en Deutsche Bank Fears Spark Buying Panic In Bunds (Despite Rising Germany Sovereign Risk) <p>Investors have piled into global developed market sovereign bonds as fears of Deutsche Bank collapse ripple through global markets. Interestingly,<strong> despite rising default risk concerns in Germany CDS, Bunds have been aggressively bid</strong> with negative yields now out to 15 years (and Finland NIRP to 10 years).</p> <p>As Deutsche Bank risk explodes to record highs, Germany&#39;s sovereign risk has been rising...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 320px;" /></a></p> <p>&nbsp;</p> <p>But that rising risk has done nothing to hold back buyers of Bunds as the &quot;global growth is awesome, bond curves are steepening&quot; narrative is destroyed...</p> <p><a href=""><img height="315" src="" width="600" /></a></p> <p>&nbsp;</p> <p>Driving the entire Bund curve below zero out to 15 years...</p> <p><a href=""><img height="293" src="" width="600" /></a></p> <p>&nbsp;</p> <p>And Finland now NIRP to 10 years...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 295px;" /></a></p> <p>&nbsp;</p> <p><em>Charts: Bloomberg</em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="962" height="505" alt="" src="" /> </div> </div> </div> Bond CDS default Deutsche Bank Finland Germany Sovereign Risk Sovereign Risk Tue, 27 Sep 2016 18:58:02 +0000 Tyler Durden 573417 at $356 Billion Fund Manager: "Now Is The Most Treacherous Time Ever. I've Never Seen This In My Career" <p>Last week <a href="">we reported </a>that Tad Rivelle, fund manager at the $195 billion TCW Group, uttered a harsh warning, telling readers of his newsletter that "<em>the time has come to leave the dance floor</em>", providing numerous examples and anecdotes as to why that is the case. </p> <p>&nbsp;</p> <p><img src="" width="500" height="392" /></p> <p>Today it was the turn of Joe Baratta, the top dealmaker at Steve Schwarzmann's $356 billion Blackstone Group, to follow up with a comparable warning. </p> <p>Speaking at the WSJ Pro Private Equity Analyst Conference in New York, Baratta said that "for any professional investor, <strong>this is the most difficult period we’ve ever experienced"</strong>, adding that “You have historically high multiples of cash flows, low yields. <strong>I’ve never seen it in my career. It’s the most treacherous moment.” </strong></p> <p>Unlike strategic buyers who have used their inflated stocks as the acquisition currency of choice to engage in what until recently was a record M&amp;A scramble, PE firms have been largely left out, as they have to invest their own equity which has not levitated at the same rate as the overall market, and are forced to plug the purchase gap with ever more greater amounts of debt. As <a href="">Bloomberg notes</a>, "the same lofty valuations that created ideal conditions to sell holdings and pocket profits have made it exceedingly difficult to deploy money into new deals at attractive entry prices."&nbsp;</p> <p>Just like in the case of the global housing bubble, now openly blamed on central bank policies as UBS did overnight, several executives, including Blackstone Chief Executive Officer Steve Schwarzman, have pinned those unprecedented conditions squarely on the Federal Reserve’s near-zero interest rate policies."</p> <p>As a result of the prevailing asset bubble, Baratta said that Blackstone isn’t finding value in large leveraged buyouts of publicly traded companies. Instead, the New York-based asset manager is targeting smaller companies with low leverage, he said. </p> <p>Still, when not buying Blackstone is mostly selling. In a separate interview with Bloomberg TV, Blackstone COO Tony James said that the firm is still selling more assets than it’s buying, </p> <p><strong>“We’re net sellers on most things right now -- prices are high,” </strong>James said in a Bloomberg Television interview Tuesday. “Interest rates are so low and there’s so much capital sloshing around the world.” So much capital in fact, that Blackstone had no problem gathering $18 billion for its latest private equity fund last year. The firm also has an energy private equity vehicle, which finished raising $4.5 billion last year. </p> <p><iframe src="" width="500" height="281" frameborder="0"></iframe></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="853" height="480" alt="" src="" /> </div> </div> </div> Housing Bubble Private Equity Tue, 27 Sep 2016 18:33:56 +0000 Tyler Durden 573414 at This Is What Trump Should Do In The Second Debate <p>Last night&#39;s debate has sparked a tsunami of conversations over who won, who looked more presidential, who coughed more, and who had bigger hands. What is more useful, however, is <strong>what can the candidates learn from this debate. </strong>Here are three readers&#39; comments that summed up perfectly what trump should do in the second debate.</p> <p>&quot;The_Dude&quot; was disappointed but had some useful questions for Trump to ask...</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Do your homework Donald!&nbsp; This isn&#39;t a game...</strong></p> <p>&nbsp;</p> <p>Does this guy prep at all or is he trying to throw it?</p> <p>&nbsp;</p> <p>Question: Internet play into her hand discussing Russia and you don&#39;t fucking mention her server.</p> <p>&nbsp;</p> <p>Question: Policing...she talks &quot;training&quot; cops...and you don&#39;t raise the issue of Fed overreach into local police forces?</p> <p>&nbsp;</p> <p>Question: Iran..took him 3/4 if his time before mentioning $150B that will be used to build them nukes?</p> <p>&nbsp;</p> <p>Question: Your taxes...hmm...I can show mine. about we discuss the taxes of the Clinton Foundation and misappropriation?</p> <p>&nbsp;</p> <p>Question: Your business bankruptcy...shit happens, let&#39;s talk about how this cunt made $150M without even having a business.</p> <p>&nbsp;</p> <p>I could go on and on. ..WTF!!!!!!!!!</p> <p>&nbsp;</p> <p><em><strong>PS...Donald. next time Lester says anything outside of a question,&nbsp; point out to him that it is not his fucking job.</strong></em></p> </blockquote> <p>But &quot;VinceFostersGhost&quot; offers a less aggressive suggestion of what the Trump casmpaign should do between now and the next debate...</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Fuck all these skewed polls. The debate didn&#39;t matter, and it didn&#39;t change anyone&#39;s mind. </strong>That said, Hillary was well prepared for Trump, while Trump performed as if didn&#39;t prepare at all. Hillary kept Trump on the defensive all night long. Trump defends his ego against anything that makes him look small, and Hillary used that character flaw against him.</p> <p>&nbsp;</p> <p>Trump should have been hammering the Clintons (that&#39;s right, Hillary and Bill) on putting Wall Street in change of America&#39;s economy, but he spent far too much time defending himself, so he didn&#39;t get that message out. Bernie Sanders proved that going after Hillary&#39;s being in Goldman Sachs&#39; pocket was the most effective way to keep her on the ropes. When Sanders let up on those Wall Street attacks, his campaign, that had been succeeding against all the odds, crashed and burned.</p> <p>&nbsp;</p> <p><strong>Trump needs to paint the Clintons as the tag team that gave the country away to the banksters, and forced 76% of Americans into living a paycheck to paycheck lives.</strong> The Clintons allowed the banksters to steal not just the interest on our savings, but our savings in total, our pensions, our homes, our futures, and our children&#39;s children&#39;s futures. Proving this should not be difficult for Trump to do, if he would just spend more time exposing the Wall Street criminals, that own the Clintons, and less time defending his ego.</p> </blockquote> <p>But &quot;sessinpo&quot; sees the endgame...</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>The country is already lost. </strong>The simple fact is we have a national debt that is unrepayable and <strong>no potus can change that.</strong></p> <p>&nbsp;</p> <p>Even if every current politician were removed, the FRB system were audited and changed, it would not change the fact we have an unrepayable debt and based upon that, a doomed us dollar. So many would agree that thrid world status is inevitable for this nation yet they still think trump can change that. That is not an awake person. That is a person frustrated and desperate. <strong>Some are just wanting trump for spite, to get those corrupt people that have destroyed this nation and I understand that. I want them punished too.</strong></p> <p>&nbsp;</p> <p>But if you are awake, you know where america is heading and you have been preparing no matter who is potus.</p> </blockquote> <p>GOP republicans, unhappy with Trump&#39;s lack of preparedness, quipped what Trump should have hammered Hillary on, <a href="">courtesy of The HIll</a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;Trump got off to a good start, but it was obvious he wasn&#39;t prepared,&rdquo; one House Republican who publicly supports Trump told The Hill. &ldquo;His performance was scattered. <strong>He didn&#39;t drive home [questions about Clinton&rsquo;s] honesty and missed great opportunities.&rdquo; </strong></p> <p>&nbsp;</p> <p><strong>&ldquo;He only mentioned her email scandal once,&rdquo; </strong>the GOP lawmaker lamented.</p> <p>&nbsp;</p> <p><strong>&ldquo;There is no better question to be able to pivot on when she completely failed on her own cybersecurity when she was secretary of State,&rdquo; </strong>added Rep. Rodney Davis (R-Ill.). Davis, who backed Trump after he won the nomination, said the businessman should have done a better job prosecuting foreign policy failures that occurred while her husband, Bill Clinton, was president and while she was running the State Department.</p> <p>&nbsp;</p> <p>&ldquo;<strong>If Hillary Clinton is trying to own the successes of the Bill Clinton presidency, she&rsquo;s gonna have to own the failures</strong>,&quot; Davis said. &quot;<strong>And a complete failure was negotiating with North Korea.&rdquo;</strong></p> <p>&nbsp;</p> <p>&ldquo;Those are two points I think [Trump] could have hit and he didn&rsquo;t,&rdquo; Davis continued. &ldquo;<strong>And I think he took things a little too personal and missed a lot of opportunities to make very good debate points that could have scored him much higher in the eyes of the American public.&rdquo;&nbsp; </strong></p> <p>&nbsp;</p> <p>&ldquo;I wish that he&rsquo;d say something, stick with it, and then move on to something else instead of saying the same thing over and over and over,&rdquo; Salmon said in an interview Tuesday without giving specific examples. &ldquo;It was just throughout the entire debate.&rdquo;</p> <p>&nbsp;</p> <p>Speaker Paul Ryan who has denounced Trump&rsquo;s comments on Muslims, Mexicans and white supremacists, argued that Trump &ldquo;met expectations&rdquo; and gave a &ldquo;spirited argument&rdquo; against Democrats&rsquo; tired policies.</p> <p>&nbsp;</p> <p>Other Republicans on Capitol Hill argued that their constituents had crowned Trump the winner of Monday&rsquo;s 90-minute debate, regardless of what Beltway pundits were saying. &ldquo;Most of my constituents have said that Trump won based solely on one recurring theme: &lsquo;<strong>You have been there for 30 years and nothing has changed</strong>,&rsquo; &rdquo; Rep. Mark Meadows (R-N.C.), a member of the ultraconservative Freedom Caucus, told The Hill. &ldquo;It expressed their frustration with nothing but talk occurring in Washington, D.C.&quot;</p> </blockquote> <p>Then there was FBR analyst Benjamin Salibury who points out that while <em>birtherism </em>was closely covered last night, key topics were notably missing from the debate:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Mr. Trump questioned the independence of the Federal Reserve in last night&rsquo;s debate, but did seem to support a &ldquo;low for longer&rdquo; interest rate environment. We have argued that a Clinton presidency would allow more consistency among the Fed&#39;s leadership, allowing it to continue accommodative monetary policy&mdash;and viewed as more positive by the market...<strong>The debate was almost as notable for what was not covered as for what was covered: Healthcare, immigration, veterans, labor, and homeland security were not mentioned in any meaningful way.</strong></p> </blockquote> <p>If you have your own opinions of <u><strong>what you would ask the candidates...</strong></u></p> <p><a href=""><img alt="" src="" style="width: 600px; height: 746px;" /></a></p> <p>&nbsp;</p> <p><a href="">Finally we leave it to Dilbert creator Scott Adams</a>, who notes that the most interesting question has to do with what problem both of them were trying to solve with the debate.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Clinton tried to look healthy, and as I mentioned, I don&rsquo;t think she completely succeeded.</strong></p> <p>&nbsp;</p> <p><strong>But Trump needed to solve exactly one problem: Look less scary. </strong>Trump needed to counter Clinton&rsquo;s successful branding of him as having a bad temperament to the point of being dangerous to the country. Trump accomplished exactly that&hellip;by&hellip;losing the debate.</p> <p>&nbsp;</p> <p><strong>Trump was defensive, and debated poorly at points, but he did not look crazy.</strong> And pundits noticed that he intentionally avoided using his strongest attacks regarding Bill Clinton&rsquo;s scandals. In other words, he showed control. He stayed in the presidential zone under pressure. And in so doing, he solved for his only remaining problem. He looked safer.</p> <p>&nbsp;</p> <p><strong>By tomorrow, no one will remember what either of them said during the debate. </strong>But we will remember how they made us feel.</p> <p>&nbsp;</p> <p><strong><u>Clinton won the debate last night. And while she was doing it, Trump won the election.</u> He had one thing to accomplish &ndash; being less scary &ndash; and he did it.</strong></p> <p>&nbsp;</p> <p><a href="">Read more here...</a></p> </blockquote> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="744" height="502" alt="" src="" /> </div> </div> </div> Bernie Sanders Federal Reserve goldman sachs Goldman Sachs Iran Monetary Policy National Debt Nomination North Korea Washington D.C. Tue, 27 Sep 2016 18:17:07 +0000 Tyler Durden 573415 at Crude Chaos Strikes: Saudis Admit "No Deal" But "Hopeful" For November <p>Having failed completely to consumate a freeze deal in Algiers, the Saudi oil minister throws out a bone of hope to crude bulls that November's OPEC meeting may see a freeze deal. Crude is testing its lows of the day but <strong>bouncing around like Hillary's eyes as the minister desperately tries to keep the dream alive.</strong></p> <p>Headlines:</p> <ul> <li><strong>*SAUDI OIL MINISTER DOESN'T SEE OPEC DEAL ON WEDNESDAY (WTF! oh no!!)</strong></li> <li><strong>*SAUDI OIL MINISTER SAYS SEVERAL FREEZE DEALS BEING DISCUSSED (phew so there's hope!)</strong></li> <li><strong>*SAUDI MINISTER SEES OPEC FREEZE DEAL POSSIBLE AT NOV. MEETING (great so buy?)</strong></li> <li><strong>*FALIH: POSSIBLE OPEC DEAL MAY MAKE EXCEPTIONS FOR SOME MEMBERS (except you just blew out Iran?)</strong></li> <li><strong>*NOVAK: RUSSIA AIMS TO KEEP OUTPUT AT CURRENT LEVELS (So Russia is out?)</strong></li> <li><strong>*ALGERIAN OIL MINISTER SAYS OUTPUT CUT AMONG ALTERNATIVES (what a load of shit!)</strong></li> <li><strong>*FALIH: IRAN, LIBYA, NIGERIA POSSIBLY TO BE ALLOWED MAX. OUTPUT (yeah, like that will happen!)</strong></li> </ul> <p>And crude's reaction...</p> <p><a href=""><img src="" width="600" height="460" /></a></p> <p>&nbsp;</p> <p>So prepare yourself for 2 more months of rumors and denials as we head towards the November meeting which will once again produce nothing.. unless oil is at $20 going in.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1337" height="1024" alt="" src="" /> </div> </div> </div> Crude headlines Iran OPEC Tue, 27 Sep 2016 18:04:34 +0000 Tyler Durden 573412 at It's Not Really About Deutsche Bank <p><a href=""><em>Submitted by Jeffrey Snider via Alhambra Investment Partners,</em></a></p> <p><span style="color: #000000;">It is never a good thing when official sources either named or unnamed are quoted in the media as <strong>denying bailout discussions.</strong> For any bank such rumors and <strong>denials are harmful because, obviously, they are a reflection of common perception</strong>. Furthermore, most people know all-too-well the <strong>true nature of any denials</strong>, thus reinforcing only that much more the troubling perceptions in the first place.</span></p> <p><span style="color: #000000;">For Deutsche Bank to be the institution in question is altogether different. When Germany&rsquo;s Commerzbank, for example, was forced to request a capital injection from the state&rsquo;s bailout fund SOFFIN in November 2008 that was a sign of the times. It was just another bad sign in an ocean of them. <strong>Should Deutsche Bank even get connected to something like that is perhaps a sign of renewal of those times.</strong></span></p> <p><span style="color: #000000;">Deutsche Bank is not Commerzbank; in many ways <u><strong>Deutsche is the last remaining remnant of what is left of the reigning wholesale, eurodollar system.</strong></u> Where other banks long ago saw <a href="">this depression</a> for what it was (all risk, no reward), DB was siding with central bankers and <a href="">deploying &ldquo;capital&rdquo;</a> into EM&rsquo;s and junk bonds. The bank was reticent to reject its derivatives book, once a source of nearly all its power and strength. And it was dreams of reclaiming lost grandeur that drove the bank into its currently perilous state. When the firm first announced estimates for its coming loss in October last year, <a href="">I wrote</a>:</span></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><span style="color: #000000;">The net result of this toxic stew of bastardized banking is a highly negative return (revenue) environment for CB&amp;S in 2015 beyond all scale of 2013, while its efforts to reduce assets (especially risk weighted calculations) continue to fly against its &ldquo;dollar&rdquo; activities. </span></p> <p>&nbsp;</p> <p><span style="color: #000000;">The firm managed to take the worst course possible by thinking the shrinking eurodollar system particularly post-May 2013 was an opportunity to replay lost pre-2007 financialism glory. To do that, the bank kept up its leverage and then went after the junk and EM bond bubbles with enthusiasm.</span></p> </blockquote> <p><span style="color: #000000;"><strong>All that is forgotten in the mainstream media that wants to frame a systemically important bank&rsquo;s troubles on once again regulation, or at least government action intruding into what it is supposed to be an otherwise stable and healthy environment. </strong>This weekend it was reported that Germany&rsquo;s Chancellor Angela Merkel denied that the state would consider a rescue of Deutsche, even though the bank&rsquo;s name literally means <a href="">Germany&rsquo;s bank</a>.</span></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><span style="color: #000000;">Deutsche Bank AG shares fell sharply Monday morning on investor concerns about the German lender&rsquo;s capital position ahead of an anticipated legal settlement with the U.S. Justice Department.</span></p> </blockquote> <p><span style="color: #000000;"><strong>Any settlement with the US on fraud charges will not help, of course, but this is so much more than a legacy issue of the &ldquo;dollar&rsquo;s&rdquo; role in the housing bubble/debacle. Lest anyone forget, it wasn&rsquo;t strictly legal charges that pushed the bank into a tremendous loss and capital preservation mode last year.</strong> The media refuses to admit these facts because they fatally damage (yet again) both sides of QE &ndash; as a recovery &ldquo;stimulus&rdquo; and as a massive liquidity buffer denying any possibility of a global &ldquo;dollar&rdquo; shortage. The mainstream convention still views quantitative easing as &ldquo;money printing&rdquo; when Deutsche Bank shows quite clearly it wasn&rsquo;t.</span></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><span style="color: #000000;">My own interest here is less about Deutsche Bank than it is the continued trajectory of the eurodollar system. I wrote not long ago about my thinking with regard to Deutsche Bank&rsquo;s central role in the &ldquo;dollar&rdquo; run that started July 6 or so; today&rsquo;s announcement is pretty bad, and likely just the beginning without some miracle turnaround, which adds up to nothing good about the &ldquo;dollar&rdquo; moving forward. Whatever negative effect Deutsche may have been having already in eurodollar liquidity, these results will quite likely speed that up.</span></p> </blockquote> <p><span style="color: #000000;">In general terms, eurodollar liquidity is the ease or hardship of balance sheet capacity; the &ldquo;bank reserves&rdquo; that are a byproduct of quantitative easing whether dollars, euros, or yen just don&rsquo;t factor all that much (I would write &ldquo;not at all&rdquo; except that there is some limited value to central bankers in perpetuating the myth&rsquo;s effects on expectations). <strong>As balance sheet capacity goes, so does the whole global system. And though the eurodollar is often impenetrably complex and obscured, there are a few pieces of evidence that unambiguously substantiate its increasing illiquidity.</strong></span></p> <p><img alt="abook-sept-2016-db-10s-swap-spread" class="aligncenter size-full wp-image-40714" height="481" src="" width="641" /></p> <p><span style="color: #000000;"><u><strong>The close correlation of &ldquo;global turmoil&rdquo; and negative swap spreads is not some accident of nature.</strong></u> Both are symptoms of the same chronic money disease. Given Deutsche Bank&rsquo;s status as the largest single purveyor of balance sheet factors through derivatives and FX, we would expect such a close relationship with its own share price. It isn&rsquo;t a bank run at least in the manner the general public or economists might recognize, but the processes are remarkably, dangerously similar &ndash; especially how they become self-reinforcing beyond some unknowable tipping point.</span></p> <p><strong><em><span style="color: #000000;">In a traditional bank run, perceptions of the bank drive depositors to withdraw from the bank&rsquo;s vault of money and cash rather than trust that the bank can meet all withdrawals, sticking the depositor with some unknown scale of loss. The intensity of the run, really illiquidity, is driven by further rumors about the bank&rsquo;s position. At some point, the withdrawals themselves just confirm the negative perceptions, thus locking the bank into a downward spiral toward failure.</span></em></strong></p> <p><span style="color: #000000;"><u><strong>This process recurred in 2007 and 2008, only wholesale in nature and interbank in format;</strong></u> it was the rare occasion that depositors were involved (Northern Rock in September 2007 being most prominent). Liquidity providers in all kinds of eurodollar formats would react to &ldquo;capital&rdquo; loss perceptions by withdrawing liquidity to the point that the act of liquidity withdrawal (rather than losses by the target) itself was the agent of destruction &ndash; just as in the traditional bank run scenario. That is what ultimately took down Lehman, Bear Stearns, AIG, etc.</span></p> <p><span style="color: #000000;">As has been the typical mainstream reaction, Deutsche Bank is being written about right now in a vacuum as if the actions and behavior (and losses) of last year were left only to last year. When global illiquidity first popped up (again) in the second half of 2014, it was regarded in the same way &ndash; a series of purportedly random, unrelated events. They <span style="text-decoration: underline;"><strong><em>had</em> </strong></span>to be strung together in a benign chain of distinct actions because convention still holds QE to be money printing. Ditching that convention has the effect of <a href="">connecting all these dots</a> as a logical and <em>ongoing</em> progression of a &ldquo;rising dollar&rdquo; that is really a euphemism for &ldquo;dollar shortage.&rdquo;</span></p> <p><span style="color: #000000;"><u><strong>And it really doesn&rsquo;t take too many dots to connect.</strong></u> This isn&rsquo;t to say that Deutsche Bank is in danger of a wholesale liquidity run, only that the bank is perhaps far closer to it than anyone in the mainstream will ever admit.<u><strong> As I wrote last year, it really isn&rsquo;t even about Deutsche Bank.</strong></u></span></p> <p><img alt="abook-sept-2016-db-10s-30s-swap-spread" class="aligncenter size-full wp-image-40713" height="481" src="" width="641" /></p> <p><img alt="abook-sept-2016-db-ted2" class="aligncenter size-full wp-image-40715" height="481" src="" width="641" /></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="604" height="427" alt="" src="" /> </div> </div> </div> AIG Bank Run Bear Stearns Bond Deutsche Bank ETC EuroDollar Germany Housing Bubble Lehman Quantitative Easing recovery Yen Tue, 27 Sep 2016 17:53:43 +0000 Tyler Durden 573411 at Trump vs Clinton Head-To-Head Was The Most Watched Presidential Debate In History <p>While the <a href="">unscientific polls say otherwise</a>, capital markets and the online bettors <a href="">say that Hillary dominated last night's debate</a>. However, Trump was the undisputed winner when it comes to another metric: social media engagement. According to Twitter, "<strong>the debate was the most tweeted-about political event in the social media company's history</strong>." <a href="">Reuters adds</a> that Trump was the focus of 62% of the conversation on the social media platform, Twitter said. Likewise on Facebook, conversations about Trump made up 79% of debate chat, while Clinton’s share of the conversation was a modest 21%.</p> <p>As <a href="">Reuters confirms </a>"Trump stole the social media spotlight during Monday night's U.S. presidential debate", although in a surprising twist he did so on what Twitter users branded his #Trumpsniffle. </p> <p>Confirming America's fascination with the trivial&nbsp; - and perhaps issues "health-related" - Reuters adds that "the wealthy businessman sniffed repeatedly as he faced off against Democratic rival Hillary Clinton in their first debate, giving rise to the hashtag and a surge of interest on social media what might be causing his nose to run. Parody accounts, Donald's Sinuses (@TrumpsSinuses) and Trump sniff (@TrumpSniff), gained a large following."</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Trump, 70, told Fox News on Tuesday morning he did not have a cold. "No, no sniffles, no," he said. "No cold." He complained he had a faulty microphone and joked that maybe it was picking up breathing. </p> <p>&nbsp;</p> <p>Several tweeters seized on the sniffling to hit back at Trump over his repeated digs at the health and stamina of Clinton, 68, who had pneumonia earlier this month.</p> </blockquote> <p>A compilation tweet showed every instance of Trump's sniffles:</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Is Donald Trump sick? Either way, <a href="">#TrumpSniffles</a> is now a thing <a href=""></a> <a href=""></a></p> <p>— USA TODAY (@USATODAY) <a href="">September 27, 2016</a></p></blockquote> <script src="//"></script><p>In an unexpected twist, former Democratic presidential candidate Howard Dean on Monday mentioned cocaine in a tweet discussing Donald Trump’s sniffling during his first presidential debate.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Notice Trump sniffing all the time. Coke user?</p> <p>— Howard Dean (@GovHowardDean) <a href="">September 27, 2016</a></p></blockquote> <script src="//"></script><p>According to <a href="">the Hill</a>, "Dean’s tweet may prove controversial for mentioning — without evidence — illicit drug use and the Republican presidential nominee in the same breath."</p> <p>Going back to media engagement, Reuters adds that sentiment appeared to go Clinton's way. Social media analytics firm Zoomph said tweets mentioning Clinton ended at a ratio of about 1.5 to 1, which meant that for every negative mention, there were 1.5 positive mentions, Zoomph said. Sentiment toward Trump fluctuated, but ended nearly flat at a ratio of one positive mention to every negative one.</p> <p>As for what drew social media participants, the most tweeted-about topics were the economy, foreign affairs, energy and the environment, terrorism and guns.</p> <p>And then there is legacy media. <a href="">According to Nielsen</a>, more than 80 million people viewed Monday's first presidential debate between Hillary Clinton and Donald Trump. The previous record was the only debate between Republican Ronald Reagan and President Jimmy Carter in 1980, which drew 80 million in an era with far few channels and no Internet. In 2012, the first debate between President Obama and Mitt Romney in 2012 drew 67 million viewers. That 80 million number doesn't include numerous streaming options made available. </p> <p>That said, the population of the United States is also much bigger than it was in 1980, which puts the Reagan-Carter debate in a different context. In 1980, the population was 225 million while today's U.S. population is 320 million. </p> <p>Some analysts were expecting as many as 100 million viewers to tune in for the Clinton-Trump showdown. The debate drew fewer viewers than the Super Bowl, which in recent years has attracted more than 100 million viewers. The debate easily beat Monday Night Football on ESPN, which is generally the top-rated program on Monday nights.</p> <p>While it is unclear if just being the most "buzzed" candidate has helped or hurt Trump - after all being a constant source of notoriety is nothing new to the billionaire -&nbsp; one thing is sure, with little resolved and with no definitive winner emerging, the next debate in two weeks time is likely to be as engaging. And just to make sure of that, moments ago Trump already vowed "<a href="">to hit Clinton harder in next U.S. presidential debate</a>." His supporters are probably asking why he did not do that last night.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="870" height="562" alt="" src="" /> </div> </div> </div> Capital Markets Donald Trump Fox News Nielsen President Obama Reuters Twitter Twitter Tue, 27 Sep 2016 17:28:58 +0000 Tyler Durden 573408 at Curve Flattens After Treasury Sells $34 Billion In Uneventful, Tailing 5Y Auction <p>Unlike yesterday's 2Y auction, when paper was trading -1.0% special in repo which helped yesterday's issuance to pass with the high yield printing through the WI, today's 5Y auction did not have the added benefit of a short squeeze going into the 1pm deadline (5Y was trading just -0.1% in repo), and as such we were not surprised to see the high yield print at 1.129%, tailing the 1.128% When Issued by a marginal 0.1 bps. Putting this in context, it was the second lowest 5Y auction yield since June 2013, with the exception only of last month's auction pricing at 1.25%</p> <p>The bid to cover of 2.39 dipped from last month's 2.54, but was in line with the recent range, just below the 6MMA of 2.41. </p> <p>The internals also deteriorated from last month's auction, with Directs taking down only 4.4% down from last month's 6.2% and below the 6.7% average, Indirects were left with 61.4%, also in line with the 6 month average, if lower than last month's 68.7%, while Dealers were left with 34.1% of the final takedown. </p> <p>Overall, an uneventful auction which had no impact on pricing for teh 5Y bucket after the deadline, however the 30Y has continued to rally, which in turn has pushed the curve somewhat flatter, as the 5s30s spread now declines to 116.1 bps, not helping the global central banks' attempts for a coordinated curve steepening.</p> <p><a href=""><img src="" width="500" height="310" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1142" height="708" alt="" src="" /> </div> </div> </div> High Yield Tue, 27 Sep 2016 17:12:52 +0000 Tyler Durden 573410 at Deutsche Curve Inverts As Bundesbank Dismisses State Support Of "Zombie" Banks <p>Deutsche Bank Sub CDS closed above 500bps for only the second day in its history (and the longer-term CDS curve inverted once again) as a bad day ended worse with Bundesbank member Andreas Dombret exclaimed<strong><em> &quot;state support of banking sector must end,&quot;</em></strong> warning that it only <em><strong>&quot;props up zombie banks.&quot;</strong></em> His pronouncements also pushed politicians to make the hard decisions and<strong><em> &quot;tell banks they need structural reform.&quot;</em></strong></p> <p>As Bloomberg details, <span><strong>&ldquo;Political support for the banking sector has to end at last,&rdquo;</strong> Bundesbank board member </span><span>Andreas Dombret</span><span> says in text of speech in Vienna. &ldquo;Unfortunately I&rsquo;m only seeing this to a limited extent.&rdquo;</span></p> <ul> <li>&ldquo;Without courageous realignment, <span style="text-decoration: underline;"><strong>banks won&rsquo;t be able to permanently survive</strong></span>, except perhaps as zombie banks with the support of public authorities,&rdquo; he says.</li> <li><strong>German and Austrian banks have to &ldquo;adjust their business models so that they match the current environment,&rdquo; he says.</strong></li> <li><span style="text-decoration: underline;"><strong>The whole sector has to shrink, because the &ldquo;systematic clean-up, inevitable after the bursting of the financial bubble, isn&rsquo;t finished yet,&rdquo;</strong></span> he says.</li> <li>Discussion shouldn&rsquo;t focus exclusively on &ldquo;fewer banks, fewer branches,&rdquo; he says, adding that the sector has to shrink to a sustainable size.</li> <li><strong>Market participants have to decide how to address overcapacities, Dombret says.</strong></li> <li>Basel III rules should be finalized by year-end and in the medium term the privileged treatment of sovereign bonds should be abolished.</li> <li><strong>Capital markets union should be advanced to strengthen capital markets as supplement to the banking system</strong></li> </ul> <p>And the credit market reacted badly with Sub CDS topping 500bps for only the 2nd day ever...</p> <p><a href=""><img height="304" src="" width="600" /></a></p> <p>&nbsp;</p> <p>And more troubling, Deutsxche Bank&#39;s longer-term CDS curve has returned to inversion...</p> <p><a href=""><img height="299" src="" width="600" /></a></p> <p>&nbsp;</p> <p>The Q&amp;A added to the worrries:</p> <ul> <li><strong>EU &ldquo;resolution regime, which started at the beginning of the year, hasn&rsquo;t been tested,&rdquo; </strong>ECB Supervisory Board member Andreas Dombret says in Q&amp;A after speech in Vienna.</li> <li><strong>&ldquo;The banking sector must be an industry where unsustainable business models mean market exit without causing a systemic crisis&rdquo;</strong></li> <li>On negative rates: &ldquo;If we reach the price-stability goal, we should get out of the low rate policy as soon as possible&rdquo;</li> </ul> <p>and Dombret&#39;s parting comments that</p> <ul> <li><u><strong>&ldquo;We need to stick to the bail-in rules. If we now propose a &lsquo;bail-in holiday&rsquo; we don&rsquo;t have the resolution system anymore&rdquo;</strong></u></li> </ul> <p>Explains why the Sub CoCo bonds are trading with a 30% haircut already...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 290px;" /></a></p> <p>&nbsp;</p> <p>This won&#39;t end well.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="958" height="486" alt="" src="" /> </div> </div> </div> Capital Markets CDS Deutsche Bank Tue, 27 Sep 2016 16:52:12 +0000 Tyler Durden 573407 at Is Charlotte Our Future? <p><a href=""><em>Submitted by Patrick Buchanan via,</em></a></p> <p>Celebrating the racial diversity of the Charlotte protesters last week, William Barber II, chairman of the North Carolina NAACP, proudly proclaimed, <strong><em>&ldquo;This is what democracy looks like.&rdquo;</em></strong></p> <p>Well, if Barber is right, so, too, was John Adams, who <em><strong>warned us that &ldquo;democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide.&rdquo;</strong></em></p> <p><u><strong>Consider what the protesters, who, exults Barber, &ldquo;show us a way forward to peace and justice,&rdquo; accomplished.</strong></u></p> <p>In the first two nights of rioting, the mob injured a dozen cops, beat white people, smashed and looted stores, blocked traffic, shut down interstate highways, got one person shot and killed, and forced the call-up of state troopers and National Guard to rescue an embattled Charlotte police force.</p> <p><u><strong>This was mobocracy,</strong></u> a criminal takeover of Charlotte&rsquo;s downtown by misfits hurling racist and obscene insults and epithets not only at the cops but also at bystanders and reporters sent to cover their antics.</p> <p><strong>We have seen Charlotte before. It was a rerun of Ferguson, Baltimore and Manhattan, after mobs in those cities concluded that innocent black men had been deliberately killed by &ldquo;racist white cops.&rdquo;</strong></p> <p><u><em><strong>Yet, one week later, what do we know of the precipitating event in Charlotte?</strong></em></u></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Keith Scott, 43-year-old African-American father of seven, was shot and killed not by a white cop, but by a black cop who shouted to him, along with others, almost 10 times &mdash; &ldquo;Drop the gun!&rdquo;</p> <p>&nbsp;</p> <p>An ex-con whose convictions included assault with a deadly weapon, Scott was wearing an ankle holster and carrying a handgun.</p> <p>&nbsp;</p> <p>Charlotte Police Chief Kerr Putney, also black, after viewing video from a dash-cam and a body-cam of the officers involved, recommended against filing any charges.</p> <p>&nbsp;</p> <p>The chief concedes that he cannot, from the video footage, see a gun in Scott&rsquo;s hands at the time he was shot.</p> </blockquote> <p><strong><em>But how is the legitimate investigation of the death of Keith Scott advanced by a mob? And if mass civil disobedience is what &ldquo;democracy looks like&rdquo; in 2016, why are we surprised that other nations look less and less to American democracy as their model?</em></strong></p> <p>Moreover, if these repeated reversions of the enraged to street action become the new normal, what do they portend for the country?</p> <p><strong>Blanket cable news coverage of the Ferguson riots split us along racial lines.</strong> But what purpose did they serve? Even Eric Holder&rsquo;s Justice Department concluded that officer Darren Wilson should not be charged in the shooting death of Michael Brown, who tried to grab his gun.</p> <p><strong>A year ago, Baltimore divided the nation.</strong></p> <p>Six Baltimore cops, three of them black, were charged in an alleged &ldquo;rough ride&rdquo; in a police van that killed 25-year-old Freddie Gray.</p> <p>This year, a black judge acquitted three of the cops in three trials, and all charges against the rest were dropped.</p> <p>No evidence was produced that the cops had intended to injure Gray.</p> <p>In New York, the five cops who piled on Eric Garner to subdue him never intended to injure him, said a grand jury. Well over 300 pounds, Garner suffered from obesity, diabetes, asthma and hypertension, and died, not of a police chokehold, but a heart attack.</p> <p><strong>Yes, there have been incidents when cops made mistakes and cases where cops acted criminally.</strong> In Tulsa last week, after a white cop shot and killed an unarmed black man who appeared to offer no threat, she was charged with first-degree manslaughter. Is not this, rather than marching mobs, the way to handle such incidents?</p> <p>Inevitably, given the violent crime in our cities &mdash; 540 murders this year in Chicago and 3,000 shootings &mdash; white and black cops are going to be confronting white and black suspects. Inevitably, some of these collisions are going to result in police shootings and black deaths.</p> <p>While most of those police decisions to shoot are going to be seen in retrospect as justified, some will not be unjustified, and some will be malicious.</p> <p>The latter will be rare, but they are going to happen.</p> <p><u><strong>But in a nation of 320 million, if every collision between white cops and black men resulting in the death of a suspect is to be seen as legitimate grounds for mob action like Charlotte, we will never know racial peace.</strong></u></p> <p>Like moths to a flame, TV cameras are attracted to conflict, especially racial conflict. Networks and TV stations reward with airtime the most incendiary of racial charges. Thus, the news going out to homes and bars will continue to polarize us along racial lines.</p> <p><strong>And when the rage of one side and the disgust of the other dissipate, some new incident, between white cops and black men, will occur, and will be recorded, and rushed onto the air.</strong></p> <p>The street action in Ferguson, Baltimore and Charlotte may be what &ldquo;democracy looks like&rdquo; to Barber&rsquo;s NAACP. <u><strong>But to most Americans, it looks like a formula for endless racial conflict &mdash; and a touch of fascism in the night.</strong></u></p> <p><a href=""><u><strong><img alt="" src="" style="width: 597px; height: 421px;" /></strong></u></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="566" height="296" alt="" src="" /> </div> </div> </div> New Normal Tue, 27 Sep 2016 16:30:14 +0000 Tyler Durden 573406 at The Global Housing Bubble Is Biggest In These Six Cities <p>One year ago, when UBS last looked at the world's most expensive housing markets, it found that <a href="">London and Hong Kong were the only two areas exposed </a>to bubble risk. </p> <p><img src="" width="503" height="323" /></p> <p>What a difference a year makes, because in the latest report by UBS wealth Management, which compiles the bank's Global Real Estate Bubble Index, it found a new champion for the title of "<em>world's biggest housing bubble</em>", namely a familiar name, Vancouver, but also that as many as six cities had made the "bubble" category, up from last year's two. Of last year's two "winners", London has been knocked into second place this year, and Hong Kong sixth, but both are still in bubble-risk territory. </p> <p><a href=""><img src="" width="500" height="345" /></a></p> <p>Looking at soaring home prices across the globe, UBS has concluded that low interest rates have now created a new global housing bubble in major cities around the world, with Vancouver and London most at risk. Not surprisingly, the Swiss bank notes that ultralow interest rates at global central banks have contributed to overheating in the housing market in recent years. </p> <p>Vancouver and London came first and second on the 2016 list of cities most at risk of real estate bubbles. Bubble risk was also evident in Stockholm, Sydney, Munich and Hong Kong: <strong>house prices in these six cities have increased by nearly 50% on average since 2011</strong>. The average price rise in other financial centers has been less than 15%. </p> <p>Who is to blame for this latest global bubble? Why your friendly, local central banker of course. </p> <p>As the <a href="">WSJ summarizes</a>, <strong>loose monetary policy at global central banks is a key driver behind rising prices</strong>, the report claims. Low interest rates have pushed investors to hunt for returns in tangible assets, “<strong>so it is hardly any wonder that housing markets are again overheating,” </strong>according to report authors Claudio Saputelli and Matthias Holzhey. </p> <p>For the European Central Bank, which controls monetary policy for all 19 member countries, the inability to adjust interest rates for particular economic development in separate countries has contributed to rising house prices in the region, UBS said. </p> <p>While unemployment across much of Europe remains in the double digits, the locals are now faced with a double whammy of not only having no income, but even if they do, being unable to afford a home.&nbsp; <strong></strong></p> <p><strong>“All European cities are overvalued, apart from Milan,” </strong>the report said. Central banks in the U.K., Canada and Australia are also keeping interest rates low. Combined with stable supply of homes and strong demand from foreign buyers, especially in China, “this has produced an ideal setting for excesses in house prices,” the authors said, adding that price-growth deceleration in New York City a "sign of weakness of the financial sector."</p> <p>Meanwhile, Vancouver house prices have been significantly overvalued since 2007, according to UBS. The culprit there is not so much the BOC as the <span style="text-decoration: underline;"><strong>P</strong></span>BOC: until recently Vancouver served as the primary offshore target for Chinese money launderers, which neither the financial crisis nor weakening commodity prices managed to dent. However, this bubble now appears to have finally burst after the provincial government of British Columbia introduced a 15% transfer tax on foreign home buyers in August, leading to a crash in the most expensive local housing segments. </p> <p>As for other housing markets, UBS said that in London, an acute housing shortage and readily-available mortgages “should be able to sustain the inflated prices for the time being,” the report said.</p> <p>According to UBS it is impossible to predict what might pop the bubbles, and when, even in cities with the clearest signs of a problem, UBS said. “A sharp increase in supply, higher interest rates or shifts in the international flow of capital could trigger a major price correction at any time,” Holzhey said. Additionally, a change in “macroeconomic momentum”, investor sentiment, or major supply increase may trigger a “rapid price decline.”</p> <p>Finally, there was some good news for Chicago residents: UBS found that the Chicago housing market remains undervalued “relative to its own history." However, considering the daily shooting spree that takes place in that city, it is probably not a big surprise.</p> <p>UBS concludes that investors now buying cities considered overvalued “should not expect real price appreciation in the medium to long run,” UBS said.</p> <p>That said, with every other asset class similarly overvalued, it is difficult to make a case in what other asset classes the nearly $2.5 trillion in record new liquidity created by central banks every year will see safer returns. </p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1062" height="732" alt="" src="" /> </div> </div> </div> Australia Central Banks China European Central Bank Hong Kong Housing Bubble Housing Market Investor Sentiment Monetary Policy New York City Real estate Unemployment Tue, 27 Sep 2016 16:07:41 +0000 Tyler Durden 573405 at