Archive - Nov 16, 2015 - Story

It would appear The ECB has undertaken the same baffle'em with bullshit meme the rest of the world's central planners have embraced. Speaking this morning (this time not to a private hedge fund group), The ECB's Benoit Coeure stated unequivocally that "The ECB doesn't see overvalued asset prices." Well that's nice, apart from the -38bps yield on German 2Y notes. But then... to lull investors from their stupor, Coeure unleashed, "The ECB does see "little bubbles" in some markets." Which ones we can only wonder as they prepare to buy Muni bonds...

Who will blink first?

That Hillary Clinton is owned by Wall Street is such an indisputable fact at this point, there’s no point in her even trying to squirm her way out of it. As such, it appears she took on a different tact at last night’s Democratic debate, straight out of the George W. Bush playbook. When asked about her Wall Street donors (her top career contributors are essentially all TBTF banks), she shamelessly replied: "We were attacked in downtown Manhattan where Wall Street is. I did spend a whole lot of time and effort helping them rebuild. That was good for New York. It was good for the economy, and it was a way to rebuke the terrorists who had attacked our country."

"Given the tragic attacks in Paris and the threats we have already seen, Texas cannot participate in any program that will result in Syrian refugees - any one of whom could be connected to terrorism - being resettled in Texas,"

Bond traders have not been this speculatively short Treasuries since early 2010. Since The Fed turned uber hawkish at the last FOMC, and convinced the market that it will raise rates in December - despite dismally dropping data everywhere, speculators have drastically increased their short positions across the entire Treasury spectrum. The last time the world was this short Treasuries, the 10Y yield collapsed from 3.94% to 2.39% in just 3 months. Simply put, The Fed has created - through its constant communication and confusion - the biggest bear trap for bond traders... if a hike does not come in December, 2010's yield collapse could look like a stroll in the park, especially in the newly illiquid normal.

Stocks are up, because of fun-durr-mentals again...

French President Hollande declared eerily early in the ‘game’ he was sure ISIS is behind the tragedy, and ISIS statements seem to confirm that conclusion. But what is ISIS? And where does it come from? It’s no longer really credible to entirely ignore the role of the west, including France, in the origins of the ‘movement’, if it can be called that. From Al Queda to ISIS, and scores of groups and factions in between and beyond, there is at least some kind of link to western military action in the middle East. And that link goes back quite a few years, if not decades.

· The tragic events in Paris are set to dictate price action at the beginning of the week in Europe

· The US sees an increase in tier 1 data this week as well as the release of the minutes from last month’s Fed meeting

Overnight saw a significant ramp higher in crude prices as, presumably, the Paris attacks sparked further Mid-East tension fears and increased the war premium (as Japanese economic growth raises more demand conccerns). But that has all gone now as WTI Crude nears a $39 handle once again and, for the first time since February 2009, OPEC Oil Basket price has traded with a $39 handle.

"My guess is that we will have negative rates in Norway before there will be any talk of QE"...

40 minutes early is very unlike The President but he stands at the front of the G20 meetings in Ankara to explain how more bombing will "contain" ISIS more.. and how everyone is united against these bad guys (though not the moderately bad guys)...

It's not just tourism and retail sales that might swoon--global sentiment might switch decisively from "risk-on" to "risk-off" with far-reaching consequences, a reversal that would quickly cascade through every asset class and every market--not just in the short-term, but in the long term.

Because if stocks are red, the terrorists win.

"Clearly we wish that we had had the presence of mind to have been aggressively net short of equities, but we did not, nor are we that lucky. We shall, however, look upon any intra-day rally in the market as a point at which to become modestly shorter of the market."