The Fed's 3rd Mandate & The Value Of Cash

Jan 2008: Bernanke "The Federal Reserve is not currently forecasting a recession." Jun 2008: Bernanke "The risk that the economy has entered a substantial downturn appears to have diminished." Jun 2016: Yellen "chances of recession this year are 'quite low'... The U.S. economy is doing well. My expectation is that the U.S. economy will continue to grow." Channelling Bernanke?

Stress Test 2016: Fed Says All 33 Banks Can Surive 70 VIX Without Needing Outside Capital

While hardly coming as a surprise to anyone, moments ago the Fed announced that all 33 banks have enough capital to withstand a severe economic shock, though Morgan Stanley trailed the rest of Wall Street in a key measure of leverage, Bloomberg reports. The biggest bank cleared the most severe scenario handily, with the exception of Morgan Stanley whose projected 4.9% leverage ratio tied for last place alongside a Canadian bank’s U.S. unit, falling within a percentage point of the 4 percent minimum. As a result of today's "test result" many banks will likely win regulators' approval next week to boost dividends.

Crude Oil Options Traders "Most Bearish" Since At Least 2010

The 'skew' between bearish puts and bullish calls has not been this negatively positioned since at least 2010 (when Bloomberg data began). "This negative skew developing is moving in sympathy with what we’re observing in the physical market," according to BNP's Harry Tchilinguirian, and just as the skew was drastically bullish at the lows in January, one might wonder if the smart-money is right once again...

UBS' Trading Roadmap For The "Day After" Brexit

Moments ago we presented a contrarian thesis from Greg Peters of how markets would react to a Leave vote (and by impliocation, Remain). Next, we go back to a more conventional model of how assets would react, and present "a roadmap for the 'Day After'" from UBS, which seeks to answer the question "at what level would we buy or sell each key asset class in either a Remain or a Leave scenario?" It then show ranges of the potential near-term market reactions.

Is The Market Looking At It Wrong: "Buy US Assets In Case Of Brexit" Says Greg Peters

Nmerous traders have suggested, that Brexit - should Remain indeed be victorious - could be one of the more significant "sell the news" events in recent years. However, an even more interesting hypothesis was proposed by Gregory Peters, senior investment officer at Prudential Fixed Income, who told Reuters on Tuesday that he thinks U.S. stocks and bonds are a "great" buying opportunity if Britain votes to exit the European Union.

After Legalizing Recreational Weed, Teen Use In Colorado Lower Than Rest Of Country

Cannabis prohibitionists have long cautioned that legalizing the plant will inevitably lead to increased use among teens, couching their restrictive beliefs in concern for the youth. While some of these concerns may be genuine, a recent survey from the Colorado Department of Public Health and Environment demonstrates — for the second year in a row — that youth in Colorado do not use cannabis any more than teens in other parts of the country. In fact, by at least one measure, they use less.

Wall Street Hockey Sticks - Correcting Sharply Downward Yet Again

At a constant 15 times EPS multiple, November’s forward earnings would have equated to a “fair value” of just less than 1,800 for the S&P 500 as an index; to about where it fell during August and February’s lurches. Pushing the EPS recovery further into the future has had the effect of, again, reducing 2016 earnings by almost 12% and thus forward “fair value” to only about 1,586. In other words, a great deal more uncertainty in terms of valuations for a market already quite overvalued.

Deadlocked Supreme Court Blocks Obama Immigration Plan

In one of today's widely anticipated rulings by the Supreme Court, the highest US legal institution dealt a blow to President Obama on Thursday, after it was deadlocked over the legality of the president's controversial immigration programs. In a one-sentence decision, the court affirmed a lower court's ruling blocking the programs from going forward. The 4-4 split leaves intact an appeals court ruling that said Obama overstepped his authority, along with a trial judge’s order preventing the program from taking effect.