"If, as seems possible, the ECB will increase, in H1 2016, the scale of its monthly asset purchases from €60bn to, say, €75bn, and if these additional purchases are concentrated on public debt, the euro area will benefit from a ‘backdoor’ helicopter money drop –something long overdue."
Athens Recalls Ambassador To Prague After Czech President Says He Is "Disappointed Greece Did Not Leave Euro Area"Submitted by Tyler Durden on 12/22/2015 13:33 -0500
Speaking to Slovak news agency TASR on December 15h, President Milos Zeman said that he was "extremely disappointed that the summer negotiations between Greece and creditors did not ultimately lead to Greece’s exit from the euro area, although it looked quite possible." Greece had an immediate response: it recalled its ambassador to Prague.
“To the intelligent man or woman, life appears infinitely mysterious, but the stupid have an answer for everything.” ~Edward Abbey
SocGen Looks At The Devastation Across Markets, Sarcastically Concludes It Is "Time For A US Rate Hike"Submitted by Tyler Durden on 12/14/2015 08:53 -0500
"The solution to uncertainty is cheaper valuations. If problems are priced in, investors can afford to look through near terms concerns and focus on the longer term. Worryingly, we have exactly the opposite situation today. Average stock valuations are close to historical highs – so we have lots of risk and little in the way of valuation cushion.... Time for a US rate rise then?"
"In short, the age of unconventional monetary policy begun by the 2007-09 financial crisis might not be ending."
- Jon Hilsenrath
"The move would arguably represent the biggest transfer of sovereignty since the creation of the single currency."
"2015 Was Like Commuting By Rollercoaster" - Art Cashin Reviews The 2015 Market And Shares His 2016 OutlookSubmitted by Tyler Durden on 12/10/2015 13:27 -0500
"2015 was like commuting by rollercoaster. There were heart-stopping drops, there were nearly vertical ascents, and when it was all over you got off just about where you started and it cost you money."
“I don’t think we’ve seen the last of this trend. When I trained as an economist, negative rates weren’t in the textbooks. But that’s the world we live in now, and it hasn’t stopped turning."
Beware The "Massive Stop Loss" - JPM's Head Quant Warns This Unexpected Downside Catalyst Looms Next WeekSubmitted by Tyler Durden on 12/07/2015 18:39 -0500
"There are $1.1 trillion of S&P 500 options expiring on Friday morning. $670Bn of these are puts, of which $215Bn are struck relatively close below the market level, between 1900 and 2050. At the time of the Fed announcement, these put options will essentially look like a massive stop loss order under the market. This important event falls at a peculiar time—less than 48 hours before the largest option expiry in many years. "
Global equity markets, as measured by the MSCI Developed World index, are above the lows hit in early October but remain on a downtrend that began after markets peaked at the end of May this year. As SocGen's Andrew Lapthorne notes, the current level is now only just above where the index stood at the beginning of 2013 and less than 1% above the 2007 peak. In other words, as he warns, "the equity market has run out of momentum," and the 'bill' for the debt overhang is coming due.
Paul Volcker and Alan Greenspan were the Elvis and Beatles of this movement – the first to see widespread fame for their efforts. Then came Ben Bernanke, perhaps the Jimi Hendrix or Led Zeppelin of his day, taking existing tools and pushing them in new, previously unconsidered, directions. Now, we have Janet Yellen and Mario Draghi, whose legacies are as yet undefined. They may end up like the next generation of rock stars from the 1970s – something like Bruce Springsteen, with a deep focus on common people in his music. Or, they could be the Bee Gees, who focused simply on commercial success. Only time will tell.
"Deteriorating market breadth and herding into an ever-narrower number of stocks is classic market top behavior. Currently, there are many other warning signs that are also being ignored. The merger mania, the stock buyback frenzy, the year-over-year declines in corporate sales and falling earnings for the entire S&P 500 index, the plunges this year in the high-yield and leveraged loan markets, the topping and rolling over of the massive (record) level of stock margin debt... and I could go on."