Rate of Change

The Problem With Corporate Debt

There are actually two problems with corporate debt. One is that there is too much of it... the other is that a lot of it appears to be going sour.

This Employment Trend Is Not Your Friend

Based on the historical correlation and the sharp growth in C&I loan delinquencies recently, it is conceivable employment drops abruptly over the next 6 months.

Iceland Has Offered Foreign Bondholders A "Choice": Sell Now, Or Have Cash Impounded Indefinitely

In a shocking turn of events, a law passed on May 22 by Iceland's parliament is offering the foreign holders of about $2.3 billion worth of krona-denominated bonds a choice of either selling out in June at a below-market exchange rate, or have the money they receive upon maturity be impounded indefinitely in low interest bank accounts. In other words, Iceland is trying to kick out foreign investors.

Gold And Negative Interest Rates

In Japan, the European Union and Switzerland, where negative nominal interest rates have already been adopted, it was observed that demand for safes and cash increased. At the same time, we learn that negative rates have boosted demand for gold in Japan (sales of gold to Japanese consumers rose to 32.8 metric tonnes in 2015 from 17.9 tonnes a year earlier). According to Takahiro Ito, chief manager at Tanaka Kikinzoku Kogyo K.K.’s store in Tokyo’s Ginza shopping district, “Many customers are wagering that it’s better to turn their savings to gold as a safe asset rather than deposit money at banks that offer low interest rates." 

Is There A Problem With The BLS Employment Reports?

It is quite evident there is something amiss about the BLS’ employment reports. Is the disparity simply an anomaly in the seasonal adjustments caused by the depth of the financial crisis? Is there an exceptional and unaccounted for margin of error in the surveys? Or, is it something more intentional by government-related agencies to keep “confidence” elevated as Central Banks globally “paddle like crazy” to keep global economies afloat.

 

Myths About Gold That Just Won’t Die

The mainstream loves to hate gold, but then again, these are the same people  who were bearish on gold all the way up from $250 to $1,900 (some turned bullish shortly before it topped, but that’s another story). What actually explains all this contempt for gold is the fact that it remains the main antagonist of the current statist centrally planned fiat money system. It’s as simple as that.

Why Janet Yellen Can Never Normalize Interest Rates

Crony capitalists, corrupt politicians, and Deep State hustlers paid good money for Yellen; she’ll do all she can to avoid letting them down. But something isn’t working. Not for her. Not for Bank of Japan governor Haruhiko Kuroda. Not for the president of the European Central Bank, Mario Draghi. Not for People’s Bank of China governor Zhou Xiaochuan. Their tricks no longer work.

"Fear" Indicator Surges To Record High

When it comes to the "here and now", which in the Fed's centrally-planned market is driven almost excusively by momentum ignition algos, complacency indeed rules (VIX 13). But even the merest glimpse into the near future, or rather how the present environment may disconnect with what may happen tomorrow, or next week, or, as the case may be, in three months, institutional investors are more concerned than ever before. But is this a confirmation that the US stock market is about to have a new "Deutsche Bank" moment?

Herbalife Stocks Plummets After Company Admits Its New Member Data Was Cooked And Overinflated

Today, however, may be a time for some modest celebrations for perennial Herbalife bear Ackman, because moments ago, Herbalife released an 8-K with some of the most unprecedented data revisions we have seen in a long time, one explaining that the company's "Active New Members" data has been not only completely wrong but massively inflated in the past year. The culprit: "database scripting errors." One wonders if there was perhaps a person who created this database...

Is A Stronger Euro And A Stronger Yen In Play?

While we still think its early to call the end of the dollar bull market that has been in place since July 2011, it's apparent that the world is currently not in as broad of a dollar bull market as we were in last year.

Financial Time Bombs Hiding In Plain Sight

The bear will soon be arriving in earnest, marauding through the canyons of Wall Street while red in tooth and claw. Our monetary central planners, of course, will once again - for the third time this century - be utterly shocked and unprepared. That’s because they have spent the better part of two decades deforming, distorting, denuding and destroying what were once serviceably free financial markets. Yet they remain as clueless as ever about the financial time bombs this inexorably fosters.

Silver Linings: Keynesian Central Banking Is Heading For A Massive Repudiation

Inflation targeting has been a giant cover story for a monumental power grab. The academics who grabbed the power had no idea what they were doing in the financial markets that they have now saturated with financial time bombs. When these FEDs (financial explosive devices) erupt in the months and years ahead, the central bankers will face a day of reckoning. And they will surely be found wanting. The immense social damage from the imploding bubbles dead ahead will be squarely on them.