Quantitative Easing
How The Global Debt Bubble Is Crushing Commodity Prices
Submitted by Tyler Durden on 11/04/2015 18:05 -0500Why is the price of oil so low now? In fact, why are all commodity prices so low? We see the problem as being an affordability issue that has been hidden by a growing debt bubble. As this debt bubble has expanded, it has kept the sales prices of commodities up with the cost of extraction (Figure 1), even though wages have not been rising as fast as commodity prices since about the year 2000. That period is ending as the productivity of additional debt is falling.
Junk Bonds Bode Badly For Bubbly Stocks Amid "Accelerating Train Wreck"
Submitted by Tyler Durden on 11/04/2015 13:00 -0500"Absent the central banks, we would be in the later stages of a credit cycle," warns Principal Global Investors's David Blake as 2015 has now seen the most corporate debt downgrades since 2009 and the upgrade-downgrade ratio crashes to financial crisis lows. A lot of people are recognising we are closer to the end of the credit cycle than the beginning, and while stocks have bounced back dramatically as Dana Lyons' details, junk bonds have not; a combination normally associated with more extensive bear markets and recessions. As BofAML analysts warned "the slow moving train wreck seems to be accelerating."
"Great Optimist" Faber Says "I Added To My Gold Position"
Submitted by GoldCore on 11/04/2015 07:03 -0500In an interview on CNBC's "Trading Nation," the Gloom, Boom & Doom Report editor revealed he may not be as bearish as some may think and that he is actually a “great optimist.”
Global Rally Continues After PBOC "Unintentionally" Sparks Market Surge With Stale News, Largest 2015 IPO Prices
Submitted by Tyler Durden on 11/04/2015 06:59 -0500- Bank of England
- BOE
- Bond
- Brazil
- Central Banks
- China
- Copper
- Crude
- Crude Oil
- default
- Equity Markets
- Eurozone
- Fed Fund Futures
- Financial Regulation
- fixed
- France
- Germany
- Glencore
- Gold Spot
- headlines
- Hong Kong
- India
- Italy
- Janet Yellen
- Japan
- Jim Reid
- Markit
- Monetary Policy
- NHTSA
- Nikkei
- Non-manufacturing ISM
- Ohio
- Porsche
- Quantitative Easing
- RANSquawk
- recovery
- Shenzhen
- Standard Chartered
- Time Warner
- Trade Balance
- Volkswagen
- Yen
- Yuan
The most entertaining overnight story has to do with the latest farcical development in the Chinese "market" when just after open, it was reported that PBOC Governor Zhou said a trading link with Shenzhen will start this year which promptly sent all Chinese brokerages soaring, and the Shanghai Composite jumped over 3%. And then, out of the blue, the PBOC said the undated comments were actually as of May. As Bloomberg put it, "China’s central bank unintentionally sparked a surge in the nation’s stock market by publishing five-month-old comments from governor Zhou Xiaochuan that said a link between exchanges in Shenzhen and Hong Kong would start in 2015."
Peter Schiff On QE's Creeping Communism: Washington Joins Tokyo On The Road To Leningrad
Submitted by Tyler Durden on 11/03/2015 19:15 -0500Hugh Hendry: "Today We Would Advise You That You Don't Panic!"
Submitted by Tyler Durden on 11/03/2015 11:28 -0500"It is ironic that we are perhaps best known for advising “that you panic”. However, if you are anxious at the wrong time it can prove very painful. Today, we would advise that you don’t panic!
... by withdrawing the “Greenspan put” and using their asset purchase schemes to eviscerate any notion of value, the authorities have paradoxically created a safer yet more paranoid market."
- Hugh Hendry
The Truth Arrives: JPM Slams ZIRP - "It Has Been Impeding Rather Than Promoting Economic Recovery"
Submitted by Tyler Durden on 11/03/2015 10:20 -0500"zero interest rate policy actually reduces demand in the economy, prompting the Federal Reserve to prescribe even further doses of a medicine that, for a long time, has been impeding rather than promoting economic recovery."
- JPM's David Kelly
A Brief History Of Crime: How The Fed Became The Undemocratic, Corrupt & Destructive Force It Is Today
Submitted by Tyler Durden on 11/02/2015 22:20 -0500Our ancestors were wiser and far more educated than modern Americans about the dangers posed by a centralized, monopolistic system charged with the creation and distribution of money, and our society and economy have paid a very heavy price for its ignorance. Indeed, some of today’s Fed critics aren’t even aware that the U.S. Central Bank originally had far less power than it does today. As concerned as they were, its early critics could never have imagined how perverted its mandate would become in the subsequent 100 years. A mandate that has now made it the single most powerful and destructive force on planet earth.
How The Fed Has Backed Itself Into A Corner
Submitted by Tyler Durden on 11/02/2015 18:05 -0500The Fed is weighing the negative consequences of a strong dollar on corporate profits vs. unleashing inflation on the electorate, pressuring long term interest rates. We will soon see which negative scenario they favor and why.
6 Reasons To Be Bullish (Or Not) On Stocks
Submitted by Tyler Durden on 11/02/2015 15:55 -0500While there are certainly reasons to be "hopeful" that stocks will continue to rise into the future, "hope" has rarely been a fruitful investment strategy longer term. Therefore, let's analyze each of the optimist's arguments from both perspectives to eliminate "confirmation bias."
Secret "Diaries" Show ECB Board Members Met With Banks, Hedge Funds "Days" Before Policy Meetings
Submitted by Tyler Durden on 11/02/2015 12:50 -0500As FT reports, "some of the European Central Bank’s top decision-makers met banks and asset managers days before major policy decisions, and on one occasion just hours before, copies of their diaries reveal."
German Bunds Tumble Amid China Reserve "Selling" Chatter
Submitted by Tyler Durden on 11/02/2015 10:56 -0500Amid the ever-expanding easing program in Europe (longer? more-er? different-er?), one of the gravest concerns was (amid a growing scarcity of collateral), finding willing sellers (at any price) to meet the needs of central bank asset purchasers could be a problem. However, as The FT reports, it appears the Chinese stepped up to the plate to 'help' The ECB (rather The Bundesbank) out from its dilemma. Just as we saw with Chinese selling US Treasuries (whether to diversify away from the major reserve currencies, deal with outflows, or to manage a liquidity crisis at home), The PBoC's reserve management wing, the State Administration of Foreign Exchange, has been selling some of its German government bonds since the ECB began buying them in March, say two sources close to central banks in China and Europe. This news has prompted further weakness in Bunds today, despite expectations of Draghi unleashing more buying in December.
The Relevance Of Gold - Sprott's 3 Litmus Tests
Submitted by Tyler Durden on 11/01/2015 13:20 -0500The investment thesis for gold has never been limited to popular relationships, such as CPI-type inflation, financial meltdown or political instability. We prefer to focus on the irretrievable gap between financial assets (claims on future output) and productive output (GDP). In essence, the most compelling reason to own gold is that financial assets have lost their underpinnings to sustainable productive output.
Fed Admits "Something's Going On Here That We Maybe Don't Understand"
Submitted by Tyler Durden on 10/31/2015 20:35 -0500In a somewhat shocking admission of its own un-omnipotence, or perhaps more of a C.Y.A. moment for the inevitable mean-reversion to reality, Reuters reports that San Francisco Fed President John Williams said Friday that low neutral interest rates are a warning sign of possible changes in the U.S. economy that the central bank does not fully understand. With Japan having been there for decades, and the rest of the developed world there for 6 years, suddenly, just weeks away from what The Fed would like the market to believe is the first rate hike in almost a decade, Williams decides now it is the time to admit the central planners might be missing a factor (and carefully demands better fiscal policy).
Offshoring The Economy: Why The US Is On The Road To The Third World
Submitted by Tyler Durden on 10/30/2015 20:05 -0500On January 6, 2004, Senator Charles Schumer and I challenged the erroneous idea that jobs offshoring was free trade in a New York Times op-ed. Our article so astounded economists that within a few days Schumer and I were summoned to a Brookings Institution conference in Washington, DC, to explain our heresy. In the nationally televised conference, I declared that the consequence of jobs offshoring would be that the US would be a Third World country in 20 years. That was 11 years ago, and the US is on course to descend to Third World status before the remaining 9 years of my prediction have expired. The evidence is everywhere.



