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Tyler Durden's picture

How To Detect Bullshit





There is little question that bullshit is a real and consequential phenomenon (especially popular in the financial markets and central planning arena). Indeed, as the following scientific study finds, given the rise of communication technology and the associated increase in the availability of information from a variety of sources, both expert and otherwise, bullshit may be more pervasive than ever before. Despite these seemingly commonplace observations, we know of no psychological research on bullshit. Are people able to detect blatant bullshit? Who is most likely to fall prey to bullshit and why?

 
Tyler Durden's picture

How To Profit From The Coming High Yield Meltdown





"Like most turns in the credit cycle, it is uncertain exactly when the bottom will fall out of corporate credit markets, but the catalyst is likely to be an unexpected major event, perhaps even a single company getting into trouble. While we have been bearish on high yield for over a year now, we didn't think the conditions were yet ripe for a collapse. Now they're ripe."

- Ellington Management

 
Tyler Durden's picture

European Stocks, US Futures Surge On Last Minute Hopes Of "Extraordinary Policy Easing" By Mario Draghi





Yesterday's market swoon which unwound all of Tuesday's gains on concerns about a hawkish Fed and fears about terrorism in the US, are now completely forgotten, and have been replaced with the latest daily round of pre-ECB euphoria, driven by hopes that Mario Draghi will announce even more dovish details to Europe's Q€ 2 than just a 10 bps rate cut and a boost to QE more than €10 billion, both of which have been already priced in.

 
Tyler Durden's picture

Mexico Faces Its Biggest Corporate Default In Two Decades As Construction Giant Misses Bond Payment





"Do I think they’re going to pay within 30 days? No. The 30 days are not going to make any difference."

 
Tyler Durden's picture

4 Telltale Signs The Credit Cycle Is Turning Now





"... As the tide of leverage goes out, the full extent of irresponsible lending becomes apparent. The previously virtuous cycle between risk spreads and fundamentals goes into reverse, with lower prices, defaults, and downgrades forcing leveraged investors to sell, leading to even lower prices."

 
Tyler Durden's picture

Fourth Turning - Politicians Driving The World Towards War





Americans today are blissfully distracted by their iGadgets, plotting out their holiday shopping strategies, leasing new cars, eating out, and buying advance tickets to the new Star Wars movie. They don’t see the wicked winter squalls ahead which will try their souls. We are experiencing the lull before the storms, but the storms are surely coming. The potential for catastrophe is high and burying our heads in the sand is not a strategy.

 
Tyler Durden's picture

Can The Oil Industry Really Handle This Much Debt?





With at least 83 percent of these companies' operating cash being spent on debt repayments - the highest on record - the renewed collapse in crude oil prices of the last month has renewed focus on the tidal wave of defaults that the credit market is increasingly pricing in (and stocks not).

 
Tyler Durden's picture

"On The Cusp Of A Staggering Default Wave": Energy Intelligence Issues Apocalyptic Warning For The Energy Sector





The US E&P sector could be on the cusp of massive defaults and bankruptcies so staggering they pose a serious threat to the US economy. Without higher oil and gas prices — which few experts foresee in the near future — an over-leveraged, under-hedged US E&P industry faces a truly grim 2016.  "I could see a wave of defaults and bankruptcies on the scale of the telecoms, which triggered the 2001 recession."

 
rcwhalen's picture

On Credit Default Swaps





"This is legal?" Stephanie Ruhle on CDS after watching "The Big Short" (Bloomberg TV) 

 
Tyler Durden's picture

"This Isn't Going To End Well" - Junk Bonds Under Pressure





There are seemingly always “good reasons” why troubles in a sector of the credit markets are supposed to be ignored – or so people are telling us, every single time. Some still recall how the developing problems in the sub-prime sector of the mortgage credit market were greeted by officials and countless market observers in the beginning in 2007. Meanwhile, the foundation of the economy continues to look rotten (the newest round of Fed surveys has begun with another bomb and other manufacturing-related data continue to disappoint as well). This isn’t going to end well, if history is any guide.

 
Tyler Durden's picture

"People Are Voting With Their Feet": PIMCO No Longer EM Bond King As Fund's AUM Tumbles 62%





Amid souring bets on Brazil and the general malaise across EM, PIMCO has been dethroned as the king of emerging market bonds. A fund run by Ireland-incorporated Stone Harbor has overtaken PIMCO's EM Local Bond Fund as the world's largest emerging market fixed income fund by AUM as rollercoaster bets on Brazil and the departure of both El-Erian and Gross weighs on investor sentiment.

 
Tyler Durden's picture

The Next Chicago? Houston Faces Pension Crisis In Latest Example Of Local Government Fiscal Folly





“If they end up doing nothing to address this budget issue ... Houston could be facing the same problem Chicago is now."

 
Tyler Durden's picture

"No QE For You!": ECB May Cut "Lifeline" To Portugal After Socialists Overthrow Government





In what sounds like the plot of a McCarthy-era propaganda spy novel, the Socialists and Communists have overthrown the government in Portugal. That means it's time for the troika to start pushing back against the undesirables by threatening the country with financial ruin. Just call it "tough love." 

 
Tyler Durden's picture

McDowngrade: S&P Cuts 'Releveraging' Junk Food Vendor's Debt To Almost Junk





Having told the world that it will borrow billions (and cut capex) to "return all free cash to investors," it appears ratings agency S&P just needed to remind McDonalds that Shareholder-friendly releveraging no longer comes for free...

*S&P LWRS MCDONALD'S RTG TO 'BBB+' ON SHR BUYBACK PLANS

Who could have seen that coming?

 
Tyler Durden's picture

Wholesale Money Markets Are "Perverted" - US Swap Spreads Hit Record Lows





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, massive corporate issuance (which we are seeing), China selling pressure (and its impact on repo markets) and "broken" wholesale money-markets.

 
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