• Sprott Money
    03/05/2015 - 04:16
    One interpretation is that we are living in the best of all possible worlds. Another is that we are being led to financial slaughter.

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Thanks For The Corporate Bond Bubble, Fed

Once upon a time businesses borrowed long term money - if they borrowed at all - in order to fund plant, equipment and other long-lived productive assets. Today American businesses are borrowing like never before - to fund financial engineering maneuvers such as stock buybacks, M&A and LBOs, not the acquisition of productive assets that can actually fuel future output and productivity. 

Let’s see. The Eccles Building has grown its balance sheet by 9X since the turn of the century, but real net investment in the business sector has plunged by 33%!



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"Chinese Economic Activity Has Probably Slowed To Less Than 3%"

The real "dynamo" of global growth since the Lehman crisis is about to go dark.



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Chart Of The Day: Recession Dead Ahead?

The past two times US manufacturing orders declined at this rate, the US economy was already in a recession.



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A Day In The Life Of A Falling BRIC

It’s not that long ago, in 2001, that Jim O’Neill, then still with Goldman Sachs, coined the term BRICs, for the fast emerging markets of Brazil, Russia, India and China. O’Neill saw a global power shift from the west to these four nations happening. Fast forward to today, and we see Russia under multiple attacks, including economic ones, from the west, as India just announced the second rate cut this year and China is attempting controlled demolition of the possibly biggest financial bubble in the history of the world. And Brazil? If anything, it’s falling even faster off its pedestal than the other three nations.



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Is JPMorgan Fabricating Its Mutual Fund Returns?

84% of JPMorgan’s 10-year long-term mutual fund AUM is ranked in the top two quartiles, while 70% and 81% of JPM US equity mutual funds have outperformed their benchmark on a 1- and 3-year timeframe, respectively according to an investor presentation. In last year’s presentation, the bank cited Morningstar and Lipper (who know a thing or two about calculating mutual fund returns) as sources. The only problem is that it later turned out that Morningstar and Lipper had no idea how JPM calculated the returns.



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Who Said It? "If You Take Out Saddam, I Guarantee It Will Have Enormous Positive Reverberations"

In 2002, Benjamin Netanyahu already harbored some extremely strong convictions on how to deal with both Iran and Iraq - "If you take out Saddam’s Regime, I guarantee you, that it will have enormous positive reverberations on the region." Fast forward nearly thirteen years, and rather than recognizing that this man’s plan in Iraq only led to death, chaos, and the emergence of ISIS, Congress felt the need to ask him for advice once again. Since as we all know, being wrong in America doesn’t lead to consequences, it leads to promotions.



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EURUSD Hits 1.09 Handle, Lowest Since Sept 2003

Draghi's devalued the Euro over 20% in 6 months...How much further?



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The Global Problem: Monetary Policy Can't Fix An Economy's Structural Problems

What with all the praise being heaped on central banks for "saving" the world from economic doomsday in 2008, it's only natural to ask which structural problems their unprecedented policies solved in the past 6 years. After all, "saving" the world from financial collapse was relatively quick work; so what problems beyond imminent implosion did the central banks policies solve in the past 6 years? Answer: none. zip, zero, nada. The truth is central bank policies of zero-interest rates and free money for financiers have made many structural problems worse.


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LaGuardia Airport Closed After Delta Airplane Skids Off The Runway

No details as yet but ABC7 reports a Delta flight has skidded off a runway upon landing at New York's Laguardia airport... 130 passengers are being evacuated - no serious injuries. 300 Gallons of fuel leaking from plane.



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Turkey Warns "Speculators Will Be Burned" As Lira Collapses To Record Lows

UPDATE: TRY now +6.5 handles at 2.6275...

The Turkish Lira is down over 4 handles again this morning as the currency's collapse accelerates exponentially. Having devalued by 30% year-to-date amid Erdogan's rage against central bank independence, selling its gold, threats of jail for not cutting interest rates, and rising repression of increasing social unrest, the country's Economy Minister took to the TV today to expose the "hidden currency war" and blast 'speculators' (because only a speculator would pull his capital from such a 'stable' place) - "The manipulation of those who play with the dollar will explode in their hands and their hands will be burned."



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High Frequency Robber Barrons

Over the weekend Barron's engaged in another attempt by the pro-HFT media lobby to make it seem that frontrunning HFT parasites (now available on a laser near you) are good for the "little guy." An attempt which fails when one actually scratches the surface even by the smallest amount.



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Take Out A 7 Year Car Loan To Buy Stocks, CNBC Experts Advise

According to two anchors, one journalist, and one "wealth strategist," now is the time to take out an 84 month car loan in order to buy stocks.



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The Great Bund Short Slaughter

With the world and his cat positioned for spread compression in European peripheral sovereigns ahead of the ECB's Q€, the natural 'short' that weighs on Bunds (against Spain, Italy, Portugal etc.) is being massively squeezed this morning. 10Y Bund yields have ripped 11bps from the start of the ECB press conference... in context, that's a 25% collapse in yield.



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US Factory Orders Drop For 6th Month In A Row - Worst Since Lehman

Must be the weather... since August. US Manufacturers New Orders tumbled 0.2% in January (missing expectations of a 0.2% rise for the 6th of the last 7 months). This extends the losing streak for factory orders to 6 months, something we have not seen since the great recession in 2008... The drop was led by a plunge in Consumer Goods - not exactly what one would expect from all those gas savings? Just add it to the growing list of missed macro data expectations since the start of Feb!



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