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"Sand Is The New Gold"?

Thanks to the growing use of fracking, or extracting oil and natural gas from shale formations, shares of U.S. companies which supply sand to energy producers are surging, and as Bloomberg reports, it does not look set to stop anytime soon. “Sand is the new gold,” says Ivaylo Ivanov, founder of Ivanhoff Capital, as Ole Slorer, a New York-based analyst at Morgan Stanley, expects demand for fracking sand in 2016 will be 96 percent higher than last year’s level. Nope, no bubble here...



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5 Things To Ponder: Labor Day Edition

With the Federal Reserve ending their support of the markets by October, and as discussed yesterday, corporate share buybacks on the decline; two of the biggest supports of asset prices over the last couple of years is fading.  What does this mean for investors going forward?



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"Unrigged" Close Buying-Panic Saves S&P 2,000 For Long Weekend

For the 6th week of the last 8, Treasury yields declined with 30Y pressing to 3.05% (and 10Y 2.32%) handles to 15-month lows. US equity markets saw volume crater as the early high-stops were run in the EU session and low-stops run in the US session before the ubiquitous EU close ramp lifted futures to VWAP and S&P cash to 2000.xx where it stayed for the rest of the day in a wholly unrigged way. Trannies ended the week red and Russell the best. The USD Index closed at 13-month highs (up 7 weeks in a row). Despite USD strength, gold and silver rose 0.5% on the week but oil was the big winner +2.4% (testing $96) as copper tumbled 2%. Credit markets closed at their wides (as stocks closed at their highs). Interestingly, once the Sept POMO schedule was released, TSYs sold off on the day to close red (but end 4-7bps lower on the week). VIX closed unch today but the ridiculous late-day panic-buying spree in futures grabbed stocks back above the crucial 2000 level for the S&P. Year-to-date, Treasuries lead +16.75% as the S&P (+8.5%) overtook gold (+6.7%) in the last few days.



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Obama's Anti-ISIS Strategy Summarized In 1 Cartoon

"Do nothing stupid..."



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ISIS Sends 2nd Beheading "Message In Blood" Video; Warns Kurds "Huge Mistake Joining Hands With America"

Just hours after hours after another video purporting to show the mass execution of up to 250 Syrian soldiers in the desert, The Independent reports ISIS has released a video apparently showing the beheading of a Kurdish man in Iraq as a warning to Kurds fighting the group in the country. The video, entitled "A Message in Blood" ends with the victim beheaded and the fighters warn others will face the same fate should Kurdish leaders choose to continue an alliance with the US..."You have made a huge mistake by joining hands with America."



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Fed Unveils Only 11 Days Of POMO In September For A Mere $15 Billion

As they say in England, we appear to be getting to the vinegar strokes of the Fed's buying efforts. As expected, the NYFed announced its Permanent Open Market Operations (POMO) schedule for September which covers just 11 days (including no Fridays at all) summing to a mere $15bn of Treasuries planned to be purchased... (with only 5 days in size).



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Rand Paul Slams US Interventionists' "Unhinged Foreign Policy" For Abetting The Rise Of ISIS

"As the murderous, terrorist Islamic State continues to threaten Iraq, the region and potentially the United States, it is vitally important that we examine how this problem arose. Any actions we take today must be informed by what we've already done in the past, and how effective our actions have been... The Islamic State represents a threat that should be taken seriously. But we should also recall how recent foreign-policy decisions have helped these extremists so that we don't make the same mistake of potentially aiding our enemies again."



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Who Is Short Treasurys? (Spoiler: Pretty Much Everyone)

Asset managers are long, while dealers, hedge funds, and other buy side investors are short. Using alternative positioning indicators, we assess where we can give credence to the CFTC data, and where there is more to the picture than the CFTC data reveals.... The clearest position concentration is short USTs (Figure 1). As the grey shaded squares indicate, the short has increased materially over the last 3 months. Equally importantly, there is an absence of corresponding longs in any client group to balance these shorts. Together that points to the prospect of even lower UST yields.



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Has Ukraine Shot Itself In The Foot With Gas Pipeline Deal?

Last week, Ukrainian Prime Minister Yatsenyuk pushed a bill through the Verkhovna Rada that would see his country’s gas transportation system sold off to a group of international investors. The provisions of the law would permit the transit of natural gas to be blocked. This decision may hurt the fragile industrial recovery in Germany and finish off Ukraine’s potential as a gas transit route to Europe.



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White House Scrambles To 'Clarify' Obama's "ISIS Strategy"

"Strategy" or "No Strategy"? Minutes after last night's admission by the President that "we don't have a strategy yet," the White House public relations department went into full damage control mode. Shameless spokesman Josh Earnest used the word "strategy" 33 times in a brief interview with CNN's Wolf Blitzer and this morning the "clarifications" continue. As NBC reports, “The president hasn't yet laid out a specific plan for military action in Syria,” White House press secretary Josh Earnest. “And the reason for that is simply that the Pentagon is still developing that plan and he is still reviewing it.” This seems to us like yet another admission that there is 'no strategy' akin to being half pregnant.



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3 Things Worth Thinking About

This won't last... here's 3 reasons to consider why...



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CBO: Obamacare Discourages Work

Remember all those allegations that Obamacare would be an unmitigated disaster for businesses, especially smaller companies? Well, now we have some facts. A week ago we noted that the Philly Fed found that Obamacare was a disaster for business, and now no lessor entity than the Congressional Budget Office (CBO) is out with its latest forecasts, concluding "certain aspects of the Affordable Care Act will tend to reduce labor force participation." While we already noted that 'work is punished' in America, it appears now that with Obamacare, non-work is actually incentivized.



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Can A National Quasi-Religion (Pro Sports) Go Broke?

Attending costly games is on the margins of the household budget. When the credit card gets maxed out, attending is no longer an option. We're not suggesting professional sports isn't the greatest thing since sliced bread: we're simply asking if attending pro sports games has become unaffordable to the average American.



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Chelsea Clinton is Quitting Her $600,000/Year NBC "Reporter" Job

Shortly after it was revealed by Politico that NBC had stooped to new lows in favoritist nepotism, having paid Chelsea Clinton an annual salary of $600,000 for "occasional" reporting work, in effect making her one of the highest paid if not the highest paid "reporter" in the world, the former first daughter quickly stunned everyone when, in the aftermath of her mother's just as stunning commentary on personal wealth and what being "broke" in the New Normal apparently means, she stated rhetorically that "I was curious if I could care about money and I couldn't." So, moments ago, to prove that she really no longer cares about such earthly things as money, since between her hedge fund husband and her parents, she has more than she can possibly spend in one lifetime, AP reported that Chelsea Clinton is quitting her job as a reporter at NBC News.



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Goldman Slashes EURUSD Forecast To 1.20

UPDATE: *JPM CUTS 1Q EUR/USD EST TO 1.28 VS 1.30; 2Q EST TO 1.26 VS 1.28

Having flip-flopped from forecasting EUR strength for the next 12 months in April (target 1.40), Goldman has rapidly ratcheted down its expectations for the flailing currency to 1.30 previously and now forecasts EURUSD at 1.20 in 12 months. As Goldman notes, "because we believe the dynamics of the Euro have fundamentally changed and because we expect cyclical outperformance of the US, a prolonged period of Euro undervaluation can be expected and this is reflected in our longer-term forecasts." Trade accordingly...



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