Biggest Weekly Stock Rally Since 2012 Continues Driven By Tumbling Dollar, Dovish Fed; Commodities SurgeSubmitted by Tyler Durden on 10/09/2015 06:53 -0400
The global risk on mood (which is really anything but, and is merely an unprecedented short covering squeeze as we will report momentarily) launched by an abysmal jobs report one week ago and "validated" yesterday by the surprisingly dovish FOMC minutes, which said nothing new but merely confirmed what most knew, namely that a rate hike is almost certain to not occur until mid-2016 if ever, and accelerated by a Fed-driven collapse in the dollar which overnight has led to a historic 3.4% move in the Indonesian Rupiah the most since 2008, has pushed global stocks even higher in their biggest weekly rally since 2012, despite the start of an earnings season where virtually every single company reporting so far has stumbled on earnings reports that were far worse than even gloomy consensus had expected.
News That Matters
Deutsche Bank warned it expects to record a third-quarter loss of $7 billion, tied to a huge write-down in its corporate-banking-and-securities segment. The bank said the charges are driven by the impact of expected higher regulatory capital requirements and its disposal of Postbank. It also said it will consider reducing or eliminating its common dividend for fiscal 2015.
DEUTSCHE BANK SEES 3Q NET LOSS EUR 6.2 BLN
DEUTSCHE BANK TO RECOMMEND DIVIDEND CUT OR POSSIBLE ELIMINATION
And now the real shocker: there is over US$100bn in gross financial exposure to Glencore. From BofA: "We estimate the financial system's exposure to Glencore at over US$100bn, and believe a significant majority is unsecured. The group's strong reputation meant that the buildup of these exposures went largely without comment. However, the recent widening in GLEN debt spreads indicates the exposure is now coming into investor focus."
In the real world, any casino (legal or otherwise) which refused to pay when the “house” lost would quickly be driven out of business
"In the event of a downgrade by Standard & Poor’s and/or Moody’s from current ratings to the level(s) immediately below... there are $4.5 billion of bonds outstanding, where a 125bps margin step-up would apply, in the event that the bonds were rated sub-investment grade by either major ratings agency."
Unfortunately, we are used to politicians saying whatever they think they need to say to be elected president, and falling way short of their campaign promises on the job. Even scarier would be the notion of selling America to the craftiest bidder. The election may be more than a year away, but isn’t it time to dig beneath the carefully crafted persona that is Trump and unearth the person and the full spectrum of his business dealings? To see the real Donald Trump is to plunge into all the conflicts of interest he denies, the financial tricks he dispenses, the crucial details he obfuscates, and the flimflam he offers up day in, day out.
"The Americans were startled once again when tragic news break out about the deadly campus shooting in Oregon on Thursday. However, the United States is "the only advanced country on earth that sees these kinds of mass shootings every few months," just like President Barack Obama has painfully acknowledged. How come a country as powerful as the United States has been unable to stop this kind of brutal attacks against innocent civilians? The problem is deeply rooted in the country's political system, where bipartisan politics and interest groups exert huge influence, to the point that security of the American people have to give way to political correctness and corporate interests."
"It is not a problem of liquidity, but of fundamentals"...
Brazilian Nightmare Worsens On Bad Budget Data, Record Low Confidence, Horrific Government Approval RatingsSubmitted by Tyler Durden on 09/30/2015 17:11 -0400
With the fiscal picture looking increasingly precarious and confidence collapsing, we bring you the latest from the frontlines of the EM meltdown. In short, Brazil is falling apart at the seams. Now, who wants tickets to the 2016 Olympic Games in Rio?
At the height of the financial crisis, the unprecedented decline in swap rates below Treasury yields was seen as an anomaly. The phenomenon is now widespread, as Bloomberg notes, what Fabozzi's bible of swap-pricing calls a "perversion" is now the rule all the way from 30Y to 2Y maturities. As one analyst notes, historical interpretations of this have been destroyed and if the flip to negative spreads persists, it would signal that its roots are in a combination of regulators’ efforts to head off another financial crisis, China selling pressure (and its impact on repo markets) and "broken" wholesale money-markets.
Are some Chinese banks ramping up their exposure to shadow conduits on the way to obscuring massive amounts of credit risk? Moody's says yes...
Some people will never learn... ever. What is happening today is nothing more than rearranging the deck chairs on the Titanic. The iceberg has been struck, we’re taking on water, and this sucker is going to sink. Game Over.
This is the sort of thing you’d expect to see in a Banana Republic. Which makes perfect sense, because America is a Banana Republic.