Investment Grade

"The Outcome Is Undeniable" - Global Debt Investors Face Reality Of A World Devoid Of Options

A recent, reluctant re-viewing of the film, 'Silence of the Lambs', fed fresh food for thought. The image of captives rejecting their freedom brought to mind another flock of corralled and stunned lambs - bond market investors. They too have been given the opportunity to escape their fate. But so many choose instead to stay. Such is the reality of a world devoid of options, with time ticking ruthlessly by.

European Taxpayers Now On The Hook For Junk Debt As ECB Bond-Buying Debacle Builds

"Picking winners" was never a good idea for policymakers - no matter what the economics textbooks say - and now the 'market' has given the ECB a big headache. Draghi's corporate-bond-buying scheme has backfired as the European Central Bank finds itself holding junk bonds in its so-called 'stimulus' plan after K+S AG was downgraded by S&P (sending its price plunging).

Never Before Seen Secret Memo On AIG Bailout From Fed's Tarullo To Obama Revealed In Podesta Emails

"...we surely do not want to unnerve markets by saying anything that would suggest your Treasury Department would undo this modification after January 20.  However, the combination of the questionable terms of the original Fed lending and failure to increase the effective stake of taxpayers as part of this deal means that we should avoid saying anything that would identify us with this move."

Barclays Warns The Party Is Almost Over As Payouts Exceed Cash Flow By $115 Billion

Corporate buybacks plus dividends will surpass $1 trillion in 2016, for the first time ever, according to Barclays calculations. This means that payouts to shareholders will surpass total S&P500 cash flow by a whopping $115 billion. And with corporate balance sheets increasing encumbered, Barclays believes that the rate of payouts, rising at 20% in recent years, is about to grind to a halt, meaning that for stocks, the "party is almost over."

"Heaven Help Us If There Is Ever A Modest Blip Of An Inflation Impulse"

"when even the limpest “trial balloon” discussion of the ECB’s hypothetical, WAY down-the-road discussion of how to end their QE program (we could be talking 2020 here people) creates yet another “Mini-Taper Tantrum,” we have to be intellectually honest with ourselves (as do CBers) and acknowledge the incredible degree to which the current monpol framework has distorted prices / valuations / market structure."

Will The ECB Buy Stocks?

With The SNB and BOJ already neck deep in their equity-buying experimentation, and even Janet Yellen hinting at it for The Fed, the most pressing question on most liquidity-hunting central-planer-watchers is - when will Draghi start buying stocks? The short answer, from ABN AMRO, is ECB equity purchases are unlikely in the near term.. and even so, The ECB would be increasing the risk on its balance sheet for uncertain, and at best modest gains in economic growth and inflation.

Turkey Lashes Out At Moody's After Downgrade To "Junk" Sends Turkish Assets Plunging

Turkish assets plummeted the most since an attempted coup in July and credit risk climbed after Moody’s Investors Service cut the country’s sovereign rating to junk. The immediate response by the Turkish administration was to lash out at Moody's calling the decision "politically-motivated", after a similar downgrade by S&P led Erdogan to acuse the agency of siding with coup plotters.

Are You Ready For The Next Recession?

The good news for economic prosperity and freedom is that the failure of the grand experimenters next time to ignite asset price inflation early on in any incipient economic upturn might lead to their dismissal (if not effected earlier!).

Michael Pento: "These Are The Most Dangerous Markets I've Ever Witnessed"

"...anybody with any objective, critical, independent mind can tell this is an unsustainable, very ephemeral rally in stocks that has occurred since 2009. And when the bond market breaks, when that bubble bursts, it will wipe out every asset -- everything will collapse together -- because everything is geared off of that so-called 'risk free' rate of return."

Time To Get Real, Part 2: "We Need Their Drugs"

On the current path, the world is experiencing the largest artificial asset allocation in modern history, one that is driven by a misguided interest rate regime that has lost its efficacy and is producing more harm than good. Yet the fear of withdrawal pain is keeping central bankers from doing the inevitable: Quit. The response is predictable: "I need the drugs!"

"It's Never Different This Time" PIMCO Warns "The Tides Of Risk Will Flow Eventually"

The old Wall Street expression is “They don’t ring a bell at the top.” This snarky adage is usually employed by those saddened financial managers who ride a successful investment to a peak and then watch in horror as it reverses course to a level below their cost basis. A pity this notion is misguided, since the market frequently “rings the bell.” It is just that most market participants are not listening. Perhaps they should be listening now.