Archive - Oct 12, 2015 - Story

In a stunning move towards the elites' endgame of 'banning cash', Greek authorities unveiled stricter capital controls for civil servants and pensioners this weekend. By drastically limiting cash withdrawals and forcing the more 'controllable' compulsory use of plastic money, Greek authorities hope to stop tax evasion through the use of 'fake cash registers'.

Last week, we said the following about the next stage of Syria’s civil war: “In case it wasn’t clear enough what was set to happen soon after the Russian air force had spent a few days softening up anti-regime positions on the ground, allow us to spell it out: with the opposition on the run thanks to days of aerial bombardment, Iran will now send in the Hezbollah/Shiite militia/Quds clean up crew, who will personally ensure that whoever is left in the wake of the Su-34 strikes is swiftly eliminated at close range." As Retuers reports, that is exactly what's unfolding.

We would argue the main reason for Blackrock’s attempt to persuade the exchanges to adopt its recommendations on trading halts is that Blackrock itself is inconvenienced by downside volatility. Presumably the company is no stranger to leverage (how else can it squeeze out large returns with a portfolio this large in a ZIRP world?) and is therefore forced to exercise stop loss orders itself when the market declines fast. Such attempts to “regulate” everything, even the price swings markets are allowed to make, are attempts to stem oneself against nature.

"The secular reality of deflation & inequality is intensified by recession & rising unemployment, investors should expect a massive policy shift in 2016. Seven years after the west went “all-in” on QE & ZIRP, the US/Japan/Europe would shift toward fiscal stimulus via government spending on infrastructure or more aggressive income redistribution.  …buy TIPs, gold, commodities, Main Street not Wall Street."

• Central Bankers Urge Fed to Get On With Interest-Rate Increase (WSJ)
• Bond Market Casualties Leading Biggest S&P 500 Revival Since '11 (BBG)... on hopes of more easing
• U.S. Patrols to Test China’s Pledge on South China Sea Islands (WSJ)
• Merkel Under Fire: German Conservatives Deeply Split over Refugees (Spiegel)
• Assault Weapons Ban Before U.S. Supreme Court (NBC)
• Hedge Funds Are Playing 'Dangerous Game' With Copper (BBG)

Just when you thought the M&A boom is over after a surge in bond yields that Goldman has repeatedly dubbed as "recessionary", and which will make the debt cost of any funding so high that there is barely any room for execution error, moments ago as had been extensively leaked previously, private Dell announced it would acquire tech giant EMC in a deal valued roughly $67 billion, while maintaining VMWare as a publicly-traded corporation. Good luck with raising the tens of billions in debt the deal will require: our best wish to Barclays, BofA, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan, RBC who will all be underwriting the required debt financing to Dell.

With the "adult supervision" of US markets gone today as bond markets are closed for Columbus day, and the USDJPY tractor beam also missing with Japan also offline for Health and Sports day, stocks took their cues from China where speculation was rife that in lieu of cutting RRR, the PBOC has unleashed even more incremental QE by expanding its Collateral Asset Refinancing Program (CAR). Specifically, the central bank said this weekend it will expand a program allowing lenders to use loan assets as collateral for borrowing from the central bank, opening it up to nine more cities from the program's test in Shandong province and Guangdong. The new areas for the program include Beijing and Shanghai. According to some estimates released several trillions in liquidity into the market, and not only sent government bond futures to new highs, but pushed the Shanghai Composite up over 3% overnight.

• BoJ minutes are due to be released on Tuesday with multiple central bank speakers on the slate to supplement the calendar
• Investment Banks are in focus as earnings season starts in full swing, with analysts looking for whether the global slowdown had an impact on results