• Gold Money
    05/26/2016 - 14:27
    Here’s a question that might have you pondering: Is gold a commodity? More importantly, are we doing a disservice to the gold industry by calling gold a commodity? These may sound like silly...

Stress Test

Tyler Durden's picture

Futures Flat Ahead Of Payrolls As Gold Continues Surge After Entering Bull Market





There is an odd feeling of Deja QEu this morning, when with two hours to go until the February payrolls, global stocks are modestly higher, US equity futures are likewise slightly higher on the back of a weaker dollar (or perhaps stronger Euro following a Market News report according to which the ECB may disappoint, more on that shortly), but it is gold that is breaking out, and after entering a bull market yesterday when it rallied 20% from its December lows gold has continued to surge, rising as high as @1,274 in early trading a price last seen in January 2015.

 
Tyler Durden's picture

Now It's China's Turn To Crash: Shanghai Plunges 6.4% Overnight





In recent weeks Chinese stocks remained relatively resilient, levitating quietly day after day. That all changed overnight when the Shanghai Composite plunged by 6.4% with the drop accelerating into the close. This was the biggest drop in over a month and was big enough to almost wipe out the entire 10% rebound from the January lows in one session.

 
Tyler Durden's picture

Maybe Albert’s Crazy Forecast Is Not That Crazy After All





"Albert Edwards sees the possibility of a 75% decline from the peak if all his fears were to manifest themselves. Now many view this as an incredible and somewhat outlandish forecast, yet it is not that unreasonable in our view.... These types of declines would leave indices down rough 60-65% from peak, and would send leverage ratios skyrocketing."

 
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Is This How The Smart Money Is Betting On A Market Crash?





Instead of allocating capital to expensive tail risk bets on direct asset class collapse (in equities, credit, and commodities), it appears, just as we detailed previously, the 'smartest money in the room' is "betting" indirectly on a stock market crash through eurodollar options.

 
Tyler Durden's picture

Weekend Reading: The Awakening





"More monetary stimulus, wherever it is in the world, isn’t the answer for a global economy still trying to find a new growth path. Pay attention to bonds and ignore the sirens of the stock market."

 
Tyler Durden's picture

Negative Interest Rates Already In Fed’s Official Scenario





"The severely adverse scenario is characterized by a severe global recession, accompanied by a period of heightened corporate financial stress and negative yields for short-term U.S. Treasury securities.... As a result of the severe decline in real activity and subdued inflation, short-term Treasury rates fall to negative ½ percent by mid-2016 and remain at that level through the end of the scenario."

 
Tyler Durden's picture

"If You're Not Confused, You Don't Understand Things Very Well"





If you believe the global economy is doing great and stocks are cheap, stop reading now; this post is not for you. We promise to write one for you at some point when stocks are cheap and the global economy is breathing well on its own - we just don’t know when that will be. But if you believe that stocks are expensive - even after the recent sell-off - and that a global economic time bomb is ticking because of unprecedented intervention by governments and central banks, then keep reading.

 
Secular Investor's picture

Banco De Portugal Indicates The ECB Stress Test Was A Complete 'Sham'





The Central Bank of Portugal conveniently released their results between Christmas and New Year, when the trading desks in Europe are virtually empty...

 
Tyler Durden's picture

The Bail-Ins Are Back! Portugal Slaps Senior Bank Bondholders With €2 Billion Loss





If you are an institutional investor and you bought Novo Banco bonds, you just had a bad morning...

 
Tyler Durden's picture

In Lehman Rerun, Banks Are Buying Protection Against Their Own Systemic Demise Again





At the peak of the craziness of the last cycle, banks took to protecting themselves by buying (credit) protection on other banks as a 'hedge' for systemic risk (which instead exacerbated contagion concerns and was never going to payoff anyway given the systemic - counterparty - collapse required to trigger it). Fast forward 8 years and it appears once again, as Bloomberg reports, that banks are buying (equity) protection in order to hedge the stress-test downside scenarios enforced by The Fed.

 
Tyler Durden's picture

"Buy The Dips! What Could Possibly Go Wrong?" Axel Merk Warns "A Hell Of A Lot"





The lack of fear in risky assets is another way of saying that risk premia have been low, or as we also like to put it, that complacency has been high. Not fully appreciative of this inherent risk, it seems many investors have refrained from rebalancing their portfolios, and bought the dips instead. We believe the Fed’s efforts to engineer an exit from its ultra-low monetary policy should get risk premia to rise once again, that if fear should come back to the market, volatility should rise, creating headwinds to ‘risky’ assets, including equities. That said, this isn’t an overnight process, as the ‘buy the dip’ mentality has taken years to be established. Conversely, it may take months, if not years, for investors to shift focus to capital preservation, i.e. to sell into rallies instead.

 
Tyler Durden's picture

Global Stocks Start Off December With A Bang, US Equity Futures Rebound; Yuan Drops





There was something for everyone in last night's much anticipated Chinese PMI data, with the official number sliding to the lowest in over 3 years, suggesting the PBOC will need to do more stimulus and is thus bullish, while the unoffocial Caixin print rising to the highest since June, suggesting whatever the PBOC is doing is working, and is also bullish. Not unexpectedly, global stocks decided to take the bullish way out, and have risen across the globe led by Asia, where stocks rose as much as 1.8%, Europe also green and US equity futures up 10 points as of this writing.

 
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