Archive - Aug 27, 2015

Every other time the markets has broken down in the last six years, a Fed President appeared to talk about some new policy to prop the markets up. NOT THIS TIME.

In The Matrix in which Americans live, nothing is ever their fault. Nowhere in the Western media other than a few alternative media websites is there an ounce of integrity. The Western media is a Ministry of Truth that operates full-time in support of the artificial existence that Westerners live inside The Matrix where Westerners exist without thought. Considering their inaptitude and inaction, Western peoples might as well not exist. More is going to collapse on the brainwashed Western fools than mere stock values.

What do you do when daily open FX interventions are sucking liquidity from the system but you need to save your RRR cuts for emergencies? This...

With prices and valuations elevated, and earnings deteriorating, the backdrop for a continued "ripping bull-market" is at risk. The problem for the "perma-bulls" is that the deflationary backwash, combined with already weak economic fundamentals, continues to erode the ability for earnings to meet elevated future expectations. It is likely earnings will continue to disappoint in the quarters ahead and put further downward pressure on asset prices to close the current gap between "financial fantasy" and "economic realities."

Earlier today FCX announced that in order to save its business, it would lay off 10% of its employees, and that it now expects $4 billion in capital expenditures for 2016, down from a prior estimate of $5.6 billion. Its 2015 capital expenditure budget currently stands at $6.3 billion. The resultant surge in the company, which exploded by 30% in the regular hours, made many wonder if there wasn't more to the story. The answer is: yes, there was, and moments ago none other than Carl Icahn announced an 88 million, or 8.46% stake in the copper miner, in a 13D which said that said the company was "undervalued" and that Icahn is now seeking a board seat.

Sometimes the surveillance state offers up a small victory... as we see Chinese citizens in their native environs re-enacting their emotions this week...

"In a securities-based loan, the customer pledges all or part of a portfolio of stocks, bonds, mutual funds and/or other securities as collateral. But unlike traditional margin loans, in which the client uses the credit to buy more securities, the borrowing is for other purchases such as real estate, a boat or education..." The result was "dangerously high margin balances,' - the products became “the vehicle of choice for investors looking to get cash for anything.” Mr. Sica and others say the products were aggressively marketed to investors by banks and brokerages.

NEW JERSEY DATA CENTER WHERE ITG OPERATES HAS HVAC ISSUE
ITG SHUTDOWN INCLUDES POSIT DARK POOL
ITG SAYS IT WON'T BE TRADING FOR REMAINDER OF DAY

“Ten years ago no one in the art market paid close attention to these corrections in the stock market. Now clients respond immediately."

That's what happens Larry when you have 64.08mm shares short against 59.5mm shares outstanding... and traders read this (and the VIX is stuck in backwardation).

It's healthy... good for you... like broccoli?

"Things have changed since I started teaching. The vibe is different. I wish there were a less blunt way to put this, but my students sometimes scare me - particularly the liberal ones....The idea that institutions must acknowledge wrongdoing is central to academic work."

BINGO. This is so essential to a functioning, ethical society, and is something that never happens in modern America. Ever.

"Price insensitive" flows are starting to materialize, and our goal is to estimate their likely size and timing. These technical flows are determined by algorithms and risk limits, and can hence push the market away from fundamentals.  The obvious risk is if these technical flows outsize fundamental buyers. In the current environment of low liquidity, they may cause a market crash such as the one we saw at the US market open on Mondaay"

Anyone betting China's GDP is really expanding at 7% and the U.S. economy will grow by 3.7% next quarter is angling to be a bagholder. Once global assets roll over for good, it's important to recall that somebody owns these assets all the way down. These owners are called bagholders, as in "left holding the bag." Those running the rigged casino have to select the bagholders in advance, lest some fat-cat cronies inadvertently get stuck with losses.