"Albert Edwards sees the possibility of a 75% decline from the peak if all his fears were to manifest themselves. Now many view this as an incredible and somewhat outlandish forecast, yet it is not that unreasonable in our view.... These types of declines would leave indices down rough 60-65% from peak, and would send leverage ratios skyrocketing."
Global Risk Off: China Reenters Bear Market, Oil Tumbles Under $30; Global Stocks, US Futures GuttedSubmitted by Tyler Durden on 01/15/2016 06:57 -0500
Yesterday, when looking at the market's "Bullard 2.0" moment, which in many ways was a carbon copy of the market's response to Bullard's "QE4" comments from October 17, 2014 until just a few minutes before the market close when suddenly selling pressure appeared, we said that either the S&P would soar - as it did in 2014 - hitting all time highs just a few months later, or the "Fed is now shooting VWAP blanks." Judging by what has happened since, in what may come as a very unpleasant surprise to the "the market is very oversold" bulls, it appears to have been the latter.
"The party's over and bond investors who always tend to be more sober types, realize this and have headed for the exits whereas equity investors are so intoxicated they haven't realized that the music has stopped. Equity investors are still gyrating around the dance floor - just as in 1999 and 2007... I believe the Yellen Fed will soon be treated with the same contempt the Greenspan Fed was in the aftermath of the 2008 financial crisis. And they will deserve it."
While the populations of Europe and the US are fed raw propaganda about the regional aims involved, the reality is far different. While we might be tempted to sit in our Western environs, secure in the idea that at least we aren’t ‘over there’ where all the bad things are happening, it would be a mistake to think that this turmoil will not impact you.
"It is already too late. Having delayed way beyond the point when it might typically have raised rates in previous cycles, it has allowed an Orc-like monster to incubate, hatch and emerge into the sunlight, snarling and ready to do battle."
When Saudi Arabia moved to Plaxico themselves last November by killing the petrodollar in an effort to bankrupt the US shale space and tighten the screws on Moscow, Riyadh set in motion a series of events that culminted in a 20% fiscal deficit and, most recently, an S&P downgrade. Now, the kingdom is not only running out of money, but water and food as well.
- There have been 606 global rate cuts since LEH
- $12.4 trillion of central bank asset purchases (QE) since Bear Stearns
- The Fed is operating a zero rate policy for the longest period ever (even exceeding the WW2 Aug’37-Sep’42 zero rate period)
- $6.3 trillion global government bonds currently yielding <0%
- $20.0 trillion global government bonds currently yielding <1%
"...the 'Ice Age' of low rates and low growth for a long time – as predicted by many analysts and economists – won’t happen. Instead, a crisis will cause a crash on Wall Street. The banks will go broke. The credit system will seize up. People will line up at ATMs to get cash and the cash will quickly run out. This will provoke the authorities to go full central bank retard. They will flood the system with “money” of all sorts. The ice will melt into a tidal wave of hyperinflation."
"The planet has been our best friend by buffering our actions and showing its resilience, but for the first time ever," warns Swedish environmental professor Johan Rockstrom, "we might shift the planet from friend to foe." As RT notes, Rockstrom explains there are nine "planetary boundaries" in a new paper published in Science – and human beings have already crossed four of them... Where's Matthew McConaughey when we need him?
With record heat (and drought) in the west and record cold (wet and snow) in the east, the global warming game-playing continues every day but the climate-gate rhetoric has increased vociferously since we first noted three weeks ago, the data that has been so relied upon to 'prove' global warming's trend was in fact manipulated. What The Telegraph called "the most extraordinary scandal of our times" - that of the "seasonally-adjusted" seasonal raw global temperature data - is about to be investigated by Congress. As Daily Caller reports, California Republican Rep. Dana Rohrbacher exclaimed "expect there to be congressional hearings into NASA altering weather station data to falsely indicate warming & sea rise."
Scientists Suggested Melting the Arctic Ice Cap to Stop an Ice Age
Albert Edwards' On The Next Shoe To Drop: The Realization That Core Inflation In The US And Europe Are The SameSubmitted by Tyler Durden on 02/08/2015 20:14 -0500
"The next shoe to drop will be the realisation that the US recovery is stalling and outright deflation is as big a threat there as it is in the eurozone. Indeed my former esteemed colleagues Marchel Alexandrovich and David Owen pointed out to me that if US core CPI is measured in a similar way to the eurozone (i.e. ex shelter), then US core CPI inflation is already pari passu with the eurozone ? despite the former having enjoyed a much stronger economy!"
Every year, David Collum writes a detailed "Year in Review" synopsis full of keen perspective and plenty of wit. This year's is no exception. "I have not seen a year in which so many risks - some truly existential - piled up so quickly. Each risk has its own, often unknown, probability of morphing into a destructive force. It feels like we’re in the final throes of a geopolitical Game of Tetris as financial and political authorities race to place the pieces correctly. But the acceleration is palpable. The proximate trigger for pain and ultimately a collapse can be small, as anyone who’s ever stepped barefoot on a Lego knows..."
"Gold Is A 6,000 Year Old Bubble" - Citi's Dutch Strategist Throws Up All Over Gold, Days After Dutch Gold RepatriationSubmitted by Tyler Durden on 11/27/2014 17:40 -0500
"Gold is the world’s most persistent bubble: 6,000 years old and going strong" - Citigroup's Willem Buiter.
Dear Willem, thank you for that valiant effort. After reading a few thousands words of shallow propaganda we understand your "confusion": our advice, if you want to understand what gold really is, read the following from Kyle Bass: "Buying gold is just buying a put against the idiocy of the political cycle. It's That Simple." Because if there is a bubble that is even bigger and longer than the "6000-year-old gold bubble" it is that of human corruption, greed, and idiocy. And that doesn't even include the stupidity of those who don't grasp this simple truth.
Albert Edwards is angry, and understandably so: almost exactly two weeks after warning readers to "sell everything and run for your lives" and the market was on the verge of its first correction in years, several powerful verbal interventions by central banks from the Fed, to the BOJ to the ECB have staged yet another massive rebound which has nearly wiped out all the October losses. Central-planning aside (and ask how much the USSR would have wished for central planning to indeed have been "aside") we share his frustrations, almost to the point where we would reiterate word for word Edwards' furious outburst, as follows: "Simply put, the central banks for all their huffing and puffing cannot eliminate the business cycle. And they should have realised after the 2008 Great Recession that the longer they suppress volatility, both economic and market, the greater the subsequent crash. Will these morons ever learn?"