Archive - Aug 28, 2015 - Story

It appears the economy is doing just well enough and the reflexive bounce in stocks showing that everything is awesome is all that Fed's vice chair Stan Fischer appeared to need to note that "we are heading [a September rate hike]direction." This has been judged as "not dovish enough" and sparked some turmoil...

Core personal consumption growth in July was just 1.2% - the weakest since March 2011. Whatever The Fed is doing to grow the middle class (yes, yes, we know: that's not in the mandate - only the "wealth effect" is) is not workingm and as the following chart suggests hasn't worked for the past 35 years.

After the U.S. Drug Enforcement Agency (DEA) was kicked out of Bolivia, the country was able to drastically reduce the amount of coca (cocaine) produced within its borders. According to data released by the United Nations, cocaine production in the country declined by 11% in the past year, marking the fourth year in a row of steady decrease.

On Thursday, Ukraine struck a restructuring agreement on some $18 billion in Eurobonds with a group of creditors headed by Franklin Templeton. That's the good news. The bad news is that Ukraine also owes $3 billion to Vladimir Putin, and Vladimir Putin wants it back. All of it.

A few months ago, Ashley Madison was the most anticipated upcoming adultery social network IPO. Then it was hacked, and all 34 million member accounts were exposed (with some amusing results and even more amusing explanations), leading to questions how long can  the company exist in its current iteration, if at all. Moments ago we got the first answer, when the Daily Beast first reported that Avid Life Media, Noel Biderman, is stepping down.

If you can't work for yourself and afford health insurance, something is seriously messed up.

Given Monday's flash-crashing mayhem, and given how predisposed household investors are to mistrust Wall Street in the post-crisis, post-Flash Boys world, retail outflows during uncertain times shouldn’t come as a surprise, but as Credit Suisse notes, something happened in July and August that hasn’t happened since Q4 of 2008...

After July's disappointing drop in UMich Consumer Confidence, August did not help. Printing 91.9, below expectations of 93.0, UMich is hovering at the 2015 lows. Both current and future sub-indices dropped with hope falling to its lowest since 2014 (biggest 7mo decline in 2 years). Income growth expectations dropped and business expectations dropped to lowest since Sept 2014. This follows the highest conference board confidence in 2015 and lowest Gallup confidence in a year. Bill Dudley will be disappointed after proclaiming this a key driver of The Fed's rate hike call (more important than jobs).

In the last 2 days traders have bought Colombia Pesos with both hands and feet, sending the currency soaring almost 5% higher. This is the biggest 2-day gain since 2010...

The Fed's ultimate dove has been unleashed and this time he means business. Faced with the inevitable rate hike, Kocherlakota has come out swinging to explain how cataclysmic inflation is and why The Fed should use its asset-purchase tools and lower interest rates further... i.e. to negative... Gold reacted instantly...

If anyone was curious why the Fear and Greed index is at 13 (up from 5) despite the biggest 2-day surge in the Dow Jones ever, the answer is very simple: nobody believes the "broken market "any more, as confirmed by the biggest weekly equity outflow on record.

This is the first time that the 50-day moving average crosses below the 200-day moving average since August 2011, creating the ominous-sounding "death cross." The month following this 'event' has produced negative returns 80% of the time...

The relief rally from the market drop that resulted over fears of a Fed rate hike, has pushed financial conditions back to a level which allows the Fed to hike again, which in turn means the market can drop again having risen enough to allow the Fed to do what it has done.

After 3 days of carnage and a day of stability, it appears the death of the bond bull market has once again been greatly exagerated. Whether it is China's absence after a strengthenig in the Yuan overnight or month-end rebalancing amid equity vol, Treasury yields are notably lower this morning...