Credit Default Swaps

Capital Flight Chaos - Safe Havens Are Tiny Markets

There's a preponderance of data that shows the world's major asset markets are dangerously overvalued. And when these asset bubbles start to burst, the 'save haven' markets that investment capital will try to flee to are ridiculously small. Investors who do not start moving their capital in advance of crisis will be forced to pay much higher prices for safety -- or may find they can't get into these haven assets at any price...

Fortunes Will Be Made & Lost When Capital Flees To Safety

There's a preponderance of data that shows the world's major asset markets are dangerously overvalued. And when these asset bubbles start to burst, the 'save haven' markets that investment capital will try to flee to are ridiculously small. Investors who do not start moving their capital in advance of crisis will be forced to pay much higher prices for safety - or may find they can't get into these haven assets at any price:

Theranos: Unicorn Valley's Madoff Moment

In “The Valley” the last 7 or 8 years has seen a morphing of true business fundamentals into a place of pure financially adulterated fantasy. Here is where the story changed from “Something built that customers love and will pay for," into “Build something that can give the illusion VC’s want to see and hear so they can pay for the right to then sell that illusion to Wall Street and we all get rich.” True business metrics or morals be damned.

Japan's Broken Economy - 25 Years Of Failed "Stimulus" & "Temporary Illusions"

Given the history of intervention and “stimulus”, and more so when it occurs and really re-occurs, any impartial observer would be forgiven if they believed that QEs were actually constant impediments to growth. The proliferation of “stimulus” after the Great Recession correlates only with this downshift in the Japanese economy that cannot be due to demographics. At best, QEs have accomplished nothing at all positive, leaving no trace of something actually being stimulated for all the sustained “stimulus”; at worst, QE is the cause of Japan’s further nightmarish descent.

The Biggest Bubbles: China vs. The U.S.

There is perhaps no other area where the tunnel-vision, hypocrisy, and corruption of the U.S. media is more visible than with respect to its nearly incessant China-bashing. Previous commentaries have exposed such vacuous drivel again and again and again. Admittedly, the numbers involved should give any sober individual cause for concern. They are an obvious symptom of the global phenomenon of worthless, paper currencies being used to pump-up, manipulate, and destabilize our markets – to a degree never before seen in the history of our species. However, singling out China’s markets as being “prone to bubbles” represents hypocritical blindness on the part of the U.S. media which is too absurd to be accidental.

Bill Clinton Confirms "Wants Economic Role" In Hillary's Administration

Is this why stocks are slipping? Following Hillary's hint last night that she would like to put her husband in "charge of revitalising the economy, because you know he knows how to do it," Bill confirmed the farce this morning, admitting he has asked for an "economic role" in his wife's adminstration. As Yves Smith so eloquently noted, after having institutionalized the neoliberal economic policies that have enriched the 1% and particularly the 0.1% at the expense of everyone else, Hillary Clinton wants to give the long-suffereing citizenry an even bigger dose. Good luck America.

June 2003 - The Fed's Brief Moment Of Clarity

We have referred to the June 2003 FOMC meeting many times before and we suspect that we will continue to do so long into the future. It was one of those events that should be marked in history, truly relevant to the future developments that became panic and now sustained economic decay. It’s as if the committee members at that time anticipated their current powerlessness – yet did nothing about it. Their preferred course from that moment until August 2007 was relieved ignorance, as Greenspan admitted at the time, " I don’t think we know enough about how the private financial system works under these conditions [sub-1% rates],  I don’t believe, that we can construct an effective preemption strategy. Well, we can construct a strategy, but I’m fearful that it would not be very useful."

Trump Picks Former Goldman Partner And Soros Employee As Finance Chairman

In an oddly ironic twist, today Donald Trump announced that he has picked as chairman of his newly launched fundraising operation none other than a former employee of the bank he has repeatedly criticized in the past, and which he used as a foil to criticize Ted Cruz: Goldman Sachs.  In addition to Goldman, Mnuchin also worked for Soros previously. Where it gets even more ironic is that Mnuchin has donated frequently to Democrats, including to Clinton and Barack Obama.

Days After Wells Fargo Admits Defrauding The Government, NY Fed Rewards It With Primary Dealer Status

Ten days ago, in the latest example of how criminal Wall Street behavior leads to zero prison time, Wells Fargo admitted that it deceived and defrauded the U.S. government.  Its punishment: a $1.2 billion settlement, one which will ultimately be paid by the bank's shareholders as no executives go to prison. And now, less than two weeks later it's time for Wells to get its reward: the NY Fed just announced it would grant Wells Fargo the much coveted Primary Dealer status.

 

New Jersey In Fiscal Peril As David Tepper Departs

First it was Connecticut, now another state is in the crosshairs following the imminent "exstatiation" of another prominent hedge fund billionaire, David Tepper.  The decision by billionaire hedge-fund manager David Tepper to quit New Jersey for tax-friendly Florida has put the Garden State in fiscal peril, and  could complicate estimates of how much tax money the struggling state will collect, the head of the Legislature’s nonpartisan research branch warned lawmakers.

The New New 'Deal' - "Markets Are Too Important To Be Left To Investors"

In the same way that FDR had an existential political interest in generating inflation and preventing volatility in the US labor market, so does the US Executive branch today (regardless of what party holds the office) have an existential political interest in generating inflation and preventing volatility in the US capital markets. Transforming Wall Street into a political utility was an afterthought for FDR; today the relative importance of the labor markets and capital markets have completely switched positions. Today, the quote would be "markets are too important to be left to investors."

Which Countries Have The Highest Default Risk: A Global CDS Heatmap

Sweden beats USA and Germany as the least likely to default on its bonds but at the other end of the global sovereign risk spectrum lie two socialist utopias - Venezuela (CDS just shy of 6000bps) and Greece (CDS around 1800bps) are the nations most likely to default.