Archive - Nov 14, 2015

"We said, don't take what is happening in Syria lightly. Unfortunately, European officials did not listen."

U.S. stock investors may be complacent regarding the ability of the stock market to withstand higher interest rates. Their confidence may come from the fact that, historically, markets have not peaked until 12-24 months after the Fed begins to tighten. This assumes the tightening cycle begins with the first official rate hike. But if it really began with the increase in the Shadow Rate, then a December rate hike will already be 19 months into the tightening cycle! Plus, given how overvalued stocks may currently be, and the amount of corporate debt accumulated to finance share buybacks, this bull market may be far more vulnerable than most to higher interest rates.

Earlier this week, the “independent” anti-doping commission WADA found that Russia engaged in state-sponsored doping and more importantly, recommended that Russia’s track and field athletes be suspended from Olympic competition in 2016. On Friday evening, that’s exactly what happened because as WSJ reports, “track and field’s world governing body provisionally suspended Russia’s athletes from international competition indefinitely."

Roughly 21 tonnes, or 685,652 troy ounces of gold in .999 fine kilo bars, was withdrawn, net of a small deposit of 27,328 ounces, from the Brinks warehouse in Hong Kong yesterday. To put that into some perspective, that is the same amount of all gold in the entire JPM warehouse in the US. The point of this is that the price discovery in New York is becoming increasingly distinct from the actual physical supply and demand flows of bullion which are taking place in Asia... And that is a potentially dangerous development, especially with respect to a commodity that is being traded at a leverage in excess of 200:1.

One weekend. The process was not gradual. It was sudden and it was total: once it began in earnest, the banks were closed and you couldn’t get your money out (more on this in a moment).

Pope Francis said "war is madness," just over a year ago while condemning the idea of war in God's name, and today, in a succinct but notably unforgiving and emotional statement, Francis reiterated his previous warning that a "piecemeal" World War III has already begun and, as he previously stated, the international community would be justified in using force to stop what he called "unjust aggression" by Islamic State militants.

Is the post-September rally already over... or is it just getting started? The answer likely depends on what market climate we’re in now.