Mario Draghi.


Japanese 'Margin' Traders Suffer Biggest Losses "Since Lehman"
Submitted by Tyler D.
02/24/2016 - 18:55

Mrs Watanabe has a major problem. Following Kuroda's regime shift to NIRP (and the ensuing collapse of Japanese stocks and USDJPY), the herded masses of leverage speculators - who bought on the back of China-like promises and Peter-Pan(ic) hopes from the government that everything will be awesome - are suffering the largest unrealized losses since Lehman. Let's hope Kuroda can do something before the unrealized becomes 'realized' and waterfalls through the real economy (and the world's collateral chains).