Recent comments by Rajesh

Zero profit growth expected for U.S. companies in first quarter
| Reuters

Falling oil prices, a soaring dollar and concern about weaker global demand have increasingly pessimistic analysts predicting Standard & Poor's 500 companies will see no earnings growth at all in the first quarter of 2015.

That would be the worst quarter for Standard & Poor's 500 earnings since the third quarter of 2009, not long after the United States emerged from its recession. Revenue for the first quarter is expected to be worse, forecast to decline 2.0 percent from a year ago, according to Thomson Reuters data.

The biggest drag is expected to be energy companies suffering from the oil price collapse, but analysts have dropped projections in almost every sector as the earnings reporting season has unfolded.

On Jan. 1, S&P 500 first-quarter earnings were forecast to rise 5.3 percent, including energy companies, and 10.5 percent excluding energy companies. On Thursday, that consensus forecast was flat from a year ago including the energy sector, and cut to 7.9 percent growth excluding energy.

Flat earnings should be good for a 20% percent gain in stock prices in the first quarter. Snark

How are home prices supposed to rise 3% a year when wages are rising 1.5% a year?

Yoringe wrote:

China 5000 Years vs US 250 Years

Egypt 12000 years vs China 5000 years.

Perhaps they should rename BRICS as 'China and its four bitches'

Yoringe wrote:

BRICS Rating Agency

So Brazil can borrow money from India who borrows the money from Russia who borrows the money from South Africa who borrows the money from China who borrows the money from Brazil.

'Falling angels' could hit $260 billion of emerging market debt
| Reuters

Russia may have company. Almost $260 billion worth of sovereign and corporate bonds - nearly a tenth of outstanding emerging market (EM) debt - is in danger of being relegated to junk, according to David Spegel, head of emerging debt at BNP Paribas, who calls such credits "falling angels".

What's more, almost $1 trillion of debt is rated BBB or BBB minus - the two lowest investment grade ranks after which junk or "high yield" status awaits.

"After a year of political upheaval and collapsing commodity prices, the sky is alight with EM falling angels," Spegel said.

In 2010, for the first time, a majority of bonds in the EMBI Global index of emerging market debt became investment grade 11EML. But now a fifth of emerging market governments rated by S&P carry negative outlooks; the agency calls emerging markets the "weak link" in the global ratings picture.

Can't keep up this morning.

'Falling angels' could hit $260 billion of emerging market debt
| Reuters

After a golden decade of improvement, credit ratings for a swathe of developing economies risk falling back to "junk", with huge potential costs for up to a tenth of outstanding emerging market bonds.

Many mainstream investment and pension funds have rules preventing them from holding debt unless it is classified as investment grade by at least two of the big ratings agencies, and a number of countries are at risk due to problems ranging from tumbling commodity export prices to political instability.

Russia this week became the first of the major economies to lose its investment grade status from Standard & Poor's, falling out off the top ratings category for credits deemed to have a low risk of default for the first time in a decade.

Fed remains 'patient', expects to reach inflation target some time this century.

Beware the Ides of March!

Doc Holiday wrote:

Now that QE is an official failure globally, what's next??

More failure.

T minus ten months and counting...

Mortgage interest rates are too high!

Beware the Ides of March!

Rickkk wrote:

CNN cleared to test drones for reporting

They've had Anderson Cooper on the air for years.

lawyerliz wrote:

Nobody have any insight to the killing?

Nigeria is a mix of Muslim (mostly in the north) and Christians (mostly in the south.) For most of its time since independence, its government has been dominated by the mostly Muslim army. There is been a history of sectarian violence especially against Christians in the northern historically Muslim states. Peace has been bought by the directing of oil wealth (produced in the South) to the northern states. More recently, the corrupt redirecting of money has reduced, in part due to greater Democracy and a Christian President. This has radicalized Muslim elements who blame their poverty on the Christians and the moderate Muslims who enable their presence in the northern states.

LawyerLiz is our token radical moderate.

sm_landlord wrote:

obsolete Russian equipment.

Is obsolete economic theory any more reassuring?

sm_landlord wrote:

What's in ten months, again?

Lift off of monetary policy.

Hopefully the FOMC will do better than Orbital Sciences.

T minus ten months and counting...

Second half recovery!

Second half of the decade.

Mortgage interest rates are too high!

Nemo wrote:

What's a good antonym for "measured"?

QE4ever!

burnside wrote:

the Baltic is presently icebound.

The Baltic in Baltic Dry Index refers to the Baltic Exchange where it trades at, not the Baltic Sea.

Apparently the Yellen put doesn't cover crude oil.

dilbert dogbert wrote:

I Blame Obummmers!!!

I blame the Jolly Rogers.

Wilberforce wrote:

now that we've linked them to the Sony hack, when do we send troops to NK?

now that we've linked them to the Sony hack, when do we send troops gamers to NK?

Call of Duty: Sony Hack.

Yoringe wrote:

Vow of Revenge!

They will make a movie based on the incident and Kim will come off looking like a total idiot cry-baby.

Swiss Franc Slips Most Since 2013 on Negative Rates; Real Rises - Bloomberg

The franc weakened against all of its 16 major peers as the Zurich-based SNB introduced a negative deposit rate for the first time since the 1970s, saying it was prepared to buy unlimited foreign currency to shield the 1.20-per-euro cap and take further measures if needed.

The Swiss currency appreciated to within 0.07 percent of the cap yesterday, reaching the strongest level since September 2012. Pressure on the cap has bolstered speculation the ECB will start a large-scale sovereign-bond buying program, a measure that may weaken the euro against its peers.

SNB President Thomas Jordan cited turmoil in Russia as a “major contributory factor” to its rate decision.

“The other thing undermining the attempts to weaken the Swiss franc is the ongoing Russian crisis and emerging-market selloff -- the franc remains a safe haven,” said Alvin T. Tan, a foreign-exchange strategist at Societe Generale SA in London. “It’s going to be a very tough environment for the SNB to push euro-Swiss up significantly.”

poicv2.0 wrote:

Only the upper crust of Thai teenagers

McDonald's is the Gucci of fast food?

Second half recovery!

Second half of the decade. Wink

CR wrote:

FOMC will remove "patient" about two meetings before the first rate hike.

"Patient" means that the FOMC is unlikely to raise rates during the next two meetings if the economy follows the expected path. They will use a different word when they think a rate hike will not occur in the next meeting.

The funny part about European tax loopholes is they don't create any jobs, so the governments are just giving away money. Business as usual.

sm_landlord wrote:

Did anyone else get that impression?

The stance hasn't changed in twelve months. Wall Street's interpretation of the stance has been bipolar, but that says more about Wall Street than it does about the FOMC.

The FOMC is projecting incompetence.

Bad Dawg Bobby wrote:

IF we ONLY have a Global economic collapes, we can consider ourselves LUCKY.

The Sun is unlikely to go nova this decade.

Other than Russia, the rest of the world is doing fine.
Japan export growth slows, may add to concerns over recession-hit economy
| Reuters

Japan's exports grew for a third straight month in November from a year earlier, but much more slowly than expected and despite a sharp fall in the yen as slowing demand in Asia and Europe dampened trade.

The 4.9 percent rise in exports was much weaker than a 7.0 percent gain seen by economists in a Reuters poll, slowing from a 9.6 percent gain in October, Ministry of Finance data showed.

Weakness in exports could compound April's sales tax rise which pushed the economy into a recessionary second quarter of contraction through September.

"Exports to Asia and Europe were weak. Europe's slump caused by Russia warrants attention, but the slowdown in Asia-bound exports was probably a temporary reaction to October's big jump boosted by one-off factors such as exports of ships to Singapore," said Hiroshi Watanabe, senior economist at SMBC Nikko Securities.

"I still expect shipments to remain firm as the U.S. economy continues to help spur output in Asia and Japan. That will be welcome to Japanese policymakers."

Russians demand help with rocketing mortgages as rouble slides
| Reuters

"We are Russian citizens. We don't want to be left without a roof over our heads. We don't want to default," said Yelena Lebedenko, an accountant whose monthly repayments have in seven years risen from 40,000 roubles to nearly 90,000.

"We want to pay loans based on the exchange rate at the time we signed the papers. The authorities, our government, must see to that."

Most of the anger appeared to be aimed at the central bank and government rather than at President Vladimir Putin, whose ratings have been sky-high since the start of the Ukraine crisis and Russia's annexation of Crimea from Ukraine in March.

Yet his popularity is based partly on the relative financial stability and prosperity of most of his 15 years in power, and the Kremlin has been wary of any signs of discontent since big protests in the winter of 2011-12 after a parliamentary election marred by accusations of fraud.

A handful of protesters who tried to picket the headquarters of the central bank on Friday were quickly asked to leave, and joined the larger rally on a snow-covered boulevard nearby.

Their banners read: "Save our families from the rouble rate" and "The central bank stole our future".

"Since I took my mortgage, my salary has remained at 70,000 roubles but my monthly payment now is 85,000 a month," said Irina, a woman in her 30s who works in an advertising firm.

"I want justice. They should not only help the banks but people like me ... I've already borrowed from all my friends. They're not taking my calls any more."

The central bank says the total value of foreign-currency mortgages stood at 129 billion roubles on Nov. 1, a small fraction of the 7 trillion in rouble mortgages.

Mortgage interest rates are too high!

Lets take a coffee break It looks like we're Russian to a currency crisis this morning.

Outsider wrote:

Study canceled after $1.3B spent and no results

Study Iraq War canceled after $1.3B $2.3 Trillion spent and no results Fixed It For Ya

Outsider wrote:

With cookies.

White Chocolate with Macadamia nuts?

Outsider wrote:

How prices shot up so unaffordably in the past 30 yrs. is a head scratcher.

Perhaps government regulation to prevent free market prices has something to do with it?

Outsider wrote:

loopy side of sanity

I'm unclear. Which is the loopy side?

Venezuela Bonds Fall Below 40 Cents as Maduro Affirms Subsidies - Bloomberg

Venezuelan bonds dropped to a 16-year low as President Nicolas Maduro said he has no plans to curb fuel subsidies while not ruling out the possibility of default.

The government’s benchmark bonds due in 2027 fell 8.2 percent to 37.835 cents on the dollar, the lowest on a closing basis since 1998, as of 4:57 p.m. in New York. The extra yield investors demand to hold Venezuela’s overseas notes instead of Treasuries rose the most in the world. Swaps contracts protecting bond investors from non-payment imply a 97 percent chance of default in the next 12 months, according to CMA data.

Maduro said in televised speeches over the weekend that he saw no need to cut the government subsidies that leave gasoline selling for 6 cents a gallon, and that he will keep a 6.3 bolivar-per-dollar fixed exchange rate for priority imports. He said there’s no possibility of default unless it was part of a strategy to bolster economic development and no such plans are in place. Oil, which makes up 95 percent of exports, fell 2.9 percent in New York to extend its drop since June to 47 percent.

1998 Comes Calling in Currency and Credit Plunges From Russia to Venezuela - Bloomberg 

Emerging markets are ending the year much like how they began it -- in freefall.

From Russia to Venezuela, Thailand to Brazil, stocks, bonds and currencies across the developing world are plunging.

The Russian ruble tumbled past 64 for the first time on record today while Venezuelan bonds sank below 40 cents on the dollar and Thai stocks fell the most in 11 months. Brazil’s corporate debt market is reeling as a graft probe of state oil producer Petroleo Brasileiro SA infects the market.

All of this has something of a familiar feel to it, dating back to 1998, when, just like now, oil was tumbling and driving crude exporters Russia and Venezuela into financial crisis.

While lots has changed in emerging markets since then -- perhaps most importantly, countries have higher foreign reserves and more flexible exchange rates -- the signs of contagion are mounting. Investors withdrew more than $2.5 billion from U.S. exchange-traded funds that buy emerging-market stocks and bonds last week, the biggest outflow since January, when political and financial instability from Argentina to Turkey and the fallout from Federal Reserve tapering policy sent money managers fleeing.

Its different this time

BarleyReturns wrote:

Soon we will party like it is 1999

Soon we will party like it is 1999 1998.

1998 Russian financial crisis - Wikipedia, the free encyclopedia 

The Russian financial crisis (also called "Ruble crisis" or the "Russian Flu") hit Russia on 17 August 1998. It resulted in the Russian government and the Russian Central Bank devaluing the ruble and defaulting on its debt.
...
The financial collapse resulted in a political crisis as Yeltsin, with his domestic support evaporating, had to contend with an emboldened opposition in the parliament. A week later, on 23 August 1998, Yeltsin fired Kiriyenko and declared his intention of returning Chernomyrdin to office as the country slipped deeper into economic turmoil.[9] Powerful business interests, fearing another round of reforms that might cause leading enterprises to fail, welcomed Kiriyenko's fall, as did the Communists.