Volatility

Tyler Durden's picture

The Era Of The Rock-Star Central Banker Is Far From Over





Paul Volcker and Alan Greenspan were the Elvis and Beatles of this movement – the first to see widespread fame for their efforts. Then came Ben Bernanke, perhaps the Jimi Hendrix or Led Zeppelin of his day, taking existing tools and pushing them in new, previously unconsidered, directions.  Now, we have Janet Yellen and Mario Draghi, whose legacies are as yet undefined. They may end up like the next generation of rock stars from the 1970s – something like Bruce Springsteen, with a deep focus on common people in his music. Or, they could be the Bee Gees, who focused simply on commercial success. Only time will tell.

 
Phoenix Capital Research's picture

Is the Fed About to Light the Fuse on a $9 Trillion Debt Bomb?





The US Federal Reserve (Fed) and European Central Bank (ECB) have created a very dangerous situation. And it is one that few if any investors are assessing.

 
 
Tyler Durden's picture

BIS Warns The Fed Rate Hike May Unleash The Biggest Dollar Margin Call In History





"While funding continued to be available, such a large negative basis indicates potential market dislocations. And this may call into question how smoothly US dollar funding conditions will adjust in the event of an increase in US onshore interest rates. Similar pricing anomalies have also emerged in interest rate swap markets recently, raising related concerns."

 
Tyler Durden's picture

"The Fed Doesn't Get It" A Rate-Hike Means People "Will Be Carried Out On Stretchers"





"It is our humble belief that the consensus at the Fed does not fully understand the magnitude of the problems in corporate credit markets and the unintended consequences of their policy actions."

 
Tyler Durden's picture

"Don't Believe The Hope" - When Forward Guidance Becomes Forward Mis-Direction





As we approach the Fed meeting expect markets to get more volatile. While the odds favor a move, it isn’t a sure thing until it is actually done. We found out last week what happens when forward guidance turns out to be forward misdirection. All those traders who thought they had a sure thing, who assumed that Draghi wouldn’t dare disappoint the market, got whipped. Whipped good.

 
Tyler Durden's picture

Will 2017 Be The Year Of The EM Corporate Debt Crisis?





"The liquidity picture for EM corporates in 2017 looks less appealing, due to a 38% yoy increase in USD bond maturities (to USD122bn) and lingering uncertainty on commodity prices (an important component of the corporate sectors’ cash flow) and FX (a headwind for domestic-oriented players). A further depletion in cash buffers and reduced appetite for certain portions of the EM corporate universe may lead to increased refinancing stress in 2017."

 
Tyler Durden's picture

The Beginning Of The End Of The Cult Of Draghi





Draghi’s Friday talk of a “no limit” ECB balance sheet must have Weidmann and responsible members of the ECB at their wits end. It’s the nature of monetary inflations that there’s always a need for more. Throughout history, it’s been ‘just one more round of ‘printing’’ or ‘just one more year and then we’ll rein things in’. But things spiral out of control – and there’s a lot of currency with a lot more zeros. It can end in hyperinflation, at least when monetary inflation is afflicting the real economy. Today’s strange variety is inflating securities market Bubbles. It will end with Bubbles bursting and confidence collapsing. Integral to the bursting Bubble thesis is that policymakers are losing control. Granted, such analysis has about zero credibility when markets are in melt-up mode. But perhaps the markets’ response to Draghi is a forewarning.

 
Tyler Durden's picture

This Is Not Your Father's Market





"We live in a dystopian investment world, whose markets have morphed into an Orwellian backdrop of omnipresent government intervention and manipulation that is increasingly dictated by the quant community -- who worship at the altar of prices and price momentum (and are agnostic on values)."

 
Tyler Durden's picture

Previewing The "Most Important Jobs Report Ever" - What Wall Street Expects





There is a high hurdle following October's surprisingly strong gain of 271,000 jobs. On the other hand, Wall Street is confident we would have to see a significantly lower number, somewhere in the 100,000 range or even lower, — and weakness in other parts of the report, such as the unemployment rate, hourly wages and weekly hours — for the FOMC to postpone a rate hike into next year.

 
Tyler Durden's picture

3 Things: Expected Returns, Returns, & Net Returns





There is no doubt that another major market reversion is coming. The only question is the timing of such an event which will wipe out the majority of the gains accrued during the first half of the current full market cycle. Assuming that you agree with that statement, here is the question: "If you were offered cash for your portfolio today, would you sell it?" This is the "dilemma" that all investors face today.

 
Tyler Durden's picture

A Crushed Goldman FX Strategist Speaks: "We Badly Misread This Meeting"





"Today’s sell-off in Bund yields (Exhibit 2) and the bounce in EUR/$ rivals those seen in April and May and again puts the question of ECB commitment to QE firmly on the table. ... We are placing our forecasts under review."

 
RANSquawk Video's picture

RANsquawk Preview: Nonfarm Payrolls 4th December 2015





 

November’s NFP release is in strong focus after the stellar reading in October which saw the largest increase this year at 271K additions. Additionally, unemployment is expecting to remain at 5% which will maintain the reading at the lowest level since Apr’08. Furthermore, average hourly earnings are typically in focus due to being a key indicator of wage inflation for the Fed.

 
Tyler Durden's picture

Janet Yellen Explains To Congress How Devoted She Is To Americans' Interests - Live Feed





Having yesterday explained how The Fed is "devoted" to Americans' interests and how "excited" she is to raise rates, Janet Yellen is set to face the Joint Economic Committee of Congress today... to explain to them how - in her mind - everything is awesome enough to hike rates, despite Chinese stocks crashing again, carnage in commodities, a revenues recession, plunging EBITDA, a collapse in US manufacturing, housing rolling over, and auto sales fading (light vehicle incentives up 14% YoY). Following the renewed volatility in markets, thanks to Draghi, the question is will Yellen be a little more hawkish given the room the ECB has given her?

 
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

The 'Goldilocks' Warning





The problem of suggesting that we have once again evolved into a "Goldilocks economy" is that such an environment of slower growth is not conducive to supporting corporate profit growth at a level to justify high valuations. Such a backdrop becomes particularly problematic when the Federal Reserve begins to raise interest rates which removes one of the fundamental underpinnings of an overvalued market which was low interest rates. Ultimately, higher interest rates, particulalry in an economy with a deteriorating economic backdrop, becomes the pin that "pops the bubble."  It is true that the bears didn't eat Goldilocks at the end of the story...but then again, there never was a sequel either.

 
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