16Apr2015 Pre-Market Commentary: Futures Down, U.S. Financial Data ‘Not-So-Good’ And The U.S. Dollar Still Falling

Here is the current market situation from CNN Money

Greek Bonds Tumble On News IMF Rejected “Unofficial” Greek Request To Delay Payment

On Wednesday, reports out of Germany indicated that Berlin was drawing up plans to keep the Greek banking sector from crumbling in the event Athens missed one or more of its upcoming payments to the IMF (i.e. in case Greece defaults). Yesterday evening, we went on to highlight a UBS note which cautioned investors not to use bond yields as a proxy for contagion risk because monetary policy has served to strip sovereign spreads of any meaning when it comes to price discovery and conveying risk to investors. It’s bank runs triggered by depositors’ conception of redenomination risk that are the real fear and a Greek exit could well cause periphery depositors to “take it to the mattresses” so to speak.

Today, we learn that earlier this month (so around the time Athens was busy denying reports of an imminent default), Greek officials floated the idea of delaying payments to the IMF due shortly after the government runs completely out of cash at the end of April. Here’s more via FT:

Greek officials have made an informal approach to the International Monetary Fund to delay repayments of loans to the international lender, highlighting the parlous state of Greek finances, but were told that no rescheduling was possible.

According to officials briefed on the talks by both sides, Athens was persuaded not to …

Citigroup profit jumps as legal, restructuring costs fall

(Reuters) – Citigroup Inc, the third biggest U.S. bank by assets, reported a 16 percent jump in quarterly profit as legal and restructuring costs plunged.

Goldman profit gets boost from increased trading

(Reuters) – Goldman Sachs Group Inc reported a first-quarter profit on Thursday that handily beat analysts’ expectations, driven by a burst of trading in fixed-income and currencies.

Goldman Reports Best Quarter In Four Years, “Average” Employee Paid $381,948

The one TBTF “bank” which unabashedly admits it is just a taxpayer backstopped hedge fund printing money for its owners (while supervising the NY Fed and all other central banks with various former employees in charge) with no actual lending or depository operations, Goldman Sachs, just hit it out of the park, when moments ago it reported Q1 earnings that smashed both top and bottom-line expectations, with revenues of $10.62 billion, up 13.8% from last year, and EPS of $6.00 printing far above the expected $9.31bn and $4.26. This was the best revenue generating quarter for Goldman since Q1 2011, or in four years.

The breakdown by product line was impressive, with ever single revenue vertical posting Y/Y increases, with FICC’s 10% increase resulting in the best quarter for the all important (and most profitable for the quarter) group since Q1 2013. Investment banking also rose 7% courtesy of an M&A and bond underwriting spree which usually see Goldman at the top (like today’s Virtu IPO for example; the same Virtu Goldman bashed indirectly via Michael Lewis’ book).

The full breakdown is below.

And since this is Goldman, if you generate money for the firm, you make money:

The accrual for compensation and benefits expenses (including salaries, estimated year-end discretionary compensation, amortization of equity awards and other items such as benefits) was $4.46 billion for the first quarter of 2015, 11% higher than the first quarter of 2014. This increase reflected an increase in net revenues, partially offset by a d …

Euro zone yields sink to new lows, Greece in focus

LONDON (Reuters) – Euro zone government borrowing costs slid to new lows on Thursday, a day after the European Central Bank pledged to fulfill its 1 trillion-euro bond-buying program and as Greece’s financial predicament deteriorated sharply.

Seeking an edge, short-sellers turn to behavioral analysis

SINGAPORE (Reuters) – When Muddy Waters unveiled a short position on Noble Group last week, it didn’t just scrutinize the commodity trader’s accounts. It also hired a behavioral analysis firm run by former CIA staff to analyze how Noble’s executives talked on a recent earnings call.

Frontrunning: April 16

Euro zone bond yields sink to historic lows (Reuters)

Clinton Foundation to Keep Foreign Donors (WSJ)

Russia says U.S. forced it to act on Ukraine (Reuters)

Bankers to China’s Rescue (BBG)

Saudi Arabia Adds Half a Bakken to Global Oil Market in a Month (BBG)

Valuations of Hong Kong’s stock market operator go interstellar (Reuters)

Switzerland Attracts Fewer Firms as Politics Hurt Business Image (BBG)

NY settles suit against Ernst & Young over Lehman audit (AP)

Judge Rules GM Can Keep Its Bankruptcy Shield (WSJ)

The Oil Industry’s ˜Man Camps’ Are Dying

Ben Bernanke to Work as Adviser to Hedge Fund

The move to Citadel Investment by the former Federal Reserve chairman is the latest by a Washington insider through the revolving door into the financial industry.

Mid-market car brands surge with European market upturn

PARIS/MILAN (Reuters) – Europe’s auto-market recovery gained a firmer footing in March, industry data showed on Thursday, as a sharp recovery in some mid-market brands eclipsed growth in no-frills “crisis cars”.

With Futures On The Verge Of A Major Breakout, Greece Drags Them Back Down; German 10Y Under 0.1%

Just as the S&P appeared set to blast off to a forward GAAP PE > 21.0x, here comes Greece and drags it back down to a far more somber 20.0x. The catalyst this time is an FT article according to which officials of now openly insolvent Greece have made an informal approach to the International Monetary Fund to delay repayments of loans to the international lender, but were told that no rescheduling was possible. The result if a drop in not only US equity futures which are down 8 points at last check, but also yields across the board with the German 10Y Bund now just single basis points above 0.00% (the German 9Y is now < 0), on its way to -0.20% at which point it will lead to a very awkward “crossing the streams” moment for the ECB.

Oil is lower as well because also overnight we learned that the recent surge in crude prices is precisely what Saudi Arabia wanted to boost production to a new record high. with March production up another 659k b/d to 10.29m b/d (a fresh all time high) amid slower growth forecast for non-OPEC supply and better global demand outlook, OPEC says in its monthly Oil Market Report. “Higher global refinery runs, driven by increased seasonal demand, along with the improvement in refinery margins, are likely to increase demand for crude over the coming months.” And the Saudis will do everything in their power power to paint the streets black… and slick.

As a result, European equities entered negative territory with the DAX earlier breaking below yesterday’s low as ECB positions are unwound and concerns surrounding Greece continue to linger with discussions between Greece and the IMF set to begin today. The ongoing uncertainty has resulted in the short end of the Greek yield curve to climb, with 3y and 5yr yields both surging over 100bps. Furthermore, S&P downgrad …

European Car Sales Make Biggest Leap in a Year

Registrations of new passenger cars in the European Union rose 10.6 percent in March from a year earlier, their biggest gain in 12 months.

Monetary Policy: Q. and A. With the Fed’s John Williams: Timing of Rate Rise Is Overrated

The president of the Federal Reserve Bank of San Francisco explains under what conditions he will vote to raise interest rates.

Ben Bernanke To Join World’s Most Levered Hedge Fund: HFT Powerhouse Citadel

Several years ago, Zero Hedge first, and to our knowledge only, reported that when it comes to unofficially executing trades in the equity market the NY Fed – through a slightly more than arms-length arrangement – does so using Chicago HFT powerhouse Citadel. In other words, while Citadel was instrumental in preserving the smooth, diagonal ramp in stocks since 2009 and igniting upward momentum just as everyone else stared to sell when the Markets Group of the NY Fed called, it was also paid handsomely: after all, nobody checks the Fed’s broker commission statement. In fact according to some, indirect Fed compensation to what is the world’s most leveraged hedge fund has been in the billions over the past decade.

Well, now it’s payback time, and as the NYT reported overnight, the Brookings Institution’s favorite blogger, former Fed Chairman Ben Bernanke, has joined none other than Citadel as an advisor.

According to the NYT, “while Mr. Bernanke will remain a full-time fellow at the Brookings Institution, the new role represents his first somewhat regular job in the private sector since stepping down as Fed chairman in January 2014. His role at Citadel was negotiated by Robert Barnett, the Washington superlawyer who also negotiated a deal for his book, “The Courage to Act,” which Mr. Bernanke recently submitted to his editor and will be published in October.”

From the NYT:

Mr. Bernanke will become a senior adviser to the Citadel Investment Group, the $25 billion hedge fund founded by the billionaire Kenneth C. Gri …

VW committee to meet on leadership Thursday: source

STUTTGART/BERLIN, Germany (Reuters) – Volkswagen’s supervisory board steering committee will meet on Thursday to try to resolve a leadership crisis caused by the exposure of a rift between its chief executive and chairman, a source familiar with the matter said.

Closure of Alexandria trade would cost Monte Paschi 1 billion euros

SIENA (Reuters) – The European Central Bank has told Monte dei Paschi di Siena to close a loss-making derivatives trade with Nomura by late July, a move that would generate a pre-tax loss of 1 billion euros ($1.06 billion), according to a letter sent by the bank to prosecutors.

Wheels: Hydrogen Fuel Cell Cars Return for Another Run

While hydrogen-powered cars failed to gain traction in the past, they now are supported by increasingly strict California mandates.

The Minimum Price for Gold, Part 1

…………….Written independantly by Jeff Nielson (click for original)

April 15, 2015

Having written for several years about precious metals, the massive threat to our financial security (from our own financial institutions), and why gold and silver represent our best protection from that threat; it’s easy to forget that there are readers who are new to this sector. For those readers; it is necessary to review the fundamentals of supply and demand.

However, even regular readers and knowledgeable investors in this sector could likely benefit from such a review, although for entirely different reasons. After nearly four, solid years of extreme, unremitting downward manipulation of prices for gold and silver; it is easy for such readers/investors to forget (or simply lose confidence in the fact) that the dramatic, upward revision of gold and silver prices is both a necessary and imminent event.

Why is such a discussion necessary for newer readers? Because explaining to these readers how gold and silver are our financial shields against the systemic financial crimes directed against us is less-than-effective if those same readers don’t also know why precious metals currently ful …

China March FDI robust at $12.4 billion, outbound flows up 29.6 percent in first-quarter

SHANGHAI (Reuters) – Foreign direct investment (FDI) into China rose 2.2 percent on the year in March, while outbound flows posted a milder rise, as foreign corporate investors remain undeterred by China’s weakening domestic economic performance.

Bernanke to advise hedge fund Citadel: NYT

(Reuters) – Ben Bernanke, former chairman of the U.S. Federal Reserve, has agreed to become a senior adviser to Citadel Investment Group, a $25 billion hedge fund founded by billionaire investor Kenneth Griffin, the New York Times reported on Thursday.

Carlyle Group names ex-Wal-Mart CEO Duke as operating executive: WSJ

(Reuters) – Carlyle Group LP has enlisted Mike Duke, former chief executive of Wal-Mart Stores Inc , to the executive team that the asset management firm taps for advise on deals, the Wall Street Journal reported.

Electric cars won’t spread even with rapid chargers: Toyota engineer

YOKOHAMA, Japan (Reuters) – Battery-powered electric vehicles don’t have a practical future as a long-range alternative to conventional cars even if technological breakthroughs allow them to be charged quickly, a top engineer at Toyota Motor Corp said on Thursday.

Monte Paschi says closing Alexandria trade to cause 1 billion euro gross loss: letter

MILAN/SIENA (Reuters) – Monte dei Paschi di Siena said the closure of a derivatives contract with Nomura by end-July, as requested by the European Central Bank, could trigger a pre-tax loss of around 1 billion euros ($1 billion), according to a letter from the bank to prosecutors.

Epoch of Belief, Epoch of Incredulity (14): Get Long the Dollar for Good on Friday

Written by Adam Whitehead, KeySignals.com

Over the Easter weekend, at the beginning of last week, the world’s two most important central bankers set the forex trend followers scrambling to get long US Dollars again.

Read more …

Unilever first-quarter sales better than expected

LONDON (Reuters) – Unilever reported better-than-expected sales for the first quarter on Thursday, showing improvement from the hammering it took last year from weak emerging markets including a slowdown in China.