Archive - Nov 17, 2015

According to Bank of America, the smart money is taking advantage of this latest rebound in stocks to sell to who else: the traditionally biggest sucker in the room - retail investors.

The bloodbath in hedge fund hotel SunEdison continues but judging by the massive volumes this is those same funds liquidating en masse (following Dan Loeb's exit and Einhorns' negative comments)... Down 57% in the last week alone, SUNE is back at levels where it cliff-dived in 2012...

Brazil is expected to increase oil production by 180,000 barrels per day in 2015, hitting 3.04 million barrels per day (mb/d). But 2016 is a different story. Petrobras has been embroiled in a corruption scandal since last year, which has cost the company tens of billions of dollars. Given that Petrobras was already the most indebted oil company in the world, major cut backs in spending were in order. OPEC sees Brazilian oil production plateauing as soon as next year. That is a pretty significant development considering the fact that, not too long ago, Petrobras thought output would continue rising rapidly through the rest of the decade.

False Flag? Light-Skinned, Clean-Shaven ISIS Jihadis Who Went Undercover To Carry Out The Terrorist Attack?  Or Homegrown Terrorists?

The precious metal pummeling continues... Which is odd given the near-record physical demand...

Editor’s Note: Last week gold price fell to 5 year lows and weakness again saw canny buyers accumulate on the dip. Sales of U.S. Mint gold coins jumped the most in nearly three months. The 2015 $10 American Gold Eagles actually sold out.

First it was Texas. Then five other states - Louisiana, Alabama, Arkansas, Indiana, and Michigan - followed in refusing to admit any Syrian refugees. It has since became an avalanche, and at last check, at least 27 states - represented by more than half the nation's governors - say they oppose letting Syrian refugees into their states.

Ten years after Symantec paid $13.5bn for Veritas, Carlyle Group agreed in August to buy the data-storage business for just $8 billion (the biggest LBO of the year). Of course, the buyout deal made sense when the cost of funding was negligible and The Fed had your back but, as Bloomberg reports, amid soaring borrowing costs, banks have pulled the $5.5 billion debt offering for Veritas signaling a clear end to the reach-for-yield, nothing is a problem, bond market's risk appetite.. and if 'growthy' deals like this are being killed, what does that say for distressed bets on Energy M&A deals?

Once again, the expected outcome of the most recent wave of deterioration in market internals will likely depend on one’s view of the current market regime. Are we in an environment that can continue to largely dismiss these breadth warnings, ala the late 1990?s? Or are stocks fated to eventually succumb to the weakening internal foundation as in the post-2000 period?

The Trade-Weighted US Dollar has risen almost 19% over the past 18 months - the fastest pace of increase on record - and is now at its highest level since 2003. As we noted previously, this is not unequivocally good for American corporate profits... and if you believe The Fed's Stan Fischer - the worst effects of this soaring exchange rate are yet to come... Most of the impact of exchange rate moves come after that first year. So we’re only just getting into the business end of the impact of the dollar’s strength on the US economy. And the Fed are about to hike?

This is the REAL picture of the global economy. It isn’t what CNBC and the talking heads tell you. It is economic collapse.

The current world-system (call it whatever you like--cartel-crony neoliberal-state capitalism, etc.) is as doomed as the Titanic, for the same reasons: the design of the system is the source of its failure.

Count us incredulous at this point (and we're sure we aren't the only ones), but it looks as there has been yet another explosion at a Chinese chemical facility, this time in Liaoning.

While there are many that continue to dismiss individual "economic data points" in order to promote a "bullish bias" for the equity markets, it is more important to accumulate the "weight of evidence." The rising inventory levels, weak consumption, and plunging imports all suggest that the domestic consumer is much weaker than currently believed. The last time this combination of data points collided was just prior to the start of the last recession. But then again, this is where "economic theory" collides with "Main Street realities." Place your bets carefully.

"Today we close our last remaining Top Trade recommendation to be short EUR/$ via a 1.00 – 0.95 put spread (initially struck at 1.20-1.15 with spot at 1.25), which expires out of the money incurring a loss of premium."