With European markets closed across the continent on Monday as the Easter holiday continues, overnight Asia was busy with China Shanghai Composite letting off some steam, and closing down 0.7% at session lows on concerns the Shanghai and Shenzhen home bubble have been popped by the politburo, Japan was a different story with the Yen sliding following a report by the Sankei newspaper that Abe will announce in May his intention to delay the planned levy hike, coupled with additional reports that Japan will unveil a major fiscal stimulus (and just on Friday Abe said he is "not thinking at all about supplemental budget" at this time).
China's choice of Djibouti as the country that will host Beijing's first overseas military outpost has put the tiny African nation in the geopolitical spotlight. Situated on one of the planet's most critical oil chokepoints, and nestled amongst countries that serve as operations bases for some of the world's most notorious terror groups, Djibouti is set to become a focal point for power poltiics in the years ahead.
"Even members of Erdogan's ruling party whisper about his increasing paranoia which, according to some Turkish officials, has gotten so bad that he seeks to install anti-aircraft missiles at his palace to prevent airborne men-in-black from targeting him in a snatch-and-grab operation."
Almost exactly three years ago, people across the entire nation of Cyprus went to bed believing that everything was OK. The next morning they woke up to a different reality... People realized immediately that just because you can log in to a bank’s website and see an account balance printed on the screen that doesn’t actually mean that the money is there. This is precisely the sort of thing that happens when a poorly structured banking system meets an insolvent government.
Following yesterday's dollar spike which, which topped the longest rally in the greenback in one month, the prevailing trade overnight has been more of the same, and in the last session of this holiday shortened week we have seen the USD rise for the fifth consecutive day on concerns the suddenly hawkish Fed (at least as long as the S&P is above 2000) may hike sooner than expected, which in turn has pressured WTI below $39 earlier in the session, and leading to weakness across virtually all global risk assets.
The process of forced multiculturalism is driving large portions of the EU and America to become violently opposed to cultural Marxists. I fear that this is leading to irreconcilable division to the point of war, just as what took place during the last Great Depression. And, as I pointed out at the beginning of this article, cultural Marxists are a tiny minority, a paper tiger posing as the real thing. If they do not stop with their incessant subversion and cultism they will end up being the first to pay the price. The rest of us will pay later.
Sadly, nations get the leadership they deserve. Turning a blind eye to reality is not a sustainable "solution." Leaders faced with unrest, rising demands and dwindling coffers always debauch their currency as the politically expedient "solution."
Everyone in the Eurozone believes that the ECB is all-powerful, because to believe otherwise is unthinkable. This was also true of Banque Royale, until it faltered. It was not a loss of confidence in the bank that was responsible for the collapse, it happened as a result of the difficulties encountered in sustaining the bubble. The lesson is that it need not take a loss of confidence in the ECB to start its destruction.
After a quiet start to the week, data flow picks up into the Easter weekend.
At the same time as the PBOC was cautioning about the dangers of excess debt (just as it injected a record amount of loans into the financial system), China's central bank warned about dangers from a stock market bubble, and perhaps just to assure the bubble gets even bigger, at the same time China eased on margin debt limits, in the process sending Chinese stocks soaring higher by 2.2%, and pushing the Shanghai Composite over 3000 for the first time in months as China now appears set to attempt another housing bubble "soft landing" while at the same time restarting its housing bubble.
- Dow's Freakish Bounce Makes Investors Whole, Can't Erase Doubts (BBG)
- R.I.P. Dollar Rally as Dovish Fed Spurs Worst Slump Since 2011 (BBG)
- Global Currencies Soar, Defying Central Bankers (WSJ)
- Oil hits 2016 high above $42 on production and demand outlook (Reuters)
- The U.S. Is Exporting Its Oil Everywhere (BBG)
- Hillary Clinton’s Allies Launch Plan to Undercut Donald Trump Now (WSJ)
Trump’s blunt, angry, provocative, anti-establishment message has struck a chord among millions of disaffected Americans who have been ignored, abused, scorned, and shit on by the elitist establishment, banking cabal, corrupt politicians and government apparatchiks. The Deep State establishment has overstepped their bounds. Their ravenous pillaging of the national wealth through outsourcing millions of American jobs, largest mortgage control fraud in history, and outrageous gall in shifting their losing bets onto the backs of hard working Americans is about to bite them in the ass.
Risk assets are up because "investors reassessed" the ECB announcement. Really? That's what happened? Real world investors stayed up till the wee hours last night and en masse concluded that they had just gotten it completely wrong yesterday? How about this for an alternative explanation: the allocation heads at one or two European mega-insurance firms were informed that they would be supporting risk assets this morning, the Narrative machine got into gear, and real world investors do what they always do, they play the Common Knowledge Game.
While Asia was up on China's bad data, and Europe was higher again this morning to catch up for the Friday afternoon US surge, US equity futures may have finally topped off and are now looking at this week's critical data, namely the BOJ's decision tomorrow (where Kuroda is expected to do nothing), and the Fed's decision on Wednesday where a far more "hawkish announcement" than currently priced in by the market, as Goldman warned last night, is likely, in what would put an end to the momentum and "weak balance sheet" rally.
Less than 24 hours after European stocks tumbled on initial disappointment by Draghi's announcement that rates will not be cut further, mood has changed dramatically and the result has been that after "reassessing" the ECB kitchen sink stimulus, risk has soared overnight with both Asian and European stocks surging. As of this moment European bourses are all broadly higher led by banks, with the DAX and FTSE both up over 2.7%, while the Stoxx 600 is higher by 2.3% as of this writing.