Archive - Aug 7, 2015

1/3 After last night’s debate I decided to accept @realDonaldTrump offer for Secretary of Treasury.

— Carl Icahn (@Carl_C_Icahn) August 7, 2015

"Any rally that occurs over the next few days from the current oversold condition should be used as a "sellable rally" to rebalance portfolios and related risk."

hhmm.....

Just shut up, smile, and nod...

Quarter after quarter, we are spoon-fed statistics 'proving' that everything is awesome trotting out the percentage of companies 'beating expectations'. However, as is widely-known 'inside' Wall Street, this is simply all smoke and mirrors. As the following two charts prove: every quarter, 'hockey-stick' hope starts off high, is then drastically reduced into the actual earnings period, which then rises during earnings to a level still lower than the pre-earnings period hope-fest... and once again, hope is pushed off into the next quarter... just one more quarter.

In this case, it’s not just about theft and destroying the world economy. Giant financial firms can apparently just “settle” even when grotesque human rights abuses occur. This is how “justice” works in America.

Paging David Einhorn...

Right now, Deutsche Bank's cross-asset-class research warns, all signals other than the offered equity risk premium suggest caution...

Colorado is now the newest state to approve intrastate crowdfunding allowing the state’s residents to be able to purchase stock in local, private companies without becoming an accredited investor. At this point, 24 states have passed laws or rules allowing for intrastate equity crowdfunding.

We would like to believe that a period of peace and prosperity lies ahead of us. Unfortunately, the facts do not support this panglossian assertion. If history  repeats it is more likely that we see hyperinflation and the sharp devaluation of paper and digital currencies in the coming years, given that no experiment with money printing has ever had a positive outcome.

Deflation is a bitch. The only way the rich can keep getting richer is if the rest of us keep getting poorer. Economic growth is a thing of the past. Deleveraging has started for real. Huge amounts of zombified ‘money’ are disappearing as we speak. That leaves the world with a lot less wealth. And still the rich seek to get richer, and they are in charge. The math is simple... but there is a point when the can gets so big and heavy, no-one can kick it down any road anymore.

“People are shooting first and asking questions later...this indiscriminate selling, to me, is just nuts," exclaims on billion-dollar AUM hedge fund CIO as media stocks faced a bloodbath this week. Small (illiquid) doors and large crowds do not mix well as Bloomberg reports, hedge funds own an average 9.7% of the 15 companies in the S&P Media Index - which has tumbled over 8% in 2 days - its biggest loss since 2008. Exuberant return chasing on merger speculation has reversed into panic-selling as Disney, Time Warner Inc., Fox, CBS and Comcast Corp. erased almost $50 billion of value in two days.

We're regularly told by the Fed and defenders of the current incumbent president that the economy is humming along pretty well. People who write columns for the New York Times and who compile government reports are doing pretty well. Unfortunately for those who don't write columns or enjoy comfortable government jobs, things seem less rosy. In fact, in an economy with a rising cost of living (especially in housing), stagnant real wages, and falling worker productivity, many in the so-called working class are very, very worried about the future. And this is a reason that Donald Trump is doing so well in the polls...

Having hovered around the $43/$44 level all morning, new from Baker Hughes that the oil rig count in the US rose 6 to 670 (its highest in over 3 months) has sent it back down to a $43 handle...

The omens are not good when momentum and quality become highly correlated, warns SocGen's cross-asset research group. Quality is now essentially price momentum and vice versa, and history tells us when these two strategies collide the omens are not usually good, as it is a phenomena usually associated with equity markets turning bearish. This becomes even more evident when they plug the factors into their bear market indicator... simply put, we are in a bear market!