• Tim Knight from...
    02/06/2016 - 00:25
    What we must remember is this: we are in a bear market, and the risk of a countertrend rally is present, but confined. The opportunity on the downside movement dwarfs the risk of a push higher, as...
  • Phoenix Capital...
    02/06/2016 - 10:15
    2008 was caused by derivatives based on consumer-focused assets (houses). The next crisis will be driven by derivatives on government-focused assets (bonds).

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Ukraine's Richest Man Mobilizes Private 'Army' After Assets Threatened

Rinat Akhmetov - Ukraine's richest man with an estimated worth of $11.4 billion - has, as Reuters reports, acquired almost feudal status in the industrial hub of Donetsk in the past 20 years - but the separatist rebellions there have altered the dynamics of power. This is not acceptable to the billionaire and so he has demanded his miners and metalworkers join police on patrol on Mariupol. As pro-Russian rebels declaring independence seized public buildings across the steel and coal belt which is the basis of his colossal fortune, he issued repeated written statements in support of a united Ukraine... but the media-shy 47-year-old, who has a workforce of 300,000 people on his payroll in the Donbass, has to tread carefully around local sensitivities and has avoided specifically condemning the action of the separatists.


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5 Things To Ponder: Demographics

"Blessed are the young, for they shall inherit the National Debt."  -  Herbert Hoover

The roll off of the massive slice of the population known as "baby boomers" in the years ahead will have a significant and profound impact on the economy and the markets. In my opinion, there is simply not enough attention paid this issue and it is an important one.  However, since demographic impacts take a very long time to mature, they are ignored by the mainstream media which are focused on the 24-hour news and market cycles. 


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"Mysterious" VIX-Seller Ramps S&P To Unchanged On The Week

For the 4th day in a row, selling pressure in US equities climaxed as Europe closed. The big buying-panic today though was sparked with about an hour to go as VIX was pummeled lower and stocks levitated to save all kinds of key technical levels - (S&P unch, Nasdaq green on the week, S&P back above its 50DMA, Russell off its 7-month lows). Trouble with all that exuberance... bonds, the USD, commodities, JPY carry, and credit weren't buying it. The USD rose 0.2% for the 2nd week in a row (led by 0.5% weakness in the EUR) and JPY strengthened. Commodities all closed higher on the week, led by oil and copper (+2%) with WTI over $102. Treasuries sold off modestly into the late-day buying scramble in stocks but ended the week 10bps lower in yield (biggest weekly drop in 2mo, lowest in 6mo). VIX plunged back to almost 12 with its biggest daily drop in a month. T-Bonds and Bullion are both +7.2% YTD, S&P +1.6% YTD, Russell 2000 -5%YTD.

 


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Meet Denmark's VoteMan: Using Sex & Violence To Get Out The Vote For EU Elections

Most people have no idea what government is about. As Bill Bonner notes, they think it is a benign institution, designed to make life better for everyone. Some governments, desperate to get more “buy in” from the public, even insist eligible voters go to the polls – or face penalties. Other countries, such as the US, merely excite the voters with dreams of avarice and threats of sanctions. Denmark - went in a different direction - "Voteman - a muscleman first seen in bed with five naked women who then proceeds to beat up young people to force them to vote."


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Vacation At "The Door To Hell," Enjoy View To Burning Gas Crater!

The cosmopolitan delights of Azerbaijan’s boomtown capital Baku are well known to international oil industry types, but for adventurous tourists, Turkmenistan offers something even more spectacular than mud volcanoes: a Door to Hell.” Set amid the bleak Karakum Desert, this attraction near the village of Derweze, or Darvaza, dates to the 1970s when a sinkhole opened beneath a test well drilled by Soviet geologists. Gas just beneath the surface ignited and has been burning merrily ever since.


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Epic VIX Slams Sparks Buying Panic In Stocks

Nasdaq and S&P back into the green for the week... Dow back into the green for the year... mission accomplished (but a little premature). And all it took was an options-expiration debacle-driven collapsed in VIX...


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At Least 6 Chinese Cities Have Bailed Out Their Real Estate Markets In The Last Month

According to the Chinese financial publication Securities Daily, emergency real estate rescue packages have been launched in large cities such as Wuxi, Nanning, Hangzhou, Tianjin, Tongling and Zhengzhou in the last month alone..."if a borrower does not fulfill the loan repayment obligations as agreed in the contract, the guarantee institutions will have to repay the housing loans..." What a surprise – a government guarantee. The market is imploding and defaults are going through the roof. Property vacancy rates in Zhengzhou are an astounding 23%. So the government is putting taxpayers on the hook. In other words, the government is panicking. But it’s not working... so much excess inventory has built up, a major slowdown was inevitable. And like the butterfly that flaps its wings, a slowdown in China has substantial effects on the rest of the world.


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Three Market Factors Which Citi Says Are Worse Now Than In 2007

"You’re picking up pennies on a train track. You are not getting paid much but you are sure that there will be a very negative surprise at some point. The risk / reward profile is as bad as ’07." - Portfolio manager speaking to Citigroup


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Mapping The "Scalpel, Not A Meat Axe" Approach To US Sectoral Sanctions Against Russia

The threat of "sectoral" sanctions is the latest arrow in America's quiver against Russia's unwillingness to back off and, as the FT reports, the US is seeking support from Europe for these efforts. The problem, as we have discussed, is that energy binds Russia to the rest of the world in a codependent relationship. Consumers – especially in Europe – need Russian oil and gas as much as Russia needs the revenue they bring in. The US believes it can circumvent that obstacle as "the situation calls for a scalpel, not a meat axe... we need targeted asymmetric sanctions that hurt them more than they hurt us." In other words, do you believe in miracles? “In a global economy, each of these actions may also come at a cost to the countries imposing the sanctions that needs to be considered.”


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Guest Post: Meet The Man Who Killed Keystone

One man stands in its way. No, not President Obama, but the billionaire environmentalist Thomas Steyer. How much did the Senate cost? With the dangled $100 million divided by 15 hours, the Senate was for sale at approximately $6 million an hour. Political commentators are openly speculating on what Obama will cost.


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The Top 12 Things That Bother American Drivers The Most

With Memorial Day rapidly approaching and the onset of summer - and the inevitable spike in the number of drivers on the road, Expedia decided to poll American drivers to understand what really pisses them off the most. The 2014 Road Rage Report ranks "The Texter" as the most aggravating driving behavior beating out "The Tailgater". Perhaps most interestingly, 7 in 10 Americans report having been "flipped off" by a fellow motorist (while only 17% admitted to the aggressive act) and the rudest drivers live in the largest cities (71% rank NYC as the rudest).


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Sell Italian Bonds But US Treasury Bulls Beware, Warns BofA

The combination of deteriorating European assets (topping European bank stocks and vulnerable peripheral debt) and poor price action (the impulsive break of 6m wedge support at 1.3685) augurs for further EURUSD weakness, warns BofAML's Macneil Curry, but it is Italian bond futures that broke a long-term uptrend and "it's time to sell the bounce in BTPs." While 30Y and 10Y US Treasuries are in medium term bull trends, he warns they are approaching a 'basing zone' - bond bulls ("if there are any" he jokes) beware.


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Darth Vader Steps Up His Political Campaign In Ukraine

The (west) Ukraine locals may be caught in a proxy war vise of a western-appointed puppet government desperate to do NATO's bidding, an IMF which has made it clear bailout funds will only continue as long as said government maintains a belligerent stance toward Russia, a Kremlin which holds all the commodity trump cards with its gas supplies, and finally an imploding economy where the industrial eastern parts are on their way to becoming part of Russia not to mention insolvent banks which are one missed IMF rescue payment from total collapse, but at least they can still make some funny clips. Such as this clip showing a very symbolic Darth Vader campaigning in Odessa promising potential voters to "build the first earth-based planetary empire."


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"Markets Not Cheap" & "Not Enough People Paid The Price For 2008" - SALT Day 2 Post Mortem

'Not' as exciting and headline-making as Day 1, as damage control was loud and proud after Tepper's "dangerous markets" call. The number of times we heard "what he meant to say was..." made us laugh but day 2 of the SkyBridge Alternatives Conference (SALT) varied from Leon Cooperman's "S&P to 2000" exuberance to Rubinstein's "markets are not cheap" disappointment and everything in between... with Nassim Taleb's "not enough people paid the price for 2008" conclusion summing it all up nicely.


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No Raises For Anyone: Real Hourly Wages Decline For The First Time Since 2012

So for all those who keep warning that wage inflation is just around the corner (you know who you are), please point out on the chart below - which shows that real hourly wages just had their first annual decline since October 2012 - where this wage inflation is so stubbornly hiding?


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