Central Banks

Kinder Morgan - Poster Boy For Bubble Finance

After Tuesday’s dividend massacre, it’s plain as day that Kinder Morgan wasn’t the greatest thing since slice bread after all. That is, a “growth” business paying rich dividends out of rock solid profit margins and flourishing cash flow. In fact, it was just a momo stock on a borrowing spree.

Bank of America: "Sadly, It Took World War II..."

"A flip to fiscal stimulus is the most likely catalyst for a Great Rotation out of “deflation plays” into “inflation plays”, undoubtedly the biggest investment decision of 2016. Sadly it took the New Deal and WW2 to end the dominance of “growth” over “value” in the 1930s."

Weekend Reading: Risk - That Is All

While the world patiently waits for Janet Yellen to raise interest rates this month, the markets have been unable to decide as of yet whether such an event is good or bad thing.

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A tragic example of this was seen in Italy in recent days when a pensioner committed suicide after having his life savings wiped out in a bank bail-in. A pensioner from near Rome, hanged himself after his €100,000 (£72,000; $110,000) investment in Banca Etruria bonds were wiped out in a bail-in. A suicide note was left by the pensioner criticising the bank.

How Peak Debt Constrains The Fed From Moving Rates Higher

As soon as the Fed moves money market rates upwards, unproductive parts of the economy will come under severe strain which in turn sets in motion recessionary forces prompting the Fed to reverse course. The only way out is to realize that the world is awash in mal-invested capital that need to be written off. Since that is inconceivable for today’s vested interests, the way forward will be further “Japanification” of the global economy. And this time we are all out of arrows.

US Equity Futures Suddenly Fall Off A Cliff As Europe Slides, Oil Tumbles, EM Currencies Turmoil

It was a relatively calm overnight session in which European stocks wobbled modestly, Japan was up, China was down following its weakest fixing since 2011 as the PBOC continues to aggressively devalue since the SDR inclusion (stoking concerns capital outflows are once again surging), EM stocks stocks were weak and the dollar was unchanged ahead of today's retail sales data and next week's Fed meeting, and then suddenly everything snapped.

The Fed's In A Bind: The Cluelessness Of The Macroeconomic Establishment

The next financial crisis could manifest itself in the coming months. If so, it will mark the end of current central bank monetary policies and state control of markets, as free markets reassert realistic pricing. Government bond yields will normalise, stock markets will fall, and banks will almost certainly fail. When something as epochal as this happens, we can expect the macroeconomic establishment to be clueless with respect to the problem itself and its scale.

After Vicious Rollercoaster Session, Global Stocks Flat, US Futures Stage Tepid Rebound In Illiquid Chaos

After yesterday's rollercoaster session in both the S&P and in oil, where initially stocks soared alongside oil, only to promptly tumble as stops were taken out and as the refiners' inventory strategy was exposed after the DOE's latest weekly numbers were released, it has been a quieter session so far, though maybe not for China where stocks jumped at the open only to fizzle and close at the lows in what appears to be ever less intervention by the market manipulating "National Team."