recovery

Goldman Cuts Oil Price Target From $50 To $43 On Rising Global Surplus

While we await every new headline out of Algiers, overnight Goldman threw in the towel on its "transitory" oil market bullishness, and in a note by Damien Courvalin looking "Beyond Algiers, Weakening Oil Fundamentals", the bank cut its Q4 oil price target from $50 to $43, as the bank admits the previously anticipated rebalancing will take longer to achieve, and now expects "a global surplus of 400 kb/d in 4Q16 vs. a 300 kb/d draw previously."

Frontrunning: September 27

  • Deutsche Bank Returns to Haunt Merkel in an Election Year (BBG)
  • Saudis, Iran dash hopes for OPEC oil deal in Algeria (Reuters); Iran Doesn’t Want Oil Deal in Algiers, Won’t Freeze Output (BBG)
  • Debate of century lives up to its billing (The Hill)
  • Candidates Spar in Debate, Offer Vastly Different Visions for Leading the U.S. (WSJ)
  • Clinton gains in online betting markets after U.S. presidential debate (Reuters)
  • Presidential Debate Illuminates Voters’ Stark Choice (WSJ)

"Hillary Rally" Fizzles As DB Hits New Record Low; Volkswagen Slammed; Oil Slides On Iran Statement

A rally in global risk that started during last night's first presidential debate on the market's take that Hillary came out on top fizzled, following news that the DOJ is assessing how big a criminal fine it can extract from Volkswagen (-3.8%) over emissions-cheating "without putting the German carmaker out of business", while Iran's oil minister Zanganeh told reporters Iran is ununwilling to freeze output at current levels. Deutsche Bank dropped to a new all time low while its default risk hit fresh record highs.

Dangerous Bubbles In Plain Sight

Relative to disposable income, the value of household financial assets now far exceeds the last two bubble peaks. And that has happened in an economic environment which suggests just the opposite. To wit, valuation multiples and cap rates should be falling owing the fact that the productivity and growth capacity of the US economy has been heading south ever since the turn of the century. So here’s the danger...

The QE Premium

"...to be blunt, given the aforementioned fundamental risks and the poor risk/return skew, history is clearly not in favor of those who remain long equities banking on the Fed to continue to levitate valuations and prices with limited tools and faulty narratives."

What Do We Know?

"These linear thinkers can’t understand why their playbook of lies, misinformation, pointless social justice issues and a myriad of other inane distractions aren’t working this time. They fail to acknowledge that history is cyclical and we’ve entered the phase when generational cohorts are aligned for dramatic sweeping change. The data is there for all to see, but those benefiting from the current perverted paradigm will not be swept aside without a bloody fight."

26 Incredible Facts About The Economy That Every American Should Know Before The Trump-Clinton Debate

Are you ready for the most anticipated presidential debate in decades? There will likely be quite a few questions about the economy, and without a doubt this is an area where Trump and Clinton have some very sharp differences.  The mainstream media would have us believe that the U.S. economy is in pretty good shape, and if that was true that would seem to favor Clinton.  But is it actually true?

"My Order Book Is Abysmal" - Dallas Fed Contracts For 21st Straight Month

For the 21st month in a row, Dallas Fed's manufacturing outlook remains stuck in contraction (-3.7 vs -2.5 exp). This is the longest streak outside of recession in the survey's history as new orders cratered (one respondent noting "my order book is abysmal") and inventories tumbling (not good for GDP).

Global Stocks Tumble, US Futures Slide On Deutsche Bank Fears, Central Bank And Commodity Concerns

While today's biggest event for both markets and politics will be tonight's highly anticipated first presidential debate between Trump and Hillary, markets are waking up to some early turmoil in both Asia and Europe, with declines in banks and energy producers dragging down stock-markets around the world, pushing investors to once again seek the safety of government bonds and the yen.

Dr. Lisa Bardack’s Faustian Bargain

When Dr. Lisa Bardack was asked to become Hillary Clinton’s personal physician in 2001, it had to have been a crowning moment in the career of the Mt. Kisco internist. Dr. Bardack could have anticipated little downside... Unfortunately, Hillary Clinton corrupts everyone who serves her.

Chinese Contagion Risks Surge: Banks' Reliance On Each Other For Funding Hits All Time High

China’s smaller banks have never been more reliant on each other for funding, prompting rating companies to warn of contagion risks in any crisis.  "Contagion risks are definitely rising," according to S&P: "The pace of the development is concerning. If this isn’t stopped in time, the central bank will lose some control and flexibility of its monetary policy."

"Hell To Pay" - The Final Condition For A Market Crash Is Falling Into Place

Our liquidity-drunk “markets” remain over-priced due to the chronic intervention of the global central banking cartel, which has demonstrated over and over again that it won't tolerate even the slightest drop in asset prices. Once faith in central banks is lost, their power to delay the deflationary day of reckoning goes with it. The stupendous amount of debt they have helped heap onto the financial system since 2008 will start going into default and the only question that will matter is: Who is going to eat the losses?