Recession

Former Morgan Stanley Chief Asia Economist: "Don't Listen To The Ruling Elite, The World Economy Is In Real Trouble"

"Don't listen to the ruling elite," warns former Morgan Stanley Asian Economist, Andy Xie, "the world economy is on the cusp of a prolonged period of stagnation and instability." Xie points out that the ruling elite is blaming it on people seeing things (skeptic and fiction peddlers), and that "their strategy is to change people’s psychology." Unfortunately for them he concludes, "the world is catching fire and that fire will eventually reach their Davos chalets."

Another Real Estate Crash Looms: Sam Zell Dumps Holdings, Warns "The Fed's Deferred Reality For Too Long"

Everything seems to be booming again – easy money, easy lending, rising prices, and a bread and circused populous. But appearances can be deceiving and highly acclaimed billionaire investor Sam Zell isn’t buying the hype... noting the nearly 50 million Americans on food stamps, the six million millennials living in their parents’ basements, or the massive spike in business debt delinquencies.

Losing Ground In Flyover America, Part 3

The Fed’s crusade to pump-up inflation toward its 2.00% target by hammering-down interest rates to the so-called zero bound is economically lethal. The former destroys the purchasing power of main street wages while the latter strip mines capital from business and channels it into Wall Street financial engineering and the inflation of stock prices.

"The Stock Market Won't Crash, Yet" - The Barron's Cover Strikes Again

When it comes to Wall Street cover page superstitions, nothing beats the Barron's front page article jinx: just when you think something will never happen, Barron's confirms it on the cover, virtually assuring that it does. In which case, be afraid bulls, be very afraid, because if past is prologue Barron's just green-lit the next crash.

Here's Why All Pension Funds Are Doomed, Doomed, Doomed

It's looking increasingly likely that third time's the charm: this set of bubbles is the last one central banks can blow. And when markets free-fall and don't reflate into new bubbles, pension funds will expire, as they were fated to do the day central banks chose zero interest rates forever as their cure for a broken economic model.

Death By A Theta Cuts

Implied volatility should remain structurally elevated into and through an eventual recession (and likely bear market) before subsiding once the next sustained recovery has begun. That is precisely why we have struggled with the idea that the high-volatility regime intact since last August may truncate at less than a year. If our reasoning is correct and volatility remains structurally elevated, it follows that the recent three-month cyclical trough, as the longest such period on record, is statistically unlikely to last much longer.

Why Stocks Keep Rising Despite Another Rate Hike On The Horizon: One Explanation

"It would seem to us that the equity outcome in the weighted average view is a lot less positive. There are few S&P 2500 optimists even at 2.5% growth but plenty of S&P 1600 or less pessimists on the negative scenario. Bottom line – one more and pretty much done is unlikely to be as risk positive as recent asset market prices action suggests."

Is The Market Priced For A Summer Rate-Hike?

Last November, capital markets were discounting a rate hike five months later, based on Fed Funds futures. Same story today. Last November, the S&P 500 was trading near 2100. Same story today. Last November, VIX levels were around 14. Same story today. Last November, instead of waiting five months, the Fed hiked rates one month later; the S&P dropped by 10% over the next eight weeks... And as BofAML's Savita Subramanian warns, hiking during a profits recession usually hasn't ended well.

Gundlach Predicts Yellen Will Be Dovish Today; Is "Quite Sure" Oil Prices Are Going Down Again

With verious Fed presidents having whipping up the market into a hawkish frenzy in the past two weeks, leading to a dramatic repricing in summer rate hike odds with expectations for a July rate hike now over 50%, many can be "disappointed" by Yellen's speech today, at least according to Jeff Gundlach who said Yellen appears to be more cautious on raising interest rates and he expects her comments to be dovish again on Friday, when she is scheduled to speak at an event in Harvard-Radcliffe.

A Spirit Of Violence And Civil Unrest Is Rising In America

It was only a matter of time before our deeply divided nation was going to start coming apart at the seams.  Waves of anger, frustration, violence and civil unrest are starting to sweep across the United States, and political rallies for Republican presidential candidate Donald Trump have become a focal point for releasing some of that energy.  The angry mob that threw rocks, bottles and burning T-shirts at police and Donald Trump supporters on Tuesday night wanted to get the attention of the national media, and they got it in droves.  Now that the election is less than five months away, this kind of scene is going to be repeated over and over, and this is something that we warned about back in MarchMillions upon millions of our young people have fully embraced the radical left, and they have already made it exceedingly clear that they are not afraid to use violence to advance their cause.

3 Things: Auto Angst, Valuation Vulnerabilities, & Delusional Decouplings

Yes, the “bull market” is currently alive and well. However, there are mounting signs that a “cancer” has taken hold and will eventually reveal itself in the not so distant future. Unfortunately, for most investors, the inevitable outcome of chasing yield with a complete disregard of the underlying risk will be catastrophic.