After a head-scratching S&P500 rally - which not even Goldman has been able to justify - pushed stocks to new all time highs with seemingly daily record highs regardless of fundamentals or geopolitical troubles, overnight US equity futures dipped modestly, tracking weak European stocks as demand for safe haven assets including U.S. Treasuries and gold rises. Asian stocks outside Japan fall. Crude oil trades near $45 a barrel.
In theocratic Iran, the clergy determine what final choices the public will have; in aristocratic-dictatorial US, the aristocracy do. Bigotry, and its natural response – anti-bigotry – both advance the cause of the aristocracy, anywhere. It’s not just divide-and-conquer. It’s also redirect-and-distract.
"These developments point to a marked increase in political risks in systemically-significant countries. At the start of the year, we flagged many of these as well as introducing our thesis that rising Geopolitical Risks, accompanied by rising "Vox Populi" risks such as Brexit and changing US politics, were at risk of converging in new and powerful ways. Even so, we did not anticipate quite how many would transpire, let alone within such a compressed timeframe."
"No matter what Alan Greenspan did he was taken as a genius. Whereas 20 years later, Janet Yellen sounds like a fumbling idiot no matter what she does. All her actions come across as desperate because the credibility has been blown away. The Fed has been forced into action and by being forced into action it has only highlighted what the Fed can’t do."
We may soon see the unprecedented paradox where a German, French or Dutch corporate is trading with a negative yield, even as the matched-maturity sovereign bond is trading with a less negative yield, or is outright positive now that the ECB has shown it is more willing to accept negative corporate bond yields than bund yields.
With half of 2016 in the history books, corporate bond defaults just hit the milestone "century" mark, or 100, last week, rising by 50% from the number of bankruptcies at this time last year and the highest level since the US emerged from recession in 2009. What is most troubling is that at the current run-rate, with half of 2016 still to come, the global debt default total is on pace to surpass 2009 for the all time corporate bankruptcy record.
The Cleveland Fed’s Loretta Mester is a clueless apparatchik and Fed lifer, who joined the system in 1985 fresh out of Barnard and Princeton and has imbibed in its Keynesian groupthink and institutional arrogance ever since. So it’s not surprising that she was out flogging - albeit downunder in Australia - the next step in the Fed’s rolling coup d’ etat...“So it’s my view that [helicopter money] would be sort of the next step if we ever found ourselves in a situation where we wanted to be more accommodative." It’s the ultimate in 'something for nothing' economics.
"...central bankers seem to view elevated security valuations as “wealth.” The longer this fallacy persists, the worse the subsequent fallout will be. I have little doubt that future generations will look at the reckless arrogance of today’s central bankers no differently than we view speculators in the South Sea Bubble and the Dutch Tulip-mania. Unfortunately, there is no mechanism by which historically-informed pleas of “no, stop, don’t!” will penetrate their dogmatic conceit. Nor can we change the psychology of investors."
One glimpse at the massive variance between the last two days polls in swing states suggests something very odd is going on. Simply put, given the post-Email-gate disapproval ratings, Pro-Hillary Clinton polls simply don't make sense... "The American public is far more pissed off than even you’d like to admit. Part of the reason you refuse to admit it is that this reality is truly terrifying."
Every time we believe Venezuela has hit rock bottom, president Nicolas Maduro finds a way to surprise us. In the latest installment of Venezuela's social collapse, we find that the president of the socialist utopia has put the armed forces in charge of a new food supply system called the Great Sovereign Supply Mission."This is now a completely militarized government" said Luis Manuel Esculpi, former head of the armed forces commission in the congress.
The investment community remains in a quandary as the S&P 500 hits new highs alongside fund managers struggling with portfolio performance. Three questions tend to be uppermost in their minds – 1) can “defensives” keep rallying, 2) how can investors be “bearish” if the S&P 500 touches record levels and 3) what if Trump wins? An added concern - or perhaps hope - is whether there a possibility of even higher P/E ratios if US bond yields are suppressed by negative yields elsewhere?
At a time when many Republicans are deeply dissatisfied with their nominee, pessimistic about their prospects for victory in the fall and alarmed about the direction of their party, there’s a reluctance about attending the convention more typically reserved for going to the DMV, being summoned for jury duty or undergoing a root canal. "I would rather attend the public hanging of a good friend", says Will Ritter, an up-and-coming Republican digital strategist who worked on the three previous conventions.
Following yesterday's report that a majority of Americans disapprove of FBI director Comey's decision on Hillary Clinton, it is perhaps not surprising that the Democrat's lead over Donald Trump has shrunk substantially in the latest NBC poll, and is now leading the presumptive Republican candidate by just three points after several days of "controversy" following FBI Director James Comey's recommendation that no criminal charges be brought against the former secretary of state over her use of a private email server.
There is now $13 trillion of global negative-yielding debt. And, as the WSJ writes, even a small increase in interest rates could inflict hefty losses on investors. With the 2013 "taper tantrum" the Fed sparked a selloff as it discussed ending its bond-buying program known as quantitative easing. A repeat "would be very painful for a lot of people" said J.P. Morgan. This is just how painful.