US Destroyer Fired Warning Shots At "Harassing" Iranian Fast-Attack Ship

A U.S. destroyer fired three warning shots after an Iranian fast-attack craft approached and circled two U.S. Navy ships and a Kuwaiti vessel in the northern Gulf on Wednesday. CNN reports that the U.S. ship fired the shots into the water after the Iranian ship did not leave after a brief radio conversation.

The Lack Of EpiPen Competitors Is The FDA's Fault

A firm cannot just willy-nilly raise their prices without a competing firm leaping in to give consumers what they want at a lower price. As it turns out, Mylan has a great friend who keeps would-be competitors out of the market, or at least makes it so difficult for them that they eventually go out of business. That friend is the FDA.

Rate Hike Jitters Return In Poor, Tailing 7Y Treasury Auction

And just like that the rate market's perception has shifted. Following two stellar auctions earlier this week, namely a blockbuster auction of 2Y and 5Y bonds, which saw such strong demand we concluded that nobody appeared to be concerned about tomorrow's Yellen testimony at least in the primary bond market. That, however changed moments ago when the Treasury sold $28 billion "belly", 7Y bonds, at a yield of 1.423%, tailing the When Issued by 1.3 bps, the first tail in this tenor since February.

The Lowest Vol In A Lifetime

In times gone by, of course, exceptionally low financial market volatility was a source of concern for policymakers.   Such conditions, they knew, were unlikely to last but might encourage behaviour that could threaten financial stability when the volatility regime and market risk premia normalized. Fast forward to today, and while there has been the occasional brief mention of the reach for yield, there's been nary a mention of the potentially pernicious problems posed by low volatility.

"Central Banks Now Own $25 Trillion Of Financial Assets"

  1. Central banks own $25tn of financial assets (a sum larger than GDP of US + Japan, and up $12tn since Lehman);
  2. There are currently $12.3tn of negative yielding global bonds (28% of total);
  3. There is currently $8tn of negative yielding sovereign debt (54% of total).

Services PMI Tumbles To 6-Month Lows: "GDP Growth Is Failing To Accelerate In Q3"

Following Manufacturing PMI's drop from a two-month bounce, Services PMI also tumbled. Against expectations of a rise from 51.4 to 51.8, Services dropped to 50.9 - lowest since Feb 2016. With the lowest jobs data in 20 months, new orders at their weakest since May, as Markit warns, "GDP growth is failing to accelerate in the third quarter from the weak 1.2% pace seen in the second quarter."

85% Of Wall Street Expects a "Dovish Hike Signal" From Yellen Tomorrow

Earlier this week, Citi's head of G10 FX strat Steven Englander conducted a survey among 350 participants asking them what they expect from Janet Yellen's Jackson Hole speech. According to the vast majority, or 85% of the respondents, Yellen will lean toward one 2016 rate hike with hiking risk “overwhelmingly” in December even as September hiking risk is seen as “modestly underpriced."

Is The End Nigh? Former FOMC Member Warns "The Fed Is Vulnerable"

If, as is likely, the economy is closer to recession than resurgence, the Fed is poorly positioned to respond with force, efficacy and credibility. The Fed is vulnerable. Its recent centennial as our nation’s central bank should not be confused with its permanent acceptance in the American political system.

Capital Goods Shipments Collapse Most Since 2009 As Durable Goods Orders Bounce In July (Thanks To Revisions)

Following June's disappointing relapse in Durable Goods Orders (which was revised drastically lower), July's preliminary headline rose 4.4% (ahead of 3.4% exp) - the biggest MoM gain since Oct 2015. However, due to the revisions durable goods orders fell 6.4% year-over-year - the second big annual drop in a row. Under the hood most of the headline data beat expectations MoM but we note that Capital Goods Shipments non-defense Ex-Aircraft fell 0.4% MoM... which led to a 9.5% collapse in year-over-year orders...

Deutsche Bank CEO Warns Of "Fatal Consequences" For Savers

The CEO of Deutsche Bank unveiled a striking warning, which however, in was not aimed at his old nemesis Mario Draghi, but at Germany itself, hinting that if Deutsche Bank goes down it is taking everyone down with it, when he warned of "fatal consequences" for savers and pension plans.