• Gold Standard I...
    07/07/2015 - 02:32
    In hyperinflation, the currency's purchasing power collapses. Many Fed critics have predicted this will come soon, though it hasn't happened yet. However all is not well with the dollar.

Risk Premium

Tyler Durden's picture

ECB Board Member Says Introduction Of Another Greek Currency "Most Realistic Scenario"





ECB’S RIMSEVICS SAYS INTRODUCTION OF ANOTHER CURRENCY IN GREECE IS MOST REALISTIC SCENARIO, MAY BE ONE LESS EURO ZONE MEMBER IN FUTURE

 
Tyler Durden's picture

Citi Identifies Contagion "Trigger Point" For More ECB QE





Should markets fret, and ECB action becomes necessary then we think the markets will price ECB action well before highly stressed levels. If we for instance take it view of the monetary policy stance impact seriously then market moves that take real yields to levels that persisted before the ECB started easing policy (negative rates started in Jun 2014) may be a trigger point.

 
Tyler Durden's picture

ECB Says "Grexit Can No Longer Be Excluded", Hints At More QE





It seems Goldman Sachs' conspiracy theory was right all along...

ECB'S COEURE SAYS ECB IS EVEN READY TO USE NEW INSTRUMENTS, WITHIN ITS MANDATE
GREECE COULD EXIT EURO, COEURE SAYS IN LES ECHOS INTERVIEW

This is exactly what The ECB wanted all along (and their leaders overlords) - all they needed was an 'excuse'. Or, in the parlance of Rahm Emanuel's times, "Let no Greek default crisis go to QE waste."

 
Tyler Durden's picture

Goldman's "Conspiracy Theory" Stunner: A Greek Default Is Precisely What The ECB Wants





"... the immediate aftermath of such a non-payment will be to push bond yields up across the periphery. This rise in the fiscal risk premium (Exhibit 3) will of course be limited, because the ECB will likely accelerate QE, including via the Bundesbank. That will push rate differentials, especially longer-dated ones, against EUR/$. We estimate that the initial fiscal risk premium effect could be three big figures, while the subsequent QE effect could be worth around seven big figures"

 
GoldCore's picture

Greek Contagion Abyss Looms – Wealth Preservation Strategies





A Greek exit from the euro would change everything. The greatest change being simply doubt and fear regarding the outlook for other vulnerable EU nations, EU banks and the EU banking and financial system. We discuss short and long term considerations, best and case outcomes, and wealth preservation strategies.

 
Tyler Durden's picture

How To "Measure" Risk





While investor behavior hasn't sunk to the depths seen just before the crisis, Oaktree Capital's Howard marks warns, in many ways it has entered the zone of imprudence. "Today I feel it's important to pay more attention to loss prevention than to the pursuit of gain... Although I have no idea what could make the day of reckoning come sooner rather than later, I don’t think it’s too early to take today’s carefree market conditions into consideration. What I do know is that those conditions are creating a degree of risk for which there is no commensurate risk premium."

 
Tyler Durden's picture

Oil Markets Can’t Ignore The Fundamentals Forever





Storage withdrawals and falling rig count have been the main sources of hope that U.S. tight oil production will fall and that oil prices will rebound. That hope is fading as it is now clear that recent withdrawals from U.S. crude oil storage are because of price, not falling supply, and that the drop in rig count has stalled. Present data, however, suggests that the global over-supply has gotten worse, not better, that overall demand for liquids remains weak, and the world economic outlook is discouraging. At the same time, market movements are not always based on fundamentals. In the long run, however, fundamentals rule suggesting the current price surge is at best premature.

 
Tyler Durden's picture

No Really, Who Is Buying?





The cumulative three-month net flows into, or rather out of equities, is now the largest on record.  So, again, we ask: just who is "buying" stocks? Because the greatest rotation is here, and as far as non-central bank participants are involved, it is into bonds and out of stocks.

 
Tyler Durden's picture

BoJ QE Exit "Out Of The Question," Former Official Says As Morgan Stanley Talks JGB Liquidity





"If the BoJ persists with its current pace of JGB purchases, then the incentive for investors to reduce their holdings any further is likely to dwindle away within the next 18–24 months, at which point liquidity may evaporate altogether," Morgan Stanley says, calling liquidity the "major theme" in the JGB market. Meanwhile, a former MoF official claims the BoJ is now in so far over its head that an exit from stimulus is "out of the question."

 
Tyler Durden's picture

The Madness Of Negative Bond Yields





Confidence in the system likely hangs by a much thinner thread than is currently widely perceived. Since “risk asset” prices are soaring in much of Europe, the underlying currents of suspicion are well masked, but that certainly doesn’t mean they don’t exist. While we believe that central bank and regulatory interventions in the market are a major reason why so many bond yields have dropped into negative territory, the role played by distrust in the banking system is probably quite large as well – a suspicion that seems to be confirmed by the strength of the euro-denominated gold price.

 
EconMatters's picture

The 5 Most Crowded Trades on Wall Street: Part 2





The Bond bubble is not only an overcrowded trade, a bubble of historic proportions but it will cause the entire crash of the financial system.

 
Tyler Durden's picture

Bonds Or Stocks: Which Bubble Is Bigger? SocGen Answers





Rich valuations point to the likelihood of low returns across asset classes. [W]e develop a cross-asset approach to risk premia and implement it across the asset classes. The results show that valuations are rich across the board. This indicates markets may become shaky as we get closer to the first Fed rate hike in nine years.

 
Tyler Durden's picture

Dear Mr. Market, "It's Not Different This Time"





Dear Mr. Market,

I’m writing to you about the sharp lift in equity valuations over the past month...

 
Tyler Durden's picture

ECB Will Cut Rates To Minus 3%: JP Morgan





Should a tail event such a deflationary spiral or Grexit occur, limits on ECB asset purchases will put Mario Draghi at a disadvantage as other central banks race to the bottom. JP Morgan says this will force the ECB to cut interest rates for cash deposits to minus 3% while the dollar will appreciate by 20%, reaching parity with euro in 2015.

 
Tyler Durden's picture

If You Listen Carefully, The Bankers Are Actually Telling Us What Is Going To Happen Next





Are we on the verge of a major worldwide economic downturn? Well, if recent warnings from prominent bankers all over the world are to be believed, that may be precisely what we are facing in the months ahead.

 
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