JPM's Head Quant Is Back With A Startling Warning
Submitted by Tyler Durden on 01/13/2016 - 13:45
"The fact that market volatility is on the rise and the Fed is raising interest rates further increases the probability of a Bear Market. The current option-implied probability of a bear market (i.e. ~20% decline this year) is about 25%. While there is no way to predict a bear market, below we look at various scenarios, and estimate that the probability of a bear market may be nearly twice as large."
In Latest Embarrassment For Obama, Iran Releases Footage From Arrest Of 10 U.S. Sailors
Submitted by Tyler Durden on 01/13/2016 - 11:04
It's Not Just China, "The Whole Damn System Is Untenable"
Submitted by Tyler Durden on 01/13/2016 - 13:50
China is untenable in its current financial position. That is the primary problem, and so long as it remains so whatever the PBOC does will have but a fleeting impact. In more immediate terms, that is being recognized by the “dollar” run which continues to savage not just China but South America (more than just Brazil), Africa, Asia (more than China) and you might even argue Canada and Mexico. From that, we see that it isn’t China that is the problem with the “dollar”, it is the whole damn system.
US Small Caps Plunge To 30-Month Lows Into Bear Market
Submitted by Tyler Durden on 01/13/2016 - 13:39
The first week of July 2013 was the last time the Russell 2000 traded at these levels. That is 30 months of buy-and-hold for no return. Despite the constant clammer from "Small Cap fund managers" that they are the plaxce to be for protection against a soaring USD (since they are dominantly domestically focused), it seems the fact that small caps are much more sensitive to credit market conditions is the real reason and that market is carnaging.
Another Bubble Bursts
Submitted by Tyler Durden on 01/13/2016 - 13:25
Dear Janet, it appears the US consumer (or small business) is nothing like as strong as you "believed."
Turkey Suicide Bomber Identified As Saudi-Born, Syrian Refugee
Submitted by Tyler Durden on 01/13/2016 - 13:20
The man who killed 10 German tourists on Tuesday in a brazen suicide attack in Istanbul has been identified as one Nabil Fadli, a ISIS-linked , Saudi-born operative who entered Turkey just last week as a Syrian refugee.
Scorching Demand For 10 Year Paper: Indirects Take Down Near Record 71%, Bid To Cover Surges
Submitted by Tyler Durden on 01/13/2016 - 13:15
If anyone had expected that today's record AB InBev deal would lead to a tail in the just concluded $21 billion 10-Year (technically 9 Year-10 month CUSIP M56 reopening) auction, they would be very disappointed, when moments ago the US Treasury announced a high yield of 2.09%, stopping a whopping 1.5 bps through the When Issued 2.105%, and the lowest yield since October's 2.07%. But the real stunner was the internals, where the Directs took down at modest 11.3%, but it was the foreign central bankers, aka the Indirects, who took down a whopping 71%, the second highest on record, and just 0.3% shy of the record high hit in February 2011.
The End Of The Luxury Housing Boom: US Treasury Launches Crack Down On Secret Buyers Of Luxury Real Estate
Submitted by Tyler Durden on 01/13/2016 - 12:49
“We are seeking to understand the risk that corrupt foreign officials, or transnational criminals, may be using premium U.S. real estate to secretly invest millions in dirty money,” said FinCEN Director Jennifer Shasky Calvery. “Cash purchases present a more complex gap that we seek to address. These GTOs will produce valuable data that will assist law enforcement and inform our broader efforts to combat money laundering in the real estate sector.”
Is This The Spot For A Small Cap Bounce?
Submitted by Tyler Durden on 01/13/2016 - 12:31
The beaten-down Russell 2000 Small-Cap Index has reached a confluence of significant potential near-term support levels. Should this level fail to provide as much as a speed bump and the Russell 2000 slices right through it, then perhaps a more devastating market decline is already at hand.
Order Book For Biggest Bond Sale Ever Takes Shape: Over $100BN In Orders For $40BN AB InBev Offering
Submitted by Tyler Durden on 01/13/2016 - 12:11
While the market for corporate bond issuance has been relatively quiet among the recent broader market turbulence, in a few hours a historic new bond is about to price and be sold to investors. Earlier today, Anheuser-Busch InBev NV, the acquiror in the second largest M&A deal of 2015 valued at $117 billion and just shy of Pfizer's massive $160 billion merger with Allergan, started offering bonds that will back its takeover of SABMiller Plc in a sale that according to Bloomberg will stretch into Europe and is set to become the biggest corporate-debt offering on record.
FANG Bloodbath
Submitted by Tyler Durden on 01/13/2016 - 12:09
Just when you thought it was safe to get back in the warm waters of the FANTAsy stocks, they slap you in the face with their triple-digit valuations...
Inflation Expectations Collapse Post-Rate-Hike, Near Record Lows
Submitted by Tyler Durden on 01/13/2016 - 11:49
Since The Fed hiked rates in December, the market's inflation expectations have collapsed in yet another clear indication of "policy error." 5Y5Y Forward inflation swaps have crashed below 2.00% for only the 3rd time in history (Lehman 2008 and September's Fed Fold were the other two) as despite central banker promises of transitory low-flation, the money is being bet against them as the regime-shift from full-faith to no-faith in Fed support continues.
After Poland Compares EU To Nazis, Brussels Launches "Unprecedented" Review Of Polish Media Laws
Submitted by Tyler Durden on 01/13/2016 - 11:35
The latest diplomatic spat to divide the EU worsened materially on Wedensday when Brussels opened an official inquiry into new media laws enacted in Poland. Although the laws have drawn criticism domestically as well as abroad, the Polish government views the probe as a violation of sovereignty by an increasingly intrusive Berlin.
War Between Saudi Arabia And Iran Could Send Oil Prices To $250
Submitted by Tyler Durden on 01/13/2016 - 11:15
The rift between Saudi Arabia and Iran has quickly ballooned into the worst conflict in decades between the two countries. The effect from the brewing conflict on oil is murky, but for now it is not having a bullish impact. But what if the current “Cold War” between Saudi Arabia and Iran turned hot?
Sweden's Foreign Minister Barred From Israel After Calling For "Extrajudicial Killings" Probe
Submitted by Tyler Durden on 01/13/2016 - 10:54
Having upset The Sauds (by exposing the truth about The Kingdom's subjugation of women and medieval laws), and hurt relations with Saudi Arabia, Swedish foreign minister Margot Wallstrom has now made an enemy of another Middle-East nation. Israel has barred Wallstrom from entering their nation after she called for investigations into "extrajudicial killings" during recent violence. In response, the Israeli Foreign Ministry said in a statement: "The Swedish Foreign Minister has, in her reckless and ludicrous comments, buoyed terrorism and by so doing is encouraging violence."
