Weekend Reading: Valuationally Challenged

As another week comes to a close, we continue to wrestle with a market that remains detached from underlying economic data and clings to recent levels of over overbought, overextended and low reward/risk outcomes. Of course, in the final stages of a bull market, this is what has historically been the case.

Putin Flies Into Crimea As Ukraine "Prepares For An Invasion"

Vladimir Putin flew into Crimea on Friday a day after staging war games there, and said he hoped Ukraine would see "common sense" when it came to resolving a diplomatic crisis over the peninsula. The visit comes a day after Ukraine president warned he was "prepares for an Russian invasion."

The Return Of The Obamacare Death Spiral

This slow exodus of insurers from the health law's marketplaces represents a serious threat to the continued stability and existence of its exchanges. Obamacare is perched on the edge of a death spiral. The fundamental problem is simple: Insurers are losing money... was that the plan all along for the Affordable Care Act?

The Marginal Buyer Holds The Pin That Pops Every Asset Bubble

The person willing to pay top dollar is called the "marginal buyer". Most of us don't really think about him much, but he (or she) is very, very important. Why? Because the marginal buyer not only determines price levels, but also their stability and degree of volatility. The behavior of the marginal buyer, as well as the degree of competition for his/her "top dog" spot, sets the prices of nearly every asset class held by today's investors.

Two More Banks Start Charging Select Clients For Holding Cash

Last weekend, when we reported that Germany's Raiffeisenbank Gmund am Tegernsee - a community bank in southern Germany - said it would start charging retail clients a fee of 0.4% on deposits of more than €100,000 we said that "now that a German banks has finally breached the retail depositor NIRP barrier, expect many more banks to follow." Not even a week later, not one but two large banks have done just that.

Inflation: It's A Wealth Redistribution Scheme

Far from maintaining economic stability and fostering prosperity, consumer price inflation targeting practically guarantees a pernicious wealth transfer year in and year out, a perpetual duping of unsuspecting employees and companies, and a permanent blind spot to hidden inflation.

Paul Tudor Jones Emerges As Latest Mega Bear With Record Surge In S&P Puts

It appears that Paul Tudor Jones is even more bearish than George Soros, based on the surge in the fund's S&P puts, which rose from $490 million notional to $1.7 billion notional, a nearly four-fold increase, and making it the biggest such position in the fund's history. In fact, as of this moment, PTJ's gross put exposure amounts to 37% of his entire disclosed long equity exposure of just over $4.7 billion.

Crude Shrugs As US Oil Rig Count Rises For 8th Straight Week

Crude prices had slipped back into the red ahead of Baker Hughes rig count data (after topping $48.50 Sept 16 overnight). For the 8th straight week (and 11 of last 12) the US oil rig count rose (up 10 to 406), tracking the lagged recovery of WTI Crude prices and up 28% from cycle lows.

Don't Count Yer Clintons Yet - It Ain't Over Till It's Over

What America has in Hillary Clinton is a potential president with the charisma but not the competence of Angela Merkel, and the ethics of Dilma Rousseff. Yet, still, on the mega-issue, America’s desire for change, and on specific issues, Trump holds something close to a full house. The coming economic news — we had 1 percent growth in the first half of 2016 — could cause a second look at Trumponomics. And whoever is out there strategically dropping Democratic emails may be readying an October surprise for Hillary Clinton, a massive document dump that buries her.

These Are The Top 50 Hedge Fund Long And Short Positions

"Even with the recent rally in the most popular long positions, the average hedge fund has returned just 3% YTD, lagging the S&P 500 for the eighth year in a row. Many active managers continue to struggle in 2016, with the average hedge fund (+3%) and large-cap core mutual fund (+7%) lagging the S&P 500. Among hedge fund styles, although most have posted similar returns, event-driven funds have fared best (+5%) while equity long/short funds trail (+2%)."

Toward Stagflation - The Real End Game For Central Banks

Norway is heading straight into stagflation and at some point Norges Bank will be forced to tighten monetary policy into a weakening economy. The world should take note, because the real end game for central banks will come when they are constrained by rising inflation in a weakening economy. We all know what happened after the 1970s stagflation; and hiking rates to 20 per cent in an overleveraged world is a lot harder than it was back then.