Madness In Mario-World: European Companies Issue Debt Simply Because The ECB Will Buy That Debt

Things are so absurd in the Eurozone that the ECB is buying private placement debt with little regard for safety. In turn, private equity companies issue debt simply because they know in advance the ECB will buy it. It’s a startling example of how the market is adapting to extremes of monetary policy, and it’s a safe conclusion the experiment will not end well.

New Home Sales Soar Most Since 2007 Driven By Southern Sales Surge

While the accuracy of the new home sales data is notorious volatile, with regular revisions wiping out both up and down-side outlier prints, moments ago the Census reported that in July, the US saw a whopping 654K new home sales, up 12.4%, from the prior month and higher by 31% from a year ago, smashing expectations of a 580K print, and a -2% decline from last month's pre-revision print of 592K (since revised lower to 582K).

Richmond Fed Manufacturing Survey Collapses By Most On Record

Following flash PMI's drop, another early August indicator has collapsed as Richmond Fed's manufacturing survey plunges to -11 (lowest since Jan 2013) missing expectations of +6. The plunge from July's +10 to August's -11 is the largest on record - back to 1993.

Gilts Spike After Cover Ratio In Today's 15Y+ POMO Tumbles, BOE Buys All Bonds At Premium

While last week the UK bond market breathed a sigh of relief when the BOE found more than enough willing sellers into its longest-maturity, 15Y+ repurchase, or POMO, operation, following the uncovered operation two weeks ago, today concerns have returned anew when moments ago the BOE reported that its GBP1.170 billion repurchase operation was covered "only" 1.54x, down nearly by half from last week's 2.93x, and suggesting that supply of longer-dated gilts may once again be getting scarce.

US Manufacturing Flashes "Warning Light" As New Orders, Employment Tumble

Following the eurozone's disappointing drift lower in Manufacturing PMI (and weakness in German Services), August's US preliminary manufacturing PMI printed a disasppointing 52.1 (against expectations of 52.6). Weakness in Employment (lowest in 4 months) and New Orders underpin the drop from 52.9 to 52.1 as the 2 month hope-fueled bounce has faded...

CLSA: "The Bank Of Japan Has Nationalized The Japanese Stock Market"

The Bank of Japan's near doubling of its purchases of Tokyo shares is causing investors to worry the central bank will dominate financial markets, which could lead to price distortions as it continues to grease the economy. It also prompted a CLSA analyst to tell the truth: "The BOJ is nationalizing the stock market."

What's Wrong With This Picture? (Again)

Stocks at the high of the day, Treasury yields at the low of the day, gold at the high of the day... someone is wrong or the 'QE trade' is back...

Obamacare Is Rapidly Becoming The Poster-Child For American Inequality

The best thing about Obama (from an oligarch’s perspective), is his uncanny ability to push through upward redistributive wealth policies while still maintaining a phony aura of caring about the little guy amongst so many of his apparently lobotomized supporters.

Frontrunning: August 23

  • Dollar Drops on Rate Outlook as European Stocks Rise, Oil Falls (BBG)
  • Bank of Japan's rush into stocks raises fears of market distortions (Reuters)
  • With Moderate Drinking Under Fire, Alcohol Companies Go on Offensive (WSJ)
  • Merkel Says Brexit Is U.K.’s Loss While Pledging EU Results (BBG)
  • Turkey cuts rates for sixth straight month amid ratings worries (Reuters)

Stocks Creep Higher As Dollar Resumes Falling, Oil Slides For Second Day

While the summer doldrums continue, with little market-moving newsflow overnight and zombified volumes, US futures crept higher and European shares rose after EU PMIs printed modestly better than expected, while a return to dollar weakness pushed emerging markets higher, even if it failed to boost oil which as we noted last night was downgraded by Goldman on various fundamental reasons.

Fed Admits Another $4 Trillion In QE Will Be Needed To Offset An "Economic Shock"

"Large-scale asset purchases and forward guidance about the future path of the federal funds rate have almost no ability to offset a shock in current circumstances, but down the road may be able to provide enough additional accommodation to fully compensate for a more limited [ability] to cut short-term interest rates in some, but not all and maybe even not most, circumstances."

Who's Going To Pick Up The UK Tab?

A large part of the reason why the UK had to be such a significant net contributor was that most EU members couldn’t scrape up their “fair share.” Who’s going to pick up the tab when that flow of revenue ends?

Jim Grant: "This Will Turn Out To Be Very Bad For Many People"

"The stock market is at record highs and the bond market is acting as if this were the Great Depression... the Fed is virtually a hostage of the financial markets. When they sputter, let alone fall, the Fed frets and steps in... the Fed is justified in that belief because it is responsible to a great degree for the elevation of financial asset values... and to me, gold is a very timely way to invest in monetary disorder."

Dispelling The Norwegian Housing Myth

Recently,an economist from DnB (Norway’s largest bank) stated that Norway is not in a housing bubble although conditions resemble one and prices can still fall. The article states that a socialist country with lots of benefits can handle higher debt levels than a capitalist one. It fails to acknowledge the impact of the eroding oil foundation on the long term economy.

Follow The Money Trail For Source Of "Russian Threat" Paranoia

How much longer will the citizens of the world put up with a situation in which warmongers with ties to the military-industrial complex are allowed to stoke up international tensions? The next time you read or hear someone issue stark warnings about the “Russian threat” - and why NATO needs to hike its spending to deal with it - just follow the money trail. It’s likely to be revealing.