Bond
Repo Experts Stumped: How Could Fed Hike Without Draining ANY Liquidity: "This Is A Market By Decree"
Submitted by Tyler Durden on 12/19/2015 12:04 -0500"The Fed didn't really drain any liquidity yesterday. They moved the IOER up to .50%, moved the RRP rate up to .25%, and the RRP volume came in at $105 billion, only $3 billion more than the day before. Where was the draining? But interest rates moved up anyway to reflect the tightening, without any fundamental change. Basically, the Fed decreed a rate tightening and the market moved rates higher.... I wonder how many economic interest rate models include "by decree" as a factor?"
The Fed Rate Hike: the Torpedo is Launched
Submitted by Sprott Money on 12/19/2015 05:59 -0500One would think that the Criminals, themselves, would not have the audacity to use the same Script (with just minor plot variations) every eight years. But here we go, again.
Japan Still Leads The Way Towards Our ENDGAME
Submitted by Secular Investor on 12/18/2015 17:11 -0500When the 'Land of the Rising Sun' jumps into the abyss...
Weekend Reading: All About Janet
Submitted by Tyler Durden on 12/18/2015 16:30 -0500"In a worst case scenario, the real economy effects of the oil sector and the earnings slowdown hit the frothy commercial real estate and REIT sector, which in turn begin the widening of the contagion begun by energy high yield. Combine this with the sudden stop to lower quality energy credits I believe is inevitable and you likely have stall speed – or even recession. And that’s where subprime auto ABS, student loan securitization and US munis come into the picture for the US domestic economy. Those markets get hit in recession."
'Twas The Hike Before Christmas
Submitted by Tyler Durden on 12/18/2015 15:55 -0500Commodities managers searched in despair; for solace, in cupboards, but cupboards were bare; BRIC managers looked at each other in shock, with a new acronym for EM markets – COCK.
The High Yield Bond Market Is Blowing Out Again
Submitted by Tyler Durden on 12/18/2015 13:51 -0500This was not supposed to happen. Since The Fed raised rates the temporary (one day) stability in high-yield bonds has been obliterated. Across all sectors, HY bonds are being sold; the HY bond ETF is tumbling back to recent lows; and Energy spreads have surged to record highs. In a nutshell, it's not over yet!
OPEC Members In Jeopardy, How Long Can They Hold Out?
Submitted by Tyler Durden on 12/18/2015 12:37 -0500The Saudi strategy has yet to bear itself out, but early indications suggest it is generating returns. Non-OPEC supply is expected to suffer its steepest decline in two decades in 2016, at a drop of nearly 0.5 mbpd. Moreover, U.S. shale producers are among the hardest hit. Oil production across the seven most prolific shale plays is expected to plummet a combined 116,000 bpd in January 2016. Still, the strategy is not without sacrifice, and several OPEC members are struggling to find – and, more importantly, endure – that magical balance between non-OPEC pain, market share retention/growth, and self-inflicted damage. Their tipping points are nearly impossible to predict, but there will be more losers than winners in this game of brinksmanship.
David Stockman Warns "Dread The Fed!" - Sell The Bonds, Sell The Stocks, Sell The House
Submitted by Tyler Durden on 12/18/2015 11:50 -0500Yellen and her cohort have no clue, however, that all of their massive money printing never really left the canyons of Wall Street, but instead inflated the mother of all financial bubbles. So they are fixing to blow-up the joint for the third time this century. That was plain as day when our Keynesian school marm insisted that the Third Avenue credit fund failure this past week was a one-off event - a lone rotten apple in the barrel. Now that is the ultimate in cluelessness.
In Largest Ever Muni Restructuring, Puerto Rico Power Authority Strikes Deal With Creditors, Insurers
Submitted by Tyler Durden on 12/18/2015 10:36 -0500When last we checked in on Puerto Rico’s seemingly intractable debt debacle, Governor Alejandro Garcia Padilla was busy using an absurd revenue clawback end-around to avoid defaulting on $273 million in GO debt. On Friday, we get the latest out of Puerto Rico and the news is ... well, good we suppose. PREPA - Puerto Rico’s power authority - has reached a restructuring agreement with bondholders and insurers to refinance some $9 billion in debt via securitization.
Dow Dumps 500 Points From Post-Yellen Highs Amid "Policy Error" Fears
Submitted by Tyler Durden on 12/18/2015 10:21 -0500Just in case yesterday's weakness was mistaken for "well, it's just stabilizing before the next leg higher," US equity markets are pooping the bed this morning with the Dow down over 500 points from its post-Yellen highs, FANGs plunging red, credit collapsing, and bond yields slumping. Between the widely watched quad-witching, Fed policy error concerns, and the utter failure of the Bank of Japan's efforts to save the world, global stocks and bonds are flashing red warnings for the end of centrally planned markets.
Ukraine "Crooks" Default On $3 Billion Bond To Putin
Submitted by Tyler Durden on 12/18/2015 10:05 -0500“I have a feeling that they will not pay us back because they are crooks.”
Moody's Downgrades Glencore To Lowest Investment Grade Rating As CDS Trade A Multi-Year Highs
Submitted by Tyler Durden on 12/18/2015 09:15 -0500Weak earnings performance in marketing operations below the current EBIT guidance of $2.4-$2.7 billion could place negative pressure on the Baa3 ratings in the absence of any mitigating measures. A weakening of the company's liquidity position, delays with the planned divestments in 2016 or a material reduction in its working capital funding capacities by the banks, as well as sustained high leverage with adjusted debt/EBITDA exceeding 4x, will also put negative pressure on the Baa3 ratings."
Japanese Jawboning Fail - Nikkei Crashes 1000 Points From Overnight Highs
Submitted by Tyler Durden on 12/18/2015 08:25 -0500For a brief few minutes, overnight saw exactly the reaction that central planners had hoped for when The Bank Of Japan announced it would buy 'moar' stock ETFs and extend bond duration buying ad nauseum. However, within just 15 minutes something happened that we haven't seen since the world embarked on this experimental nightmare. Despite the front-ran promises to buy Japanese stocks "whatever it takes" traders sold... and sold large.
Futures Slide As Quad-Witching Has A Violently Volatile Start After Massive BOJ FX Headfake; Oil Tumbles
Submitted by Tyler Durden on 12/18/2015 06:49 -0500- Australia
- Bank of Japan
- Beige Book
- Bond
- Central Banks
- China
- Copper
- CPI
- Crude
- Crude Oil
- default
- Economic Calendar
- Equity Markets
- Federal Reserve
- fixed
- France
- Germany
- headlines
- Hong Kong
- Hungary
- Initial Jobless Claims
- Japan
- Jim Reid
- Kuwait
- Markit
- Mexico
- Monetary Base
- Monetary Policy
- Natural Gas
- New Zealand
- Nikkei
- Norges Bank
- Philly Fed
- Precious Metals
- Price Action
- RANSquawk
- Real estate
- Sheldon Adelson
- Ukraine
- Volatility
- Yen
Following the latest BOJ statement, the market found itself wrongfooted assuming the BOJ was actually launching another episode of easing, sending the USDJPY soaring, until suddenly the realization swept the market that not only was the incremental action not really material, but even Kuroda spoke shortly after the announcement, confirming that "today's decision wasn't additional easing." The result was one of the biggest FX headfakes in recent days, perhaps on par with that from December 4 when EUR shorts were crushed, as the biggest carry pair first soared then tumbled and since the Yen correlation drives so many risk assets, also pulled down not only Japanese stocks but US equity futures.
Markets Brace For More Fund Liquidations As Record Outflows Slam Debt Funds
Submitted by Tyler Durden on 12/17/2015 21:33 -0500As new investor liquidity evaporates and as billions are redeemed first from the junk bond universe, then investment grade and then loans, the debt crisis which was unleashed in anticipation of the Fed's rate hike, is about to get much worse, and lead to even more prominent hedge fund "gates" and liquidations.




