Eurozone

QE: The Good, Bad And Ugly (Or, Why War Is Coming)

"The ugly part comes in when thinking about how to exit QE, if at all. Unfortunately I can't help but think of how the Great Depression ended: it was a boost of fiscal spending, all right: the financing of a war... note that increasing military expenditures in the name of national defense may be more easily passed through the legislature in countries without strong majorities than infrastructure spending. Add to that a rise in populist politicians throughout the world, and we have a mix that suggests to me history may well repeat to those unwilling to learn from it."

Here They Come: ECB Pledges To Bailout Markets In Case Of Brexit

The European Central Bank would publicly pledge to backstop financial markets in tandem with the Bank of England should Britain vote to leave the European Union, officials with knowledge of the matter told Reuters. "there will be a statement to do whatever it takes to maintain adequate market liquidity."

Soaring Brexit Fears Spark Global Flight To Safety, Send 10 Year Bunds Tumbling Below 0%

The UK EU referendum is suddenly totally dominant in financial markets. The increased focus comes as the leave campaign has gathered steam as 4 polls yesterday afternoon/evening put the 'leave' campaign ahead. As a result of the continued global scramble for safety, German 10Y bunds finally dropped below 0% for the first time ever, while global risk assets are red around the globe.

UK Establishment Loses The Mainstream Media: "Why I Am Voting To Leave The EU"

"Stripped of distractions, it comes down to an elemental choice: whether to restore the full self-government of this nation, or to continue living under a higher supranational regime, ruled by a European Council that we do not elect in any meaningful sense, and that the British people can never remove, even when it persists in error...Americans of all people should understand why a nation may wish to assert its independence."

An Everyman's Guide To Understanding Cryptocurrencies

When an asset rises by almost 30% in a few weeks, it tends to attract attention. Recently, that asset was bitcoin (BTC). Are these cryptocurrencies mere fads? Or are they potentially game-changing alternatives to the conventional currencies such as the U.S. dollar, Chinese RMB, Japanese yen or European Union euro? There’s no lack of skeptics and critics of bitcoin and other cryptocurrencies; yet despite concerns about security, criminal use and volatility, cryptocurrencies have proliferated at a dizzying pace. So what are those who can't follow the technical arguments supposed to make of all this?

"Deliberately Overblown" Brexit Fears Backfire

As the June 23rd BREXIT (the UK-wide referendum to leave the EU) vote draws near, the polls indicate a close result. Those urging a vote for the UK to remain inside the EU are suggesting increasingly dire economic consequences that would follow a yes vote by the British people to leave. Voices from London, Brussels, and Washington have all put immense pressure on British voters to bend to the will of the elites. To listen to their commentary one would think that apocalypse was just around the corner. But is there any substance to their warnings?

Goldman Prepares To Turn Bearish On Oil Again; Boosts 2016 Bond Default Target By 25%

"After a quiet Jan/Feb, E&P bankruptcies picked up steam in late 1Q ahead of spring borrowing base redeterminations. By our math, about $30bn of par value debt has defaulted in the HY E&P space YTD, representing about a 17% default rate. On the back of our bottom up analysis we are now raising our full year default forecast to 21% from 17% previously."

Mario Draghi Is Now Buying Junk Bonds

A few days after the ECB unexpectedly announced its CSPP, or corporate bond buying program which based on its definition was limited to investment grade, non-financial debt, we explained "Why The ECB Will Be Forced To Buy Junk Bonds", saying that "the EU corporate sector’s penchant for bond buybacks may ultimately force Draghi further down the ratings ladder lest the ECB should end up entangled tender offers or else end up without enough debt to monetize." This was confirmed on the very first day of the ECB's bond purchases.

With Daily Record Lows, Here Is A Chart OF German Bund Yields Since 1977

Two stunning statistics: according to Commerzbank almost two-thirds of all German sovereign debt outstanding now yields below minus-0.4%, which makes it ineligible for central-bank purchases. Additionally, as DB adds, Bund yield across the whole curve has gone negative for the first time.