Having been abandoned by equity analysts, perhaps investors could find some solace in the Treasury analyst community. Alas no: as Bloomberg notes this morning, citing independent Treasury strategist Marty Mitchell, "our concern is that things will only get worse (effects of commodity super-cycle, bankruptcies, debt defaults, hedge fund redemption/failures, global economic slowdown, equity weakness, global debt deleveraging, etc, etc) before they get better."
- Oil slips toward $30, traders bet on more falls (Reuters)
- Oil Plunge Sparks Bankruptcy Concerns (WSJ)
- RBS cries 'sell everything' as deflationary crisis nears (Telegraph)
- World stocks drop but Europe shrugs off oil slide, China money market surge (Reuters)
- Canadian Stocks Fall in Longest Slump Since 2002 as Oil Slides (BBG)
- "Murderous" Yuan Rate Jolts Hong Kong as Top Currency Hub (BBG)
"The burn rate has been worrying. It’s not about how long it gets to zero, its about how long it gets to about 2, which is what they need."
"Until the market acquires greater confidence on the intended scale of currency depreciation as well as the equilibrium level of capital outflows (and effectiveness of capital controls) concerns around China’s currency policy are unlikely to subside any time soon."
This week is simply the worst we had in recent history for markets, RBS exclaims, the worst ever start to the year for The Dow, the worst since 1999 for S&P and the second-worst for credit since 2008. Worst still is, they think there’s more weakness ahead and that many fundamental risks will continue to haunt markets. Why? Simple! Investors drank too much policy kool-aid last year.
"Saudi Aramco confirms that it has been studying various options to allow broad public participation in its equity through the listing in the capital markets of an appropriate percentage of the Company’s shares and/or the listing of a bundle its downstream subsidiaries."
- Oil prices drop towards 11-year lows on worsening glut (Reuters)
- Third Avenue Seen by Top Investors as Fueling More Carnage (BBG)
- Lucidus Has Liquidated $900 Million Credit Funds, Plans to Shut (BBG)
- Investor nerves tested with yuan, oil, Fed in play (Reuters)
- Junk Bonds Stagger as Funds Flee (WSJ)
- Seattle lawmakers set to vote on allowing Uber, other drivers to unionize (Reuters)
Futures Resume Slide After Oil Tumbles Below $35, Natgas At 13 Year Low; EM, Junk Bond Turmoil AcceleratesSubmitted by Tyler Durden on 12/14/2015 07:51 -0400
With just 72 hours to go until Yellen decides to soak up to $800 billion in liquidity, suddenly we have China and the Emerging Market fracturing, commodities plunging, and junk bonds everywhere desperate to avoid being the next to liquidate.
The mainstream media is increasingly suggesting that we have once again entered into a 'Goldilocks Economy.' The problem is that in the rush to come up with a 'bullish thesis' as to why stocks should continue to elevate in the future, they have forgotten the last time the U.S. entered into such a state of 'economic bliss.' You might remember this: "The Fed's official forecast, an average of forecasts by Fed governors and the Fed's district banks, essentially portrays a 'Goldilocks' economy that is neither too hot, with inflation, nor too cold, with rising unemployment." - WSJ Feb 15, 2007. Of course, it was just 10-months later that the U.S. entered into a recession followed by the worst financial crisis since the 'Great Depression.'
After asking rhetorically "if something just blew up in junk," as CCC-yields explode to crisis-peak levels - suggesting something "spectaculor" is occurring as one trader noted, The FT reports that, according to Standard & Poor’s, companies have defaulted on $78bn worth of debt so far this year with 2015 set to finish with the highest number of worldwide defaults since 2009.
One recurring word prevails in every single Wall Street reaction to Mario Draghi's announcement today: "disappointment"... the same disappointment we warned about yesterday, and which we said could push the EURUSD to 1.09 today, just as happened an hour earlier.
- Soothing Fed sounds send shares, emerging markets higher (Reuters)
- Belgian Police Conduct Raids in Connection With Paris Attacks (WSJ)
- The Paris Attacks Can’t Lead to a Closed Europe (BBG)
- Alleged Mastermind of Paris Attacks Was ‘Emir of War’ (WSJ)
- U.S. Eyes Russia-Iran Split in Bid to End Syria Conflict (WSJ)
- Despite tensions, Asia-Pacific nations close ranks against terrorism (Reuters)
"The equilibrium, for now, is QE infinity – but political risk could be the breaking point"...