Update: even the rating agencies finally noticed - S&P: GLENCORE TO BBB/NEGATIVE FROM BBB/STABLE
Earlier today, Glencore stock plunged to a new all time low, after crashing nearly 20% in the past two days as investors with rose-colored glasses finally appreciate the dire reality facing the global miner. However, the best way to trade the beginning of the end for Glencore is not using stock at all.
News That Matters
First Trump, now this...!?
- Hilsenrath: Fed Appears to Hold Line on Rate Plan (WSJ)
- Europe, Asia stocks set for worst monthly drop in three years on China, Fed (Reuters)
- Beijing abandons large-scale share purchases (FT), if only for a few hours
- China’s Next Problem: Paying for Its Stock-Market Bailout (WSJ)
- Crises Put First Dents in Xi Jinping’s Power (WSJ)
- Man Group’s China Chief Said to Assist Police in Probe (BBG)
After forensically analyzing Morgan Stanley's balance sheet (which is very much like the rest of Wall Street's balance sheet) I can draw direct parallels to that of Lehman and Bear Stearns in 2007. It's a party!
Whether it’s intentional or accidental. The more Mom and Pop tunes out – the less to feed on for the HFT’s till eventually there’s no one left to feed on except for themselves – and I believe you are witnessing in real-time this exact phenom which will be brought on not only quicker, but with more ferocity moving forward. For Mom and Pop are not coming back to either the “markets” or CNBC. They’re done.
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At a certain point, we suppose Joe Biden took a look at the state of the 2016 race for The White House and thought: "why not me?"
Want further evidence of the misappropriation of taxpayer funds to post-secondary education? Look no further than the Pell grant program.
Following the end of a horrible week for petroleum importers (not to mention shale producers) despite WTI briefly dipping under $40 (wasn't this supposed to be great news for the US economy?) we have the start of a just as ugly week for the Persian Gulf oil exporters, whose Sunday market open can be described as a continuation of last week's broad risk carnage, and where Saudi Arabia, until recently the region's best performing market, is now down 10% for the year and down 30% compared to 12 months ago.
Last week, in the global currency war’s latest escalation, Kazakhstan instituted a free float for the tenge causing the currency to immediately plunge by some 25%. The rationale behind the move was clear enough. What might not be as clear is how recent events in developing economy FX markets stem from a seismic shift we began discussing late last year - namely, the death of the petrodollar system which has served to underwrite decades of dollar dominance and was, until recently, a fixture of the post-war global economic order.
Imagine that the Food and Drug Administration (FDA) was a corporation, with its shares owned by the nation's major pharmaceutical companies. How would you feel about the regulation of medications? Whose interests would this corporation be serving? Or suppose that major oil companies appointed a small committee to periodically announce the price of a barrel of crude in the United States. How would that impact you at the gasoline pump? Such hypotheticals would strike the majority of Americans as completely absurd, but it's exactly how our banking system operates.
Even if it is short term oversold, this is actually a quite dangerous market – caveat emptor, as they say.
News That Matters...
Persistently low oil prices have already inflicted economic pain on oil-producing countries. But with crude sticking near six-year lows, the risk of political turmoil is starting to rise. There are several countries in which the risks are the greatest – Algeria, Iraq, Libya, Nigeria, and Venezuela – and, as we noted previously, RBC Capital Markets has labeled them the “Fragile Five.”