GREECE REJECTS THE IMF’s PENSION CUT DEMANDS

This story will slowly begin to pick up steam until they’re due to negotiate terms this summer, when Greece will need more money. Until then, as the migration of people from war torn areas of the Middle East strangle Greece to death, you will hear a lot of posturing out of Greek officials, emboldened by recent events.

Greek rejected the IMF’s demands for further pension cuts, which have been cut 11 times since the Greek drama began.

“It (the IMF) thinks that the figures don’t add up for us to reach (a primary surplus) of 3.5 percent of GDP in 2018 and says that since you have cut down on everything else, where are you going to find (money) if you don’t lower pensions further?” Tsakalotos told parliament.

Pensions have been cut 11 times since Greece signed its first bailout in 2010 and Athens cannot lower them further, the minister said.

He said the economy last year had performed better than projected under the bailout deal signed up in August. “The average estimate when we were discussing was for GDP growth of -2 percent and now we know it will be between -0.4 and -0.7 percent,” said Tsakalotos.

The IMF is also pushing EU lenders — the European Central Bank, the European Stability Mechanism and the EU Commission — to offer Greece more generous debt relief to make its reform program more sustainable, he said.

If Greece is ever going to leave the euro, 2016 would be ideal…for them at least.

B. Gross, some guy from Janus, said to avoid bank stocks, not so much because of their exposure to deleterious oil balance sheets, but because the negative yield situation that prevails in Europe and Japan renders them without room to grow.

Moreover, he likened them to a utility stock.

“The recent collapse in worldwide bank stock prices can be explained not so much by potential defaults in the energy/commodity complex, as by investor recognition that banks are now not only being more tightly regulated, but that future Return On Equity’s will be much akin to a utility stock.”

Gross warned investors: “Banking/finance seems to be either a screaming sector ready to be bought or a permanently damaged victim of write-offs, tighter regulation and significantly lower future margins. I’ll vote for the latter.”

Gross said investors should not reach for the “tantalizing apple of high yield or the low price/book ratio of bank stocks.” Those prices are where they are because of low/negative interest rates, Gross said.

Additionally, investors should not reach for the seemingly momentum-driven higher prices of German bunds and U.S. Treasuries that negative yields have produced, Gross said.
“A 30-year Treasury at 2.5 percent can wipe out your annual income in one day with a 10 basis point increase,” Gross said.

“The secret in a negative interest rate world that poses extraordinary duration risk for AAA sovereign bonds is to No 1, keep bond maturities short and No 2 borrow at those attractive yields in a mildly levered form that provides a yield and expected return of 5-6 percent.”

Lots of warnings taking place in this article. One of them should’ve said “do not invest with me at Janus because I’m washed up.”

This company is a huge piece of shit and I’m glad it’s crashing through the floor boards this morning. Plus anyway, Ackman has had enough damage inflicted to humble 10,000 ordinary men. I am certain he’s learned the many valuable lessons of humility these past 12 or so months and will sin no more. It’s time for a little revenge trading, of the biblical varietal.

Herbalife admitted to rigging their growth numbers this morning, sort of. They rigged it to the first degree and did so with great fraudulent energy, like any ordinary mountebank. But they’re blaming it on a spread sheet malfunction instead of plain old fraud. You know why of course. The latter sends them all packing towards clown raping prison.

A metric called active new members increased 3.2 percent worldwide in the fourth quarter from a year earlier, not the 16.7 percent cited on a Feb. 25 conference call, the Los Angeles-based company said in a regulatory filing Thursday. U.S. active new members increased 30.7 percent, not the 71 percent mention on the call, Herbalife said. Those were among more than two dozen instances where the company misstated new member statistics, according to the filing. The company relies on independent distributors to sell weight-loss shakes and supplements.

Bear in mind, on the other side of the ledger is old man Icahn, who is long out of his nostril hairs. Ackman, of course, is short to the magnitude of $1 billion.

The price of copper has been quietly edging higher over the past few weeks, after an odious decline.

As such, the all important indicator of global economic vitality presses four month highs.

The most leveraged and best positioned to play this move, should it continue, is Freeport McMoran, ticker FCX.

This shall forever been known as the ‘night of the long knives’ in red, hell, communist china.

Moody’s went buck wild this evening and slashed the credit ratings for dozens of Chinese state owned businesses, 38 in total.

“The negative outlook revision on both the Chinese sovereign and banks is not a huge surprise as the challenges that China is facing are well flagged,” Nicholas Yap, a credit analyst at Mitsubishi UFJ Securities HK Ltd. in Hong Kong, wrote in a report. “We expect the near-term impact on yield spreads to be relatively muted.”

Amongst the prominent companies cut include China Mobile, ICBC, Bank of China, Citic Group, China State Construction, China metallurgical and many others!

Moody’s cites China’s 247 debt/equity levels, coupled with the capital flight that is pervasively infecting the Chinese economy and forex markets as the main drivers for the downgrades.

In a Fox business news interview, ‘legendary’ investor, Jim Rogers warned of a global financial meltdown, yet again. He lectured the host, Liz, about the simplicity of buying low and selling high, suggesting now might be a good time to buy China, while admitting it might still trade lower, and selling short America because its wrought with excess and overvalued stocks.

He is short FANG: Facebook, Amazon, Netflix, Google and junk bonds. He’s long the dollar and bow’d ties.

The folksy Rogers was very sure to remind his interviewer, as well as his audience, that his timing might not be optimal, hedging his calls by proclaming to be a simple village idiot of the first order.

I love studies like this. We all know X is X. But when X is viewed in the prism of W, it is then Y.

Y sucks and is getting worse.

Get it?

Free cash flow for the dog eating nation of China is cascading lower, at a time and place when the debt burden is skyrocketing.

This lads, and pardon my lack of civility on the subject, is when the farmers who moved into the city to work at a suicidal Foxconn den of inequity start to realize they’ve made a mistake and China’s urbanization plans turn to shit.

While in yuan terms the slowdown is more gradual, the decline in nominal GDP gains is still dramatic — to a 6.4 percent pace at the end of 2015 compared with 10.1 percent back in 2013 and in excess of 18 percent in 2010 and 2011. The slide highlights the need to follow through on slashing excess industrial capacity, eliminating unprofitable enterprises and revving up new drivers of expansion.

“The biggest problem with plunging nominal GDP growth is that the cash-flow growth to the corporate sector has declined at a time when growth in its debt servicing has accelerated,” said Victor Shih, a professor at the University of California at San Diego who studies China’s politics and finance. “Because debt is so much larger than the economy, debt servicing each year will still be two to three times the incremental growth of nominal GDP.”

China’s debt-to-GDP ratio surged to 247 percent last year from 166 percent in 2007, propelled by a lending binge in the aftermath of the global financial crisis. Days before the National People’s Congress, the central bank this week lowered the ratio of deposits major banks must hold in reserve, letting them deploy more in lending.

We’re back to melt up mode. Nothing is able to stop this locomotive, not even Fed heads discussing ways to destroy the global economy. Trump is in the lead. Hillary is a pathetic caricature of someone who, cravenly, wants to secure power for a corrupt elite. And oil is mending recent losses. All is well at $35 WTI.

The fuck.

Bear in mind and let it be a reminder to you: markets like to go up in March. Deep down, all humans are optimistic creatures, even the most doomful and glum of us all. It’s why pastel colored clothing now adorns your local textile retailer, instead of the appropriate choice of heavy garb. Logic dictates we should desire heavy sweaters in March– for the weather is still frigid and will continue to be as such until April. But we’re optimistic in our assessment of the weather, despite a vast bank of memories to the contrary. There was that one March in 1989 that stuck in our memories and made us hopeful that this year will be a repeat of that. As such, when we see spring clothes at Macy’s, in the fucking iceberg’d weather of late February, we buy them.

The same could be said about the seasonality effect of stocks in March and April. It’s the never-ending search for happiness and fulfilment that keeps the engine revving. These trends are easy to break, however, as the human mind is malleable and susceptible to fear. Once the news becomes important again, you’ll see centaurs on the NYSE, dictating how stocks should be treated.

The Republican Party is fucking ridiculous. It’s so obvious the special interest groups, the oligarchy, are upset that their apple card might be disrupted. Therefore, they are taking out their water boy, Romney, to try to sway the vote to Rubio.

“Mitt doesn’t believe Donald Trump is the right person to lead the party,” the Republican said. “There are a number of mainstream Republicans falling in line with Trump, and he wants to speak up before more people go that route.”

I guarantee you the exact opposite will occur. If there’s one thing Americans don’t like it’s bullshit like this. We can smell the rot a mile away.

ATTENTION CHART CHOMPERS: Your leader, the #1 rated technical analyst, Jim deGraaf says shut the fuck up and fade this rally. No word on who arbitrarily declared Jim to be #1; but I’m going with it anyway.

“This entire 150-point rally has been one of the weaker rallies in my 25-year career,” deGraaf, the top-ranked technical analyst in Institutional Investor’s annual survey for the last 11 years, wrote in a note Wednesday. The market’s long-term trend has stayed bearish and with more stocks showing signs of rising too far too fast investors should “fade this breakout,” he said. “We appreciate price momentum, but it has to be contextualized.”

Tuesday’s rally exhibited lackluster volume again. While the number of rising stocks outpaced those falling by 4.7 to 1, the ratio of their trading was “astoundingly lighter”, at 3.6 to 1, according to deGraaf. Breadth weakened too, as the proportion of stocks hitting 20-day highs stood at 35 percent, “a far cry” from the 55 percent that suggests a lasting bull market, he wrote.

At the same time, there were signs that stocks may have run ahead of themselves, he said, as the percentage of stocks signaling “overbought” versus “oversold” hit 52.4 percent, a level that suggests the market is poised to fall.

DeGraaf also cited the lack of consistent strength among stocks and assets as reason for caution. While financial shares and the credit market led the initial rebound, their performance has since been short of what Renaissance Macro expected. Over the same period, energy shares have trailed the market and credit conditions remain “uncomfortable,” deGraaf wrote.

Naturally, I put as much credence in this analysis as reports that US astronauts flew to the moon, in what Jeff Macke likes to call a calculator wrapped in tin foil. Nevertheless, I know some of you are faithful clan members of the church of charts and would appreciate to hear what your leader had to say about this rally.