Futures Fizzle, Europe Red As Markets Ask: "What Do Central Banks Do Now?"

In our Chinese stock market wrap following Friday's unexpected rate cut, which saw the Shanghai Composite storm out of the gate, we said that "we would not be surprised to see China's stocks sliding back into the red very shortly as "sell the news" concerns return, and as the increasingly more addicted "markets" demand even more liquidity from central banks just to stay unchanged, let alone rise to new all time highs." Sure enough, with just minutes to go before the close, the SHCOMP wiped out all its daily gains and was set for a red close had it not been for the "national team" miraculous last minute intervention which was inevitable after Friday's PBOC rate cut, and which lifted the composite 0.5% into the green as the euphoria was rapidly evaporating.

The Death Of Europe

European leaders talk about two things these days; preserving European values by taking in Muslim migrants and integrating Muslim migrants into Europe by getting them to adopt European values. It does not occur to them that their plan to save European values depends on killing European values.

"How Would One Position For One Final Melt-Up On Wall Street"? - Here Is BofA's Answer

"It could simply be 1998/99 all over again. After all, a “speculative blow-off” in asset prices is one logical conclusion to a world dominated by central bank liquidity, technological disruption & wealth inequality. What worked back then? What rose from the rubble of 1998? How would one position for one final melt-up on Wall Street..."

The Mechanics Of The Fed As Seen By The Eurodollar Curve

Eurodollar curve captures the mechanics of Fed expectations in a simple way. Away from the very front end, the curve dynamics is displays a rather rigid structure where a single risk premium parameter explains bulk of the spreads movement in different sectors of the curve. Typically, in anticipation of Fed hikes or cuts, the market makes up its mind about the terminal Fed funds (Greens) and begins to price in the rates path around that. The more aggressive the initial hikes are, the less they will have to do later

Chinese Stocks Rise To 2 Month High Following PBOC's Rate, RRR Cut But Copper, Crude Struggle

China's key index, the Shanghai Composite, was is up over 1%, or 40 points in early, to just under 3,500 - the highest in 2 months, a gain which however is well below Friday's pre-rate cut gain and if prior rate cut history is any indication, not to mention the weak reaction by commodities on Friday (continuing into today, where WTI turned green by the smallest of margins just seconds ago we would not be surprised to see China's stocks sliding back into the red very shortly as "sell the news" concerns return, and as the increasingly more addicted "markets" demand even more liquidity from central banks just to stay unchanged, let alone rise to new all time highs.

Crisis Alpha & Why Volatility Is The 'Only' Asset Class

There is a tiresome debate as to whether or not volatility is an asset class. Let us end that debate... Volatility is the ONLY asset class. We are all volatility traders and the only question is whether we realize it or not.  If you disagree do me a favor and imagine you are an alien that just landed on earth and you know nothing about investing.

"If We Don't Find A Solution Today, It's The End Of The European Union" - Refugee Crisis Hits Tipping Point

"If European leaders fail to agree a plan to counter the sudden inflows of refugees, it could mean the end of the European Union. If we don't find a solution today, if we don't do everything we can today, then it is the end of the European Union as such," Prime Minister Miro Cerar said. "If we don't deliver concrete action, I believe Europe will start falling apart."

Overstock Holds 3 Months Of Food, $10 Million In Gold For Employees In Preparation For The Next Collapse

"What do we do as a business so that we would be prepared when the next crash happens. One thing that we do that is fairly unique: we have about $10 million in gold, mostly the small button-sized coins, that we keep outside of the banking system. We expect that when there is a financial crisis there will be a banking holiday. I don't know if it will be 2 days, or 2 weeks, or 2 months. We also happen to have three months of food supply for every employee that we can live on."

Just When You Thought Wall Street's Heist Couldn't Get Any Crazier...

In reading various recent regulatory reports, it is clear that almost none of the promises that were made to the public about what was going to happen under Dodd-Frank financial reform is actually happening. Welcome to another day at the casino where the model continues to be — heads they win, tails you lose.

US Economic Data Has Never Been This Weak For This Long

Despite the ongoing propaganda reinforcing America's "cleanest sheets in a brothel" economic growth, the fact is, there is a reason why The Fed folded, why Draghi doubled-down, why China cut, and why Kuroda will likely unleash moar QQE this week. It appears the 'trap' that central planners have set for themselves - by enabling massive financial asset inflation in the face of what is now the longest streak of economic weakness and data disappointment on record - now looks set to prove their impotence and/or Enisteinian insanity.

The Fatal Fallacy Of Faith In The Fed's Assumed Powers

Doing as Yellen and her counterparts demand is the biggest risk of all. The Yellen Doctrine requires that central banks be both correct and able, abilities that have been (and can only be) in utter short supply. Her view would show more proactive and effective central bank management where only reactive and impromptu, last minute white-knuckling has abounded. Central banks have been in the past year only holding on for dear life, which is where obscurity has been their benefit. In the end, however, it will bring about their own downfall as it only serves to make matters worse. Yellen wants the central bank to be viewed as almost godlike, but they continually reveal themselves weak, deceptive and ineffectual; eschewing all long run sustainability in order to just make it through one day at a time.

When Is A Ceiling Not A Ceiling?

When corrupt politicians do as they are told by their keepers on Wall Street and in the boardrooms of S&P 500 mega-corps....