With VIX collapsing 10 days straight (for the first time since October 2010), one might be forgiven for thinking "everything is awesome." However, as always, the real news is in the nuance that the mainstream often misses. As VIX has plunged (complacency about 'normal' risk), Skew (which measures extreme tail risk) has exploded to its highest ever...
Credit Suisse is out with the latest edition of its Global Wealth report and although the results are not entirely surprising, they are worth highlighting. Three standouts: i) the rise in the value of financial assets is most certainly contributing to an increase in global inequality, ii) dollar strength led to the first decline in total global wealth (which fell by $12.4 trillion to $250.1 trillion) since 2007-2008, iii) 0.7% of the world's population own nearly half of the world's wealth while the bottom 71% of the population own just 3%.
Some things you CAN see coming, in life and certainly in finance. Quite a few things, actually. Once you understand we’re on a long term downward path, also both in life and in finance, and you’re not exclusively looking at short term gains, it all sort of falls into place. Of course, the entire global economy has been hanging together with strands of duct tape for decades now, but hey, it looks good as long as you don’t take a peek behind the facade, right?
“After careful consideration and analysis, we have decided to close the Fortress Macro Funds and return cash to our investors... But we have had an extremely challenging two years, and I do not believe the current environment is conducive to achieving our best results."
With December rate-hike odds already plumbing record lows, today's data from The NY Fed's Consumer Expectatiopns Survey hamers the nail home that all is not well in America. Away from inflation expectations dropping and earnings expectations tumbling, household spending growth expectations have plunged to record lows.
Investors Are Terrified Of An EM Debt Crisis, But Are Bullish Because They Think Everyone Else Is TooSubmitted by Tyler Durden on 10/13/2015 - 11:09
Welcome to Reflexivity 101.
No professional or successful investor every bought and held for the long-term without regard, or respect, for the risks that are undertaken. If the professionals are looking at "risk" and planning on how to protect their capital from losses when things go wrong - then why aren't you? Exactly how many warnings do you need?
This. Will. Not. End. Well. As WSJ reports, "retailers such as Kmart and Office Depot this week are starting to roll out cards that give the recipients small amounts of stock in some of the country’s best-known companies." "I have always wanted to get into the stock market business, but I honestly don’t have the time to explore what’s going on in the market trends of the day"...
In medicine, they have something called the Hippocratic Oath. It requires physicians to swear to uphold certain ethical standards. In modern fund management, there is no Hippocratic Oath. Whereas doctors are expected to “First, do no harm”, in modern fund management, iatrogenic illnesses hold sway. An iatrogenic illness is one that is caused by the physician himself. Fund management doctors seem to be doing the best they can to kill their own patients. Science has a word for this, too. It’s called parasite. There is a solution to all this insanity.
Cables leaked by U.S. Army whistleblower Chelsea Manning reveal an apparent plot by the U.S. government to assassinate Bolivian President Evo Morales and overthrow his administration. TeleSUR, a Latin American TV network, reported last week that the Bolivian government is continuing a formal investigation into the allegations, despite denials by U.S. government officials.
After losing 7% in September, and down 20% for 2015 as of Oct. 1, the question is will Andy Hall be the only hedge fund manager with the distinction to have blown up not once but twice in one year, on the very same bet?
So what's left in the toolbag of central banks and states to stimulate recessionary economies if QE has been discredited? The answer: Helicopter Money.
The Oldest Trick In The Book: Here Is How Johnson & Johnson's "Beat Earnings" Despite Sliding RevenuesSubmitted by Tyler Durden on 10/13/2015 - 08:45
When looking at JNJ's EPS line, things were not nearly as bad, because despite a 7% slide in revenues and a whopping 40% collapse in pretax net income, somehow JNJ reported Q3 non-GAAP EPS of a solid $1.49, actually beating consensus of $1.45, and only 7% lower than a year ago. Hardly terrible... until one looks at the detail and finds the "oldest accounting gimmick in the book": adjusting the tax rate.
"Sell the rumor, buy the news" appears to be the meme for now as TWTR delivers on the chatter:
*TWITTER CUTTING UP TO 8% OF JOBS, UP TO 336 JOBS
*TWTR SEES 3Q ADJ EBITDA AT/ABOVE TOP END $110-$115M,EST $116.7M
So drastic job cuts, lowered revenue and EBITDA guidance, and "tough but necessary" decisions - TWTR up 5% in the pre-market.