Central Banks

Dennis Gartman Turns Bearish And Futures Hit Overnight Highs

"when this sort of thing happens following bullish moves it has almost always signaled the end of the bull-run. Couple this unanimity of price movement with the “reversals” noted above and we have a situation that  concerns us greatly. Indeed it concerns us enough to exit our long positions entirely upon receipt of this commentaryCertainly we do not like switching positions this quickly, for we appear to be flippant and foolhardy, but history tells us that we have no choice."

HSBC Is Now "Highly Risk Averse" Amid Growth Worries, Loss Of Central Bank Put

A confluence of circumstances have conspired to make asset allocation a somewhat vexing task these days. The so called “tricky trinity” is comprised of the following three factors: decelerating global growth, the absence of a policy put, and risk premia offering but a limited buffer. For HSBC, this means "remaining highly risk averse" going forward.

Buy The Fear (And You Will Be Protected From The Horror)

Global central banks have made a Faustian bargain with our economic soul selling our future for a false stability today. At this stage, absent continuous intervention, a large deflationary crash in the global economy is inevitable. The next Lehman brothers will be a country. The real ‘shadow convexity’ will not come from markets but political unrest or war. Peace is not the absence of conflict. Global Central Banks have set up the greatest long volatility trade in history. Buy the fear and you will be protected from the horror.

The "1%" Own Half The World's Assets: The Stunning Chart

Credit Suisse is out with the latest edition of its Global Wealth report and although the results are not entirely surprising, they are worth highlighting. Three standouts: i) the rise in the value of financial assets is most certainly contributing to an increase in global inequality, ii) dollar strength led to the first decline in total global wealth (which fell by $12.4 trillion to $250.1 trillion) since 2007-2008, iii) 0.7% of the world's population own nearly half of the world's wealth while the bottom 71% of the population own just 3%.

Coming Soon To A Checkout Lane Near You: Stock Giftcards

This. Will. Not. End. Well. As WSJ reports, "retailers such as Kmart and Office Depot this week are starting to roll out cards that give the recipients small amounts of stock in some of the country’s best-known companies." "I have always wanted to get into the stock market business, but I honestly don’t have the time to explore what’s going on in the market trends of the day"...

Johnson & Johnson Announces $10 Billion Buyback Ahead Of Earnings To Stabilize Sliding Stock Price

With JNJ about to announce - what are almost certain to be very bad - earnings in just over an hour, the company decided it was prudent to set the mood by preannouncing, less than an hour before earnings, good days are back again and that the company will do all in its power to not only increase the buyback pardon equity-linked compensation of CEO Alex Gorsky, but to reward shareholders for sticking with a company that hasn't announced a major buyback plan in recent months.

Futures Slump After China Imports Plunge, German Sentiment Crashes, UK Enters Deflation

For the past two weeks, the thinking probably went that if only the biggest short squeeze in history and the most "whiplashy" move since 2009 sends stocks high enough, the global economy will forget it is grinding toward recession with each passing day (and that the Fed are just looking for a 2-handle on the S&P and a 1-handle on the VIX before resuming with the rate hike rhetoric). Unfortunately, that's not how it worked out, and overnight we got abysmal economic data first from China, whose imports imploded, then the UK, which posted its first deflation CPI print since April, and finally from Germany, where the ZEW expectation surve tumbled from 12.1 to barely positive, printing at just 1.9 far below the 6.5 expected.

The Monetary Policy Dead-End

Fed chief Janet Yellen’s hesitations and the market turmoil since August seem to validate that it is impossible to stop the accommodative monetary policy, unless you accept that doing so would trigger a new global crisis. The Fed is aware that raising interest rates too fast and too high could have the same effect as pressing the nuclear button. The whole system could collapse and it cannot be taken for granted that the central banks would be able to extinguish the fire this time. Their strike force has weakened because their balance sheets are exposed to market fluctuations and their credibility was seriously damaged because the measure they have taken have failed to strengthen the economy.