"It’s Surreal" - Negative Yielding Debt Rises To Record $13.4 Trillion

“It’s surreal,” said Gregory Peters, senior investment officer at Prudential Fixed Income "Regarding negative yields he added that “It’s clear that central banks are dominating markets. There’s a race to the bottom. Central banks are the main drivers of this, it’s not fundamental."

Portugal Gaining On Italy In The European Banking "Doom Loop"

Portugal’s doom loop metric has soared over the past two years.  Portuguese banks have been gorging on Portuguese sovereign debt, taking it from 7 percent of total assets to 10 percent - the same level as Spain.  If they continuing loading up at this pace, they will reach Italian levels by 2018.

Merkel Urges German CEOs To Hire Refugees

Merkel has invited executives from some of Germany's biggest listed companies to attend a summit next month where she will urge them to hire more refugees. According to Germany's Bild, the government wants to get as many as possible refugees into the job market, which would reduce their dependence on the state. This is great news for Deutsche Bank, which now has many potential candidates for a "scapegoat" CEO as the company's woes accelerate.

Trump Backpedals, Says Accusing Obama Of Founding ISIS Was "Sarcasm"

In another unexpected retreat by Trump, the republican presidential nominee tweeted earlier today that his comment which again took the media by storm, when he said that Obama and Hillary were the "founder and co-founder of ISIS", was "sarcasm" even as he reaffirmed what he "meant" in a radio interview last night.

Erdogan Threatens To Abandon US Dollar In Trade With Russia

According to Turkey's Gunes newspaper, which said that as part of the discussion between Putin and Erdogan on Tuesday, the Turkish president suggested to abandon the US dollar in bilateral trade between Turkey and Russia, and instead to transact directly in lira and rubles.

Citi Lays Out The "Black Swans" That Donald Trump Would Unleash If He Becomes President

With less than 90 days left until the presidential election, Citi's Dana Paterson writes that the "election risks clock starts now." Here is how Citi previews the upcoming US election which "may generate extremely high uncertainty that likely will impose a significant drag on economic growth", and Citi's breakdown of Black Swans, mostly associated with a Trump presidency.

Angry Chinese CFO Kicks Out Analyst Who Rated Company A "Sell"

A CFO threw an analyst out of a company presentation in Hong Kong because he disagreed with the analyst’s negative views (not to mention his Sell rating), in a vivid example of a company lashing out personally and publicly against its critics.

Secret Service "Holds More Than One Conversation" With Trump About His Second Amendment Remark

Hillary Clinton's campaign responded to criticism that she did not reject the support of the Orlando shooter who made headlines earlier this week when he was seen sitting in the crowd at a Clinton rally in Kissimmee, Florida: "She disagrees with his views and disavows his support." Shortly thereafter she responded to Trump's 2nd amendment comment, saying his statement demonstrates "he does not have the temperament to be president."

Frontrunning: August 10

  • World stocks hit one-year peak, dollar sags on weak U.S. data (Reuters)
  • Trump's remarks on gun rights, Clinton unleash torrent of criticism (Reuters)
  • Newly Released Emails Highlight Clinton Foundation’s Ties to State Department (WSJ)
  • One-in-five U.S. Republicans want Trump to drop out: Reuters/Ipsos poll (Reuters)
  • Soaring Debt Has U.S. Companies as Vulnerable to Default as 2008 (BBG)
  • BOJ to defend QQE in Sept policy assessment (Reuters)

US Futures Flat; Bonds Rise, Dollar And Oil Slide Over US Productivity Collapse Fears

Following yesterday's muted action which saw the S&P500 close unchanged, it has been more of the same listless trading overnight, with US equity index futures little changed as the Nikkei fell on the back of a stronger Yen, while government bonds rose and European stocks reversed early gains following the BOE failed bond monetization operation. Crude oil dropped for a second day after Saudi Arabia told OPEC that it pumped a record 10.67 million barrels of oil a day,

Buffett Exits Entire Credit Default Swap Exposure, As Citi's Appetite For Derivative Destruction Surges

It was considered one of the bigger paradoxes for years. Back in 2003, Warren Buffett famously dubbed derivatives “financial weapons of mass destruction” and yet over the next several years went ahead and entered a number of the contracts, including both equities and credit, ostensibly by selling CDS to collect up monthly premiums. However, at least when it comes to CDS, after several years of Berkshire trimming its credit derivative exposure, it is now completely out. Meanwhile, Citi is loading up on any CDS it can find...

The Stock Market's Big Lie: "I'll Take The Under"

One of the biggest “lies” in the financial world is that if you just invest your money in the markets over the long-term, you will average 7, 8 or 10% a year. Asset-gatherers don't give enough credence to the long-term effects of the “when” you start your investing cycle. The primary problem is that investors DO NOT have 100-years to invest BEFORE their disbursement cycle begins. Unfortunately, with stock valuations pushing the second highest level in history, forward return expectations (before inflation, taxes, and expenses) are extremely low.

David Stockman Rants Against The Dangers & Digressions Of The Donald's Demagoguery

"Making America great" is about unleashing the nation’s capitalists again. It’s an expression that prosperity is not bestowed by the state but won by the kind of builders, investors, innovators and workers that The Donald fancies to be the essence of Trump Inc. To that extent, Donald Trump could be regarded as an incipient anti-statist. While this might seem like an overly generous characterization, it is a measure, alas, of the degree to which the bipartisan “policy” consensus against him has congealed around what is essentially a Keynesian axiom of endless macroeconomic intervention and “stimulus”.