Tyler Durden's picture

China's Largest Manager Of Bad Debt On The Economy: "Grim And Complicated"

"The business environment this year has been "grim and complicated"; that is the message from China's largest manager of bad debt. As Bloomberg reports, China’s bad-loan ratio rose "significantly" in the first quarter, increasing risks for the nation’s banking industry, driving up banks’ sour loans for a ninth straight quarter as of December to the highest level since 2008. Huarong expects pressures on asset-quality, liquidity, and lending margins to continue.



Tyler Durden's picture

David Stockman Blasts "America's Housing Fiasco Is On You, Alan Greenspan"

So far we have experienced 7 million foreclosures. Beyond that there are still 9 million homeowners seriously underwater on their mortgages and there are millions more who are stranded in place because they don’t have enough positive equity to cover transactions costs and more stringent down payment requirements. And that’s before the next down-turn in housing prices - a development which will show-up any day. In short, the socio-economic mayhem implicit in the graph below is not the end of the line or a one-time nightmare that has subsided and is now working its way out of the system as the Kool-Aid drinkers would have you believe based on the “incoming data” conveyed in the chart. Instead, the serial bubble makers in the Eccles Building have already laid the ground-work for the next up-welling of busted mortgages, home foreclosures and the related wave of disposed families and social distress.



Tyler Durden's picture

Flood Of Students Demanding Loan Forgiveness Forces Administration Scramble

"Loan forgiveness creates incentives for students to borrow too much to attend college, potentially contributing to rising college prices for everyone," is a study's warning over government plans that allow students to rack up big debts and then forgive the unpaid balance after a set period. As WSJ reports, enrollment in student debt forgiveness plans have surged nearly 40% in just six months, to include at least 1.3 million Americans owing around $72 billion. The administration is looking to cap debt eligible for forgiveness, as President Obama's revamped Pay As You Earn scheme has seen applications soar and is estimated to cost taxpayers $14bn a year. The 'popularity' of the student loan bailout plan surged after Obama promoted it in 2012, and now the administration must back-track as costs have massively outpaced government predictions.



Tyler Durden's picture

HSBC China PMI Indicates 4th Month Of Contraction As Yuan Weakens To Fresh 16 Months Lows

HSBC's (Flash) China Manufacturing PMI for April met expectations at 48.3 - holding at its 2nd lowest in 20 months. This is the 4 month of contraction and 4th month without a beat of expectations. April's flash (preliminary) print rose modestly over March's 48.0 but all sub-indices remain weak though some 2nd derivatives are shifting. Employment is worsening at a faster pace and new export orders contracted. While the world waits open-mouthed for the next Chinese stimulus (which they have now explained will be limited and targeted and not 2009-style) and bloviators expound on last night's RRR cut for rural banks (remember, they do not have a liquidity issue, banks are hording PBOC cash and not lending - due to credit risk concerns), it seems no matter what the PMI (weak, weaker, or weakest) the reforms are being stuck to, CNY is being allowed to weaken, and no new avalanche of credit creation (commodity-backed or not) is coming anytime soon.



Tyler Durden's picture

Chinese Police Forces To Carry Guns For First Time In Over 60 Years

Following the Kunming massacre disaster (knife attacks on March 1 at a train station in China's southwestern city of Kunming left 33 people dead and 130 injured) and the recent violent civilian unrest against the Chengguan, The Wall Street Journal reports that over the weekend, more than 1,000 street-patrol officers began carrying 9mm revolvers, Shanghai's Public Security Bureau said. Several other cities across China were set to begin similar programs. Officials said officers are getting training in the largest cities in Tibet, Xinjiang, Hunan, Sichuan and Yunnan, where Kunming is the capital. This comes over 60 years since Mao Zedong - who famously said "political power grows out of the barrel of a gun" - stripped weapons from many police officers shortly after he rose to power in 1949.



Tyler Durden's picture

Here Comes The Next Great Rotation: Out Of Stocks And Into Bonds

If the great rotation out of bonds into stocks was the story of 2013, it now appears that 2014 will see another great rotation - a mirror image one, out of stocks and back into bonds, driven on one hand, of course, by the Fed which will continue to monetize the bulk of net duration issuance for the foreseeable future, but more importantly, by some $16 trillion in corporate pension assets which after (almost) recovering their post-crisis high water market are once again, will now phase out their risky holdings in favor of safe (Treasury) exposure.  As Scotiabank's Guy Haselmann explains, "The rationale is quite simply that the cost/benefit equation changes as the plans’ funding status improves. In other words, the upside for a firm with a fully-funded plan is less rewarding than for an under-funded plan." As Haselmann concludes: "Given the decline in market liquidity and so many investors chasing the same crowded riskseeking trades, these pension flows could have a material impact on market prices for the remainder of the year."



Tyler Durden's picture

Guest Post: Piketty's Gold?

With all that has been written in respect to Thomas Piketty's new book "Capital", you would think someone would remark on the odd coincidence of timing of the rapid rise in inequality that the Professor is so upset about. It’s the issue of the hour. Yet when it comes to the timing at which this phenomenon presented itself, nada. Omerta from the liberal intelligentsia. What could have marked 1971 as the year the picture began to change in respect of inequality in America? It turns out that was the year America defaulted on its obligation under Bretton Woods to redeem in gold dollars held by foreign governments and the era of fiat money began.



Tyler Durden's picture

This Is The 7500 Square Foot Soho Loft That Just Sold For $27 Million

It may not be a castle, but this $26.58 million penthouse loft in Soho (New York) has become one of the priciest co-ops ever sold in Manhattan below 34th Street. As The Wall Street Journal reports, located in a former manufacturing building at 383 West Broadway, the duplex unit is roughly 7,500 square feet, with four bedrooms, five full bathrooms and one half bath. The deal closed Monday. The buyer is unknown... nope, no bubble here...



Tyler Durden's picture

The Rise Of The Fatty

For all the talk about QE this, HFT that, crony capitalism, cold war 2.0, hyperinflation, hyperdeflation, social inequality, Keynesian dead end, global financial meltdown, perhaps the one most tangible threat to mankind as a whole (and to the future underfunded healthcare costs) is something fatr simpler: the rise of the fatty.



Tyler Durden's picture

Unhappy Earth Day

As the world celebrates "Earth Day" and all the wondrous beauty this planet has to offer, those investing from another world will likely be allocating away from the constant economic-growth-disappointing planet Earth. As the following chart of world growth hopes shows... it's anything but happy...



Tyler Durden's picture

Second US Warship Enters Black Sea To "Promote Peace And Stability"

Less than two short weeks ago, the US sent their first warship into The Black Sea to "reassure NATO allies and Black Sea partners." Since then, thing shave escalated and then de-escalated last week with the so-called "truce deal." So why is the US sending a second ship? The Oliver Hazard Perry-class frigate USS Taylor (FFG 50), homeported in Mayport, Fla., will enter the Black Sea April 22 to "promote peace and stability in the region." We are sure that Putin will stand idly by and watch as NATO and the US build forces on his borders, but no matter how aggressive his response, the US Navy combat dolphin and sea lion team will not accompany the mission.



Tyler Durden's picture

The Political Poison of Vested Interests

Combine diminishing returns with the political dominance of vested interests and you get a system incapable of reforming itself and incapable of stopping the slide off the cliff. Vested interests have no concern for the unintended consequences of their self-aggrandizement; the entire poilitical structure is based on the faith that there is always more money to feed the insatiable hunger of entrenched interests for more funding, more protection and more power. And so the only possible "solution" left is collapse.



Tyler Durden's picture

WTF Headline Of The Day: Tax-Cheating IRS Staff Got Bonuses

If you read this without saying "umm, what?" read it again... USA Today notes that a report by the Treasury Inspector General for Tax Administration shows the IRS handed out $2.8 million in bonuses to employees with disciplinary issues - including more than $1 million to employees who didn't pay their federal taxes.

 



Tyler Durden's picture

Ex-Morgan Stanley Chief Economist Admits "Fed Is Distorting Markets"

Stephen Roach, former Chief Economist at Morgan Stanley, has never been shy to share his opinions about the world and having left the Wall Street firm is even freer to speak uncomfortable truthiness. This brief clip, as Sovereign Man's Simon Black notes, says it all so succinctly... "The market has been distorted by far bigger forces than flash trading. To me, the force that has rigged the market... is the Federal Reserve, not the flash traders."



Tyler Durden's picture

Tuesday Pop Turns To Einhorn Drop As Stocks Stumble Into Close

US Equity markets were on a mission today... all-time highs for the S&P and Dow were in sight, green for April for the S&P, and unchanged year-to-date for the Nasdaq and Russell was just over the horizon, but... a total divergence from JPY carry, bond yields, credit, and even VIX meant that a 'warning' from David Einhorn about Tech Bubble 2.0 was just enough to take the juice out of what was already a low volume levitation. It's a Tuesday so we closed green - the 6th up day in a row - longest run in 7 months. Biotechs ripped higher on M&A "get rich quick'"fever - biggest 2-day rise in 30 months. Treasuries were mixed with 30Y bond yields ripping lower and 5s30s dropping 4bps to 1.75% - new lows since 2007. Copper made modest gains on the day but gold, silver, and worst of all WTI crude all dropped on the day (WTI -2% to $102).



Do NOT follow this link or you will be banned from the site!