Based on the chart of the KBW Bank Index, Jamie Dimon’s decision to purchase shares of JPMorgan may have been well timed... but the credit markets have a very different perspective on what happens next.
Remember the mass layoffs of 2008-2009? The US economy shed millions of jobs quickly and relentlessly, as companies died and the rest fought for survival. Then the Fed and the US government flooded the banks and the corporate sector with bailouts and handouts. The nightmare of 2008 soon became a golden era of 'recovery'. Well, 2016 is showing us that that era is over. And as stock prices cease to rise, and in fact fall within many industries, layoffs are beginning to make a return as companies jettison costs in attempt to reduce losses.
With The Fed definitely off the table, China promising nothing but daily liquidity drips, and Europe unable to do anything but jawbone, the world's bullish equity market investors are anxiously trawling for a central bank to save the world. Tonight's BoJ meeting could well be it - though judging by their past epic failures - it will be anything but successful as QE23 looms in Japan. “The need for a Kuroda bazooka is increasing,” saidYuji Shimanaka, an economist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo. “This is decision time for Kuroda” as additional stimulus can stop the trend of yen gains and falling stocks.
It may not be as sexy as gold and silver, but sometimes even doctor copper needs a little squeeze and corner love as well, and according to Bloomberg, that is precisely what someone is trying to do. One company whose identity is unknown, is "hoarding as much as half the copper available in warehouses tracked by the London Metal Exchange."
One thing is clear: banks are not only not telling the full story, but the story they are telling is compromised. Still one has to start somewhere with whatever data is publicly available, so courtesy of Reuters, here is a summary of what the big U.S. banks who have reported Q4 earnings so far, say about their energy exposure.
"It’s Black Wednesday for emerging markets," one strategist warned and Thursday is not looking any better, as SocGen's Berg warns "The rout in emerging markets could continue for some time, especially as the major global central banks have exhausted their ammunition in recent years, making it unlikely that they will rescue global markets this time around." In fact, as Bloomberg reports, this year's EM turmoil is already worse than in the same period in 1998's Asian financial crisis (and EM FX is even worse).
The end of America’s oil “miracle” is coming and there’s nothing Wall Street can do to stop it. At this point in the game, no one is going to finance the oil patch's cash flow deficits and the fundamentals in the oil market are laughably bad. As Bloomberg reports, Wall Street is about to have a serious bout of “indigestion” because recent auctions suggest that “some bankrupt oil and gas drillers can’t give their assets away.”