University of Michigan survey results show Current Economic Conditions plunged to 103.5 - the lowest since Oct 2015. The biggest driver of this weakness is tumbling inflation expectations (with 1Y outlook dropping to 2.3% - the lowest since Sept 2010).
"The Fed is increasingly F#ked," exclaimed one veteran market participant as Core CPI - among The Fed's favorite inflation indicators - surged to +2.3% YoY, the highest since Sept 2008. This is the 10th month in a row above the Fed's mandated 2% 'stable' growth as shelter and healthcare costs continue to surge.
"To our surprise, we find that financial market information provides little support for the view that major institutions are significantly safer than they were before the crisis and some support for the notion that risks have actually increased."
Wondering why the stock and bond markets are tumbling simultaneously? Confused by the market's apparent inability to follow the mainstream media's narrative that higher rates are good for markets? Wonder no longer - the answer, as we have previously detailed - is the collapse in so-called "risk-parity" funds that force leveraged long positions in equity and bond markets to be unwound en masse.
After yesterday's torrid rally, which sent stocks higher the most in 2 months on the back of Lael Brainard surprisingly dovish comments, we have seen an unexpected profit-taking session overnight in ES, with US equity futures down 0.6%, driven largely by a renewed drop in oil prices which slid after the IEA said a surplus in global markets will last longer than initially estimated, persisting well into 2017 as reported previously.
In a June 2016 study published by the National Institute of Justice, Richard Rosenfeld, a criminology professor at the University of Missouri-St. Louis, declared that “the  homicide increase in the nation’s large cities was real and nearly unprecedented."
"In the days following the collapse, all I wanted was for the towers to be rebuilt just like before. I wanted the skyline back to what I had know since the day I came into this earth at a New York City hospital to be restored exactly as I had always known it. I read a lengthy tome on Osama Bin Laden and al-Qaeda. I was an emotional and psychological mess, and it was when I was in this state of heightened distress that my own government and the military-industrial complex took advantage of me..."
Nowhere else is the impact of central banks more evident than the total decoupling of global stock markets from global economic developments. However, as money managers attempt to diversify away from what they all know will not end well, Credit Suisse warns the overwhelming flow from central bank interventions "are driving everything" pushing their so-called cross-market contagion indicator to levels more worrisome than anytime since 2008's Lehman-inspired financial crisis.
“[T]he long run meets the present [where] systems that no longer pay their way exhaust their credit and go broke. The Breaking Point is a nonlinear departure on the road to nowhere. It occurs when collateral collapses, burying the public’s faith in fiat money and the institutions that create and regulate it.”
Once again FOMC policy is at odds with what is taking place in deeper and far more intellectually-sound money markets. The TED spread confirms risk not policy as the underlying mechanism, while the eurodollar futures price reveals the growing pessimism about what that could mean for the intermediate and long terms in real economic conditions.