• Marc To Market
    11/22/2014 - 10:16
    Contrary to the death of the dollar chatter, the US currency continues to appreciate.  Here's why there is still punch left in the bowl.  
  • Tim Knight from...
    11/21/2014 - 21:06
    As you can see by this view of the NQ, this massively bullish news has not, as of yet, represented any kind of sea-change in the markets. Before the day was even out (again, in some, not all markets...

Bond

Tyler Durden's picture

Paul Singer Slams The Fake World: "Fake Growth, Fake Money, Fake Jobs, Fake Stability, Fake Inflation Numbers"





"Nobody can predict how long governments can get away with fake growth, fake money, fake financial stability, fake jobs, fake inflation numbers and fake income growth. Our feeling is that confidence, especially when it is unjustified, is quite a thin veneer. When confidence is lost, that loss can be severe, sudden and simultaneous across a number of markets and sectors."

"The situation is universal, a consequence of incompetent leaders and careless (or ignorant) citizenry."

 
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Into The Unknown





“On October 15th 2014, if only for a few short minutes, market forces broke out and the failure of central bankers was briefly evident... There is a very simple lesson that when the markets finally break through the manipulation they move to price in deflation and not inflation. This is key because it means financial repression has failed.” These days, you don’t tend to hear the words ‘failure’ and ‘central bankers’ in the same sentence (unless the topic happens to be Zimbabwe). But perhaps the omniscience and omnipotence of central bankers is somewhat overstated.

 
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Markets Slide As European Central Bankers Mutiny: Challenge Draghi, Just Say No To QE





Game changer? It appears there is a mutiny afoot in Europe as Reuters and Bloomberg report that a number (rumored to be between 7 and 10) central bankers are set to challenge ECB head mario Draghi's leadership style and question his decisions on quantitative easing. As Reuters reports, bankers faulted his secretiveness and communication style making it hard for ECB to take bolder steps. Stocks are not happy and peripheral bond risk is cracking higher.

 
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"Japan's Debt Market Could Crash In Ways That Make The Collapse Of Lehman Look Like A Warm-up"





"In announcing that it will boost purchases of government bonds to a record annual pace of $709 billion, the central bank has just added further fuel to the most obvious bond bubble in modern history -- and helped create a fresh one on stocks. Once the laws of finance, and gravity, reassert themselves, Japan's debt market could crash in ways that make the 2008 collapse of Lehman Brothers look like a warm-up. Worse, because Japan's interest-rate environment is so warped, investors won't have the usual warning signs of market distress. Even before Friday's bond-buying move, Japan had lost its last honest tool of price discovery. When a nation that needs 16 digits in yen terms to express its national debt (it reached 1,000,000,000,000,000 yen in August 2013) sees benchmark yields falling, you've entered the financial Twilight Zone. Good luck fairly pricing corporate, asset-backed or mortgage-backed securities."

 
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Oil Slumps To 3-Year Lows, Bond Yields Tumble, Stocks Stumble





Overnight saw the weakness in the crude complex continue with WTI dumping to its lowest since October 2011 at $75.84. Treasury yields tracked crude lower and 30Y yields are now down 4bps on the week (having been up 5bps at their peak yesterday before Saudi Arabia's pricing decision). Stocks are sliding in the pre-market but have room to fall to catch down to oil/bonds implied weakness. Gold, silver, and copper are also lower even as the dollar slides lower.

 
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Frontrunning: November 4





  • Republicans expect gains, but many races close on election day (Reuters)
  • Ahead of tough election, White House blames dismay with Washington (Reuters)
  • On Election Day, a Tale of the Young and the Old (WSJ)
  • Because the recovery: Sprint to Cut 2,000 Jobs as Mobile Customers Keep Leaving (BBG)
  • Ukraine's rebel leader is sworn in, crisis deepens (Reuters)
  • Brilliant: Burkina Faso Army Promises Religious Leaders It Will Step Down (BBG)
  • More Unknowns Leave Central Banks Facing Greater Internal Strife (BBG)
  • Scapegoat found: IBM to Change Leadership at Global Services Unit (WSJ)
  • Explains why Europe just slashed its GDP forecast: Don’t Be Fooled by Warm Spell as Cold Air About to Return (BBG)
 
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Futures Fail To Surge On European Commission Slashing Growth Outlook As Crude Plunge Continues





what is strange is that while traditionally such a major downward growth revision would have been sufficient to send futures soaring - why: because in a world where only central banks are left, it means more central bank global bailouts of course - this time the adverse update actually had the impact of sending futures to their lows of the session, granted just a few tiny points since the market is clearly disconnected with even the most pro forma, non-GAAP version of reality, but the reaction direction was clearly unexpected. Perhaps this is explained by the ongoing devastation in both WTI and Brent, which were trading at $76.70 and $82.50 at last check, both down almost 3% as the plan to use Saudi Arabia to crush Russia has instead backfired and the Saudi princes are now openly looking at destroying the US shale infrastructure, as we forecast in the worst, for Obama, scenario.

 
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How The Petrodollar Quietly Died, And Nobody Noticed





The Petrodollar, long serving as the US leverage to encourage and facilitate USD recycling, and a steady reinvestment in US-denominated assets by the Oil exporting nations, and thus a means to steadily increase the nominal price of all USD-priced assets, just drove itself into irrelevance. A consequence of this year's dramatic drop in oil prices, the shift is likely to cause global market liquidity to fall.  This decline follows years of windfalls for oil exporters such as Russia, Angola, Saudi Arabia and Nigeria. Much of that money found its way into financial markets, helping to boost asset prices and keep the cost of borrowing down, through so-called petrodollar recycling. But no more: "this year the oil producers will effectively import capital amounting to $7.6 billion.

 
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Alan Greenspan To Marc Faber: "I Never Said The Fed Was Independent"





"I was on a panel with Alan Greenspan a week ago... I said, you mean to say that the Federal Reserve is not independent? He immediately said, Marc, I never said the Fed was independent. In other words, the Fed and the Treasury and the government is basically one and the same."

"Japan is engaged in a Ponzi scheme"

"The oil price decline is not necessarily very good for the US - if oil prices went lower, it may actually have an adverse impact on the US economy"

 
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This Is The Devastation That Follows When Stock Buybacks Grind To A Halt (Hint: Herbalife)





Herbalife: the harbinger of what happens when every stock buyback story inevitably turns very, very ugly.

 
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Bubble Exit Rule: "You Only Get Out If You Panic Before Everyone Else Does"





The problem with what we call the Exit Rule for Bubbles - "you only get out if you panic before everyone else does" – is that you also have to decide whether to look like an idiot before the crash or an idiot after it.

 
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Stocks Pump (On 'Bad' Data) And Dump (On 'Good' Oil Price Cuts)





As we noted earlier, something is seriously broken in these 'markets' and when the head of Blackrock appears on CNBC and uses the "cash on the sidelines" meme to justify stocks going higher (which is unbridled idiocy remember), we suspect even the big boys are getting nervous about the decouplings, illiquidity, and BoJ-driven exuberance. The early pre-open ramp in stocks was quickly eviscerated as data missed (PMI & Construction Spending) and stocks retraced back to bond reality... but 'they' needed all-time highs to run some more stops as USDJPY burst to 114. Once those highs in US equyities were tagged and traders realized what the Saudi actions regarding oil prices meant, WTI plunged and dragged stocks with it. Bonds, oil, HY credit, and VIX all decoupled from stocks.

 
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US Stocks Play Vertical Catch Up To USDJPY's Overnight Surge





Just as we 'forecast' this morning, on no news whatsoever...

 
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