Capital Markets

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After €670 Billion In QE, European Inflation Plunges To -0.2%: Lowest In One Year





A little under one year after the ECB launched its own QE of €60 Billion/month in bond purchases in early March 2015, a process which has resulted in the ECB monetizing over €670 billion in European - mostly German - sovereign paper, moments ago Eurostat reported European February inflation (even though the month is not over yet), and it was a shock, with headline inflation tumbling form +0.3% Y/Y in January to a depressing -0.2% in February, the worst print since January 2015. It was expected to drop to "only" 0.0%.

 
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The Global Run On Physical Cash Has Begun: Why It Pays To Panic First





If, and when, a run on physical cash begins, there will be roughly $1 dollar in physical to satisfy $10 dollars in savers' claims, a ratio which drops to 20 cents of "deliverable" cash if the $100 bill is taken out of circulation.

 
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The G-20 Meeting Was A Big Disappointment: What Happens Next





It is now all up to the ECB: "If they lowball or grudgingly meet expectations, we could face another December 4 move because market participants will see it as the equivalent of a ‘last ease in the cycle announcement’, basically ECB throwing in the towel. If they move aggressively they will catch market off guard and unwind the view that policymakers see themselves as powerless."

 
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About That $1 Trillion In Distressed Credit: UBS Responds To Wall Street's Shock





UBS' recent bearish assessment of the junk bond space led to a firestorm of protests from Wall Street asset managers for whom just the selloff in itself had become a catalyst to buy. So, to clear up any confusion, here is Matthew Mish responding to the barrage of angry bulls why the $1 trillion in distressed credit - a third of the entire universe - is not just an energy story, and responding to the five most important and recurring questions

 
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Keynesian Skeptics Ask "Can Binge Drinking Really Cure Alcoholism?"





Central bankers are like alcoholics - drunk on stupidity and arrogance; and, like a suffering alcoholic, reticent to address the real problem.

 
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An Odd Correlation Between Market Crashes And "Socialism"





While we were looking at various other Google trends, we stumbled across the following chart, which may have profound implications for not only U.S. capital markets, and what the media does or does not follow, but ostensibly the outcome of the U.S. presidential election and the overall future of the U.S.

 
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This Is The Data Revision Which Just Made A Rate Hike Much More Likely





Janet Yellen's last "data-dependent" loophole to delay a rate hike in the coming months was just revised away.

 
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G-20 Needs To "Man Up" Or Risk Sparking Market Chaos, Citi Warns





“Keeping the previous language would be very disappointing and would be viewed as either complacent or reflecting policy paralysis. [They need to] man up and tell member countries that monetary policy should be accompanied by fiscal expansion.”

 
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Copper & Crude Are Soaring On China Hype





Amid hype hope that China will suddenly change course and unleash all new fiscal stimulus - because just what the nation needs is more ghost cities, ghost bridges to nowhere, and ghost infrastructure - has sparked panic-buying in crude and copper this morning...

 
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R.I.P. M&A Boom: Goldman Fails To Get $2 Billion LBO Deal Done Even At Double-Digit Yields





On Thursday, we got still more evidence that the market's appetite for junk is waning when Goldman ran into trouble trying to get the financing done for the Vista/Solera deal. Solera - which is being sold to PE Vista Equity Partners - didn't have any trouble with a $1.9 billion leveraged loan offering last week (it was actually oversubscribed), but when Goldman tried to price $2 billion in bonds intended to help fund the LBO, things got dicey.

 
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Dimon's Bottom In Danger Of Penetration After JPM Warns Of 25% Plunge In Capital Markets Revenue





Fr all those who were positive that Dimon's bottom - set when Jamie bought some $26 million in JPM stock two weeks ago - can not possibly be penetrated, keep a close eye on this chart.

 
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These Are The Two Canadian Banks Most Exposed To A Severe Oil Shock According To Moody's





The severe stress case "could force lenders to cut dividends, sell shares or take measures to preserve capital. The six biggest banks would see losses of C$5.56 billion ($4 billion) in a moderate scenario, while losses in a severe scenario would reach C$12.9 billion, or about 1.5 times the lenders’ combined quarterly profits."

 
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"Perma-bears" 2 - BofA Economist 0





"Capital markets seem to be pricing in a 50% or higher probability of a US recession. Our rates team has developed an adjusted yield curve measure that signals a 68% probability of recession."

 
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