Bond

USDJPY Plunges On Japan Stimulus Concerns; US Futures Flat With As Fed Begins Meeting

In a turbulent session for FX, the Yen soared as much as 1.4%, the most in three weeks, after Finance Minister Aso says the government will "leave actual policy measures to BOJ", sending the Nikkei lower by 1.4%. European stocks and U.S. equity index futures are little changed despite the slide in the key carry pair as the Fed starts its two day meeting.

The "New Housing Crisis" – Not Enough Rental Homes?

The real crisis is not a lack of homes for people to buy, just a lack of enough homes for people to rent. Which says more about the “real economy” than just about anything else. While there are many hopes pinned on the housing recovery as a “driver” of economic growth in 2013, 2014, 2015, 2016 – the lack of recovery in the home ownership data suggests otherwise.

US Futures Unchanged As Europe Stocks Rise; Strong Dollar Pressures Oil

There has been little notable market moves overnight, with the record rally in the S&P500 set to continue and European stocks climbing as German IFO business confidence proved more resilient than economists predicted in the month after Britain voted to leave the European Union, falling less than expected from 108.7 to 108.3, above the 107.5 consensus, with expectations printing at 102.2 above the 101.2 expected. Bonds fell with gold as the dollar gained before central bank meetings in the U.S. and Japan this week.

With Kuroda Under Pressure To Increase Stimulus Again, Dissenters Appear

With the yen strengthening ~12% against the US dollar and the Nikkei down ~10% YTD, it seems Haruhiko “Peter Pan” Kuroda is having a difficult time working his magic in favor of Abenomics. As the WSJ reports, Kuroda is under increasing pressure from the Prime Minister’s advisers to coordinate efforts to jumpstart the economy. Earlier this month, we first reported of the secretive meeting between Kuroda and Bernanke, where the former Fed Chairman urged Japan to unleash helicopter money.

"Champagne Supernova" - IceCap Asks What Happens When The Bond Bubble Finally Pops

Most investors today have no idea what is happening in the bond market today and have exposed themselves to incredible amounts of risk. Because a global crisis in the government bond market has never occurred in our lifetime – advisors, financial planners and big banks continue the tradition of telling their clients that bonds are safer than stocks. As a result, investors remain heavily invested in the bond market and are therefore smack dab in the middle of the riskiest investment they’ll ever see.

Celebrating 45 Years Of Phony Money

In the pre-1971 economy, it was Main Street that produced wealth and accumulated real dollars. After 1971, it was Wall Street that controlled access to the new counterfeit money – and made sure it captured much of it. The new system gave the feds the “flexibility” they were looking for. But it completely changed the nature of our money and our economy.

 

The Real Message From Asset Inflation

The earliest signs are developing of hyperinflation, more correctly described as a collapse of the purchasing power of all the major government currencies. Extreme one-way bets aside, the overriding reason for valuation disparities is becoming more consistent with the downgrading of cash, rather than a revaluation of assets

Eric Peters: "In A World Awash In Stimulus, How Should You Invest In The Absence Of A Crisis"

"No one knows whether the accumulation of all this extraordinary stimulus is solving our problems, or simply staving off a crisis that will reappear soon after we stop. And with so much of this new money leaking to America and emerging markets, it’s not just a question for Europe and Japan. Which leaves investors facing a dilemma all their own: In a world awash in stimulus, how should you invest in the absence of a crisis?"

A Post Western World? A Disturbing Interview With Prof. Harry Redner

The political and economic issues broadly discussed in the media usually revolve around political cycles, terrorism, foreign policy, rising debt levels, sluggish economic performance, academic underachievement, environmental problems, ageing demographics and so forth.  In our view, this all ties into a major cycle of history that has been with us for some time, and which has been gaining traction since the 1990s: the end of "Western Civilization" and the transition towards a globalized society.

A Collision-Course With Crisis: Making The Wrong Choices For The Wrong Reasons

Life is full of examples where folks make bad choices for noble reasons. Not every decision is a winner: sometimes you make the right call, sometimes you don't. That's completely understandable and defensible. Fate is fickle, and no one is 100% right 100% of the time. But what's much harder to condone is when people embrace the wrong decision even when they have ample evidence and comprehension that doing so runs counter to their welfare.

Goldman: The Last Two Times P/E Multiples Expanded This Much, The Result Was A Historic Crash

"The current P/E expansion cycle is now one of the largest in history. Since September 2011, S&P 500 forward P/E has grown by 75% (from 10x to 18x). This expansion has only been surpassed twice since 1976, when the multiple rose by 111% from 1984-1987 (ending with the 22% Black Monday collapse) and by 115% from 1994-1999 (ending with the Tech Bubble pop)." - Goldman Sachs

"Policymakers Have Been Calling A 'Depression' A 'Recovery' For Nearly A Decade"

"I'd like to think that logic and reality will prevail; that distaste for being told how great the world is has become sufficiently revolting and obviously false to stir the world’s populace to end the imbalances. But that, again, will take time, perhaps a good deal of time; until then, whenever it hopefully is, central banks continue to operate with impunity even though the risks of their intemperance rise exponentially..."

A Fully Automated Stock Market Blow-Off?

About one month ago we read that risk parity and volatility targeting funds had record exposure to US equities. It seems unlikely that this has changed – what is likely though is that the exposure of CTAs has in the meantime increased as well, as the recent breakout to new highs should be delivering the required technical signals. All these strategies are more or less automated (essentially they are simply quantitative and/or technical strategies relying on inter-market correlations, volatility measures, and/or momentum). We believe this is an inherently very dangerous situation.