"The world has fundamentally shifted over the last decade, especially since we’ve emerged from the Great Recession... But the professional class has been very slow to understand what is going on, not just quantitatively but qualitatively in a new generational configuration that I call the Fourth Turning. They don’t accept the new normal. They keep insisting, just two or three years out there on the horizon, that the old normal will return – in GDP growth, in housing starts, in global trade. But it doesn’t return."
As the following chart from Reuters shows, the year-to-date stock price performance for most European banks is on pace to far surpass - to the downside - the dreadful for the global financial system 2008.
S&P Downgrades Banks With Highest Energy Exposure; Expects "Sharp Increase" In Non-Performing AssetsSubmitted by Tyler Durden on 02/09/2016 17:35 -0500
Moments ago S&P continued its downgrade cycle, this time taking the axe to the regional banks with the highest energy exposure due to "expectations for higher loan losses." Specifically, its lowered its long-term issuer credit ratings on four U.S. regional banks by one notch: BOK Financial Corp., Comerica Inc., Cullen/Frost Bankers Inc., and Texas Capital Bancshares. The outlooks on these banks are negative.
Here is the one chart showing why the time to panic about Canadian banks may have finally arrived...
Overnight, one of the two rating agencies, Standard and Poors, came one step closer to that fateful moment of junking Glencore when it downgraded Glencore, however it decided to throw the company one last lifeline by keeping it at the very lowest investment grade rating, and instead of cutting it from BBB to single B or CCC where its CDS and bond yield implies the company should be trading, it kept it a BBB-.
While the biggest news of the night had nothing to do with either oil or China, all that mattered to US equity futures trading also was oil and China, and since WTI managed to rebound modestly from their biggest 2-day drop in years, rising back over $30, and with China falling only 0.4% overnight after the National Team made a rare, for 2016, appearance and pushed stocks to close at the day's high, US E-minis were able to rebound from overnight lows in the mid-1880s, and levitate above 1900. Whether they sustain this level remains to be seen.
Just 10 days after "Moody's Put Over Half A Trillion Dollars In Energy Debt On Downgrade Review", moments ago S&P decided it wanted to be first out of the gate with a wholesale downgarde of the US energy companies, and announced that it was taking rating actions on 20 investment-grade companies, including 10 downgrades as follows: Chevron Corp.; EOG Resources; Apache Corp; Devon Energy Corp; Hess Corp; Marathon Oil Corp; Murphy Oil Corp; Continental Resources; Hunt Oil; Southwestern Energy.
Speaking of the need for citizen participation in our national politics in his final State of the Union address, President Obama said, “Our brand of democracy is hard.” A more accurate characterization might have been: “Our brand of democracy is cold hard cash.” Cash, mountains of it, is increasingly the necessary tool for presidential candidates. Several Powerball jackpots could already be fueled from the billions of dollars in contributions in play in election 2016. When considering the present donation season, however, the devil lies in the details, which is why the details follow.
"Unless the root causes of popular discontent are addressed (uneven growth, pockets of high unemployment and weak wage growth), the protest vote is unlikely to go away. In fact, it may well grow."
It's all falling apart in Germany as frightened citizens load up on small arms and hurl grenades at migrant centers while at least 40% of the public now believes the "Iron Chancellor" should resign.
Donald Trump "won't be bothering" with Thursday's GOP debate thanks to the fact that Fox's Megyn Kelly is among the event's moderators, but he will be hosting his own "special" event in the same city at the same time, setting up a ratings battle with the network. Meanwhile, Ted Cruz has challenged the bellicose billinoaire to a one-on-one showdown worth $1.5 million for veterans charities.
"We believe that the current environment is not a normal cyclical downturn but a fundamental shift in the operating environment for these commodities. As a consequence, a wholesale recalibration of ratings in the mining industry is deemed necessary. " - Moody's
- China shares end at 14-month lows after late selling frenzy (Reuters)
- China Dec gold imports through Hong Kong highest since 2013 (Reuters)
- China Contagion Fades as European Stocks Pare Drop, Oil Rises (BBG)
- Apple set for slowest ever iPhone sales growth (Reuters)
- Saudis, Russia Seen by Iraq as More Flexible on Oil-Output Cuts (BBG)
- China Probes NEV sector for subsidy fraud (China Daily)
While energy E&P companies were dropping like flies in 2015, credit rating agencies and banks have remained awfully quiet....