"This Is Much Larger Than Subprime" - Here Are The Legendary Hedge Funds Fighting The Chinese Central BankSubmitted by Tyler Durden on 01/31/2016 21:57 -0400
Who are the brave souls who have decided to very openly fight the People's Bank of China? Here is a sample: Soros, Bass, Ackman, Druckenmiller, Tepper, Schreiber, Einhorn, Scogging, and Carlyle, Nexus and many more.
Many believed that the NOK was backed by oil, not requiring a gold reserve. However, oil is no longer a scarce resource but an abundant commodity. Switzerland, Germany, America and other first world nations have gold reserves. Norway should have one too.
"I don’t want to invest in stocks because they’re crazy and real estate is a solid, safe investment."
It is safe to say that nobody expected the BOJ stunner announced last night, when Kuroda announced that Japan would become the latest country to unleash negative interest rates, for one simple reason: Kuroda himself said Japan would not adopt negative rates just one week ago! However, a few BIS conference calls since then clearly changed the Japanese central banker's mind and as we wrote, and as those who are just waking up are shocked to learn, negative rates are now a reality in Japan. The immediate reaction was to send the USDJPY surging by nearly 200 pips, back to levels seen... well, about a month ago.
Americans across the country have been priced out of the U.S. housing market since the “recovery” began due to a combination of factors; stagnant wages, private equity purchases and money laundering foreigners. As such, many potential first time buyers have been sidelined despite the availability of meager 3% downpayment loans from the FHA as well as Fannie Mae and Freddie Mac. Fortunately for the U.S. ponzi scheme economy, the U.S. government has a solution. Lower mortgage insurance premiums.
It has been another volatile, illiquid, whipsawed session, driven by the only two things that have mattered so far in 2016, China and oil.... and stop-hunting algos of course.
As we put it on Friday, "the Texas recession is only in its early innings," because we are just now beginning to witness the bankruptcies and shut-ins that will soon become endemic and sweep across the entire US oil patch as revolvers are reigned in and Wall Street suddenly refuses to finance uneconomic producers' funding gaps. So how bad can things get in Texas, you ask? Goldman has ventured a guess.
"China 2016 Is US 2008" Felix Zulauf Warns "The Outcome Of A Major Yuan Devaluation Would Be Disastrous"Submitted by Tyler Durden on 01/22/2016 16:55 -0400
"China is to the current cycle what the US housing market was for the Global Financial Crisis in 2008. It will take years to correct the excesses that were built up in China... the consequences of a weaker yuan would be disastrous...If China devalues, all the other countries in the region will follow suit which will lead to a global deflationary shock. There is a real chance of a bigger correction than many investors realize..."
Following November's collapse in existing home sales (-10.5% - worst since July 2010), December saw home sales soar 14.7% (the biggest MoM jump ever). Don't get too excited as this is simply the new (know before you owe) mortgage rules delayed sales coming back. All in all it was a wash over the 2 months and NAR is careful to warn not to expect 2016 to be as good as 2015 for sales.
Maybe this is it. Maybe the global financial system has truly reached its limit. Maybe the world has realized that the path to prosperity is not in conjuring money out of thin air, raising taxes, or going deeper into debt. Maybe people have finally figured out that an insolvent government and insolvent central bank cannot possibly continue to underpin the entire financial system. Or maybe not. But the incredible thing is how much panic there has been, particularly in banking and financial markets, just at the mere HINT of problems in the system.
Things are looking increasingly shaky for central planners around the globe.
When Correlation Is Causation - The Most Important Chart In The World If You're A Realtor In London Or NYCSubmitted by Tyler Durden on 01/19/2016 22:15 -0400
If ever there was any doubts about the narrative of freedom-seeking China capital outflows driving the irrationally exuberant prices of homes in some of the world's largest cities to record highs, the following two charts will extinguish them entirely. As China continues to strengthen (as quietly as possible) its capital controls to slow the leak of money from the devaluing currency nation, and US authorities clamp-down on the anonymity of cash-only transactions, realtors in NYC, Miami, and London better hope that correlation is not causation.
There may be shallow lulls in the asset markets, nothing ever only falls down in a straight line in the real world, but the debt will and must come down and be deleveraged. The process will in all likelihood lead to warfare, and to refugee movements the likes of which the world has never seen just because of the sheer humbers of people added in the past 50 years. When your children reach your age, they will not live in a world that you ever thought was possible. But they will still have to live in it, and deal with it. They will no longer have the facade you’ve been staring at for so long now, to lull them into a complacent sleep. And the Kardashians will no longer be looking so attractive either.
Last night's Chinese data deluge can only be classified with one word: bad. So if bad news was again bad news as many claim, both commodities (read oil), and US equity futures should be tumbling right now... but just the opposite is happening and in fact both Brent and WTI have already jumped over $30 this morning. This happens even as the IEA said this morning that global oil markets could “drown in oversupply,” And yet this morning both commodities, global stocks and futures soaring? Simple: the following Bloomberg headline summarizes it: "Brent Rallies More Than $1 as China GDP Spurs Stimulus Bets," and where Brent goes, so goes risk, and the S&P.
With the US closed today for Martin Luther King Holiday, global risk tone has once again been set entirely by oil, which opened sharply lower at fresh 12 year lows on fears of an Iran oil glut, but has steadily rebounded on the latest OPEC comments, and at last check both WTI and Brent were unchanged trading in the low $29's on muted volume. With Asian markets mixed, European shares swung between gains and losses, while the yen weakened as China stepped up efforts to curb foreign speculation against its currency. Crude oil rose from a 12-year low after the Organization of Petroleum Exporting Countries forecast a decline in supplies from rival producers.