• Sprott Money
    05/26/2016 - 05:58
    How many “emergency” “secret” meetings do the central planners around the world need to have before the citizens of the respective countries begin to fully understand and take notice that something...

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Chasing Yield Into Minefields

Fed policies are directly responsible for ballooning the systemic risk in the financial and socioeconomic landscape. Not just pensions but actual individual retirees are facing the very same dilemma. For those lucky enough to still have a nest egg after the last two bubble crashes they are forced to venture further out onto the risk continuum. But there must be some upside to the ZIRP policies to offset the almost unmanageable amount of resultant risk, right? I mean these policies are meant to help the average American not hurt them, correct??


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Add It Up... And It Doesn't Add Up

Continuing deceleration of population growth offset by rate cuts incentivizing ever greater debt loads (with continually underperforming GDP) was the central banks only play. And now as population growth and decelerating demand really begin to wane...the playbook is basically exhausted save for one play...simply print money with which to buy and "permanently retire" those assets. Think Treasury's, think MBS, think equity's...think anything that can be digitally created and digitally destroyed all to perpetually shrink the outstanding float (think perpetual short squeeze). How long this can maintain asset values northward march in the face of the populations southward divergence is anybody's guess.


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Erdogan Halts European Refugee Deal After Merkel Snub, Says Turkey Has Other Options

Following Monday's visa snub by Merkel, Turkey's president said he would not take any steps regarding the implementation of migrant readmission until progress was made on visa liberalization. He also said funds that the EU had promised to pay Ankara for taking back refugees had not been paid.  Turkey added it is not worried if a decision cannot be reached, with Ankara’s new EU affairs minister saying that the EU was not the "sole option." 


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Downtown Seattle Hit By Widespread Power Outage

France may go dark tomorrow, but for residents of downtown Seattle elevators ground to a halt and lights went out across downtown Seattle late Wednesday morning as a major power outage struck. According to Komo News, the outage struck at about 11:30 a.m. The cause of the disruption was an equipment failure at Massachusetts Street Substation and was expected to last about two hours, according to Seattle City Light.


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The Two 'Faces' Of The Democratic Party

Presented with no comment...


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Monetary Lunacy: The ECB Could End Up Funding Bayer's Purchase Of Monsanto

Today we find an even more striking example of just how broken the global bond market has become thanks to the ECB because as Reuters writes, Bayer could receive financing from none other than the European Central Bank to help fund its takeover of the world's largest seed company, US-based Monsanto, according to the terms of the ECB's bond-buying program.


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Hillary Responds To Damaging State Department Report

CLINTON SPOKESMAN SAYS INSPECTOR GENERAL'S REPORT SHOWS CLINTON'S EMAIL PRACTICES CONSISTENT WITH THAT OF FORMER SECRETARIES OF STATE


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A Non-Random Straight-Line Walk Up Wall Street

Malkiel would be shocked...


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Myopic Markets & The Looming Mall REITs Massacre

While markets are myopically co-moving to the siren songs of Fed hawks and doves, deteriorating fundamentals are becoming harder to ignore. Like wildfires, it’s hard to predict how quickly and where market panic will spread to next. However, the chain-reaction of peak consumer credit growth, softening retail sales, and tightening credit conditions does not bode well for REITs going forward.


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France Goes Dark? Staff In 19 French Nuclear Power Plants To Go On Strike Tomorrow

Following strikes over the unpopular French labor reform, that started over the weekend and crippled the French refining industry leading to gasoline shortages and rationing, things are about to get far more serious for the country whose economy has already been threatened with a sharp slowdown as a result of a relentless wave of labor unrest. According to Reuters, staff in France's 19 nuclear plants - which by definition we assume is essential - have voted to go on strike on Thursday as part of protests over a labour reform, according to a CGT union official.


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Detroit, Fresh Out Of Bankruptcy, Discovers $195M Pension Shortfall

On December 10, 2014 the city of Detroit exited bankruptcy. It was the largest municipal bankruptcy in US history. The bondholders were totally screwed in favor of the pensioners (not that I generally like bondholders). Regardless, everything was supposed to be fixed. It wasn’t.


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Nigeria Currency Devaluation Looms As FX Forwards Crash To Record Lows

Despite US equity investors' exuberance over bouncing crude oil prices, the world's crude producers continue to suffer and while Venezuela is in the headlines every day (having already collapsed into chaos), Nigeria appears the nearest to that abyss next. Having urged investors "don't panic" last year, and seeing dollar reserves drying up rapidly earlier this year, recent "lies" about the nation's statistics have raised fears of a looming devaluation as FX forwards have crashed to 291 Naira to the dollar (current peg is 199).


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Another Blistering Auction: Foreign Central Banks Just Can't Get Enough Of 5Y Paper

Following yesterday's surprisingly strong 2 Year auction, the US Treasury pulled off another blistering auction when moments ago it sold $34 billion in 5 year paper (Cusip R77), at a high yield of 1.395%, stopping through the when issued by 0.8 bps, a surprising outcome following two consecutive tailing auctions, with a Bid to Cover of 2.60, the highest since November 2014. Incidentally, the yield of 1.395% was lower than last month's 1.41% when June rate hike odds were in the single digits.


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Why Cheap Shale Gas Will End Soon

Enthusiasts believe that shale gas is simultaneously cheap, abundant and profitable thus defying all rules of business and economics. That is magical thinking.


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