May 30th, 2015
There have been 21 quarters since 1960 in which corporate profits were down notably from recent highs at the same time as stocks were making new highs. Without going into great depth of analysis, one can tell by the inauspicious dates that these circumstances have not worked out well in the past... the average drawdown over the 2 years following these quarters was -18.6%.
The man who gave America "Hope", the poster, says he has none left.
Greece still has one card left to play in fractious negotiations with creditors: the so-called 'Russian pivot'. Over the course of difficult talks between Syriza and the troika Moscow has, at various times, sought to take advantage of the hostilities between Athens and Brussels by making a series of overtures including the possibility of Greece joining the BRICS bank. Now, at least one Greek official says the country will likely accept the invite.
What happens if the Fed actually stop reinvesting TSY holdings after they reach lift-off? Net supply will on the private market will increase accordingly and market volatility will force the FOMC to reassess their fleeting exit strategy...again
You can’t build a solid economy on the jelly of unaffordable housing, unpayable debts, and unsustainable asset prices. But that’s what we’ve got. The only way to get down to something more reliable... more real... and healthier... is to wash away the financial glop and goo that has accumulated during the last 30 years.
In simple terms, if the system is ever under duress again, money market funds can lock in capital (meaning you can’t get your money out) for up to 10 days. This is just the start of a much larger strategy by the Fed to declare War on Cash.
Game theorists know that a Plan A is never enough. One must also develop and put forward a credible Plan B – the implied threat that drives forward negotiations on Plan A. Greece’s finance minister, Yanis Varoufakis, knows this very well. Many people in Europe seem to believe that Varoufakis, an experienced game theorist but a political neophyte, does not know how to play the cards that Greece has been dealt. They should think again – before Greece walks away with the pot.
Successive rounds of government bond monetization have worked to destroy the Treasury, JGB, and EU core markets while the post-crisis regulatory regime has seen dealers back away from providing liquity in the secondary market for corporate credit just as the very same monetary policy that broke government bond markets has led to an explosion of new issuance from corporate borrowers, creating the potential for a self-feeding catastrophe in the event of selloff in corporate bonds.
The primary job of modern American regulators is to protect entrenched status quo interests. Protecting the public doesn’t even factor into the equation.
Just days after David Cameron's "I promise a referendum" victory in the British elections, which JPMorgan warns now looks likely to happen as early as 2016, France's far-right National Front party has called for an in/out referendum on the EU at the same time as the UK holds its vote. As EUObserver reports, Florian Philippot, an MEP and the party’s deputy head wrote to French President Francois Hollande this week, "the time has come to ask everybody in Europe Yes or No - if they want sovereignty to decide on their own future."
Combination of important events/data and large move in last two weeks, the dollar may pullback/consolidate in the days ahead.
Now what? The Fed says they are going to raise rates. The QE spigot has been turned off. The hedge funds are selling their buy and rent hovel investments, cash buyers are dwindling, the flippers who appeared in 2005 are back, Boomers are looking to sell and downsize, young people are already in debt up to their eyeballs thanks to the government doling out student loans like candy, the number of full-time good paying jobs continue to dwindle, and the rigged 37% price increase has priced millions of people out of the market.
Warren Buffet isn’t one of the richest men in the world with the flair for making a fast buck or two for nothing.
Meet Gulmurod Khalimov, the US-trained and funded former commander of Tajikistan's special forces, who, as Reuters reports, has now gone to Syria to fight with ISIS. He has a message: "Listen, you American pigs, I’ve been three times to America, and I saw how you train fighters to kill Muslims...God willing, I will come with this weapon to your cities, your homes, and we will kill you." The big question is - was he 'recorded' as a moderate when America considered funding and training his elite special forces unit?