Trump embodies the American zeitgeist, circa 2015 – its virtues, its vulgarity, its inchoate mixture of common sense and incoherence. You may not like Donald Trump, for any one of a number of reasons, but anti-interventionists have to give him some credit for opening up the presidential debate to a critique of US foreign policy that hasn’t been seen or heard since the Ron Paul campaign.
A beleaguered Deutsche Bank is set to slash the investment bank bonus pool by some $566 million as John Cyran's effort to right a sinking ship continues. As Bloomberg reports, "no decision has been taken and the biggest reductions are likely to impact employees in the fixed-income business. Some managing directors may have their entire bonus scrapped, according to the person."
Moments ago the US Treasury promptly removed any latent optimism that this latest debt ceiling crisis will somehow be magically fixed on its own after it announced that it would postpone the two-year note auction previously scheduled for Tuesday, as the impasse over the debt limit constrains the nation’s borrowing. “Due to debt ceiling constraints, there is a risk that Treasury would not be able to settle the two-year note”
After yesterday's dramatic late day market rout catalyzed by the tumble in the biotech sector in general, and Valeant in particular, and foreseen in its entirety by Gartman who went bullish just hours before, this morning US equity futures and European stocks have recouped some losses on the recursive, and traditional, hope that Mario Draghi will say something to push risk higher when he speaks in 2 hours at the ECB's press conference in Malta. And yet, just like Yellen a month ago, Draghi faces the paradox of reflexivity that after years of being ignored, is the "new thing" in town: how does he intervene and demonstrate he is readier than ever to set up stimulus, without panicking investors over euro area’s health.
China Calms Fears, Says "Stock Plunge Is Normal Correction" As Panic-Buying Resumes On Japanese OpenSubmitted by Tyler Durden on 10/21/2015 20:35 -0500
After last night's bloodbathery in China, analysts and officials are out en masse to ensure a newly re-leveraged Chinese investors that the "stock plunge is a normal correction." Disappointingly, Chinese stocks are barely bouncing at the open, which is not what we can say for Japan, where the mysterious uneconomic panic-buyer-of-first-resort appeared once again and smashed the Nikkei 225 200 points higher at the open (after weakness in the US).
Paul Volcker announced his intention to squeeze inflation out of the system soon after he became Fed chairman. Too bad he didn’t save a better system. Not many men can resist the appeal of free money. Americans proved they were no better at it than others. Falling interest rates and the paper dollar gave them a way to impoverish themselves – by spending money they hadn’t earned. They took the opportunity offered to them. They borrowed and spent... and drove the entire world forward at a furious pace. But now that stage is over.
Since either NIRP, or QE, or most likely both, are about to cross the Atlantic and make landfall in the US before the Fed is forced to launch the monetary helicopter, those who want to know what is really coming - no, not rate hikes - are urged to read this.
"The decline of fixed income liquidity in 2015 can be seen as a gap between supply and demand. Banks are supplying less liquidity, yet investors are still demanding more of it. The result? Potentially severe losses in fixed income."
Rising rents have been cited as a reason millennials aren’t moving out of their parents’ basements. But higher rents could force some boomers to move in with their children... it is shaping up to be a crisis for some boomers for the following reasons...
After yesterday's closing ramp "prudently" just ahead of an abysmal IBM earnings report with the lowest revenues since 2002, and the latest rally in capital markets which sent European stocks to their highest level since August on the back of a barrage of global bad data which has unleashed the Pavlovian liquidity dogs screaming for moar central bank bailouts, this morning has seen a modest decline in the Stoxx 600 driven by energy names, while S&P500 futures are set to open lower on IBM's disappointment at least until the latest massive BOJ USDJPY buying spree sends the pair to 120 and the S&P solidly in the green. The biggest political event overnight was the Canadian election, where Trudeau's liberals swept PM Harper from power, capping the biggest political comeback in the country's history; the Canadian dollar is largely unchanged after initially weakening then rising.
In its attempt to evade the shackles of conventional fixed and variable costs, Rio Tinto has decided to begin eliminating humans from its "workforce" altogether. According to the Chinese state media, Rio Tinto has started using automated, driverless trucks to move iron ore in its Pilbara mines, controlled from an operations center 1,200 kilometers away in Perth.
News That Matters
The entire global financial system is leveraged to the 'Modern Portfolio Theory' concept that stocks and bonds are always anti-correlated. It is impossible to estimate how many trillions of dollars are managed according to the simple 60/40 mantras but let us just assume something north of $1.4 trillion and something south of "more money than God." However, the truth about the long-term (132-year) historical relationship between stocks and bonds is scary. The last three decades of extraordinary anti-correlation has been an era of falling rates, globalization, accommodative monetary policy, and very low volatility of CPI. With the global economy now at the zero bound, those days are over.
Swedish Nazi Creates "Accommodation Centers" For Refugees As Turkey Insists "We're Not A Concentration Camp"Submitted by Tyler Durden on 10/19/2015 17:06 -0500
Submitted for your consideration: 1) "A man from northern Sweden who has praised Adolf Hitler on Facebook and participated in Nazi demonstrations has answered a call from Sweden's Migration Agency for volunteers willing to offer accommodation to refugees," 2) "I said this to Merkel too. No one should expect Turkey to turn into a concentration camp where all the refugees stay in."