Sovereign Debt

JPMorgan Lays Out "The Worst Case"

"Longer term the implications for markets could be more serious. Investor positioning during the euro debt crisis can be thought of as the worst case for markets in the current conjuncture.  It would require another 10% decline in global equity indices from here, for the equity weighting of non-bank investors in the world to return to euro debt crisis levels in a worst case scenario. Such a decline would also push the current bond allocation of 22% to above the 23% peak seen during the euro debt crisis."

Stockman: "At Last The Tyranny Of The Global Financial Elite Has Been Slammed"

At long last the tyranny of the global financial elite has been slammed good and hard. You can count on them to attempt another central bank based shock and awe campaign to halt and reverse the current sell-off, but it won’t be credible, sustainable or maybe even possible. The central bankers and their compatriots at the EU, IMF, White House/Treasury, OECD, G-7 and the rest of the Bubble Finance apparatus have well and truly over-played their hand. They have created a tissue of financial lies; an affront to the very laws of markets, sound money and capitalist prosperity.

"Today Is The Appetizer For Monday"

"Monday is where we’re going to see a truer-look at “where the bodies are buried” and a more accurate “price discovery” process than what we’re seeing today (as we’re washing out all the delta one flows which are dwarfing client trading)…lots of discipline being displayed thus far, with low turnovers and folks not chasing.  "

"Don't Try To Be A Hero Today" Veteran Trader Warns "Self-Preservation Is Paramount"

With knife-catching "value" investors proclaiming yesterday that any dip today would be an opportunity, it appears once again that faced with the reality of Brexit blowback, no one (not even the central banks) are buying the f##king dip). As Bloomberg's Mark Cudmore exclaims "Don't be a hero," to those value-investors, warning that "most of the market is still in denial."

America's Seen 50% Surge In Partisan Conflict Since Obama's Second Term Started

'Hope & Change' and devolved into Nope & Deranged... Since the start of President Obama's second term, Goldman Sachs note that the Partisan Conflict Index has averaged 50% higher than its 30 year average. So who is to blame? President Obama's divisiveness? Or The Federal Reserve's extremely accommodative monetary polict removing any need for actual decision-making?

Here Is Why One Credit Rating Agency Believes Russia Is Safer Than The US

If posed with the question who has the better credit rating, the United States or Russia, most people would presumably pick the United States. However, that is not the case for Dagong Global Credit Rating Co, one of the three biggest credit rating companies in China. Here's why...

Global Stocks Rebound As Brexit Odds Decline Following Tragic Death Of UK Lawmaker

While it may very well not last and all of yesterday's gains could evaporate instantly if the Brexit vote is set to take place as scheduled, all 10 industry groups in the MSCI All-Country World Index advanced, with the index rising 0.7% trimming the week’s drop 1.6%. The Stoxx Europe 600 Index rose 1.4%. Futures on the S&P 500 were little changed, after equities Thursday snapped their longest losing streak since February. . Oil rose, paring its biggest weekly decline in more than two months. Bond yields around the globe fell.

Will Brexit Give The US Negative Interest Rates?

One of the oddest things in this increasingly odd world is the spread of negative interest rates everywhere but in the US. One answer is that the Bank of Japan and the European Central Bank are buying up all the high-quality (and increasing amounts of low-quality) debt in their territories, thus forcing down rates, while the US Fed has stopped its own bond buying program. The other answer is that this is just one of those periodic anomalies that persist for a while and then get arbitraged away. And Brexit might be the catalyst for that phase change.

16% Of Europe's IG Corporate Bonds Now Yield Below 0%

In addition to negative yielding sovereign debt, it's now time to also look at corporate debt, because the amount of euro-denominated investment-grade corporate bonds with negative yields has tripled over the last six weeks, a move accelerated by their inclusion in the European Central Bank's quantitative easing programme. Specifically around 16%, or 440 billion euros, of the 2.8 trillion euros of these bonds now yield less than zero, up from around 5% at the start of May, according to Tradeweb data.

Tyranny Of The PhDs

Sad to say, you haven’t seen nothin’ yet. The world is drifting into financial entropy, and it is going to get steadily worse. That’s because the emerging stock market slump isn’t just another cyclical correction; it’s the opening phase of the end-game. That is, the end game of the PhD Tyranny.