Central Banks

Goldman Downgrades S&P 500, Stoxx 600 To Sell, Cites "Elevated Valuations And The Risk Of Shocks"

After tactfully warning clients for months that staying invested in US stocks and bonds is an unacceptable risk, overnight Goldman's Peter Oppenheimer finally changed Goldman's official "tactical" bias, and as of this moment recommends selling not only bonds, as well as the S&P500 and Europe's Stoxx 600 "due to elevated valuations across assets and the risk of shocks."

US Futures; Euro Stocks Slide On Deutsche Bank Liquidity Fears; Bonds Bid

Following yesterday's paradoxical US stock surge catalyzed by a bevy of bad macroeonomic news, the overnight session has seen some good old "risk off" mood which hit European shares as a result of the previously reported $14 billion DOJ claim against Deutsche Bank, which sent Europe's biggest bank tumbling, dragging the banking sector lower, while a continued drop in the price of oil pushed energy companies lower.

Infrastructure Spending Does Not "Grow The Economy"

In simple terms that even Donald Trump and Paul Krugman can understand: there is no such thing as the Infrastructure Fairy that takes government spending and magically turns it into economic growth.

Beware Central Banks' "Illusion Of Control"; Spitznagel Warns "If The Fed Hikes, Markets Will Go Down Very, Very Hard"

"There is this sort of collective psychology that says that the Fed can keep this going, that the Fed is in control. But, in fact, central banks are not in control... Central bank balance sheets are twenty-trillion, the whole global securities and derivatives market is a half-a-quadrillion. So, in fact, central banks are miniscule compared to that. The only thing they have going for them is this collective psychology. It’s an illusion of control."

Bernanke Urges Use Of Negative Rates When Next Recession Strikes

"the fact that negative rates would be temporary and deployed only during severely adverse economic conditions would be an advantage. Like quantitative easing, which was also unpopular in many quarters, a period of negative rates would probably be tolerated by politicians if properly motivated and explained" - Ben Bernanke

5 Core Economic 'Facts'

Scores of economic figures go screaming across our screens every day, many of them contradicting yesterday’s figures, and perhaps half of them based upon lies. On top of that, we have dozens of economic theorists arguing back and forth. In the end, it’s all too muddled for most of us to make out. We each have our guesses, but none of them are terribly certain. So, this week we’d like to point out the central economic facts of the moment, five fundamental conditions that we should all be clear on...

Taper Tantrum II: "There's No Simple, Painless Solution"

It is time for central banks to start acknowledging their limitations, and doing so by acting and not talking about their future intentions. It is also time for investors to stop believing that central banks had the answers to begin with.

US Futures, European Stocks Rebound, Bonds Fall Ahead Of US Data Deluge

The overnight session started with more weakness out of Asia, where chatter that the BOJ may end up doing nothing despite all the trial balloons (as we hinted yesterday), sent the USDJPY sliding, pushing the Nikkei lower, leading to a 7th consecutive decline in the Topix, the longest such stretch since 2014 even though the BOJ is now actively buying a record amount of ETFs. However, the modest dip in S&P futures and European stocks proved too much for BTFD algos, and risk promptly rebounded.

Not Everyone Went Down With The Titanic

It’s one of the most dangerous myths most people believe... Boobus Americanus thinks cash he deposits into a bank is a personal asset he owns. But that’s not true. Once a deposit is made at the bank, it’s no longer your property. It’s the bank’s.