Capital Markets

Frontrunning: May 12

  • World stocks ease off record highs, Fed rate hopes boost dollar (Reuters)
  • Trump Escalates FBI Fight With Comey Attack. The FBI Fights Back (BBG)
  • Trump attacks on fired FBI chief meet resistance (Reuters)
  • China Stocks Are Tumbling Again. This Time, the World Doesn’t Care (BBG)
  • Yuan Becomes Oasis of Calm in China’s Volatile Markets (WSJ)

Chinese Black Swans? No Problem!

With bonds, stocks, and commodities collapsing amid a renewed wave of Chinese monetray conditions tightening, concerns over potential butterfly effects and potential 'black swans' are beginning to appear. However, as The South China Morning Post reports, the people of Shanghai have a solution for that...

Moodys Slashes Ratings On 6 Canadian Banks, Fears Asset-Quality Deterioration, Soaring Household Debt

Amid Poloz-described "unsustainable prices" in various cities, and just days after the collapse of Canadian mortgage lender Home Capital Group and our discussion of the dire state of Canadian savers (and their record household debt), Moodys has cut the rating son six of Canada's largest banks because of "ongoing concerns that expanding levels of private-sector debt could weaken asset quality in the future."

April Was Cruel… To The US Treasury

Last month was not so good to the US Treasury. “Individual Income and Employment Taxes, Not Withheld” (the Treasury line item for receipts outside the customary withholding process) were down 5.7% year over year to $182 billion. Moreover, this is the lowest April haul since 2012. The April tax receipts of 2013 to 2016 ran between $193 billion (2014) to $219 billion (2015). This year’s receipt totals are far from those.

"Mystery" Central Bank Buyer Revealed, Goes On Q1 Buying Spree

While traders and investors were struck by the perplexing price action in the market in the first few months of the year, where on one hand institutions were dumping stocks at a near-record pace even as the S&P was making fresh all time highs, one central bank was quietly buying everything in sight....