As of this moment, the 6 big central banks have a balance sheet that is equivalent to nearly 40% of global GDP, a number which if extrapolated will hit 50% just after 2018. Those wondering if this means that central banks are engaged in a creeping, stealthy, indrect LBO of the world's assets on behalf of third parties, the answer is perilously close to a resounding "yes."
"...Trump is the desperate “last hurrah” of the old order. I don’t support Trump per se, even though, given the alternative, I hope he wins. It’s clear he has all kinds of dangerous authoritarian tendencies. And has all kinds of really silly economic notions. But the good news is that he may - to at least a degree - upset the Deep State’s apple cart, at least until he’s co-opted into the Deep State. No matter who wins, this election is going to be ugly. So try not to take it very seriously..."
"The trouble is, financial prices cannot be falsified indefinitely. At length, they become the subject of a pure confidence game and the risk of shocks and black swans that even the central banks are unable to off-set. Then the day of reckoning arrives in traumatic and violent aspect."
Gold futures saw a massive $1.5 billion liquidation in one minute yesterday which had all the hallmarks of a "non profit" liquidation - a large seller trying to manipulate gold futures lower rather than maximise profits.
Just as the Vancouver housing bubble has burst, the "smart money", which rode the bubble all the way up, has duly noticed, and wants out. Immediately. As Bloomberg reports, the Ontario Teachers’ Pension Plan is quietly seeking buyers for a minority stake in its C$4 billion real-estate portfolio in Vancouver, including office towers and shopping malls.
2016 has been according to one buysider, "the most difficult, treacherous year" for the hedge fund community in recent history as a result of unprecedented shifts in market sentiment, choppy trading, low conviction, investor redemptions, illiquidity and volatility month after month, which has left the hedge fund community exhausted and reeling even as the S&P hits all time highs.
After months of declining market exposure, the sharp increase in hedge fund leverage in recent weeks has helped drive outperformance. In addition to adding leverage through cash equities, call option volume rose to record levels, hedge fund S&P 500 futures exposures climbed by $15 billion, and the share of S&P 500 market cap held short fell to a 1-year low.
"Even with the recent rally in the most popular long positions, the average hedge fund has returned just 3% YTD, lagging the S&P 500 for the eighth year in a row. Many active managers continue to struggle in 2016, with the average hedge fund (+3%) and large-cap core mutual fund (+7%) lagging the S&P 500. Among hedge fund styles, although most have posted similar returns, event-driven funds have fared best (+5%) while equity long/short funds trail (+2%)."
The problem for individual investors is the “trap” that is currently being laid between the appearance of strong market dynamics against the backdrop of weak economic and market fundamentals. Ignoring the last two to chase the former has historically not worked out well.
Gold buying surged to record levels in H1, 2016 due to increasing concerns about the political, economic and monetary outlook. In particular, deepening concerns about the negative interest rate money "madness" of central banks today.