This is just the beginning. The bond bubble will take months to completely implode. And eventually it will consume even sovereign nations. Globally the bond bubble is $100 trillion in size: larger than even global GDP.
EM debt bubble... emaciated, FX Carry... crucified, Crude...crushed, High yield bonds... burst, Chinese equities... blown, Trannies... trounced, Small Caps... slammed, Biotechs... busted, and FANGs finally FUBAR! But there is one big (very big) bubble left in the world that no one is talking about, and a rather large liquidity-busting pin beckons...
Globally the bond bubble has grown by more than $20 trillion since 2008. Today it is north of $100 trillion, with an additional $555+ trillion in derivatives trading based on it.
The Fed almost always gives Wall Street extra money to play around with during options expiration. $9 billion and change to be exact.
Some very troubling charts for the stock bulls to consider.
It was an ominous beginning to what is poised to be a most tumultuous year. Market participants are quickly coming to appreciate that China does in fact matter. Few understand why. Most – from billionaires to fund managers to retail investors – will “Do Nothing.” This has worked just fine in the past – repeatedly. Not understanding and not doing anything will be detriments going forward.
Central Banks have employed virtually all of their ammunition including policies that would have been considered "nuclear" in 2008. And the debt bubble is $20 trillion larger than it was in 2008!
We might get a bounce here to retest that green line, but unless a major Central Bank launches a new monetary program stocks are heading DOWN.
China Suspends Circuit-Breaker Rule - "This Is Insane; We Were Forced To Liquidate All Our Holdings This Morning"Submitted by Tyler Durden on 01/07/2016 10:38 -0400
Update: *CHINA SUSPENDS STOCK CIRCUIT BREAKER RULE - In Q&A, CSRC insists circuit breakers didn't cause the China meltdown but admits they may have aggravated sell-off.
"It couldn't be worse," exclaims one manager who started his fund mid-year in 2015, blaming China's equity market carnage on its newly-created circuit-breakers (as opposed to the fact that the Chinese market trades at 64x P/E and there are sellers everywhere). "Panic will eventually turn into a buying opportunity," hopes one strategist while another proclaims "poorly-designed" circuit breakers need to be adjusted to 10% (seriously). Blame is everywhere, but it is Chen Gang who summed up the panic best, "this is insane... we were forced to liquidate all our holdings this morning."
The former market leaders are all beginning to breakdown. Has the market top finally hit?
A lot of people were expecting some really great things to happen in 2015, but most of them did not happen. But what did happen? A global financial crisis began during the second half of 2015 threatens to greatly accelerate as we enter 2016. This is what the early stages of a financial crisis look like, and the worst is yet to come.
The sources of growth for US corporates have all dried up. Stocks have yet to adjust to this, but when they do it’s going to be an all out collapse.
Ever since it started making complicated bets against some leveraged ETFs, Miller’s Catalyst Macro Strategies Funds has since grown from $500,000 in assets at the start of the year to about $170 million. It achieved a more than 50 percent return this year, placing it far ahead of its competitors.
With more financing in place, the world’s tallest skyscraper is moving forward. Saud Arabia's Kingdom Tower in Jeddah is only the latest phase in an enormous boom that began setting new records in 2014, raising another 'skyscraper alert' as the completion of record-setting skyscrapers has long seemed to indicate the beginning of economic crises.
Between these two banking systems alone, you’ve got the makings of a global financial crisis at least on par with 2008.