"it seems reasonable to judge that the Fed’s current political situation is more parlous than is the case among its overseas counterparts. For all of the above reasons, we believe the hurdle for NIRP in the US is quite high, and we would need to see recession-like conditions before the Fed seriously considered this option."
And you thought Greece was "fixed"...
The political class has completely disrupted the American structure of production, made American workers uncompetitive, snuffed the life out of entrepreneurs, and burdened the entire nation with a debt obligation the size of Jupiter. The US economy is not the strongest and most durable in the world — it is an unskilled thirty-two-year-old waiter crashing at his parent’s place and trying to pay down an $80,000 international relations degree.
The bid for precious metals is accelerating. Gold just broke above its October 2015 highs to 8-month highs. Silver is also bursting higher, soaring above its 200-day moving-average.
With China celebrating the Lunar New Year and offline until next weekend, and with the US in the usual post-payrolls macro newsflow lull, the markets will have more than enough time to stew in the latest source of contagion fears, namely Europe, the same Europe which until recently was fixed but is broken all over again.
FANG stocks are collapsing in the pre-market as faith in the "growth at any cost" meme crashing on the shores of reality once again. Now down over 16% from their post-Fed-rate-hike highs, the stocks you should never sell are being sold in size as large crowds and small doors press NFLX and AMZN (and TSLA for good measure) down over 30% year-to-date. Even Mark Cuban is hedging...
The saga of the gas giant Aubrey McClendon's built, Chesapeake Energy, enters its endgame, when moments ago following a Debtwire report that the company has hired Kirkland and Ellis as its restructuring/bankruptcy attorney - typically a step taken just weeks ahead of a formal Chapter 11 filing - the stock has plunged 22% to $2.40, the lowest price in the 21st century, and for all intents and purposes, ever.
"The biases of momentum investing and passive indexation have resulted in valuation distortions across assets as well as equity segments including Technology. Over the past years this trend has picked winning assets, sectors, and stocks often with less regard to fundamental valuation and more regard to momentum and extrapolated growth. We believe that 2016 may result in a reversion of this trend.... Even if this rebalancing comes as a result of market volatility and broader equity declines, long term it will benefit capital markets and the efficient allocation of capital."
Gold is now up over 13% from its pre-Fed rate-hike lows, having surged through its 200-day moving average by the most in 2 years. As bank risk spikes globally, it appears bonds & bullion are the investment of choice once again in the face of systemic fragility concerns. At 4-month highs, gold is nearing a crucial breakout point...
There is a new element to the latest European selloff, one which turned vicious just minutes after Europe opened for trading this morning with not just commercial banks (who are now all subject to bail-ins courtesy of the BRRD) being dumped with the Deutsche Bank water, but peripheral spreads and equity markets have all joined in. And moments ago, the Athens stock market just dropped to the lowest level since 1990, while the Greek banking index just crashed over 21% to a new all time low.
For the first time since 2012, Bafin - Germany’s banking regulator, which for a minute looked like it might actually accuse Anshu Jain of lying about LIBOR - has closed a bank. All financial transactions by Maple Bank of Canada’s German subsidiary have been halted due to "imminent over indebtedness."
- European stocks plunge as Lunar New Year offers no cheer (Reuters)
- European Stocks Fall, Credit Weakens as Signs of Distress Abound (BBG)
- Management trouble at world's biggest hedge fund: Bridgewater succession plan in flux as heir Greg Jensen steps back (FT)
- U.S. athletes should consider not attending Olympics if fear Zika - officials (Reuters)
- Geithner Gets JPMorgan Credit Line to Invest With Warburg Pincus (BBG)
- Top Clinton Donor Wants a Law Against $1 Million Gifts Like His (BBG)
Everything went from bad to worse once Europe opened, and things started going "bump in the morning" across the European banking sector, where not only has it been more of the same with CDS spreads for major banks - most notably Deutsche Bank - continuing their surge wider, but also EM spreads to Bunds all following, with the Portugal-Germany Yield spread blowing out above 300 bps for the first time since 2014, and other peripheral nations following.