FRIDAY 1/17/14

Aussie miners are up but retailers down. The dollar/yen is 104.34 off its high yesterday at 104.70. Japan’s consumer sentiment drops. NIKK and SSEC trade lower. The Shanghai is at a 5-month low. UBS Bank is boosting bonuses for Asian top performers. Nintendo reports weak results with the WII U. Consumers keep moving towards mobile gaming devices instead of consoles. China Mobile begins selling the iPhone in China. Pre-orders are well over one million. Tim Cook is in China to promote Apple but he displays all the enthusiasm of an undertaker. More and more consumers, especially Asian, prefer the larger smartphone screens which may prove challenging for the skinny iPhone. Thailand’s social unrest turns ugly with over 20 people hurt in an explosion targeting anti-government protestors. An investigation begins into a rice corruption and price-fixing scandal. Thailand’s GDP may be cut in half to 2% or 3% due to the increasing social unrest and violence. Shell says profit will fall far below expectations. Shell drops -3%. UK holiday retail sales are far better than expected especially with small boutique shops. The pound jumps strongly to 1.6440. European markets are flat to higher. HSBC Bank’s capital holdings may be overstated according to a research report. UK banks are trading lower. The 10-year Gilts (UK) and US 10-year Treasury yields are both at 2.84%. The euro sits at the 1.36 pivot trying to decide which way to go. 








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Chinese millionaires continue to leave the country to hide assets abroad to protect them from government seizure. This behavior only serves to fuel the ongoing asset bubbles in dividend stocks, biotech, specialized tech stocks, real estate, art, and many other areas. Chinese property values have jumped over 20% in the last four years fueling the property bubble that is ripe for popping. US margin interest sets another all-time record high well above the lofty peaks that identified the 2000 and 2007 stock market tops. CBOE SKEW is at 137 at very high levels that identify increased likelihood for a black swan event. Greece and Spain remain very troubled economically.Greece and Spain remain very troubled economically. Spanish banks continue to fail at record levels.