Archive - Sep 9, 2015

30Y Treasury yields are up 40bps from the Black Monday flash-crash panic low yields, breaking back above 3.00% for the first time since the end of July.  It appears China selling (and rate locks) is trumping Element Capital's buying (for now).

This key barometer of global equities dropped to a level that it could ill-afford to lose. And while a bounce should transpire from here, the fact that the index has been traversing this level for the past 8 days reminds us that significant potential risk awaits should it fall off the precipice.

"We believe a global recession scenario has become the most likely global macroeconomic scenario for the next two years or so. Helicopter money drops would be the best instrument to tackle a downturn in all DMs. We expect to see QE #N, where N could become a large integer, as part of the monetary policy response in the US and the UK, and QEE2 in Japan." 

• All surveyed analysts expect the Bank of England to keep monetary policy unchanged, with the bank rate at 0.5% and the Asset Purchase Facility at GBP 375bln
• Headline UK CPI printed at 0.1% for July, still well below the BoE’s mandated 2% target
• The accompanying minutes release is expected to once again show an 8-1 vote split in favour of keeping rates on hold

Silver premiums continue to move higher, while premiums on gold have remained steady. UK households are sitting on a £173 billion debt time bomb after once again being lured into a spending splurge by banks and credit card companies.

"... we came into yesterday’s session decently net short; not aggressively so, but not marginally so either. However, it made no difference; we were short in a rampaging bullish move and we had no choice but to rush to cover much of the net short position immediately upon the opening of trade on the NYSE... We’ve no choice. The market has spoken and it has  spoken loudly."

- Dennis Gartman

• Global stocks rally as investors scent fresh stimulus (Reuters)
• Japan's Nikkei 225 Rises 7.7% for Biggest Gain Since October 2008 (BBG)
• China's Stocks Advance for Second Day Amid Stimulus Speculation (BBG)
• Abe Pledges Corporate Tax Cut as Investments Slump (BBG)
• U.S. to shift 50 staff to boost office handling Clinton emails (Reuters)
• Chinese Premier Li Keqiang Says China Doesn't Want a Currency War (BBG)
• One Thing China Got Right (BBG)

And to think all it took was Gartman going short of stocks in 25% correction terms yesterday...

If you were to tell someone that the life insurance they had purchased was “a bad bet” or (even more judgmentally) “sheer stupidity”, almost certainly that person would feel insulted.