Over the past two weeks, China has resorted to an eye-watering array of policy maneuvers and pronouncements in a desperate attempt to resurrect the country's margin-fueled equity bubble. Amid the chaos, Morgan Stanley — whose "don't buy this dip" call might well have been the straw that broke the dragon's back, so to speak — is out with a detailed history of Beijing's plunge protection playbook.
Health insurance companies around the country are seeking rate increases of 20 percent to 40 percent or more, saying their new customers under the Affordable Care Act turned out to be sicker than expected.
Even after this somewhat catastrophic drop, BofAML warns the Chinese market looks expensive. Deleveraging is likely far from over, they add, concluding that the market is a "falling knife" and only direct buying by the government will mark the bottom. As Deutsche adds, "so large are the losses for the 20 million accounts opened from mid-April to mid-June that in aggregate no money has been made for 2 years."
This is the question that astute investors are forced to ask themselves these days. No reasonable person believes that a system of ever-expanding debt can resolve painlessly. It simply cannot happen... not, at least, until 2+2 stops equaling four. But the international money system, while deeply interconnected, can implode in sections. In fact, it’s highly unlikely that it will crash as a single unit. So, if you have significant moneys to invest, you end up coming back to our question: Who will be the last to crash?
We warned previously that when (not if) the market crashes next, The Fed is going to need a scapegoat (other than British traders living at home with their parents) and judging by The Fed's Lael Brainard's comments today, high-frequency-traders (HFT) are in the crosshairs. Crucially, Brainard warns that HFT "may amplify market shocks," and The Fed is "studying possible changes in liquidity resilience."
That an ETF can satisfy redemption with underlying bonds or shares, only raises the nightmare possibility of a disillusioned and uninformed public throwing in the towel once again after they receive thousands of individual odd lot pieces under such circumstances.
"As pension funds move into riskier investments in search of higher returns to fulfil their pension promises, they may be seriously compromising their solvency situation in the event of a negative shock."
Looking at electricity consumption, adjusted or otherwise, things are definitely looking very sluggish in the US economy right now.
President Barack Obama in 2014 said Mr. Gruber was “some adviser who never worked on our staff.” And then there's this:
“Thank you for being an integral part of getting us to this historic moment,” according to Sept. 9, 2009 email to Mr. Gruber from Jeanne Lambrew, a top Obama administration health adviser who worked at HHS and the White House. In a November 2009 email, she called Mr. Gruber “our hero.”
“We ran the model forward to the year 2040, along a business-as-usual trajectory based on ‘do-nothing’ trends - that is, without any feedback loops that would change the underlying trend. The results show that based on plausible climate trends, and a total failure to change course, the global food supply system would face catastrophic losses, and an unprecedented epidemic of food riots. In this scenario, global society essentially collapses as food production falls permanently short of consumption.”
With The Spread Between CPI And PCE Blowing Out The Most Since 2009, Is The Fed Making A Big MistakeSubmitted by Tyler Durden on 06/17/2015 12:53 -0400
With a small possibility that later today the Fed may hike rates for the first time in nearly a decade, and if not today then in 65 days (per the Bank of America countdown to the repeat of the "Ghost of 1937") at the September 17 meeting on which consensus has congregated as the historic rate hike day, there is one particular chart that if not readers, then certainly the Fed, should focus on: the near historic difference between the two primary inflation measures, core CPI and the Fed's preferred, core PCE which is now at the lowest level since the financial crisis.
The issue at hand is: far more people have discovered whether by chance or direct analysis of their own, both the Fed., as well as their gaggle of cohorts throughout academia, as well as in the financial media, are all watching and gaining their clues – from the same “rock.” Furthermore: It’s now self-evident to anyone willing to look. It’s not to see if the rock is wet, dry, or anything else. It’s to make the rock wet, dry, or anything else needed for the narrative. Because today; narrative trumps reality in today’s economic disciplines.
When it came to the highly confidential TPP, it was unclear just which corporations were dominant in pulling the strings. Now thanks to more documents published by Wikileaks, and analyzed by the NYT, it appears that "big pharma" is the mastermind behind the Trans Pacific Partnership, which if passed will "empower big pharmaceutical firms to command higher reimbursement rates in the United States and abroad, at the expense of consumers" according to "public health professionals, generic-drug makers and activists opposed to the trade deal."
"We take issue with the widespread notion that the problem is solely due to regulators having raised the cost of dealer balance sheet, and could be ameliorated if only there were greater investment in e-trading or a rise in non-dealer-to-non dealer activity... illiquidity is a growing concern even in markets like equities and FX, which use barely any balance sheet at all, and where e-trading is the already the norm rather than the exception."
"It’s about time we start getting worried about possibly the next [financial crisis]," warns BlueMountain's James Staley explaining that, "the lack of liquidity that currently exists today, is something that people on the buy side, sell side and regulatory side need to be focused on." In an effort to quantify just how big that 'issue' is, Bloomberg reports that the U.S. corporate-bond market has ballooned by $3.7 trillion during the past decade, yet, as Citi's Stephen Antczak warns, almost all of that growth is concentrated in the hands of three types of buyers, "we used to have 23 types of investors in the market. Now we have three. In my mind, that’s the key driver."