Archive - Sep 16, 2015

In the end, whatever the Feds announce at 2PM NY time today should not affect your long-term outlook on markets as neither of the two possible decisions will significantly alter the future fate of global markets. Instead, the most important thing to understand is the massive fraud that is systemic in the global financial system and to allow a deep and complex understanding of this fraud to drive your investment decisions.

While Lindsay Graham was a clear winner in the undercard (like being the tallest midget?), the main event was a mosh-pit of anatagonistic self-abuse for The GOP as candidates ran rough-shod over each other and the moderators. Fiorina stood up to Trump (though not too aggressively) and Trump replied how beautiful Fiorina's face was, Paul was bowled over (by Trump), and Trump was ironically dismissed as "a great entertainer" as the debate took place in great entertainer Ronald Reagan's library. It was clear that "the rest" of the GOP field was not about to let Trump dominate... and he didn't but the night was, in one word, chaos. Trump spoke the most as expected and in most polls was voted as 'winner' with Fiorina gaining most.

With a complex and disaster-prone system of interdependence causing social strife and chaos, why not just simplify everything with a global currency and perhaps even global governance? The elites will squeeze the collapse for all it’s worth if they can, and a Fed rate hike may be exactly what they need to begin the final descent.

The evening started with disappointing Japanese trade data cross the board - weakest imports, exports, and trade balance in 6 months - which follows the largest selling of Japanese stocks by foreigners ever. China opened with the first rise in margin debt in 6 days, stocks were lower  in the pre-open after last night's epic farce ramp. PBOC strengthened the Yuan fix modestly and also injected another CNY 40 billion.

“Buy land — they’re not making any more!” is an old investing chestnut, and a common sense one to boot. Economically, it’s also completely false. As counterintuitive as it may seem, we make land all the time. It just doesn’t look like land.

And then there were eleven (in tonight's main event)...

Just like 13F clones end up getting burned more often than not, so too unfortunately for the Chinese copycats, an endorsement from the equity market’s savior has done nothing to ensure outsized returns. In fact, as Bloomberg adds, it was just the opposite - the stock picks have trailed the broader market. The 46 companies that reported the agency as a top 10 shareholder in the past two months lost an average 29 percent since the announcement, versus a 21 percent drop for the Shanghai Composite Index.

A powerful earthquake strikes off the coast of Chile. The quake, originally measured at 7.2, has reportedly been upgraded to 8.3.

"Let’s not kid ourselves, that’s a joke. This is just a total failure."

Tomorrow's FOMC decision is the dominant topic for investors and traders across all asset classes, with FX, perhaps, the most sensitive to perceived changes (and instigator of trades via carry). As Credit Suisse details, FX volatility remains notably elevated and along with the uncertain flows surrounding so-called "risk parity" trading strategies, and the fact that 2y Treasury yields at around 0.80% are at their highest levels since 2011 - despite the less than 30% chance of a Fed hike priced in for tomorrow - only adds to the sense of uncertainty about the Fed's reaction function. In this light, how do we see the various possibilities that could emerge from tomorrow's FOMC? Here are Credit Suisse's 5 scenarios...

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