Debt, Deficits & Economic Warnings

The processes that fueled the economic growth over the last 30 years are now beginning to run in reverse, and when combined with the demographic shifts in the U.S., the impact could be far more immediate and prolonged than the media, economists and analysts are currently expecting...It is simply a function of the math.

Michael Lewitt: "We're In The Late Stages of Ponzi Finance"

“They’ve tried to solve the debt crisis by printing trillions of dollars of more debt, and somehow they expect the economy to grow under the weight of those burdens. We’re just borrowing new money to pay back old money. I would say that we’re in the late stages of Ponzi finance.”

Stanley Fischer's Bizarre Justification For Negative Rates

"Well, clearly there are different responses to negative rates. If you’re a saver, they’re very difficult to deal with and to accept, although typically they go along with quite decent equity prices. But we consider all that and we have to make trade-offs in economics all the time and the idea is the lower the interest rate the better it is for investors."

Oil Extends Losses After Big Distillates Inventory Build

After last week's surprise crude build (biggest in ~4 months) and builds across the entire complex, API reported a crude build of 942k barreles (just shy of expectations of +1.5mm) and while Cushing and Gasoline saw draws, Distillates saw a major 3mm barrel build (+275k exp). The initial reaction in crude was to extend the day's losses, back below $46.50...

Obama Admits 10,000 Syrian Refugees: This Is Where They Are Headed

Yesterday, the White House announced that the US had met President Obama’s goal of admitting 10,000 Syrian refugees into the country; it did so ahead of schedule.  So where are they going: the top state destination for refugee influx are the states of Michigan and California.

What Really Happened Among The Ja'ss Holes?

“We still have plenty of tools,” remarked a spokesperson: “Janet Yellen, Mark Carney, Andy Haldane, Mario Draghi – does any remote, unelected bureaucracy anywhere in the world have a bigger set of tools?”

Deutsche Bank Calculates How Much Of The S&P's Value Is Due To Central Banks

If the ERP is responsible for 92% of the S&P500 move since 2012, or just over 800 points, that would imply that central bank policies are directly responsible for approximately 40% of the "value" in the market; any moves to undo this support could result in a drop that leaves the S&P in the neighborhood of ~1,400.

ICI Lists Three Ways The Market Is "Weird"

  • Eequity Capital Markets volume is down ~50%, we’re in our 10th straight month of down y/y volume
  • PE funds are doing more selling vs IPO'ing lately and block trades are 3x their normal percentage of secondary volume as sellers look to take the money and run 
  • Several industries (like energy, biotech/health care and parts of technology) have been lesser participants

After Its "Predatory Tax Grab", Europe Prepares Crackdown On Amazon, McDonald's

With Europe desperate to boost its dwindling public coffers and only starting tits anti-tax avoidance campaign, AAPL is only the start in the European Commission's crackdown.  As the WSJ writes, following today's ruling that Apple got an unfair advantage over its competitors because of help it got from Ireland government’s, the EU’s antitrust regulator is likely next to turn to two other ongoing tax investigations on its docket: Amazon.com and McDonald's.

(Too) Great Expectations

While there are many things to 'worry' about in today's markets, there is one "great expectation" that it appears everyone is dreaming about...