"Today, six and a half years after the collapse of Lehman, there is a Bigger Short cooking. That Bigger Short is long-term claims on paper money, i.e., bonds."
In a sign of just how dire the situation in Greece truly is, Reuters is reporting that Athens now owes billions to drugmakers as the consequences of being completely beholden to the ”institutions” which control the printing of a fiat currency now weigh on Greece's ability to provide basic medical services for its citizens.
The emperor has no clothes: there are markets (finance included) screaming out for disruption!
You know it's bad when...
What do we really know?
The Man in the Moon studies the pathology of Earth’s global economy and markets from a distance where there’s no gravitational pull towards empiricism or consensus. His findings: 1) the global economy is over-leveraged, fragile, stagnating, and increasingly centrally managed; 2) capital markets and asset performance have been captured by the perception of the ongoing value of money, and so; 3) unconventional investment analysis is prudent.
Another round of the Crisis is coming and the Powers That Be know it. This is why they’re preparing by buying up Gold bullion.
“Things always become obvious after the fact” – Nassim Nicholas Taleb
“Facts do not cease to exist because they are ignored.” – Aldous Huxley
A day after the 2 Year auction surprised with solid demand all around, moments ago the US Treasury issued $35 billion in 5 Year paper which also came stronger than some had expected, pricing at a yield of 1.56%, 0.6 bps through the 1.566% When Issued. Like in yesterday's auction, the yield was the highest of 2015. The Bid To Cover dipped modestly, dwon from 2.56 to 2.46, and in line with the 2.47 average.
Bill Gross just revealed another aspect of trading in the new (or any) normal: one may get the direction and the timing with laser-like precision (as Gross did on his Bund trade), but if said trade is excecuted in a way where the inherent "coiled spring" volatility of the Gross-defined "new normal" blows up the trade structure, the losses will make one wish never to have had the correct idea in the first place.
"We begin then by saying without equivocation that we have changed our mind again regarding equities... Hence in our retirement funds here we reduced very slightly our long position in Apple directly and then wrote near-the-money calls against the remaining position. Further, we sold just out-of-the money calls against the “tanker” shares we owned, and we used the money taken in from those calls to buy more derivatives sufficient to take us back to market neutrality."
It had been a painfully quiet session in Asia (where Chinese levitation continues with the Shanghai Composite up another 0.6% oblivious of yesterday's rout in the US, because as we explained for China it is now critical to blow the world's biggest stock bubble) and Europe, where the only notable news as that for the first time in months the ECB had not increase the Greek ELA, keeping it at €80.2 billion on conflicting reports that Greek deposit withdrawals had halted even as Kathimerini said another €300MM had been pulled just yesterday, suggesting the ECB has reached the end of its road when it comes to funding nearly two-thirds of what Greek deposits are left in local banks. But the punchline came moments ago when Bloomberg reported that "Greece will likely miss a deadline for a deal with creditors by the end of the week as the two sides have made little progress during talks in recent days."
"The top 25 hedge fund managers made more than all the kindergarten teachers in the country," declared President Obama. One side supports him, and the other defends hedgies. Both get it partially right.
"Graccident" Will Trigger The Demise Of The ECB And The World's Toxic Regime Of Keynesian Central BankingSubmitted by Tyler Durden on 05/27/2015 03:00 -0400
The euro-19 area is now close to having a 100% debt to GDP ratio, and that’s flattered by German surpluses from an export boom that is rapidly cooling, and the fact the for a few quarters Mario’s printing press has conferred huge interest rate subsidies on their depleted fiscal accounts. The pending Graccident will puncture that illusion, tipping most of Europe into acute fiscal crisis and political upheaval of the type that has already roiled Greece and was starkly evident in Spain’s elections last weekend. The odds that the European superstate and the ECB’s Keynesian monetary regime will survive the resulting upheaval are, thankfully, somewhere between slim and none.