Wednesday, December 9, 2015

OVERNIGHT

The WSJ reported Asian shares were mixed in light of the upcoming expected U.S. rate hike.

Asian stocks were mixed in morning trade Thursday as regional central banks came into focus with less than a week before the U.S. Federal Reserve decides whether to raise interest rates.

While Korea’s Kospi was flat as the Bank of Korea kept rates unchanged at 1.5%, New Zealand’s S&P/NZX 10 index fell 0.4% after the country’s central bank cut rates for the fourth time this year.

Chinese equities bucked the regional trend as the People’s Bank of China depreciated the yuan against the U.S. dollar for a fourth consecutive day. On Wednesday, it set its yuan reference rate at the weakest level in four years. In Hong Kong, the Hang Seng Index rose 0.2%, while the Hang Seng China Enterprises Index, a gauge of Chinese companies with listings in Hong Kong, was up 0.5%. In mainland China, the Shanghai Composite gained 0.6% while the smaller Shenzhen market rallied 0.5%.

Japan’s Nikkei Stock Average fell 1% and the S&P/ASX 200 was last down 1.3% after Australia added an unusually high number of jobs in November. Investors are taking positions in anticipation of the first rise in U.S. interest rates since 2006 when the Fed concludes its meeting on Dec. 16.

The downturn in regional equities this week reflects investors taking money off the table in case of any shocks after rates rise, analysts said. “The general sentiment is that they’re positioning for next week,” said Evan Lucas, market strategist at IG in Melbourne. “The market’s trying to get ahead of a possibly volatile reaction.”

Federal fund futures are pricing in an 87% probability of a rate increase next week, according to CME Group. The S&P 500 was down 0.77% on Wednesday.

After the Reserve Bank of New Zealand cut interest rates by 0.25% to 2.5%, the Kiwi dollar advanced 0.3% to 0.6734 against the U.S. dollar, despite the bank’s downbeat assessment of regional economic growth
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Come tomorrow you can look for: The US economic calendar today will see Jobless Claims, Import and Export Prices, and the Treasury Budget will be released. Overseas, the Swiss National Bank will announce their Rate Statement and the Bank of England will announce their Official Bank Rate which will directly impact the Great British Pound.

minyanville.com/special-features/daily-recap/articles/stocks-trading-economy-oil-kinder-morgan/12/9/2015/


IT'S SCIENCE, JAKE.

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 It's little wonder that many people never tire of poking fun at the scientific community.

It's a community, like its economic brethren, that deserves much of the derision it gets. If someone came out with a study yesterday that vitamin F cures the common cold, a short while later someone else will come out with a study showing it causes polio.

Now we have the latest gem:"Sad News: Scientists say happiness won't extend your life after all."

Happy people live longer, a relationship that’s been documented in a variety of research studies.
But a new paper published in the medical journal Lancet comes to the sad conclusion that happiness isn’t responsible for this observed longevity. Instead, the things that make people happy, particularly their good health, are the same things that shield them from premature death.
 
“Happiness and related measures of well-being do not appear to have any direct effect on mortality,” the study authors wrote.

To get to the bottom of the relationship between happiness and a long life, researchers led by Dr. Bette Liu, an epidemiologist at the University of New South Wales in Sydney, examined data on 719,671 people who participated in the Million Women Study. All of the women joined the study from 1996 to 2001.

Three years after signing up, researchers asked them how often they felt happy. The 39% who answered “most of the time” and the 44% who answered “usually” were classified as happy people. The other 17%, who said they were “sometimes” or “rarely/never” happy, were deemed unhappy.
At the same time, the women were also asked to rate their health status as “excellent,” “good,” “fair” or “poor.” Then researchers kept track of them for nearly 10 years, on average. During that time, 31,531 (or 4%) of them died.

In their first pass at the numbers that adjusted for age, the researchers found that women who said they were unhappy were 29% more likely to have died compared with their counterparts who were happy. But the women who were unhappy were also more likely to be in poor health. Once the researchers took that into account, the association between happiness and mortality disappeared. That held up after the team added in variables such as socioeconomic status, exercise and sleeping habits; whether they lived with a partner; and whether they were religious.

The 20% of women who rated their health as fair or poor at the start of the study were 67% more likely to die during the study period than the 80% of women who rated their health as excellent or good. But in each group, the women who said they were happy had the same odds of dying as the women who said they were unhappy.

When the researchers focused just on women who died of heart disease or cancer, the results were the same: Those who were happy at the start of the study were just as likely to die as their unhappy counterparts.

Finally, the researchers took a slight detour from happiness to see whether women who felt they were “in control, relaxed, or not stressed” had any protection against an early death. Among the women who said their health was excellent or good, these stress-related measures had no bearing on mortality risk, the researchers found.
“Our large prospective study shows no robust evidence that happiness itself reduces cardiac, cancer, or overall mortality,” they concluded.

So there you have it. If correct this study just killed off a large section of the pharmaceutical anti-stress, anti-anxiety community. Hopefully, someone will gently inform all those mad laboratory-chained scientists working on their synthetic concoctions. 

latimes.com/science/sciencenow/la-sci-sn-happiness-death-20151209-story.


FACEBOOK COMMENT TO MR. ZUCKERBERG

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It is astounding how easily today disagreeing gets twisted into hate.

Mark Zuckerberg's recent comment is a case in point. He writes:

"Having a child has given us so much hope, but the hate of some can make it easy to succumb to cynicism," Zuckerberg wrote Wednesday. "We must not lose hope. As long as we stand together and see the good in each other, we can build a better world for all people." 

All of that is good and true. But in no way does it negate the right of people to protect themselves. There is a legitimate difference of opinion here about how to protect an obviously threatened populous from a determined, persistent enemy who has proved way beyond words it will do anything to succeed. This is not fear; this simple common sense.

Mr. Zuckerberg's kind and well-intentioned words are good as far as they go, but he has no right to speak for the rest of those who may differ with him on this issue or suggest without knowing them they are haters or in any way endanger them.
Congratulations and our best on being a new father, but perhaps you need to be reminded that you are not alone on this planet in enjoying that honor.



THE DISCUSSION DEEPENS

The discussion about world events deepens and, as such, there is no shortage of political, economic and academic hacks all too willing to define things for you.

Here's an interesting article from marctomarket.com.

It was the Fascists that first offered the "third way" between Bolshevism and Liberalism (capitalism).  None less than Hitler himself saw the linkages between socialism and Fascism.  He observed in 1942 that, “There is not much difference between the basic economic techniques of socialism and fascism.”     
However, when we first wrote about this a month after Lehman collapsed, some pushed back and noted that an essential part of Fascism was missing--some unifying hatred or racism. The refugee challenge coupled with the terrorist strike has exacerbated the xenophobia and Islamophobia that was bubbling near the surface in any event.

The refugee challenge alone prompted several countries (e.g., Germany, Sweden, Austria and Hungary) to suspend the free passage (passport-free travel).  However, in light of the terrorist attack on France, a more dramatic solution has been proposed.  The EU interior ministers met last week and were recommending a wider suspension of the Schengen Agreement that created a passport-free travel zone well before EMU was contemplated (Maastricht).  
One of the prices of greater security is less liberty.  The interior ministers also proposed the establishment of a passenger name record for planes, trains and ships.  It would be not only for travel in and out of the region but also intra-EU travel.  This appears to have been agreed upon back in 2008, but due to concern about privacy issues, it has not gone forward.  Now it likely will. 
Some observers think that without free mobility, the European project is over.  Of course, many of those that are sympathetic to this argument seem to be euro-skeptics in the first place.  Moreover, there are contingencies within the Schengen Agreement for precisely this. Just like in many sports, the violation of the rule are incorporated into the rules themselves, so too with many official agreements. 

The idea that people who want to protect themselves--since it's an admitted fact government can't protect them--is a form of hatred is a curious one for sure. About once every four years, we get a cold. Most colds are caused by viruses. Do we hate viruses, not at all. But we do want to and try to avoid the havoc they can bring.?  One of the ways even so-called medical experts, many of whom are government bureaucrats at non-legitimate government agencies like the CDC,recommend is isolation.

Don't go where the viruses might be and don't bring them home. Incidentally, from time to time, that becomes a government policy regarding international travel. We don't know about yours, but when we visit our health care provider one of the first questions they are still asking as recently as a week ago, is have you been to west Africa or out of the country lately?

It is also instructive to note this writer omits the chasm that exists between climate-change freaks and non-believers. It's a given in MSM that the philistines and the haters are the non-believers. Not the zealots pushing their propaganda to enforce their agenda. The stakes have now been ramped up so high, many non-believers who speak up are openly punished.

Like the old saying it depends on whose ox is getting gored, the definition of hatred and xenophobe apparently rests with who's defining it. And you can start with the government official PC policy of zero tolerance.

In a not so strange way, isn't that what those ISIS people are saying, zero tolerance? At the bottom line isn't that what most wars are about? What do you do when someone or some entity intrudes into your space too much? You can if possible avoid them, take it to the courts if you still have any faith left in them, or go to war. The point here is: war can be defined in many different ways.

With few exceptions, most of those we've interviewed who went through a nasty divorce described it as war. You might not like that definition but each side usually sees it as being about survival.

The so-called far right in France--whom we have no connection to--is making a statement no different from what their opponents are doing. The number of people in Europe opposed to the EMU is no secret. And it's growing. That rattles establishment cages big time.




THE MISSING HEARTWARMING

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The holiday season is suppose to be a heartwarming one with visions of sugar plums, crackling fireplaces and hot chocolate. But the gloom and the doom of the oil patch continues and some say the outlook for next year isn't that heartwarming either.

Low oil prices for much longer will once again put the spotlight back on U.S. shale production, which has lost only about 300,000 barrels per day since peaking in April at 9.6 mb/d. The latest EIA data shows that output fell by just 20,000 barrels per day in September, a stubbornly small decline given how low oil prices are trading nowadays.

But OPEC members, mostly driven by state-backed production, won’t reduce their output. OPEC production is not driven by market forces; each individual country produces as much as possible. By failing to agree on a target cut, that trend will continue, if not increase. Iran has cleared just about all of the remaining hurdles to its comeback, and once sanctions are removed in January 2016, it could quickly increase output.

So, just as before, the contraction in supply will have to come from higher-cost production, notably U.S. shale. The financial pressure should increase on shale producers for a few reasons, all of which point to a sharper contraction in the months ahead.

THAT"S A GREAT IDEA

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
Given MSM's obsession with the Donald, here's a story you won't here about from MSM in any detail if at all. Our question is all those climate-change folks backing Hillary, do they know about it?

We're no experts on it, but deep sea mining sounds like it could hold environmental disasters within its depths, something akin to the deep secrets this lady holds within her. We came across it on a specialized, somewhat obscure mining website.

U.S. leading Democratic presidential candidate, Hillary Clinton, intervened in a request from her son-in-law on behalf of a deep-sea mining firm to meet with her or other agency officials while she was secretary of state, Associated Press reported.

The 2012 emails from an investor in Florida-based deep sea mining firm Neptune Minerals Inc. were forwarded to Clinton by her son-in-law and hedge fund partner Marc Mezvinsky.
According to AP, Clinton sent the request to Thomas Nides, a vice chairman at Morgan Stanley who at the time was a deputy secretary of state.

It is not known whether the meeting took place. Clinton's campaign declined to comment.

 http://www.mining.com/hillary-clintons-emails-reveal-pro-deep-sea-miner-move-after-request-from-son-in-law

BOND KING SPEAKS

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
Jeffery Grundlach, as Bill Gross of Pimco fame, once called the Lebron James of bonds, doesn't walk that softly or speak with a small tongue. In the bond world, Gross' description is not that far fetched.

Here's a sample from wolfstreet.com.

“We are looking at real carnage in the junk bond market,” Jeffrey Gundlach, the bond guru who runs DoubleLine Capital, announced in a webcast on Tuesday.

He blamed the Fed. It was “unthinkable” to raise rates, with junk bonds and leveraged loans having such a hard time, he said – as they’re now dragging down his firm’s $80 billion in assets under management.

“High-yield spreads have never been this high prior to a Fed rate hike,” he said – as the junk bond market is now in a precarious situation, after seven years of ZIRP and nearly as many years of QE, which made Grundlach a ton of money. When he talks, he wants the Fed to listen. He wants the Fed to move his multi-billion-dollar bets in the right direction.

But it’s not a measly quarter-point rate hike that’s the problem. Bond yields move more than that in a single day without breaking a sweat. The problem is the risk investors piled on over the past seven years, when they still believed in the Fed’s hype that risks didn’t matter, that they should be blindly taken in large quantities without compensation, and that rates would always remain at zero. Those risks that didn’t exist are now coming home to roost.

They’re affecting the riskiest parts of the credit spectrum first: lower-rated junk bonds and leveraged loans. Grundlach presumably has plenty of them in his portfolios. More:

wolfstreet.com/2015/12/09/bond-king-gets-antsy-as-junk-bonds-which-lead-stocks-spiral-to-heck


DISTORTIONS HAPPEN


We have spent a good deal of time writing about the downside of all the new regulations and government intrusions in life in general and the financial market in particular. No matter how it's wrapped or packaged, the usual excuse is labeled as well intentioned and necessary to clear up all the greed and corruption.

 But as Scottish poet Bobby Burn noted more than 100 years ago about the best plans of mice and men, distortions, like you know what, happen. Yes, greed and corruption exist. As long as their are humans it mostly will. We of late have seen an article or two even about the risk of robot's going haywire, just another way to say distortion.

Government interference by both central banks and regulators (the latter are desperately fighting the “last crisis”, bolting the barn door long after the horse has escaped, thereby putting into place the preconditions for the next crisis) has created an ever more fragile situation in both the global economy and the financial markets. As the below charts and data show, price distortions and dislocations have been moving from one market segment to the next and they keep growing, which indicates to us that there is considerable danger that a really big dislocation will eventually happen. Read:

http://www.zerohedge.com/news/2015-12-09/ever-greater-distortions-hint-rising-crash-probabilities

Tuesday, December 8, 2015

COMMODITIES ANYONE?

Around the time Goldman Sachs and other big Wall Street firms are cutting back on their commodity exposure we run into this interesting story.

Tuesday was another bleak day on commodity markets. The prices of crude oil, iron ore and industrial and precious metals all declined pushing a number of commodities to fresh multi-year lows.
The world's major mining companies were trading even weaker than their wares with stock valuations of the top tier reaching decade and sometimes record lows.The commodities market is a contrarian's dream at the moment, but so far few investors that trade on these principles have taken the plunge.

In fact over the past three years 12 commodity asset managers have closed up shop in addition to the big banks closing down their commodity trading arms.This week at least one high-profile hedge fund is sticking its neck out saying the metals market have lost touch with fundamentals. 

The $2 billion Orion Mine Finance Group announced it is launching a new hedge fund in January to trade industrial and precious metals (and eventually equities) Oskar Lewnowski, the founder and chief investment officer of Orion tells Bloomberg "there are three factors driving commodities: momentum-driven financial flows, physical fundamentals and macro events"
 "For a long time, metals were driven by financial flows, be it mining-orientated banks, commodity hedge funds, CTAs [Commodity Trading Advisor] and even retail equity investors," Lewnowski said in an interview in London.
"With those guys out, we are back to fundamentals. And that’s an environment in which we can do well."
Lewnowski, which spun Orion out of his Red Kite fund in 2013 to invest in junior mining firms, is also willing to put a date on a turnaround:
"The turnaround is going to come in 2018," Lewnowski said. "The peak price cycle was in 2011 and these cycles tend to last seven years."
His top pick? Nickel.
Which is perhaps not that surprising considering it's the second worst performing commodity after iron ore this year. And perhaps the one steelmaking raw material that has decoupled from fundamentals the most.

mining.com/this-guy-is-launching-a-new-hedge-fund-to-invest-in-metals/

OVERNIGHT

Markets in Asia trend lower, according to the WSJ, for the second day running as concerns about  China's weakness persist.

Asian markets headed lower for a second day early Wednesday, with better-than-expected economic data from Japan and China failing to stem the selling.

But Chinese stocks made gains after the People’s Bank of China set the yuan reference rate—which determines the currency’s trading levels—at its weakest point against the dollar in four years.

As Chinese markets opened, the National Bureau of Statistics reported the 45th consecutive month of producer-price deflation. Factory-gate prices fell 5.9% from a year earlier, while consumer prices rose 1.5%. Both measures were slightly better than economists had expected in a Wall Street Journal poll.

After an initial selloff, mainland Chinese markets rallied, with the Shanghai Composite last up 0.7% and the smaller Shenzhen market gaining 0.3%. But Hong Kong’s Hang Seng Index fell 0.3% while the Hang Seng China Enterprises Index, a gauge of Chinese companies with listings offshore, sank 0.8%. Elsewhere in Asia, Japan’s Nikkei Stock Average extended declines into a second day, down 0.8% after a brief rally sparked by machinery orders data that sharply beat expectations.

Australia’s S&P/ASX 200 slipped 0.1% after consumer confidence for December deteriorated, while South Korea’s Kospi was flat. The U.S. dollar index, which tracks the greenback against a basket of currencies, was last down 0.1% at 98.32. Gold held steady, with bullion last up 0.2% at $1,076.90.

Some economists said the yuan’s depreciation below levels in August reflected underlying weakness in China’s economy.

Reuters reported falling Chinese factory producer prices continuing its trend and noted the ongoing weakness in commodities as shown in The Thomson Reuters Core Commodity index (TRJCB) Tuesday trading "at its lowest level since November 2002."