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Raising Interest Rates Can't End Well

"The economy looks to me like a type of Ponzi Scheme. It depends on both rising energy consumption and rising debt. Judging from the problems we are having now, it seems to be reaching its limit in the near term. Raising interest rates will tend to push it even further toward its limit, or over the limit. The world economy is operating at too close to 'stall speed'. The financial system is too fragile."

A Critical Week For Markets Begins: Preview Of The Main Events

A pivotal, catalyst-filled week for global markets is now underway as investors brace for the second US interest rate hike in 2 quarter, a Dutch election, the expiration of the US debt ceiling deal, the imminent invoking of Article 50 by Theresa May, the first G20 finance ministers' meeting of the Trump era and perhaps the disclosure of Trump's proposed budget.

Frontrunning: March 13

  • Oil touches three-month lows, as U.S. supply swells (Reuters)
  • Oil Steadies Below $49 as U.S. Drilling Threatens Longer Glut (BBG)
  • Traders Brace as Crucial Events Loom for Markets (WSJ)
  • Preet Bharara’s Probes Likely to Continue After His Exit (WSJ)
  • Dollar steadies after three-day fall (Reuters)
  • GOP Health Plan Would Hit Rural Areas Hard (WSJ)

Global Stocks Rise, S&P Futs Flat As Dollar Rebounds Ahead Of Critical Week For Markets

European bourses advance and Asian share rose led by a surge in Hong Kong stocks which rose the most in three months as Japan hit 15 month highs. U.S. futures are little changed along while the dollar rebounded from session lows after Friday's selloff. Crude oil has continued its retreat, down 0.2% and sliding for a 6th straight day after breifly dropping below $48 in overnight trading.

Japan Begins QE Tapering: BOJ Hints It May Purchase 18% Less Bonds Than Planned

Japan appears to have quietly commenced its own monteary tightening because, as Bloomberg calculates looking at the BOJ's latest bond-purchase plan, the central bank is on track to miss an annual target, by a substantial margin, prompting investor concerns that the BOJ has commenced its own "stealth tapering."

10 Straight Weeks Of Equity Inflows As All The New Money Goes To ETFs

The flood of retail money into the global stocks showed no sign of relenting in the latest week, after investors around the globe pumped money into stocks for the tenth straight week, according to EPFR data cited by BofA, which showed some $11.8 billion in equity inflows, however in continued disappointment for active asset managers, over $15 billion of was allocated to ETFs, while mutual funds saw another outflow of $3.6 billion.

S&P Futures, Global Stocks Jump Ahead Of US Payrolls As Global Bond Rout Continues

European and Asian shares rise along with a jump in S&P futures which are pointing to a solidly green open on US payrolls day. The dollar, trading somewhat weaker against the euro was stronger against the yen, and was on track for its firth week of gains, while the rout in global Treasuries continued following a Mario Draghi conference that was interpreted as more hawkish than expected.

Things Just Got Even Weirder

Just when you thought the 8 year bull market for US stocks had shown us everything, something new comes along. 

Frontrunning: March 9

  • Investors Await ECB for Clues on Path of Policy (WSJ)
  • U.S. crude slumps below $50 after stocks build (Reuters)
  • Markets Are Selling Off as Dollar, Euro Gain (BBG)
  • Opposition Mounts as GOP’s Health Bill Undergoes Review (WSJ)
  • Ryan Ready to Twist Arms to Sell Health Plan to House GOP (BBG)
  • Gutting Dodd-Frank Is Hard, So Republicans Turn to Easier Things (BBG)

What The Hell Is Going On? - Part 2

"Desperate households across the land aren’t clinging to guns and bibles. They’re clinging to credit cards as their only lifeline in this failing empire of debt, deception, and delusion. "

Stocks Mixed As Treasuries Suffer Longest Losing Streak Since 2012, Dollar Pops Ahead Of ADP

Asian markets dropped following disappointing China trade and Japan GDP data, while European stocks rebounded for the first time in five sessions led by miners and banks. US futures were little changed with a strong dollar pressuring oil below $53; sterling slid for the eighth day out of nine before the chancellor of the exchequer delivers his spring budget. Treasuries are headed for their longest losing streak since 2012 ahead of a 10Y U.S. debt auction, and today's ADP private payrolls report.