New Normal

Tyler Durden's picture

"Burning Money To Keep Warm" - China's New Normal





Worried about money-printing in China... don't! As China.org reports, an electricity generation plant in China's troubled Henan province is burning banknotes in what appears to be an effort to raise efficiency and reduce toxic emissions. One ton of scrapped banknotes can generate about 660 kWh of electricity, which means around 4,000 tonnes of coal can be saved in the province every year by using this process. Perhaps that is the solution to higher natural gas prices in winter for the US NorthEast... just transfer some banknotes up from The Eccles Building and heat the nation...

 
Tyler Durden's picture

Deutsche Bank Is Stumped: The Broad Market Is Ignoring The Bear Market In Energy, "Something Has To Give"





First the BIS came out with the following stunner when discussing markets: "The highly abnormal is becoming uncomfortably normal. Central banks and markets have been pushing benchmark sovereign yields to extraordinary lows - unimaginable just a few years back. There is something vaguely troubling when the unthinkable becomes routine." And now the routine of the unthinkable has forced Deutsche Bank to look at the unprecedented disconnect between the collapse in energy assets and the general market - which continues its hypnotized, low-volume levitation - and conclude that it makes absolutely no sense:  "We find current dislocation between deep distress in Energy assets and marginal reaction in broad market indexes to be inconsistent with each other. Either energy has to rebound noticeably, or it could pull broader market indexes lower. Exceptions to this assessment are rare."

 
GoldCore's picture

European Banks At Risk Of Bail-Ins In 2015 - Moody's and S&P Warn On Bail-Ins





Europe's banks are vulnerable in 2015 due to weak macroeconomic conditions, unfinished regulatory hurdles and the risk of bail-ins according to credit rating agencies  ...  Oh what a tangled web, we weave  ...

 
Tyler Durden's picture

It Wasn't Only China: Here Is What Else Is Crashing Overnight





It wasn't just China's long overdue crash last night. In addition to the Shanghai Composite suffering its biggest plunge since August 2009, there has been a sharp slide in the USDJPY which has broken its uptrend to +∞ (and hyperinflation), and around the time Chinese gamblers were panicking, the FX pair tumbled under 120, although since then the 120 tractor beam has been activated. Elsewhere, the Athens stock exchange is also crashing by over 10% this morning on the heels of news that the Greek government has accelerated the process to elect the next president and possibly, a rerun of the drama from the summer of 2012 when the Eurozone was hanging by a thread when Tsipras almost won the presidential vote and killed the world's most artificial and insolvent monetary union. And finally, the crude plunge appears to have finally caught up with ground zero, with ADX General Index in Abu Dhabi plunging 3.5%, also poised for the biggest drop since 2009. In fact the only thing that isn't crashing (at least not this moment), is Brent, which did drop to new 5 year lows earlier under $66, but has since staged a feeble rebound.

 
Tyler Durden's picture

China Surges, Japan Closes Green On Horrible Econ Data; Oil Tumbles To Fresh 5 Year Lows





Without doubt, the most memorable line from the latest quarterly report by the BIS, one which shows how shocked even the central banks' central bank is with how perverted and broken the "market" has become is the following: "The highly abnormal is becoming uncomfortably normal.... There is something vaguely troubling when the unthinkable becomes routine." Overnight, "markets" did all in their (central banks') power to justify the BIS' amazement, when first the Nikkei closed green following another shocker of Japanese econ data, when it was revealed that the quadruple-dip recession was even worse than expected, and then the Shanghai composite soaring over 3000 or up 2.8% for the session, following news of the worst trade data - whether completely fabricated or not - out of China in over half a year.

 
Tyler Durden's picture

SkyNet's Favorite "Harmonic Oscillator" Algo Is Back





Over two years later, it is good to see our old friend is still right there and that SkyNet still reigns supreme, because as the following chart of CTRP, courtesy of Nanex, shows "new normal" algo-controlled stocks appears to have just two default modes: a relentless ramp higher (courtesy of a VWAP buyback programs or just momentum ignition), or a far more "nuanced" sinewave oscillation up and down in what only a Princeon economist could call "price discovery."

 
Tyler Durden's picture

You Know It's A Bubble When...





Because nothing says rational equity markets like a 16-year-old penny-stock-day-trader who turned $10,000 into $300,000 this year... Meet Connor Bruggermann - the new normal 'investor'

 
Tyler Durden's picture

It's All Coming To An End, Bill Gross Warns





“Can a debt crisis be cured with more debt?” it is difficult to envision a return to normalcy within my lifetime (shorter than it is for most of you). I suspect future generations will be asking current policymakers the same thing that many of us now ask about public smoking, or discrimination against gays, or any other wrong turn in the process of being righted. How could they? How could policymakers have allowed so much debt to be created in the first place, and then failed to regulate their own system accordingly? How could they have thought that money printing and debt creation could create wealth instead of just more and more debt? How could fiscal authorities have stood by and attempted to balance budgets as opposed to borrowing cheaply and investing the proceeds in infrastructure and innovation? It has been a nursery rhyme experience for sure, but more than likely without a fairytale ending.

 
Tyler Durden's picture

ISM Services Surges To 4th Highest On Record (As Services PMI Plummets)





On the heels of 5 months of weakness in Services PMI, and 2 months of weakness in ISM Services, it only makes sense that ISM's Services print would massively beat expectations at 59.3 (against 57.5). All ISM subindices rose - apart from employment (which dropped to 4 months lows)! Just 15 minutes after one survey indicates a drastic slowdown in domestic demand for services, another one says it has almost never been better...

 
Tyler Durden's picture

UK Regulator Shocked That Slapping Banker Wrists Achieves Nothing





Not a quarter passes without a bank announcing, as part of its earning statement, that - it just so happens - it has incurred a few hundreds million (or billion) in legal fees, expenses and charges for breaking the law and manipulating this market or that (recall that for banks "Crime Is Now An Ordinary Course Of Business"), but it's ok, because it is a one-time, non-recurring thing, so please exclude it from the EPS calculation.... Until the next quarter when everything repeats once more. But the repetition of "one-time" events is not the only constant: the other one, of course, is that nobody ever goes to jail. The latter is also the reason why, as the WSJ reports, British regulators are "getting exasperated with banks failing to clean up their act after repeated wrongdoings." No, really: the UK's equivalent to the SEC truly can't understand how banks refuse to stop breaking the law when the have a paid for by others - and quite literal - get out of jail card.

 
Tyler Durden's picture

Stocks Rebound, Oil Resumes Slide, Ruble Tumbles As Yen Flirts With 119





A few days of near-record crude volatility (which the CME is scrambling to reduce following 2 crude margin hikes in the past week) is giving way to the New Normal default thinking: that central banks will soon take care of everything. And sure enough, just an hour earlier, US equity futures had jumped 8 points on virtually zero volume, wiping out all of yesterday's losses, driven higher by that new "old favorite", the USDJPY, which has once again resumed its climb higher, briefly rising above 119.00 once again and sending the Nikkei and the Topix to fresh 7 year highs, perfectly oblivious to both yesterday's Moody's downgrade and now open warnings from both Eisuke Sakakibara and Goldman Sachs that further declines in the Yen will accelerate the collapse of the Japanese economy. And, since there is also zero liquidity in the market, that entire gain was also just as promptly wiped out with futures now practically unchanged from yesterday's close.

 
Tyler Durden's picture

Surprise: GAAP S&P500 EPS Set To Decline 1.3% In 2014





As of Q3, when adding the consensus number for Q4 EPS, we find that while non-GAAP EPS is set to rise by a healthy 6.6%, real rarnings, as in GAAP EPS, will actually decline by 1.3% in 2014, meaning that for yet another year, the only upside in stocks has been due to - thank you Fed - multiples expansion.

 
Bruno de Landevoisin's picture

Economic Energy Elation





Money is stored labor.  Labor is part of human life.  To devalue money is to debase life itself.

 
Tyler Durden's picture

This Sunday May Mark The End Of Western Monetary Dominance





Western dominance was born from a distrust in the dominant reserve currency at the time. Its decline will be because they followed the same route. And the canary in the coal mine is what’s happening in Switzerland this weekend.

 
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