• Tim Knight from...
    02/06/2016 - 00:25
    What we must remember is this: we are in a bear market, and the risk of a countertrend rally is present, but confined. The opportunity on the downside movement dwarfs the risk of a push higher, as...
  • Phoenix Capital...
    02/06/2016 - 10:15
    2008 was caused by derivatives based on consumer-focused assets (houses). The next crisis will be driven by derivatives on government-focused assets (bonds).

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"The Worst Case Scenario Is Already A Reality": Minnesota's Mining Country Is "Melting"

With all of the focus on oil, not much attention has been paid to the impact the commodities downturn has had on other things people pull out of the ground in North America. Courtesy of the Washington Post, we get an in-depth look at the dramatic effect slumping demand and acute overcapacity in China has had on one corner of America’s Heartland: Minnesota's "iron ridge."


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Obama Proposes $10/Barrell Oil Tax To Fund Government Transportation Spending

"It's a supply issue", "No, it's a demand issue" - when it comes to the cause for plunging oil prices, the two camps will surely never agree on just what is causing it. Luckily, Obama may provide just the tiebreaker.


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"HY Primary Markets Are All But Shut" - What Keeps BofA's Junk Bond Analyst Up At Night

"HY primary markets are all but shut except for very high quality issuers. And if this trend continues for a while (the probability of which in our opinion is very high), we could envision a world where enterprises, big and small, find it harder to acquire financing across all industries, leading to widespread defaults, even outside of commodities."


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Sweden: Death By Immigration

Mass immigration is continuing to claim victims in Sweden. Murder, assaults and rape have become everyday occurrences in this small country, with a population just short of ten million, which last year opened its doors to almost 163,000 immigrants. The atmosphere on Swedish social media is now almost revolutionary.


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The Real Reason For Oil's Crazy Volatility This Week

The volatility in crude oil trading has reached the highest levels since Lehman's systemic crisis in 2008. Intraday swings of 5-10% are now de rigeur with OPEC and geopolitical headlines jockeying for narrative amid collapsing fundamentals.. but there is another, much bigger driver of this sudden chaos. As Reuters reports, the sudden liquidation of a $600 million triple-levered fund bet on falling prices wreaked havoc through the entire crude complex.


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The Bond Market Is Waiting For A Further Correction In Equity Prices

While equity prices and this bond spread moved in fairly close lockstep from 2008-2013, this relationship has been diverging since the middle of 2014. The widening of this spread also doesn’t bode well for a turnaround in industrial production anytime soon.


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Why One Hedge Fund Thinks Saudi Arabia's Three Decade Old Currency Peg Will Fall In 2016

"Speculators (like hunters) sense wounded prey, and already bets are being laid on a riyal devaluation. Although it is possible Saudi Arabia can afford to maintain its oil regime and U.S. dollar peg, this will come will escalating costs, financial and political, and one suspects the Saudi citizenry is not big on sacrifices."


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S&P Downgrades Glencore To Lowest Investment Grade Rating

Overnight, one of the two rating agencies, Standard and Poors, came one step closer to that fateful moment of junking Glencore when it downgraded Glencore, however it decided to throw the company one last lifeline by keeping it at the very lowest investment grade rating, and instead of cutting it from BBB to single B or CCC where its CDS and bond yield implies the company should be trading, it kept it a BBB-.


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Is The Fed "Seriously Considering" Negative Interest Rates?

Who said it? - "If it were positive to take interest rates into negative territory I would be voting for that."


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The Full Summary Of U.S. Banks' Energy And Commodity Exposure

For all those looking for a comprehensive summary of publicly available data of the bank sector's exposure to oil and gas firms, here is Janney's comprehensive summary of US bank energy and commodity exposure, with the caveat that should depressed oil prices persist, all of these indicators will certainly be revised drastically lower as model marks have no choice but to catch up to reality.


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The Opaque Process Of Collapse

The ultimate cost of protecting the privileges of the few at the expense of the many is the dissolution of the social order that enabled the rule of the privileged few.


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How The Fed Unwittingly Confirmed A Recession And A Default Cycle Are Now Inevitable

In the fourth quarter, lending standards tightened for the second consecutive quarter.  This is problematic because as DB's Jim Reid writes, two consecutive quarters of tightening standards "has never happened before without it signalling an eventual move into recession and a notable default cycle. Once we have 2 such quarters lending standards don't net loosen again until the start of the next cycle."


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