Archive - Jun 21, 2013

CalibratedConfidence's picture

Moral Hazards And Dangers To Market Stability





Now, after the Fed's generosity caused by "a decoupling of the 'real' economy from the financial economy with its lavish creation of fictitious wealth...

 

Tyler Durden's picture

Guest Post: Everything Is Being Sold





Global financial markets are now in a very perilous state, and there is a much higher than normal chance of a crash. Bernanke's recent statement revealed just how large a role speculation had played in the prices of nearly everything, and now there is a mad dash for cash taking place all over the world. Collectively, the move away from commodities, bonds, and equities in all markets globally tells us that there's nowhere to hide and that this is a 2008-style dash for cash. Everything is being sold, as it must, to meet margin calls, pay down leverage, and get out of positions; all are signs of the end of a speculative phase.

 

Tyler Durden's picture

Marc Faber: "Believing In Bernanke Is Like Believing In Santa Claus"





"If you believe that [Bernanke] means what he says," explains Gloom, Boom, and Doom's Marc Faber to a spell-bound Trish Regan on Bloomberg TV, "then you believe in Father Christmas." Simply out, Faber adds, "we are going to see QE99," and while he notes that equities, bonds, and gold are "very oversold," he would "rather buy bonds and gold than equities." From his views on Laszlo Birinyi to inflation, the 'taper', US housing, and China, Faber calmly warns that "the S&P could drop 20-30% from the recent highs - easily."

"The only thing that I know is that I want to own some physical gold because I don't want all of my assets in financial assets."

"I am not a prophet, I don't know exactly where the price will be on a month by month basis, but I want to have some wealth, some of my assets in physical gold. I can see a lot of problems coming into the world including expropriation through taxation or through regulation or even through revolution and social strife."

 

 

Tyler Durden's picture

The Waste List: 66 Ways The U.S. Government Is Blowing Your Hard-Earned Money





Why did the U.S. government spend 2.6 million dollars to train Chinese prostitutes to drink responsibly?  Why did the U.S. government spend $175,587 "to determine if cocaine makes Japanese quail engage in sexually risky behavior"?  Why did the U.S. government spend nearly a million dollars on a new soccer field for detainees being held at Guantanamo Bay?  This week when we saw that the IRS was about to pay out 70 million dollars in bonuses to their employees and that the U.S. government was going to be leaving 7 billion dollars worth of military equipment behind in Afghanistan, it caused us to reflect on all of the other crazy ways that the government has been wasting our money in recent years.  So we decided to go back through my previous articles and put together a list.  We call it "The Waste List".

 

Tyler Durden's picture

US Asks Hong Kong To Detain Snowden On Charges Of Spying





The United States has asked Hong Kong to detain Edward Snowden on a provisional arrest warrant after filing a sealed criminal complaint alleging espionage, theft, and conversion of government property. As The Washington Post reports, the complaint was filed in the Eastern District of Virginia - where Snowden's former employer Booz Allen is headquartered:

  • *U.S. CHARGES SNOWDEN IN SEALED COMPLAINT IN NSA LEAK, POST SAYS
  • *U.S. SAID TO CHARGE SNOWDEN IN NSA SURVEILLANCE DISCLOSURES

While there was really little doubt that the Justice Department would seek to prosecute Snowden over the leaks, the district chosen, according to WaPo, has a long track-record of prosecuting cases with national security implications; and while Honk Kong does have an extradition treaty with the US, there are exceptions for political offenses.

 

George Washington's picture

NSA Whistleblower: NSA Illegally Spied On Top Generals, All Supreme Court Justices, White House Spokesman





Source of 2005 New York Times Spying Expose Says Spy Agency Targeting Highest-Level American Leaders

 

Tyler Durden's picture

Peter Schiff And The Untapering "Waiting for Godot" Era





The mere mention that tapering was even possible, combined with the Chairman's fairly sunny disposition (perhaps caused by the realization that the real mess will likely be his successor's problem to clean up) was enough to convince the market that the post-QE world was at hand. This conclusion is wrong. Although many haven't yet realized it, the financial markets are stuck in a "Waiting for Godot" era in which the change in policy that all are straining to see, will never in fact arrive. Most fail to grasp the degree to which the "recovery" will stall without the $85 billion per month that the Fed is currently pumping into the economy.  Of course, when the Fed is forced to make this concession, it should be obvious to a critical mass that the recovery is a sham.

 

Tyler Durden's picture

The Illustrated History Of High Yield





Buybacks, dividends, and M&A all depend on firms' abilities to borrow cheap. With leverage ratios rising (and micro fundamentals weakening) as we noted here, macro fundamentals deteriorating, and the visible hand of the Fed now lifting off the repressed neck of risk managers, we have a simple question - What Happens Next? Simply put, your glowing stocks cannot rally in a world of surging debt finance costs.

 

Tyler Durden's picture

Friday Humor #2: Adding Real, Present-Day People To Old Movie Scripts





Paul Krugman meets Hannibal Lecter, Barack Obama stymies E.T., Ben Bernanke advises H.I. McDunnough, and more...

 

Tyler Durden's picture

QBAMCO: "Authorities Must Answer To The True Power - The Marketplace"





That pesky marketplace (Bernanke vs Obama) - a political fable...

Moral: When the financial markets no longer reflect the human condition, authorities must answer to true power – the marketplace.

 

Tyler Durden's picture

The Week That Was: June 17th - June 21st 2013





Succinctly summarizing the positive and negative news, data, and market events of the week...

 

Pivotfarm's picture

Eurozone Banks: Confidence Gone!





As if the Greeks don’t have enough to deal with right now with their country cut off from the benefits of a national television and radio station. What is it they say in the UK? Something like ‘when it rains it pours’.

 

Tyler Durden's picture

Treasuries' Worst Week In 50 Years; Stocks Worst Week In 2013





5Y yields rose a stunning 37% this week - the most in the 50 year record of Bloomberg data. The 38bps increase in yields is also among the worst absolute shifts over that period but off such low levels it is quite a shock. Credit markets saw hedge protection bought early on in the week and then covered as real money started to sell their bonds on the back of redemptions in the last two days. The high-yield bond ETF had its biggest weekly loss in 13 months (notably clinging to the Lehman ledge levels). Equity markets suffered too (down 3.5 to 4.0% from the FOMC) with the S&P's worst week of the year (even as it bounced off its 100DMA). Most sectors hung around the 3-4% drop but homebuilders are down over 8% since the FOMC. The USD surged over 2.1% on the week with JPY's worst week in 43 months. VIX ended the day down 1.7 vols at 18.8% but beware as OPEX and hedge unwinds into underlying covers seems prevalent. Gold's worst week in 21 months left it back under $1300.

 

 

Tyler Durden's picture

The Macro-Market Three-Legged Stool





Until the great-and-powerful Ben pronounced the Taper, US Treasury bonds had tracked the deteriorating macro fundamentals of this 'recovery' rather well. In the few weeks since, the squeeze has hit and yields have played catch up to equity's exuberance. However, now that the two asset classes have recoupled in the less-supported world, the question is, which of the three legs of reality - equities, bonds, or fundamentals - will move next?

 
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