"Real Housewives of Orange County" meets Wold of Wall Street - BBC's 'Traders: Millions By The Minute' 2-part documentary goes inside the competitive world of financial traders to meet the men and women who play the markets in London, New York, Chicago and Amsterdam. As The BBC describes, this show offers a rare, personal portrait of what life is like for the people who do this lucrative but relentless job, against a backdrop of non-stop news, globalised markets and the rise of ultra-fast computers capable of placing millions of trades at a time. We can only assume that Johnny-5 and his algorithmic friends refused to be part of this in-depth look at market participants.
The US economy and financial system are in worse condition than the Fed and Treasury claim and the financial media reports. Gold serves as a warning for aware people that financial and economic trouble are brewing. In the 21st century, US debt and money creation has not been matched by an increase in real goods and services. The implication of this mismatch is inflation. Without the price-rigging by the bullion banks, gold and silver would be reflecting these inflation expectations.
While we already know that "work is punished" in America, with almost 20% of Americans' disposable personal income made up of US government transfer payments (up from just 5% 60 years ago), it is perhaps no surprise that Bloomberg's Comfort Index shows the jobless in America haven't been this comfortable since 2007...
"In conclusion, this analysis finds little evidence of the permanent structural damage to the economy’s productive potential that many commentators see as the main culprit for the subpar recovery from the Great Recession..." and Surprise... "our model suggests that monetary policy played an important role in cushioning the blow from the financial crisis and in sustaining the recovery, which could have been significantly more disappointing without the aggressive actions undertaken by the Fed."
Having infamously "thrown in the bearish towel" late last year (must read), Hugh Hendry's Eclectica fund has not enjoyed the kind of money-printing melt-up euphoria he had hoped for in 2014. According to his August letter to investors, the fund is -10.9% year-to-date, shrinking the firm's performance since inception to a mere +0.7%. His positions are intriguing but his commentary can be summed with this sentence alone, "when central banks are actively pursuing a goal of higher prices the most rational course is to tenaciously remain invested in equities." And so he is...
Faux-pas, non? And these are the only airstrike-supporting Western "allies" America has in The Middle East?
Do you have a friend who consistently borrows 30% of his income each year, is currently in debt about six times her annual income, and wanted to take advantage of short-term interest rates so that he needs to renegotiate with his banker about once every six years? Well, if Uncle Sam is your friend you do!
"Russia is already more isolated than at any time since the Cold War" - President Obama, August 2014
"China will never support or join recently imposed sanctions against Russia" - China President Xi Jinping, September 2014
The last couple of hours of today's US session were quite surreal for many cross-asset-class traders. As the following chart shows, the "need" for the S&P 500 to achieve 2,000 (and green post-FOMC) was evident in a 3-step process of manipulating VIX, USDJPY, and Gold. All they could achieve was 1,999.79 highs but not without an epic last minute VIXtermination effort...
Do you believe in miracles? With death-crosses crossing, Hindenburgs Omening, bonds and credit diverging, breadth deteriorating, stocks on the verge of the worst run of thge year, and the S&P 500 testing the crucial 50-day moving average... it should be no surprise that a combination of VIX-slamming, USDJPY-ramping, PBOC-firing, Fed-speaking sent stocks to their biggest gains in 7-weeks after the worst selling in 5 weeks (and people think the BoJ is the only one buying stocks). Treasury yields rose but nothing like the exuberance in stocks. HY credit markets deteriorated notably (bounced with stocks but notably less so). The USD surged (apparently on PBOC rumors) early (+0.3% on the week). Gold & Silver dropped, copper rose modestly but WTI oil prices exploded higher with stocks' exuberance (and Benghazi headlines). VIX was banged from over 15 to under 13.5. S&P 500 2,000 (1,999.79 achieved) and getting back to green post-FOMC was all that mattered today - and Mission Accomplished... before a slightly weak close.
President Obama is explaining to The UN Security Council why actions are needed... not words...
- *OBAMA SPEAKS AT UN SECURITY COUNCIL SUMMIT ON FOREIGN FIGHTERS
- *ABOUT 15K FOREIGN FIGHTERS FROM 40 NATIONS IN SYRIA: OBAMA
- *OBAMA SAYS POLITICAL SOLUTION IN SYRIA MUST BE SOUGHT
- *OBAMA SAYS `RESOLUTIONS ALONE' WILL NOT BE ENOUGH ON TERROR
If tapering isn't tightening.. and it's about the stock not the flow... then equity bulls have nothing to worry about. However, this chart suggests both of those flawed assumptions are entirely incorrect...