Archive - Aug 17, 2015 - Story

While we have grown used to reading of Asian citizens setting themselves on fire in protest (most recently here), news that a 58-year-old man lit himself on fire in front of Ohio City Hall in Columbus is shocking. There are no details as to the reason for this sad act, but as ABC6 reports, the man has been transported to OSU Medical Center in critical condition.

"Time is now rapidly running out," warns The Telegraph's John Ficenec as the British paper takes a deep dive into the dark realities behind the mainstream media headlines continued faith in central planning. Sounding very "Zero Hedge", Ficenec warns that from China to Brazil, the central banks have lost control and at the same time the global economy is grinding to a halt. It is only a matter of time before stock markets collapse under the weight of their lofty expectations and record valuations.

Over the weekend, the Donald came to Iowa, saw, and then left in his chopper. But not before declaring himself to be America's latest caped crusader. So having gone back to New York, what is keeping the Donald occupied today? The answer: jury duty. Perhaps the reason the media is particularly fascinated with Trump's appearance in court is because it was his first time in six that he decided to respond to a jury duty summons: "The real estate mogul's service came after a state judge in March fined him $250 for failing to respond to summonses to serve jury duty five times since 2006."

At the peak of bull markets, when stock prices have been rising long enough for people who just recently started paying attention to conclude that they always go up - that’s when retail investors traditionally go all-in to snag some of that apparently easy Dow Jones money. That’s also when markets tend to peak and then roll over, once again transferring a sizable chunk of societal wealth from late-to-the-party “dumb money” investors to the pros who have been here before and recognize a peak when they see one. So it’s interesting to hear that retail investors are departing from the script in 2015.

In what looks like the latest escalation in a string of wartime crackdowns, Turkey has declared a curfew for citizens of Lice, a district of Diyarbakir province. As Bloomberg reports, “citizens are prohibited from going out on streets from 9pm tonight until 7am on Tuesday.” Additionally, “the Governor of Diyarbakir [has] declared ‘special security zones’ in Silvan, Lice, Kulp and Dicle,” citing the PKK “terror” threat.

We suspect Goldman's buyback desk is busy again...

Here, in one chart, is the reason why anyone following China's devaluation is very nervous. And if they aren't yet, they should be. As Goldman explains, "if the recent CNY moves are the start of a journey, even undoing half of the accumulated trade-weighted appreciation of the last three years, this may provoke a meaningful additional bout of currency depreciation across the EM complex."

The US equity markets stumbled out of the gate as the S&P 500 slipped back down to test its 200-day moving average. Then as volume dried up, the inevitable occurred - an algo-driven vertical melt-up pushing stocks back to unchanged... Crucially, undelying this 'panic-buying' is only 35% of stocks are advancing!!

NAHB Sentiment jumped to 61 - the highest since 2005 - despite weakening new home sales and collapsing lumber prices. Housing Starts also remain tepid (especially compared to 2005 levels) but hope springs eternal for an industry almost 100% reliant on hope. Prospective buyer traffic rose 2 points as Northeast saw a drop as West and South saw modest increases.

Is Saudi Arabia on the verge of winning the war on US Shale firms? It appears the spigot of malinvestment-subsidizing liquidity that kept numerous zombie energy firms alive has been shut off almost entirely. As oil prices return to cycle lows, so credit risk has spiked to record highs and issuance of life-giving bonds has collapsed. As Reuters reports, this has opened up opportunities for deep-pocketed private equity firms to push for restructuring or buy assets as many oil companies need cash to replenish banks' slimmed-down lending facilities, service their bonds and finance drilling of new wells to keep pumping oil and sustain cash flow. But hope is fading as one private equity form CEO warns "I would say, this is a good time to be careful when it comes to investing in energy."

“These insiders to our government... Trump has scared the hell out of them, because as you said, they can’t control him,”

The fallout from last week’s massive explosion in the Chinese port of Tianjin continues to worsen, despite Beijing’s best efforts to play down the danger to the public. The death toll from the apocalyptic blast - which was described by witnesses as akin to a nuclear explosion - has risen above 100 with 114 people confirmed killed and more than 700 injured. Some 6,000 have been displaced. Authorities now fear that storms in the area could transform sodium cyanide (which is water soluble) present on the scene into hydrogen cyanide, which is "rapidly fatal." 

"The BBC's Jonathan Head, who is at the scene, says there appear to be both dead and injured, amid a huge amount of chaos. There are burnt motorbikes on the main road, with paramedics and police trying to take the injured away, he says."

It appears faith in The Fed is falling. A disastrous Empire Fed print (following weak Japan growth overnight) has led to a decidedly risk off move this morning. The move seems to signal like a "QE4"-on trade (USD down, bonds bid, PMs up) but the equity market weakness suggests trust that the recovery hope The Fed keeps spewing just is not there... in other words - for stocks, "bad" news is no longer good news as the narrative begins to break...

Having 'stabilized' in recent months, The Empire Fed Manufacturing Survey just collapsed to -14.92 (from 3.86) missing expectations of 4.50 by the biggest margin since 2010. Across the board it was a bloodbath with New Orders crashing, inventories plunging and employment lower (with both workweek and number of employees falling). The headline data would have been worse were it not for the concurrent spike in 'hope' - highest since April.