In the race to get to the top what does it matter that we destroy the planet along the way?
Every quarter ConvergEx's Nick Colas reviews a raft of unusual and less examined datasets with an eye to refining and adding perspective to the more traditional macroeconomic analyses. This quarter’s assessment of everything from large pickup truck and firearms sales to Google search autofills for “I want to buy/sell” shows a U.S. economy that is reasonably strong but growing only very slowly. The chief areas of concern: Food Stamp participation is still very high at 45.6 million Americans (14% of the total population) and indicators like used car prices and large pickup sales are flat.
That an ETF can satisfy redemption with underlying bonds or shares, only raises the nightmare possibility of a disillusioned and uninformed public throwing in the towel once again after they receive thousands of individual odd lot pieces under such circumstances.
Four months after the UK opened the membership floodgates and dealt Washington a humiliating political blow, China has officially launched the Asian Infrastructure Investment Bank.
At the open, Europe looked in the abyss, and with no help coming from China, it did not like what it saw: And then the answer came from the Swiss National Bank, which stepped in to prevent the collapse just as Europe was opening. Because seemingly out of nowhere, a tremendous bid came in to life the EURCHF, buying Euros (against the CHF and the USD) and selling Europe's last left safety currency. We now know that it was the SNB, the same central bank which is the proud owner of well over $1 billion in Apple stock.
"As pension funds move into riskier investments in search of higher returns to fulfil their pension promises, they may be seriously compromising their solvency situation in the event of a negative shock."
"More cynically, if a default of bank liabilities is inevitable, it may deem it better to ensure that domestic claimants on Greek banks switch into hard 'convertible' Euro banknotes (or offshore accounts), leaving the residual claimants (the ECB which has provided ELA funding) to take the loss."
"The growing size of the asset management industry may have increased the risk of liquidity illusion: market liquidity seems to be ample in normal times, but vanishes quickly during market stress. This liquidity may be artificial and less robust in the event of market turbulence." So what's the solution? Unfortunately there isn't one. Instead, fund managers are simply resorting to emergency liquidity lines with banks which is just another manifestation of using cheap cash to delay the Schumpeterian endgame scenario which, if ever allowed to play out, will finally purge capital markets, reset the system, and free the world from the nefarious clutches of central bankers gone mad with delusions of Keynesian grandeur.
As we have asserted since 2012, the template for dealing with Crises has been laid out in Europe, particularly in the countries of Spain and Cyprus.
Speaking at Russell Napier’s Library of Mistakes in Edinburgh earlier this month, Jim Grant of Grant’s Interest Rate Observer was asked what financial mistakes we’re making today that future generations will regard as the most ridiculous. If you’re familiar with Grant’s writing the short answer won’t surprise you...
Germany’s financial regulator says departing Deutsche Bank co-CEO Anshu Jain may have lied to the Bundesbank about LIBOR manipulation when he apparently denied having any knowledge of rumors that the fixes may have been fixed (so to speak) even as his inbox told a different story.
"Investors have experienced many mood swings, some institutionalized irrationality, as well as treacherous trading conditions in the first six months of 2015. The wacky has become the norm."
If you jump off of a make believe cliff, don't be surprised when you hit the reality of the ground! Reggie Middleton
China's margin loan balance sits at around CNY2.2 trillion, and while that’s certainly impressive, there’s every reason to believe that at least another CNY500 billion in margin lending has been funneled into the Chinese stock market via the country’s shadow banking complex. As regulators tighten the screws on shadow margin lending, are stocks in for a rude awakening?