Why The Deep State Is Dumping Hillary

The governed are ready for a period of retrenchment, consolidation and diplomatic solutions to unwinnable conflicts, as imperfect as the peace might be to hawks. For these reasons, the more adept elements of the Deep State have no choice but to dump Hillary. Empires fall not just from defeat in war with external enemies, but from the abandonment of expansionist Imperial burdens by the domestic populace. Put another way: drones and proxies don't pay taxes.

Germany Goes There: "You Can't Compare Deutsche Bank To Lehman"

"When it's important, you have to lie," is the now well-known mantra from European leaders when the crisis hit. So when a German politician proclaims "you can’t compare Deutsche Bank with Lehman. The bank is in a position to get out of this situation on its own," it's time to panic. Just a week after the 8th anniversary of Lehman's collapse, the multi-trillion dollar derivative book of Deutsche Bank dwarfs that of Lehman... and the credit markets are starting to wake up again.

"My Order Book Is Abysmal" - Dallas Fed Contracts For 21st Straight Month

For the 21st month in a row, Dallas Fed's manufacturing outlook remains stuck in contraction (-3.7 vs -2.5 exp). This is the longest streak outside of recession in the survey's history as new orders cratered (one respondent noting "my order book is abysmal") and inventories tumbling (not good for GDP).

Hillary Clinton Unveils Guest List For Debate

With Gennifer Flowers seemingly off Trump's list, The Clinton campaign has unveiled its all-female guest list (on top of the already announced front-row seats for token male Mark Cuban).

Citi Slams "Increasingly Bizarre" Presidential Race As Morgan Stanley Unveils Trump "Contingency Plans"

Citi said that its "base case is for a Clinton victory and mostly continuity in policies, which would leave U.S. and global growth expectations relatively unchanged,” while describing the U.S. contest as “increasingly bizarre.” Bizarre or not, earlier this morning Morgan Stanley, whose base case is still a Clinton victory has presented several "contingency planning" scenarios in case Trump does win.

New Home Sales Tumble As Prices Hit 2-Year Lows

Following July's exuberant spike, August saw new home sales tumbled 7.6% MoM (better than expected 8.3% drop) catching down to Existing and Pending Home Sales (and Housing Starts) plunge. Perhaps more problematic, the median new home price slipped to $284k, its lowest since September 2014. Probably a good time to hike interest rates...

Key Events In The Coming Extremely Busy Week

The week ahead is striking in the sheer number of central bank speakers, but with the Fed on hold until December and the BoJ’s new framework now revealed, focus turns squarely from central banks to US politics. The first US presidential debate at the start of the week will be a key focus.

US Slams Russian "Barbarism" In Syria; Moscow Responds Peace "Almost Impossible Now"

Just three weeks after yet another "landmark" Syria peace deal was signed, the agreement is not only in tatters but the war drums are beating louder than ever before after the US slammed Russia's action in Syria as "barbarism," not counter-terrorism, while Moscow's U.N. envoy said ending the war "is almost an impossible task now" as Syrian government forces, backed by Moscow, bombed the city of Aleppo.

A Crashing Deutsche Bank Scrambles To Assure Markets That It Is "Fine"

 "I don’t buy at all what’s coming out of Germany in terms of Germany not wanting to step in ultimately if Deutsche Bank was really in trouble" said Andreas Utermann, Allianz Global Investors’ chief investment officer. "Deutsche Bank is “too important for the German economy.”

Frontrunning: September 26

  • Stocks Drop on Bank, Commodity Company Woes; Turkish Lira Falls (BBG)
  • Clinton and Trump to square off in highly anticipated debate showdown (Reuters)
  • Profit Slump for S&P 500 Heads for a Sixth Straight Quarter  (WSJ)
  • Oil rises as OPEC meets, volatility hits post-Doha high (Reuters)
  • Deutsche Bank Slumps to Fresh Record Low on Capital Concerns (BBG)
  • Police Videos Fail to Quiet Protests in Charlotte (WSJ)

Turkey Lashes Out At Moody's After Downgrade To "Junk" Sends Turkish Assets Plunging

Turkish assets plummeted the most since an attempted coup in July and credit risk climbed after Moody’s Investors Service cut the country’s sovereign rating to junk. The immediate response by the Turkish administration was to lash out at Moody's calling the decision "politically-motivated", after a similar downgrade by S&P led Erdogan to acuse the agency of siding with coup plotters.

Global Stocks Tumble, US Futures Slide On Deutsche Bank Fears, Central Bank And Commodity Concerns

While today's biggest event for both markets and politics will be tonight's highly anticipated first presidential debate between Trump and Hillary, markets are waking up to some early turmoil in both Asia and Europe, with declines in banks and energy producers dragging down stock-markets around the world, pushing investors to once again seek the safety of government bonds and the yen.

Deutsche Bank Stock Plunges To All Time Low After Merkel Rules Out State Bailout; Default Risk Surges

As reported over the weekend, in an unexpected announcement Angela Merkel announced that she has ruled out state aid for Deutsche Bank, and the market reaction has been swift and brutal, with the bank's shares tumbling to a new all time low, sliding more than 6% this morning to €10.70, as the company's default risk has soared higher and is now the widest name in the Markit iTraxx index.