David Einhorn's Confession: "We Lost Money Every Quarter; Never Had A Year Where So Little Went Right"

"2015 began with David’s favorite football team, the Green Bay Packers, blowing the conference championship game and a chance at the Super Bowl despite looking like the better team on the field, and holding the ball with a 12-point lead with less than 5 minutes to go. The Packers ended 2015 by getting blown out by the Arizona Cardinals 38-8 in a game where they looked like they didn’t even belong in the league.  Our year felt a lot like that. Let’s get some of the gory facts out of the way: We lost money every quarter."

Hong Kong Dollar Plunges To Weakest Since Aug 2007

Modest overnight weakness in the Hong Kong Dollar has accelerated notably as the US session starts with USDHKD down 150 pips in the last hour, plunging to its weakest against the dollar since Aug 2007...

Dip-Buyers Beware: History Is Not On Your Side Here

With the S&P 500 Index falling nearly 10% over the past three weeks, there’ve been a lot of panicky headlines. Markets aren’t in a happy place, and the technical damage implies there may be more pain to come. However, as Bloomberg's Mark Cudmore warns, for those searching for a bottom, history doesn’t offer much solace.

Why This Slump Has Legs

There may be shallow lulls in the asset markets, nothing ever only falls down in a straight line in the real world, but the debt will and must come down and be deleveraged. The process will in all likelihood lead to warfare, and to refugee movements the likes of which the world has never seen just because of the sheer humbers of people added in the past 50 years. When your children reach your age, they will not live in a world that you ever thought was possible. But they will still have to live in it, and deal with it. They will no longer have the facade you’ve been staring at for so long now, to lull them into a complacent sleep. And the Kardashians will no longer be looking so attractive either.

62 People Have More Wealth Than Half The World, Top 1% Have More Than Everyone Else

The global inequality crisis is reaching new extremes. The richest 1% now have more wealth than the rest of the world combined. Power and privilege is being used to skew the economic system to increase the gap between the richest and the rest," Oxfam asserts, adding that "the current system did not come about by accident, humanity can do better than this."

WTI Crude Plunges Back Below $30, Drags Stocks Lower

So crappy China growth and increased Iran supply prompted a stop-run surge in crude oil overnight as "bad news is good news" stimulus hopes lifted all boats. But that is over now as Iran cuts oil prices to Europe, reigniting the price wars...

Why The 10Y Yield Will Slide To 1.75%: Deutsche Bank Explains

"Before investors sell 10s, they need the Fed to pause...  The curve flattens into March 2s10s with risk off market dynamics and an increasing probability of relent, followed by bear steepening after a Fed pause. Rates could then stabilize or decline, depending on whether recession is avoided or at least postponed."

Proving Wall Street Strategists Are "Full Of Bull"

How overoptimistic are Wall Street forecasts year in and year out? On average, forecasts were wildly bullish, even with the gains in recent years with results no better than a coin toss as to whether the S&P came in above or below the average forecast. Nonetheless, every year had one thing in common: Not once did a consensus predict a down year.

Frontrunning: January 19

  • Spot the common thread: China's growth hits quarter-century low, raising hopes of more stimulus (Reuters)
  • And here: China stocks climb on hopes for new economic stimulus (Reuters)
  • Welcome to the Crisis Economy, Where Tumult Reigns (WSJ)
  • IEA Sees Risk of World Drowning in Oil (BBG)
  • IEA Sees Iran's Return Intensifying Battle for Europe Oil Market (BBG)
  • China 2015 power, steel output drop for first time in decades (Reuters)

BofA Reports $21.3 Billion In Energy Exposure; Beats On EPS Despite Revenue Miss, Sliding Sales And Trading

Here is what everyone wanted to know from BofA results:  commercial net charge-offs increased $75MM compared to 3Q15, driven by losses in Energy, while the Allowance increased $144MM from 3Q15, driven by energy-related exposures and higher loan growth across the portfolio. Most importantly, BofA revealed its "Utilized Energy exposure of $21.3B ($1B traded products)", down $2.6 billion from a year ago. BofA also notes that the "higher risk sub-sectors of Oil Field Services and Exploration & Production comprise 39% of utilized energy exposure." NPLs increased $110MM from 3Q15, to $1.2 billion driven mostly by increases in Energy. 

"The Oil Market Could Drown In Oversupply," IEA Warns

With Brent and WTI having dipped below $30 (today’s rebound notwithstanding), and with some grades going for less than zero in the US, the question on everyone’s mind is simply this: can oil continue to move lower? According to the IEA, the answer is “an emphatic yes.”

Equities Soar, Oil Back Over $30 On Hopes For More Stimulus Following Disturbing Chinese Data

Last night's Chinese data deluge can only be classified with one word: bad. So if bad news was again bad news as many claim, both commodities (read oil), and US equity futures should be tumbling right now... but just the opposite is happening and in fact both Brent and WTI have already jumped over $30 this morning. This happens even as the IEA said this morning that global oil markets could “drown in oversupply,”  And yet this morning both commodities, global stocks and futures soaring? Simple: the following Bloomberg headline summarizes it: "Brent Rallies More Than $1 as China GDP Spurs Stimulus Bets," and where Brent goes, so goes risk, and the S&P.

The American Revolution - The Sequel

Most Americans receive benefits of one type or another from their government; and most Americans receive their opinions from the media. The pervasive difficulty here lies in the erroneous concept that there can be a return to freedom whilst maintaining the dependency upon largesse from the State. “Government is the great fiction, through which everybody endeavours to live at the expense of everybody else.”