Archive - Nov 2015

As the USDollar surges ahead this morning - crushing the hopes and hupes of corporate earnings in America - so precious metals are being battered once again. Silver is now down for the 9th consecutive day - the longest streak in 8 months; and Gold is down again (after a brief reprieve yesterday) to its lowest levels in 3 months.

On the heels of Washington's move to send a guided missile destroyer to Subi Reef, Beijing has now moved its fighter jets closer to the Spratlys in what certainly looks like an effort to "deter" any further "meddling" by the US and its regional allies. 

It appears the stop sbelow yesterday's lows (following The ECB's jawboning of "big cuts" in rates) have been run, sparking a 40 pip waterfall to a 1.06 handle in EURUSD (and there are more ECB speakers to come). These are 7-month lows in EURUSD and are pressing The USD Index to break April's highs.

The Valeant drama continues, and one day after Bill Ackman hosted another desperate call to convince LPs in his fund not to submit redemption requests following a $2+ billion loss on his VRX investment (and maybe buy a little here and there), here comes Valeant itself which in a few moments will provide a "business update for investors on a conference call to be held Tuesday, November 10, 2015 at 8:00 a.m. ET."

"Using a dataset on developed market business cycles, we calculate that the unconditional odds that a six-year-old expansion will avoid recession for another four years—and mature into a 10-year-old expansion—are about 60%."

The cobasis briefly peaked around 11% (from around 0.5% previously).

• Bonds Rise as China Drags Down Metals, Selloff in Stocks Resumes (BBG)
• European Stock Rally Runs Out of Steam Amid China Growth Concern (BBG)
• Obama's immigration action blocked again; Supreme Court only option left (Reuters)
• Ukraine: Cyberwar’s Hottest Front (WSJ)
• With $170.4 Million Sale at Auction, Modigliani Work Joins Rarefied Nine-Figure Club (NYT)
• IEA Sees OPEC Market Share Growth in 2020 as Rivals Stagnate (BBG)

The ongoing failure of China to achieve any stabilization in its economy, after already cutting interest rates six times in the past year, and the prospect of a U.S. interest rate hike in December, had made markets increasingly jittery and worried which is not only why the S&P 500 Index had its biggest drop in a month, but thanks to the soaring dollar emerging market stocks are falling for a fourth day - led by China - bringing their decline in that period to almost 4 percent, and the global stock index down for a 5th consecutive day.

Those who choose to distance themselves (and their wealth – however large or small) geographically from the centre of the hurricane will fare best.

A busy night in Asia began with a total collapse in Philippines Exports (-24.7% YoY - the biggest miss since Lehman). This was quickly followed by a 0.3% drop (deflation) in CPI MoM (thanks to a drop in pork -1.9%, eggs -6.9%, and veggies -5.6%) which sparked buying in stocks (because moar stimulus). Chatter of a few large fund houses under investigation stymied the rally quickly but as nobody was summoned stocks recovered, then rallied strongly back into the green on renewed chatter of Stock Connect occurring sooner than expected. With CSI-300 (China's S&P 500), up at the break, this is the longest winning streak since the peak of the bubble in May. And finally Shanghai Copper and Nickel tumbled to new multi-year lows, dragging Bloomberg's Commodity Index to fresh 16-year lows.

JS Kim Issues Critical Warning About Newly Introduced Global Banking "Gold Programs". Could Bankers Be Duping Us into Yet Another One of Their Reverse Alchemy Schemes?

Free speech is not something that people would normally see as a realm of economics, but in many ways, an economic understanding of the support and opposition to free speech can shed a lot of light on what’s happening now in the West.

Are we in for another nuclear standoff with the Kremlin?