Having apparently taken the day off from selling US Treasuries and buying Offshore Yuan (following yesterday's "murderous" short-squeeze"), completing a 40 handle round trip in the "stable" currency year-to-date, PBOC decided to hold Yuan flat for the 4th day but make a statement that they would "give policy support to exports" - in other words devalue more.
How can it be that automaker stock prices are tumbling given that auto sales (if one listens to CNBC) are surging, that (if one listens to the CEOs) everything is awesome for automakers, and (if one listens to Phil LeBeau) there is no bubble in auto credit? The answer is simple... (you just don't want to admit it)
Two words - channel-stuffing!
In fact, as IceFarm Capital's Michael Green details, the credit-fueled over-productiuon has historically been disastrous for the global auto sector...
With the seasonally drawdown-prone December completed, we begin seasonally build-prone January with expectations for a 2mm barrel build. However, according to API, both total and Cushing inventory levels tumbled (-3.9mm and 300k respectively). Great news - so why is crude tumbling? Simple - massive builds in end-products again with Gasoline up a massive 7mm barrels and Distillates up 3.6mm barrels. Having ramped off sub-$30 levels aftwr NYMEX closed, and lifted by the Iran-US news, WTI is sliding back rapidly.
The largest 2-week Gasoline invenrtiory build ever...
The Royal Bank of Scotland (RBS) are advising investors to brace themselves for a “cataclysmic year”, warning that stock markets are likely to crash and oil prices will dip to $16 USD per barrel. The banks credit team have warned clients that the markets appear to be flashing similar “stress alerts” that preceded the Lehman crisis in 2008, advising clients to “sell everything”. “Sell everything except high quality bonds. This is about return of capital, not return on capital. In a crowded hall, exit doors are small,” the bank told clients.
Submitted by Simon Black via SovereignMan.com,
Switzerland is famous for being punctual.
The trains. The buses. The meticulously crafted, hand polished luxury watches.
The Swiss are so culturally punctual that they even tend to pay their taxes well in advance of the filing deadline.
So it was quite a shock to hear this morning that the Swiss canton of Zug is asking its citizens to delay paying their taxes for as long as possible.
Why? Negative interest rates.