Archive - Dec 15, 2015

Today's stock market brought to you the number '25' and the word 'algo'...

"The U.S. troops are about to see for themselves what they're up against, and if America is serious about defeating ISIS, it will need to contribute more than guns and bullets; America's new allies will need artillery, armored vehicles and antitank weapons to match ISIS' firepower."

"As many as 60,000 homes bought off-plan in new developments in areas such as Nine Elms are scheduled for completion by the end of 2017 and many will be put up for sale immediately because of the growing disillusion with London... Of these, we believe between 50 to 60 per cent have been sold off-plan to international buyers. Therefore, it is likely that up to 30,000 properties could be returning to the market in the coming two years.”

The new normal... 1000 point swings in less than 3 trading days...

Presented with little comment.. aside to note that every rip from a dip is greeted by the mainstream stock enthusiasts as a balls-deep buying opportunity in every oil & gas stock... only to be grossly disappointed a day or two later...

Combine the rising regulatory burden with the decline of entrepreneurship, and you get a bubbling brew that is toxic to self-employment/small business.

We’ve already gotten a taste of what happens when asset classes finally “adjust” to underlying “demand” with the commodity markets: having operated based on Central Bank money printing for five years, they then wiped out ALL of those gains in six months.

Dr. Copper and Captain Crude are in significant disagreement over the state of the world... or it is just algos gone wild once again?

Money Week editor John Stepek has looked at the recent mutual fund collapse in the junk bond market and correctly warns that it is a canary in the coal mine.

This is the highest percentage of Americans to mention terrorism in a decade... So are the terrorists winning? Or the fearmongers?

Earlier today Jefferies reported another quarter in which its Fixed Income revenue could best be described as dismal: Fixed Income posted a nominal $8.4 million in revenue: a whopping 83% collapse from the already subdued $48.6 million a year ago.  The biggest irony is that while other banks are clamoring to be allowed to "prop trade" again, Jefferies which has had the green light to do just that as it never got an FDIC bailout and remains the only sizable pure-play investment bank, just got crushed precisely due to its junk bond prop trading.

If there is one chart that tells the 'truth' about the US equity 'market' it is this. Not only has breadth collapsed back to Black Monday lows (despite elevated index prices) but yesterday's exuberant rip higher diverged dramatically from a very significant drop (3 decliners for every advancer) in overall market breadth. Yes, it's Fed week, and OPEX, but the underlying support for the ponzi is waning rapidly.

Despite already record levels of "long USD", from Cable to EUR, traders are dumping everything and buying USDollars, sending the USD Index surging off overnight lows. At the same time, Treasuries are being dumped en masse with the bellyu of the curve up 15-17bps since Friday. But stocks have decoupled from USDJPY...

Where most analysis on oil markets tends to fall short is on the depth of analysis vs. reading headlines and group think, the latter of which is heavily shaped by misinformed media and government propaganda.

"For those who think Fed hikes are “good” for economic confidence, it would also be odd for the Fed to suggest, implicitly via a lowering of the dots that things were not quite so rosy. On balance the Fed therefore looks set for effectively “insisting” on their median dots – closer to a hawkish rather than dovish hike."