Archive - Aug 24, 2015

Blink and you missed it. With stocks surging back to green and CNBC celebrating, one could be forgiven (were on a goldfish) for believing everything is truly awesome again. However, as Deutsche Bank details, there are ten good reasons why this is far from over...

Well that un-escalated quickly...

If the Fed was hoping to get the retail investor back and buying in the market to allow the hedge funds, institutions and private clients who are all selling at unprecedented levels it may have to come up with a different strategy than today's flash crash rerun.

So now comes the era of gluts, shrinking profits and a drastic deflation of the giant financial bubble that the world’s central banks have so foolishly generated. And this time they will be powerless to stop the carnage. Yet the beleaguered central bankers will launch desperate verbal and market manipulation ploys to brake the current sell-off and thereby preserve the bloodied remnants of their handiwork.  When in response the gamblers make their eighth run at buying a dip that is now rapidly turning into a crater, it will be an excellent time to sell anything in the casino that isn’t nailed down.

Thanks to the SEC's ignorance of seemingly illegal exchanges of information between Jim Cramer and Tim Cook - everything is awesome again...

Translation: the Fed is not data dependent, but it is, as we have said all along, entirely market dependent.

During the flash crash of May 6, 2010, the 1000 plunge in the Dow Jones seems historic, unprecedented and surely unrepeatable - after all the regulators had "learned their lesson" and would never allow a move like this ever again, right? Wrong.

Following the recent broad market selloff which has taken all US stock indices into the red for 2015 and in some cases, red for the past 52 weeks, the real question traders should be asking themselves now that the power and potentcy of central bank intervention is increasingly questioned is whether stocks are now fundamentally cheap or at least, "fairly" valued. The answer, as SocGen's Andy Lapthorne points out, is a resounding no.

The S&P Energy sector ETF - XLE - collapsed at the open to its lowest since October 2011... Of course, this should come as no surprise whatsover to those who watch credit...

It might be time for sellside FX strategists to reconsider their position that the Saudi currency regime isn’t likely to change anytime soon...

With 4,500 'crash' events this morning, we thought it worth surveying some of the carnage that 'liquidity-providing' high-frequency scapegoats left in their wake at the open.

While CNBC is crowing that Dow down 420 points is the new 'up', Donald Trump has a warning for all Americans...

Plenty amongst you will be talking about economic cycles, and opportunities, and debate how to ‘play’ the crash, but all this is useless if and when a market doesn’t function. And just about all markets in the richer part of the world stopped functioning when central banks started buying assets. That’s when you stopped being investors. And when market strategies stopped making sense. Central banks will come up with more, much more, ‘stimulus’, but what China teaches us today is that we’re woefully close to the moment when central banks will lose the faith and trust of everyone. After injecting tens of billions of dollars in markets, which thereby ceased to function, the global economy is in a bigger mess then it was prior to QE. The whole thing is one big bubble now, and we know what invariably happens to those.

Curious why few if any traders can actually execute any trades, whether buys or sells? The reason is that despite the relative calmness of the index prints, what is going on beneath the surface is an unprecedented wave of constant halt and unhalts, making it virutally impossible for any matching enginge to, well, match buyers and sellers.

It appears all that money-printing did mean something after all...