Archive - Nov 21, 2015

Liquidity in the junk (and all other markets) is evaporating, and according to Citi the spread between an illiquid and liquid junk bond portfolio just hit 100 bps, the most in the history of the series. Meanwhile according to Mohamed El-Erian "The market is comfortable that whenever we hit a hiccup, the Fed is going to come back in," he said. "It's very deeply embedded that central banks are our best friends forever."

Fed Speak became hawkish to telegraph to financial markets that the December meeting was a potential live meeting for a rate rise.

A fire burning in a residence on the 50th floor of the John Hancock Center in Chicago has been put out according to the city’s fire department.

The infamous John Hancock building in Chicago is on fire. CNN reports, and the following tweets show, flames visible halfway up and enormous plumes of smoke amid the freezing Illinois air. The fire is in the northeast corner of what appears to be the 50th floor of the building. The Chicago Tribune reports at least six ambulances were called to the scene. Authorities have shut down Michigan Avenue, which will be holding the Magnificent Mile Festival of Lights Parade Saturday evening.

Americans have taken on more revolving debt (credit cards basically) since March than they did the previous three years combined. Economists are, as you would expect, nearly ecstatic over the impoverishment. To them, it signals the final capitulation of consumers to that which Janet Yellen has been professing since her term began. But there is a huge problem with that view; if consumers are borrowing, what are they doing with the balances? Instead, this discontinuity can only be consistent where consumers are completely out of options. If there are noticeably fewer goods being shipped here and within here, the US, and borrowing has just exploded at the same exact time then it is rather easy to conclude far more of full recession than recovery.

Success... or?

Swap spreads recently took a nosedive and are once again trading at negative levels, even for shorter maturities. This market perversion suggest that Wall Street is a safer counterpart than the very institution that underwrites the whole fractional reserve fraud in the first place. To price in a higher risk premium on the US government than on US banks is a contradiction in terms so there need to be another explanation behind this puzzling market phenomenon... There is, and you're not going to like it.

Dear Mr. President, your country faces a stagnating economy... The truth is it is too late for our politicians to act, because the speculative peak that precedes the crisis is already upon us.

There is a widespread global campaign to eradicate physical cash. And we’ve now got a connected insider confirming it.

The global economic order is shifting beneath the feet of Washington and Tokyo as Xi marches ahead with "One Belt, One Road" and prepares to extend the first loans from the China-led development bank that embarrassed the Obama administration earlier this year. 

At this week’s close, the FANG stocks were valued at just under $1.2 trillion, meaning they have gained $450 billion of market cap or 60% during the last 11 months - even as their combined earnings for the September LTM period were up by only 13%. In a word, the gamblers are piling on to the last train out of the station. And that means look out below!

Is any of this surprising to anyone but the maniacs running the circus?

"From July through October, hedge fund favorite stocks posted their worst relative returns outside of 2008."

According to The Times, EU leaders are holding "secret" meetings to discuss the future of Europe's cherished Schengen Agreement which allows for passport-free travel within the bloc. As one unnamed diplomat put it, "the current system is simply not working."