Central Banks

Courtesy of the Fed, the most bearish trade going into the year end period is to go long a handful of very specific stocks.

Liquidity in the junk (and all other markets) is evaporating, and according to Citi the spread between an illiquid and liquid junk bond portfolio just hit 100 bps, the most in the history of the series. Meanwhile according to Mohamed El-Erian "The market is comfortable that whenever we hit a hiccup, the Fed is going to come back in," he said. "It's very deeply embedded that central banks are our best friends forever."

Dear Mr. President, your country faces a stagnating economy... The truth is it is too late for our politicians to act, because the speculative peak that precedes the crisis is already upon us.

There is a widespread global campaign to eradicate physical cash. And we’ve now got a connected insider confirming it.

Importantly, while the "bias" of the market is to the upside, primarily due to the psychological momentum that "stocks are the only game in town," the mounting risks are clearly evident. From economic to earnings-related weakness, the "bullish underpinnings" are slowly being chipped away.

The sums in play are so staggering (an estimated $11 trillion in emerging market debts denominated in other currencies) that even the Fed won't be able to stop the meltdown.

"So much of what we now accept as routine in financial markets would have been thought impossible prior to the 2008 crisis ?- the next logical stage in the global currency war will be direct fx intervention!"

- Albert Edwards

If you had any confidence in your ability to understand The Fed's future course of action, Fed vice-chair Stanley Fischer just destroyed it in a speech in San Francisco that beggars belief in its CYA hedgedness...

"I hesitated on doing this but I literally owe Etrade $106,445.56 as of this moment what would you do if you were in my situation?"

Having detailed the "perverted nonsense" that is the collapsing and negative US swap spreads (here, here, here, and here) and noted money manager's concerns that the big question remains whether there is "something bigger brewing under the surface that so far hasn’t been pinpointed yet," it appears Goldman Sachs feels the need to 'explain' the anomaly in what appears an effort to calm fears about the broken money markets. Of course, we don’t have to figure out what the “market” is saying about a negative spread because it isn’t saying anything other than “something” is wrong and even Goldman admits this signals funding and balance sheet strains are worsening since August.

Central planners around the world are waging a War on Cash because, as Ron Paul so eloquently put it "the cashless society is the [government]’s dream: total knowledge of, and control over, the finances of every single [citizen]." It is perhaps ironic then that Sweden, which became the first country in Europe to issue paper money in 1661, is probably going to be the first in the world to entirely eliminate it.

"The equilibrium, for now, is QE infinity – but political risk could be the breaking point"...

Stripped of accounting gimmicks, real GDP growth shows economic collapse. And it will culminate in another stock market crash.

I had never heard the term "safe space" until just a few days ago, but it's a zone in which free speech is completely forbidden, for fear of hurting the feelings of some special snowflake.