Bank Of England Exposes US Cronyism: Questions Why Buffett's Berkshire Hathaway Is Not Too Big To FailSubmitted by Tyler Durden on 04/20/2015 18:00 -0400
If you thought currency-wars were a problem, just wait until crony-wars begin. In a stunning show of disagreement among the omnipotent, The FT reports that a Freedom of Information Act request has confirmed The Bank of England wrote to US authorities seeking clarity about Berkshire’s absence from a provisional list of "systemically import" (Too Big To Fail) financial institutions (SIFIs). The US Treasury declined to comment...
While this week sees the peak of Q1 earnings season, it will be a generally quiet week on the macro economic front for both EM and DM, with the emphasis on the latest seasonally adjusted manufacturing sentiment surveys, US durables and Japan trade.
It is only fitting that the next business day following a headline that "Global Futures Slide China Tumbles On Short Selling Boost" we would see China, in an apparent panic, not only cut its RRR by 100 bps to 18.5% - far more than expected and the most since 2008 - but, more importantly, hinted that the Friday regulatory decision to encourage short sales and tighter margin rules on "umbrella trusts" was in no way meant to pop that the Chinese stock bubble, ridiculous as it may be. End result: after Chinese futures crashed by up to 6% on Friday after the Shanghai close, overnight the SHCOMP was down just 1.64%, erasing the bulk of the futures loss. More importantly, US equity futures have seen a strong bid this morning in yet another attempt to defend not only the Apple Sachs Industrial Average from going red on the year but the all important 100 DMA technical levels.
A “soft landing” is unlikely.
Can you arbitrage time? Can you buy and sell time? We think that you can from the perspective of time horizons. In our view, financial markets are operating on the wrong time horizon – one that is too long (thanks to central banks ZIRP/NIRP and credit creation) - although there are signs that this is beginning to change.
UK Housing Bubble Bursts: Sales Of Luxury Homes Crash By 80% As "Waves Of Wealthy People Are Leaving"Submitted by Tyler Durden on 04/12/2015 16:56 -0400
The problem with the relentless scramble into London real-estate is that it was almost entirely driven by the high end, which as we have reported tirelessly over the past 4 years, has become - alongside the US ultra luxury real estate market - the new "Swiss bank account": a mostly anonymous place (with anonymous LLCs and Corps buying on behalf of uber-rich foreign oligarchs) where tax evaders can park their cash, with the NAR's, and the government's, blessing. And now, the party is over. As the FT reports, "sales of homes worth more than £2m have dropped by 80 per cent in the past year."... "It is like the 1970s again, when waves of wealthy people left Britain and it was a disaster.”
Asia Superbubble Unstoppable: Hong Kong Up 10% In Past Week; Soaring Dollar Pushes Euro Back Under 1.06Submitted by Tyler Durden on 04/10/2015 06:53 -0400
Overnight market news was once again driven by the Asian superbubble, where as expected, the Hang Seng (+1.22%) soared once more and is now up 9.5% for the week, following news the Hong Kong Exchanges and Clearing Ltd (HKEx) expects it will "substantially increase" quotas for the stock connect program between Hong Kong and Shanghai, HKEx Chief Executive Charles Li said on Friday. The exchange could boost the current quotas, which cap how much mainland investors can buy Hong Kong stocks and vice versa under the trading link, by more than 20 or 30 percent, Li said at a media briefing in Hong Kong. Li did not give a precise date for when the quotas would be raised, but one thing is clear: everyone in China, and Hong Kong, must be all in stocks if the Chinese housing bubble can not be reflated. The Shanghai Comp closed higher by almost 2.0% following better than expected Chinese inflation data, while HK stocks continued their recent rally to closer higher by 9.5% for the week.
As noted several hours ago, the main story overnight is not that Greece once again narrowly averted a Grexit when it was reported it would make its scheduled payment to the IMF today (adding that next month is a "different story") a development that was met with yet another ultimatum by its "partner", the Eurozone, but the dot com bubble deja vu-esque move in Hong Kong stocks, where the Chinese, seemingly tired of pushing up their local market into the stratosphere have turned their attention southward and are desperate to buy up every single Hong Kong stock.
Yesterday it was only the US that got the full benefit of the market-wide stop hunt that sent the US market soaring on its biggest opening ramp in 2015 following the worst payroll data since 2013, because Europe was closed for Easter Monday. Which means today it was Europe's turn to celebrate atrocious US data (yes, yes, snow - because somehow tremendous January and February jobs data was not impacted by snow), and in the first European trading session of the week, equities have started off on the front-foot.
Hedge Fund Legend Julian Robertson Warns Of A "Complete Explosion" Unless Fed Contains "Boiling, Bubble" MarketSubmitted by Tyler Durden on 04/06/2015 23:28 -0400
According to hedge fund legend Julian Robertson, the Fed must act and hike rates soon because “the economy warrants it and I think [the Fed is] not crazy enough just to let this thing boil over into complete explosion. I am looking at a bubble that is almost sure to pop at some time and I don't know when it's going to happen, but I know it's going to happen. The bigger this bubble gets, the bigger the burst." What happens then: "I don't think it's at all ridiculous to think of a selloff like we saw in 2008."
A dispassionate look at the drivers of the investment climate in the week ahead.
* Silver surges 6.5% in dollars and 19% and 12% in euros and pounds *Oil and most commodities declined on economic concerns in the quarter (see table) *U.S. stocks eked out minor gains to new record highs and look toppy *Gold performance impressive given strength of dollar and equities, oil collapse and negative sentiment
A look ahead at the major drivers in the days ahead.
A non-bombastic look at the week ahead in the capital markets.
After a few days of dollar weakness due to concerns that the Fed's rate hike intentions have been derailed following some undisputedly ugly economic data (perhaps the Fed should just make it clear there will never be rate hikes during the winter ever again) the USD has resumed its rise, and as a result risk assets, after surging early in the overnight session driven by the Nikkei225 and the Emini, the "strong dollar is bad for risk" trade has re-emerged, with the Nikkei dropping almost 500 points off its intraday highs, with US equity futures poised to open lower once more, sliding nearly 20 points in the overnight session, and surprising the BTFDers who have not seen five consecutive days of "risk-off" in a long time.