Private Equity

US Futures; Euro Stocks Slide On Deutsche Bank Liquidity Fears; Bonds Bid

Following yesterday's paradoxical US stock surge catalyzed by a bevy of bad macroeonomic news, the overnight session has seen some good old "risk off" mood which hit European shares as a result of the previously reported $14 billion DOJ claim against Deutsche Bank, which sent Europe's biggest bank tumbling, dragging the banking sector lower, while a continued drop in the price of oil pushed energy companies lower.

The Status Quo vs. Donald Trump

"...the corrupt status quo of both useless political parties are making a huge calculated error by coming together so publicly against Trump. By rallying so aggressively and passionately around Hillary Clinton, the worst of the worst from America’s oligarchy have succeeded in the impossible. They have made a billionaire reality tv star look like a counter culture iconoclast."

Global Market Rout Abates As Bond Selloff Pauses, Oil Rebounds

After a sudden rout in financial markets that wiped $2 trillion in global market cap over the past week showed signs of easing, overnight stocks tried to stage another "BTFD-type" comeback with European stocks climbing for the first time in five days as oil and metals prices gained. S&P futures were modestly in green, although they faded earlier gains, on the back of a slide in the USDJPY which initially spiked to 103.31 only to fade back to the mid 102-range.

"Global Market Rout" - Bond Selloff Snowballs Into Stock Liquidations On "Stimulus Pullback" Fears

With traders in the US arriving at their desks, the global selling appears to be accelerating and as Bloomberg notes, "a selloff in fixed income is starting to snowball into a global market rout" driven by what Reuters dubbed "growing concerns that global central banks' commitment to the post-crisis orthodoxy of super-low interest rates and asset purchase programs may be waning."

Frontrunning: September 9

  • German jitters weigh on stocks, ECB doubts lift yields (Reuters)
  • Chinese Billionaire Linked to Giant Aluminum Stockpile in Mexican Desert (WSJ)
  • Monte dei Paschi CEO to be replaced as cash call looms (Reuters)
  • German exports plummet in July, hit trade surplus (MW)
  • North Korea conducts fifth and largest nuclear test (Reuters)
  • Hedge Fund and Cybersecurity Firm Team Up to Short-Sell Device Maker (NYT)

For The First Time, Two European Non-Financial Companies Will Be Paid To Issue Debt

Today was another historic day in the monetary twilight zone that is Europe, when two large European, non-financial companies were the first in history to be paid by investors to borrow, courtesy of the ECB's corporate debt monetization program, which has unleashed an unprecedented scramble for frontrunning the central bank's purchases of corporate debt and a historic collapse in bond spreads.

Bank of America "Thinks The Unthinkable"

"The unthinkable: BB yields about to become negative. Such has been Draghi’s influence across the whole credit market that we are close to seeing our first negative yielding BB-rated bond. But if debt costs for speculative grade companies become “inverted”, then the economics of LBOs will be transformed, and the quality of the assets they are buying will become secondary. We see a growing risk that another private equity cycle emerges in Europe."

Want "Unlimited Access To A Target's Mobile Devices... Leaving No Trace"? Ask NSO Group

For the affordable price of $650,000, Israeli company NSO Group will enable you to invisibly spy on 10 iPhone owners without their knowledge. The cost is a little higher for Blackberry users (5 for $500,000).. and there is a 17% maintenance fee every thereafter to ensure "leaving no traces whatsoever." Welcome to the new world of private companies selling surveillance tools to the 'average joe'...

Futures Flat, Global Stocks Higher As Dollar Resumes Rise

The quiet overnight market had been focused on the upcoming comments by Stanley Fischer, who is set to give a Bloomberg TV interview at 6:30am ET, where he was expected to expand on his recent hawkish comments. Heading into Fischer's appearance, the dollar strengthened, global stocks rose, oil hovered around $47, while US index futures were largely flat and Treasuries fell.

With Janet Yellen Just Hours Away, Directionless Markets Wait For A Signal

With Yellen's much anticipated speech just hours away, the already comatose market flatlined overnight in another directionless session, with European stocks and US equity futures practically unchanged, while Asian shares to a two-week low, led by Japan, as investors showed a reluctance to take on risk before Yellen’s speech. The dollar was a tad lower, along with oil which is set for its first weekly drop in a month. 

Frontrunning: August 24

  • 'Voices under the rubble' after quake hits Italy; at least 38 dead (Reuters)
  • Turkish tanks, special forces launch first major push into Syria to battle IS (Reuters)
  • A Year After Stocks Armageddon, It’s Smooth Sailing for Markets (BBG)
  • Global stocks ease, dollar holds ground as U.S. rate bets abound (Reuters)
  • Merkel Tells Renzi He Can’t Bend Euro Rules to Boost Growth (BBG)

Madness In Mario-World: European Companies Issue Debt Simply Because The ECB Will Buy That Debt

Things are so absurd in the Eurozone that the ECB is buying private placement debt with little regard for safety. In turn, private equity companies issue debt simply because they know in advance the ECB will buy it. It’s a startling example of how the market is adapting to extremes of monetary policy, and it’s a safe conclusion the experiment will not end well.