Dow /quotes/zigman/627449 13,882 -105 0.75%
Nasdaq /quotes/zigman/12633936 3,140 -27 0.87%
S&P 500 /quotes/zigman/3870025 1,502 -10 0.67%
GlobalDow /quotes/zigman/629063 2,102 -12 0.54%
Gold /quotes/zigman/8702781 1,669 -10 0.58%
Oil /quotes/zigman/2291769 96.48 -0.13 0.13%
more importantly, the BLS also reported Q4 unit labor costs and nonfarm productivity and as a result of the previously reported adjustments to worker data and negative GDP print, it was widely expected that productivity would drop. It did, but it did so far more than most expected, plunging by a whopping 2%, which “reflects increases of 0.1 percent in output and 2.2 percent in hours worked. (All quarterly percent changes in this release are seasonally adjusted annual rates.” The offset: unit labor cost which soared by 4.5% in the fourth quarter of 2012, the combined effect of the 2.0 percent decrease in productivity and a 2.4 percent increase in hourly compensation. Unit labor costs rose 1.9 percent over the last four quarters.
The following is a excerpt from a recent client letter.
The house of cards that is Europe is close to collapsing as those widely held responsible for solving the Crisis (Prime Ministers, Treasurers and ECB head Mario Draghi) have all been recently implicated in corruption scandals.
Those EU leaders who have yet to be implicated in scandals are not faring much better than their more corrupt counterparts. In France, socialist Prime Minister Francois Hollande, has proven yet again that socialism doesn’t work by chasing after the wealthy and trying to grow France’s public sector… when the public sector already accounts for 56% of French employment.
France was already suffering from a lack of competitiveness. Now that wealthy businesspeople are fleeing the country (meaning investment will dry up), the economy has begun to positively implode.
The first sign of this came actually came from Germany. As we noted a few months ago, Germany had prepared a working group to examine the impact of an economic collapse in France.
German Finance Minister Wolfgang Schaeuble has asked a panel of advisers to look into reform proposals for France, concerned that weakness in the euro zone’s second largest economy could come back to haunt Germany and the broader currency bloc.
Two officials, speaking on condition of anonymity, told Reuters this week that Schaeuble asked the council of economic advisers to the German government, known as the “wise men”, to consider drafting a report on what France should do…
Just as we recently noted the similarities between the European Union and the Soviet Union, so Soros believes the ‘Euro’ itself is “bound to break up the European Union.” It may take generations, he notes, as a terrible tragedy of “lost political freedom and economic prosperity.”
From Davos – two weeks ago…optimism that the banking system had been revived but even then he was concerned…
…the european banking system, the interbank market, has revived so there’s a general sense of let’s say almost euphoria that the crisis is over. I think that is somewhat premature. because the fundamental internal inconsistencies in the dis-tim have not been addressed, and actually, therefore, you face political dangers.
The Euro is transforming the European Union into something very different from the original conception which was a voluntary association of equal states, and instead of that, the financial created a two-class system where the euro, the creditors and debtors and the creditors are in charge. The political situation I think is going to get worse.
Fellow billionaire John Paulson, who made a fortune betting on the subprime mortgage meltdown, is clearing out of U.S. stocks too. During the second quarter of the year, Paulson’s hedge fund, Paulson & Co., dumped 14 million shares of JPMorgan Chase. The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee.
Why are corporate insiders dumping huge numbers of shares in their own companies right now? Why are some very large investors suddenly making gigantic bets that the stock market will crash at some point in the next 60 days? Do Wall Street insiders expect something really BIG to happen very soon? Do they know something that we do not know? What you are about to read below is startling. Every time that the market has fallen in recent years, insiders have been able to get out ahead of time. David Coleman of the Vickers Weekly Insider report recently noted that Wall Street insiders have shown “a remarkable ability of late to identify both market peaks and troughs”. That is why it is so alarming that corporate insiders are selling nine times as many shares as they are buying right now. In addition, some extraordinarily large bets have just been made that will only pay off if the financial markets in the U.S. crash by the end of April. So what does all of this mean? Well, it could mean absolutely nothing or it could mean that there are people out there that actually have insider knowledge that a market crash is coming.
According to Barron’s columnist Steven Sears, someone made a big bet against the financials ETF yesterday (ticker symbol XLF), and it has everybody buzzing.
Last week somebody put on a call spread on the VIX using the April 20 and 25 puts. They bought 150,000 contracts for a net of $75 per contract. That is an $11,250,000 bet that the VIX will move over 20 over the next 60 days.
That’s the highest level of insider selling since March 2012. And it comes just as individual investors are starting to return to the stock market.