Archive - 2016 - Story

"The Fed got it wrong when it predicted a drop in oil prices would be a big boon for the economy. It turned out the world had changed; the US has a lot of jobs connected to the oil industry."

- SF Fed President John Williams

In principle, the BRRD, or “bail-in directive” as it is also known, is quite a good idea. The fact that lending money to fractionally reserved banks or even merely depositing it with them, involves risks needed to be firmly reestablished. One simply cannot expect that banks and their creditors will be bailed out by taxpayers at every opportunity. Besides, the admission that there are risks in banking that have hitherto been glossed over or have even been lied about was long overdue. However, Europe’s governments are now likely to find out that the current monetary system with its fractionally reserved banks is actually incompatible with this admission, so to speak.

Health insurers are in panic mode as the Obama administration, ever eager maximize coverage optics for Obamacare, has, as The NY Times reports, allowed large numbers of people to sign up for insurance after the deadlines in the last two years, destabilizing insurance markets and driving up premiums. This surge in costs, from unintended consequences, has left 1 in 5 Americans with health insurance is having problems paying medical bills; and, as a new poll finds, more than one in three Americans, or 35 percent, said they were unable to pay for basic necessities such as food, heat, and housing because of medical bill problems...

"As more companies cross the Rubicon out of the buyback zone, the bid for their equity shrivels.  For the 2013 financial year, 60% of stocks in my sample were in good shape to gear-up for buybacks. By the end of 2015, just 35% of the sample were in good shape to do buybacks."

As China’s leaders figure out that pegging the yuan to the dollar while quintupling their debt in five years was a colossal mistake, they are, apparently, concluding that the only way out is a sudden, sharp currency devaluation...

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Chances are you’ve never heard of the company. If you have heard of the company, chances are you misunderstand the shear enormity of the global company and their contracts. From transport to air traffic control, getting your license in Canada, to running all 7 immigration detention centers in Australia, private prisons in the UK, military base presence, running nuclear arsenals, and running all state schools in Bradford, Serco, somewhere, has played a part in moving, educating, or detaining people.

Ming Pao, the most influential Chinese newspaper in Hong Kong, reports that Shanghai residents are lining up at local banks to sell Yuan for Dollars over fears of even more Yuan devaluation.

Libya is "crying for help" as its oil infrastructure is under attack by Islamic State. The fires burning at Es Sider and Ras Lanuf are so large, NASA spotted them from space.

Dear Client,

We believe there is a chance of disruption and highly illiquid conditions in the forex market during the coming weeks (and/or months). Please be aware that market gaps tend to occur over the weekend – that is, currencies trade at prices considerably distant from previous levels.

Remember a week ago when every TV anchor, pundit, asset-gatherer, and commission-taker stormed onto mainstream media and proclaimed the credit market collapse "fixed" because prices had 'stabilized' over the holiday period "proving that 3rd Avenue was a one off" and this dip was a buying opportunity? Yeah, well that was all complete crap... as Investment-Grade cost of funding hits a 3-year high, HY bond spreads blew out to cycle wides, 'triple-hooks' soared to their worst levels in almost 7 years, and credit protection costs rose by the most in years.

The NYSE Composite’s bull market is on very thin ice.

“Are they really going to create their own tax authority and other state structures? Ignore the rhetoric and declarations, follow the actions.”

In April the Dutch people will vote on the European-Ukraine association treaty.  In an interview with the NRC, a Dutch leading newspaper, Juncker warned the Dutch voters a “NO” will lead to a big continental crisis. “Russia and anti European movements will profit from a Dutch No, the Dutch has to vote yes for reasons not related to the treaty, the Dutch should act like an European strategist” according to Mr Juncker.

With all eyes focused on tonight's China open (and the "oops, China matters after all" meme), the Middle-East has fallen off the front (or back) pages of mainstream media. However, the last few days have been a bloodbath (analogistically as opposed to literally) across the Middle-East with Saudi stocks plunging 2.5% overnight (down almost 13% in the last 5 days) and every market from Bahrain to UAE all tumbling below August lows.