Bank of America
"Essentially, the rates market is stuck between pricing in more Fed easing or more China worries."
The Next Shoe Just Dropped: Equity NAVs Of 348 CLOs Slide Below Zero; "Market Changed Dramatically In 6 Weeks"Submitted by Tyler Durden on 02/21/2016 23:34 -0400
First it was Junk Bonds, then Investment Grade bonds, then bank loans, and now, in just six weeks, the CLO shoe has finally dropped.
The OPEX game is back in full swing and brought back hope amongst signs of bullish capitulation everywhere.... but there is plenty of bad (and even ugly) to consider.
"...in a world where corporate balance sheets are arguably the most unhealthy they have ever been (all-time high leverage in HG and HY) where companies have relied on cheap debt to fund a growth through acquisition strategy, what happens if funding is either unavailable or too expensive to make a growth through acquisition strategy make sense? Same goes for buybacks and special dividends?"
It appears that China has finally figured out this loophole to track the PBOC's attempts at masking the sheer size of its outflows, because as SCMP reported overnight, "sensitive data is missing from a regular central bank report in China" ... Financial analysts say the sudden lack of clear information makes it difficult for markets to assess the scale of capital flows out of China.
In a market where fraud is tolerated or even encouraged, no amount of capital will suffice to maintain investor confidence.
"In a scenario in which investors are not bailed out and thus become more cautious, eg, rolling over some of the debt instruments in the shadow banking sector, some borrowers may struggle to obtain credit, for example, developers and coal miners. Whether this scenario would trigger a chain reaction is a key risk that needs to be monitored."
Biggest Short Squeeze In 7 Years Continues After Bullard Hints At More QE, OECD Cuts Global ForecastsSubmitted by Tyler Durden on 02/18/2016 08:00 -0400
Just when traders thought that the biggest and most violent 3-day short squeeze in 7 years was about to end a squeeze that has resulted in 3 consecutve 1%+ sessions for the S&P for the first time since October 2011, overnight we got one of the Fed's biggest faux-hakws, St. Louis Fed's Jim Bullard, who said that it would be "unwise" to continue hiking rates at this moment, and hinted that "if needed", the most natural option for the Fed going forward would be to do further Q.E.
"...a moratorium on printing new high denomination notes would make the world a better place."
- Larry Summers, Harvard Professor
It is ironic how when central bankers take away the training wheels, nobody has any clue anymore how to trade this "market"
As the One Bank strips humanity bare of all its wealth, these Owners make it harder and harder for themselves to continue to hide.
Not a bad way to launch a global ban on paper currency ahead of a global NIRP regime, and all, of course, in the name of fighting "tax evasion, financial crime, terrorism and corruption."
One place that provides some glimpse into true price discovery was the just completed government tender, in which a parcel of land sold by the government in the New Territories went for nearly 70% less per square foot than a similar transaction in September.
Here is the real reason why suddenly high denomination bank notes are the target: it is not because "drug dealers" and tax-evaders use them, but because between banning Europe's €500 bill and the US $100 bill, over half of all physical currency currently in circulation would disappear.