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Retail Investors Pile Into Stocks Amid "Malign, Unthinking Mental Slavery"

As Warren Buffett himself once said, "If you’ve been playing poker for half an hour and you still don’t know who the patsy is, you're the patsy." The central bank bond market poker game has been in train for a good deal longer than half an hour, and the stakes have never been higher. Sometimes, if you simply can't fathom the new rules of the game, it's surely better not to play. But such madness is not limited to the world of bonds. Malign, unthinking mental slavery has fixed itself upon the equity markets, too. And as stock markets have powered ahead, index trackers have enjoyed their highest ever retail inflows.



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Why Europe's Doomsayers Are Right, In One Chart

In retrospect perhaps it is time for Wolfi Schauble to take a stab at draft 2 of his famous FT scribe: "Ignore the doomsayers: Europe is being fixed," because quite clearly the doomsayers are right: Europe is finished.



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Is the Stock Market Top In?

The pool of greater fools willing and able to buy assets at higher prices with leveraged free money has been drained by six years of credit/risk expansion. Those who believe the stock market can continue rising despite the end of the Fed's "free money for financiers" programs are implicitly claiming that the pool of greater fools is still filled to the brim. Simply put, speculating with leveraged free money and extending credit to marginal borrowers is not sustainable or productive, and the stock market seems poised to reflect these three dynamics...



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Hong Kong Protesters Give Wednesday Deadline For Reform As Chinese Army Watches From Above

The crowds of protesters in Hong Kong swelled overnight with some estimates that 3-400,000 "will join in a show of people's power," on the eve of the two-day National Day holiday. With neither side showing any signs of backing down, protestors remain calm and police keeping their distance - though monitoring from on high - as the Occupy Central group said it will announce plans for its next stage of civil disobedience on Wednesday if Hong Kong Chief Executive Leung Chun-ying does not meet their demands for democratic reform, including true universal elections by October 1 and Leung's resignation. Leung has called for Occupy Central leaders to "fulfill the promise they made to society" and immediately stop the protests, which he said have gotten "out of control," adding that, for now, they could keep control without the help of the People's Liberation Army (PLA). The protest meme remains one heard around the world - in addition to their concerns about democracy and out of control local government, Hong Kong’s younger generation are worried about low-paying jobs.



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Commodities Are Crashing Amid Stock-Bond Disconnect Deja Vu

UPDATE: S&P and 30Y have recoupled post EU close...

Well it wouldn't be the US trading session if bonds and stocks didn't decouple from one another's reality... But what happens when Europe closes? Silver and WTI Crude are getting crushed into the European close and beyond and copper and gold are starting to crack lower...



Tyler Durden's picture

Did The Winter War Just Begin? Russian Gas Supplies To Europe Plunge 15%, Ukraine Transit Slashed 54%

Just a week ago, the Russian energy minister made the first public 'threat' of gas supply "throttling" disruptions to Europe but judging by the data that has just been released, it appears the 'throttling' has begun. Bloomberg reports that Russian gas supplies to Europe fell 15% year-over-year in Q3 - the most in over two years - as natural gas transit through Ukraine plunged 54% year-over-year. In 2013, Gazprom sent 60% of its supply via Ukraine pipelines, in August that dropped to 39%, and in September only 34%. Of course, Europe remains confident its storage efforts will buffer any "Winter War" disruptions, as we noted here, but as Citi warned previously, "if colder weather arrives, storage levels will be drained," and then there is the Spring (and German industry needs).



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America's "All Important" Housing Market Flashing Red After Bad Data Double Whammy

The ultra high end of US housing is now sliding fast, and that unless some other central banks steps up and resumes the injections of some $100 billion in outside money into inflating asset prices such as stocks and billionaire mansions, then all bets are soon off.



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Consumer Confidence Plunges, Biggest Miss Since Jan 2012

Despite stock indices hitting record highs (apart from small caps and 50% of individual stocks down notably), The Conference Board's Consumer Confidence narrowed its divergence with UMich confidence and tumbled to 86.0 (missing expectations of 92.5). This is the biggest miss since Jan 2012. The gap between the confidence of rich and poor increased but the gap between economic confidence and consumer confidence narrowed.



Tyler Durden's picture

Chicago PMI Misses As New Orders & Production Slump

US equity markets were sliding into the Chicago PMI print as early release indications proved correct and it missed expectations. Having flip-flopped from worst since July 2013 to almost cycle highs last month, Chicago PMI printed 60.5 (vs 62.0 expectations) hindered a drop in new orders and production. The silver lining, the employment index improved modestly. Prices Paid surged to its highest since 2012.



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US Stocks Slide, Ruble Plunges As Russia Prepares Capital Controls

Just days after Ukraine began discussing capital controls, and Russian lawmakers passed a bill enabling asset freezes, it appears Russia has reached its limit.

*RUSSIA SAID TO WEIGH CAPITAL CONTROLS IF NET OUTFLOWS INTENSIFY

The Ruble is plunging towards 40 to the USD (CB intervention levels), US equity futures gapped lower, and European stocks are sliding.



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"Broad-Based Deceleration" - Case-Shiller Home Prices Tumble Most Since Nov 2011, 3rd Drop In A Row

For the 3rd month in a row, S&P Case-Shiller home prices fell MoM with July's 0.5% drop the biggest since November 2011. This dragged the YoY growth to 6.75% (missing expectations of 7.4%) and its slowest rate of increase since November 2012. Non-seasonally-adjusted the drop is even larger (-0.6% MoM). Perhaps most notably San Francisco was the biggest drag on the index.



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US Regulators Fear "Runs" From PIMCO's Systemic Risk As Outflows Soar To 12.5% Of Assets

Things are rapidly shifting from bad to worse for PIMCO. In a triple whammy this morning, Bloomberg reports the Total Return Fund ETF (managed previously by Bill Gross) has suffered $446 million outflows (or over 12.5% of assets) so far; Morningstar downgrades the fund from 'gold' to 'bronze' citing "uncertainty regarding outflows and the reshuffling of management responsibilities"; and perhaps most concerning - given our previous warnings over bond market illiquidity - The FT reports, US regulators are monitoring trading and fund flows surrounding PIMCO's Total Return Bond fund warning investors they should contemplate the unintended consequences of pulling their money and the possibility of systemic risk disruptions, fearful of "runs."



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Frontrunning: September 30

  • Hong Kong protesters stockpile supplies, fear fresh police advance (Reuters)
  • Protesters stay out on Hong Kong streets, defying Beijing (Reuters)
  • Traders Turn Up Grilling Sausages at Hong Kong Protests (BBG)
  • Ukraine Army Sees Worst Day Since Truce as Battles Flare (BBG)
  • Islamic State uses grain to tighten grip in Iraq (Reuters)
  • For Putin Ally, U.S. Sanctions Only Add to Anti-Russia Conspiracy Theory (WSJ)
  • Coinbase Leads Move to Bring Bitcoin to Masses (BBG) - good luck
  • Austria Cracks Down on Spies -- and Jihadis (BBG)
  • EU Believes Apple, Fiat Tax Deals Broke Rules (WSJ); Apple’s Irish Tax Deal ‘Engineered’ to Boost Employment, EU Says (BBG)


Tyler Durden's picture

Carl Icahn Wins Again: eBay To Spin Off PayPal, CEO John Donahoe Is Out

And so Carl Icahn wins again, this time with his demand that eBay spin off PayPal. As a reminder, eBay swore up and down it would never spin off its best performing asset, then swore again, and swore some more. And then 3 minutes ago, revealed it was only kidding, because eBay just reported PayPal will be spun off in a move that will cost CEO John Donahoe his job: "Neither Donahoe nor Swan will have an executive management role in the new eBay and PayPal companies. But to provide continuity, they each expect to serve on one or both of the boards of the two companies. Oh, and another winner: "Goldman, Sachs & Co. and Allen & Company LLC are serving as financial advisors to eBay Inc."



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