With retail store closures running at their fastest pace since Lehman, and business closure rates higher than start-up rates for the first time in US history, billionaire venture capitalist Peter Thiel has some short-and-sweet advice on how to fix the apparent anti-business sentiment in America: "Get Government Out Of The Way."
Having cautioned investors this morning of the historical tendency for market reversals on September 22nd after hitting all-time highs, UBS' Art Cashin's warning has been echoed by BofAML's Macneil Curry who notes risk assets are set to correct as negative seasonals dominate the S&P500 this week. This is bullish for Treasuries, Curry adds. "Crazy? Maybe, but forewarned is forearmed," as Cashin concludes.
Moments ago, the Goldmanite in charge of the European Central Bank delivered yet another speech, this time seeking to offset some of the hawkish comments over the weekend from his comrades, all of which suggested that no more easing, or public QE, was coming any time soon. It was, as usual, full of the same lies that have pushed European stocks to highs not seen since Lehman even as Europe's economy is now slumping into a triple-dip recession. Here is a choice selection of his comments, properly annotated.
“We are mindful of the potential for a build-up of excessive risk in financial markets, particularly in an environment of low interest rates and low asset price volatility,” the G-20 officials said in a communique released in Cairns, Australia. “We welcome the stronger economic conditions in some key economies, although growth in the global economy is uneven.”It is unclear just what that statement means: BTFATH, but only on a downtick?
Caterpillar Posts Record 21 Consecutive Months Of Declining Global Retail Sales, Worse Than Financial CrisisSubmitted by Tyler Durden on 09/19/2014 09:08 -0500
With fake recoveries like these, who needs all too real global recessions?
Ever wonder why for the US, it is all about reflating the stock market bubble in order to boost the "wealth effect", if only for a small portion of the population? Or, for that matter, why in China where the Shanghai Composite has gone absolutely nowhere since the Lehman crash (and certainly isn't up some 200% unlike the liquidity-supercharged S&P 500), it is all about preserving the sanctity of the housing bubble? Then the following chart should make it all clear.
When a former Goldman executive and the prior head of its housing research team comes out with a shocking analysis so contrary to what the same individual would do in his "former life" when he would be extolling the "inevitable" rise of home prices from here to eternity and beyond, and also throw in an open letter to none other than president Obama, predicting at least a 15% crash in home prices in the next three years, a move which would without debt catalyze the next US recession, it is time to pay attention. Meet Joshua Pollard, who in February 2009 took over coverage of US Housing at Goldman Sachs. His point, in short: "House prices are 12% overvalued today. They have already started to decline. Today’s misvaluation matches the excess of 2006-07, just before the Great Recession... 5 of the last 7 US recessions were led by a weakening housing market... I am lamentably confident that home prices will fall by 15% within three years." Or, as some may call it, crash.
What if it had gone differently? What if, six years ago, in the throes of the financial crisis, the political leaders in D.C. had decided that enough was enough, and they were going to seize the opportunity to make real and meaningful positive changes?
Those 4 C’s are: Confirmation, Crisis, Contagion, Catastrophe.
"The West is done, it's over! We screwed it all up. Do you want your great-grandchildren speaking Chinese?"
So many candidates to choose from...What sayeth you?
It appears today's weakness in stocks (most notably high-beta momo) and bonds (HY credit weakness) was triggered by two "ma"s - grandma Yellen and grand-poohbah BABA's Ma. Hawkish FOMC concerns took the shine off HY credit (and stocks) but Treasury bonds rallied modestly (5Y -3bps, 10Y -2bps). However, high-beta momo stocks dragged Nasdaq and Russell lower as 'smart money' proclaimed this was making room for the Alibaba IPO (which raises the question - if there is so much pent-up demand money on the sidelines just dying to be lost in the stock market, then why were so many high-beta, high-growth, momo names being sold today, theoretically in order to make room for the BABA IPO?) The USDollar ended marginally higher (GBP weakness, EUR strength) but most commodities gained on the day (Copper down on China) with WTI back to $93. Stocks did have a mini-melt-up on absolutely no news whatsoever into the last hour but gave most back. The Russell 2000 is -0.5% in 2014.
"...we anticipate that the start of US rate hikes will do damage to markets in the short term, but that there will be greater differentiation over a more medium term between liquid and less liquid assets. In the short term, investors sell what they can, making liquid assets more vulnerable." - JPMorgan
Something appears to have changed not only because the USDJPY is not some 100 pips higher overnight on, well, nothing but because the S&P, which is treading water, has yet to spike on no volume reasons unknown. That something may be algos which are too confused to buy ahead of this week's Fed announcement which may or may not have some notable changes in language or the Scottish referendum on the 18th. Or it could simply be that algos are no longer allowed to openly manipulate and rig the market on the CME as of today now that "disruptive market practices" are banned (why weren't they before)? In any case, keep a close eye on the market today: not all is at it has been for a while, unless of course it is still just a little early and the rigging algos (which haven't gotten the Rule 575 memo of course) haven't woken up just yet.