"We believe such a scenario would have the potential to 'burst the corporate bond bubble' as bond yields would rise with inflation, corporate confidence would run high and a releveraging/deterioration in credit metrics would materialise resulting in bond fund outflows. The lack of liquidity in corporate bond markets would make the process particularly painful," UBS says, reiterating the perilousness of a secondary market lacking ample liquidity amid voracious investor demand for new issuance.
As was largely expected, after 11 hours of deliberations by the jury, Dzhokhar Tsarnaev was convicted moments ago of killing four people and injuring 264 in the 2013 Boston Marathon bombings. While the guilty counts are still being read (the full list of 30 is presented below), he has already been found guilty of counts 1-10 all of which carry the death penalty. Next up: the jury must decide if he gets the death penalty.
Following the surprise dovish FOMC dot-downgrade to counter hawkish 'patience removal', and this morning's admission by Dudley that The Fed is Dow-Data-Dependent; expectations for the FOMC Minutes offering any insights were low...
- *FED OFFICIALS FAVORING LIFTOFF LATER IN 2015 CITED DOLLAR, OIL, CHINA, GREECE
- *FED OFFICIALS WERE SPLIT ON JUNE RATE RISE, FOMC MINUTES SHOW
- *MOST OFFICIALS SAW RISKS TO OUTLOOK, JOB MKT NEARLY BALANCED
So "worried" about the world, "downside" risk to growth but reasons to be cheerful, unpatient and data-dependent liftoff... something for everyone.
What were you thinking?
It wouldn’t be a first, but it would certainly be a – bigger – shock. That is to say, the Bank of England hijacked the head of Canada’s central bank some time ago, but, while unexpected enough, that would pale in comparison to the US hiring the present razor sharp and fiercely independent Governor of the Russian central bank, Elvira Sakhipzadovna Nabiullina. It would still seem to be a mighty fine idea, though. Not that we think it will happen. Yellen is obviously neither; she’s a cog in a machine that huffs and puffs and pumps and dumps to make sure her overlords in the blissful world of US finance make ever more profit no matter how bad things get in American society.
Shorts Mauled In Another Strong 10 Year Auction In Which Foreign Central Banks Push Yield To Taper Tantrum LowsSubmitted by Tyler Durden on 04/08/2015 13:15 -0400
As noted yesterday, the short interest heading into today's 10 Year auction was massive. So massive, in fact, that the 10Y was trading super special in repo to the tune of -2.24% as an unknown number of speculators had hoped that what did not happen in March (when the 10Y auction carried a comparable short interest) will take place today. Sadly for them, they will have to wait one more month, while suffering yet another squeeze in the interim, because moments ago the 10Y priced at a yield of 1.925%, well through the 1.929% When Issued, and the lowest yield for bond auction since the bond market's "Taper Tantrum" freak out in May of 2013.
In retrospect, we almost feel bad for Gregg: after all in the new paranormal, in which the market is manipulated, fragmented and broken from the top (central banks) all the way to the very bottom (HFTs) with the sole purpose of pushing it ever higher in a futile attempt to restore confidence and retail investor participation in what is so clearly a rigged casino it is not easy pretending everything is fine when everything is on the verge of total collapse at any given (nano)second, and where the only recourse to coordinated selling is for the markets to break. Literally.
"It’s like walking in a mine field. Many risks lie ahead of you. Even if you are in the middle class, if something unexpected happens, you could slip into poverty."
The FOMC surprised the market on March 18 by lowering "the dots" by about 50 basis points. While Yellen gave a fairly exhaustive explanation for this in her speech on March 27 (and Dudley just managed expectations this morning), SocGen notes that market participants hope for more color from the FOMC minutes today. As for the timing of the rates lift-off, the FOMC minutes are unlikely to offer any new insight.
Curious how the third largest energy deal, and 14th largest corporate take over in history, happened? The answer, courtesy of Reuters, is simple: all it took was a phone call.
"We felt a great disturbance in The Farce, as if millions of voices suddenly cried out in terror, and were suddenly silenced. We fear something terrible has happened in Cushing."
Following last night's huge 12.2 mm barrel inventory rise estimate from API, DOE has just confirmed last week saw an almost all-time high 10.95 million barrel inventory build. This is the higest since March 2001. With today's 1.232 million barrel addition at Cushing, Goldman estimates only about 10% of storage capacity is left. And to complete the trifecta, crude oil production ticked back up again after last week's hope-strewn reduction.
DUDLEY: CAN IMAGINE SCENARIOS IN WHICH JUNE LIFTOFF IS IN PLAY but DUDLEY SEES REASONS TO ERR ON SIDE OF BEING LATE ON RATES
Then he spewed the following previously undisclosed (though assumed - The Dow Data Dependent Fed) "How we react after liftoff will depend on how the market reacts." and the market front-runs.. as he indicates that weakness in March is due to the weather (hawkish) but that "the timing of the Fed's first rate hike is later" (dovish)...
The talks between Russia's Putin and Greek PM Tsipras have concluded and the much anticipated press conference has begun. Watch it live below.