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Saxobank CIO Warns: "Fed Rate Hike In June Is A Margin Call On Assets"
While Bridgewater's Ray Dalio "hopes that The Fed will be very cautious about tightening," Saxobank CIO Steen Jakobsen explains in this brief clip that The Fed "is wrong, always wrong," and will likely raise rates in June no matter what. The Fed is boxed in, Jakobsen notes, and despite the weak macro data, changing direction now is unlikely - leaving the market surprised as it recognizes that "this is a margin call on assets," seemingly confirming Dalio's conclusion that, "inadequate attention is being paid to the risks of a downturn in which central bankers' abilities to ease are significantly impaired."
Jakobsen explains in 2 minutes why The Fed is boxed in and the market will be shocked at "the margin call on assets"...
And Bridgewater's Ray Dalio concludes rather uncomfortably,
Though the prices of risky assets are high, and the expected returns are low relative to traditional levels, these things are not in relation to existing levels of interest rates and liquidity. However, should interest rates rise and liquidity levels decline materially, that picture will change.
Further, though cash returns are terrible, few investors in risky assets have given much attention to how quickly losses of capital can be worse and what the appropriate risk premia should be to make them indifferent.
Additionally, in our opinion, inadequate attention is being paid to the risks of a downturn in which central bankers' abilities to ease are significantly impaired. Please understand that we are not sure of anything but, for the reasons explained, we do not want to have any concentrated bets, especially at this time.
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Wait, margin calls are bullish, right?
It's a Margin Call on Asses, not Assets.
I call your margin raise of 1000000 electronic digits backed by nothing, and raise 100000000000000 electronic digits.
I'm rich right?
RIPS
Saxobank CIO Warns Old Yeller: "Hike Fed Funds Rate & The 401(k)s Get Sliced Throats, Ala Our Warnings Over TARP/TALP Not Being Approved On The First Request, Bitches."
I would love to see that fucker Hank just try and pull another "tanks in the streets" robbery, go ahead you stupid fucks, just ask for another bailout...
What would be the issue?
I foresee no difficulties if he or anyone else were to do so.
Seriously. American Sheeple will somehow, someway, magically rise up (assuming they were even mentally lucid)?
It's Orwell's Morning In Amerika.
There won't be a rate hike. It would crash the debt/derivative pyramid. Total bullshit.
So, you're saying that 1/5th of USSA's eCONomy is purely speculative, fart in the wind, vaporware ASSets that would be crushed into their actual worthless value by non-ZIRP/NIRP theft?
NOOOOOOOOO !!!!!!
The Fed dare not raise interest rates or it kills the golden goose called the stock market that has been preventing the US economy from falling into a deep depression. Zero or near zero rates forever.
so, more free money for the bankers and financiers then? Oh yeah, that should really "help"...
either way, tick tock motherfuckers...
...the stock market that has been preventing the US economy from falling into a deep depression.
How has the QE powered bull market done anything to keep us from a deep depression??? It has pulled capital from the real economy solely for the benefit of the oligarchy. If anything your statement should read:
...the stock market that has been preventing the US economy from ESCAPING THE GREAT RECESSION.
We could be building a coast to coast fiber network, repairing roads and highways, getting water from where it is to where we need it to be, etc. Instead the FED has fueled the biggest speculative bubble in history so that the oligarchy do nothings and their sycophants can maintain their power and wealth.
LOL!!! Okay, but are they talking about real assets or paper assets?
Remember, these fuckers use "mark to fantasy" accounting and are in the "business" of selling debt and financial "products" of mass destruction.
Fuck em.
Any rate increase we...might... see will be tiny but the gods of Wall st. worries that it might give people the wrong idea.....
That was the exact same thinking regarding the Grexit. We all know how that went...
The only question that needs to be asked is if raising rates are good for the TBTF banks?
Potentially, what are reserve requirements these days anyway?
http://www.zerohedge.com/news/2014-05-17/bernanke-shocker-no-rate-normal...
Does it really matter?
http://www.zerohedge.com/news/2015-02-24/us-governments-new-rule-allows-banks-completely-make-sht
saxo bank is a cia front
LOL!!
Look at all the BTFD'ers squirm!!
I'll believe it when I see it...
What rate hike?
Sounds like market makers are up to old tricks.
A quarter of a point rate hike perhaps?
LOL...............
25 bps... Run for your life!
It's the end of a free lunch.
Time to find an honest job.
"It's the end of a free lunch.
Time to find an honest job. "
Criminals don't find honest jobs when one con or heist is completed, they instigate another con or heist.
IF you think that a measly rate hike is gonna clean up this mess you're certifiable.
Excess Reserves are still banking coin at The FED at rates the public cannot access.
Panic after a 25 bps hike: the sign of a robust economy! LOL
You misheard. Yellen is starting to raise goats, not rates.
My friend Contango sez that WTI under $40 will likely put an end to this rate hike talk.
What a joker he is...
his partner is Cash, right?
Rest assured the only asset that will be sold, and sold vigorously and publicly, will be PMs... even though nobody on WS holds any, apparently.
So in reality, the argument might break down into something as simple as this:
'How fast and to what level, would the S&P have to drop before a panicked Fed stepped back into the lurch with either a statement of re-affirmation, or an actual policy tool implementation...?'
Must be St. Pat's Day, but the headline reminded me of that one Blues Bros. tune, toward the end: "last call for alcohol." It'll be like "Hey, Fed Chair, hey man lookee here, draw one, draw two, draw three four rounds of QE"
Who in the hell, I keep asking, buys T-bonds at 0.25 for 1 year, 1.6 for 5, 2.15 for 10, and weirdest of all, 2.75 for 30? Even those with the numbest of nuts knows that locks in losses for decades.
So it's better to rent money at nearly face value to buy stawks at TFATH and lock in moar losses? Good Lord, it would take Michael Jackson-sized doses of fentanyl to numb 'em up that good.
"Who in the hell, I keep asking, buys T-bonds at 0.25 for 1 year, 1.6 for 5, 2.15 for 10, and weirdest of all, 2.75 for 30? Even those with the numbest of nuts knows that locks in losses for decades. "
Ask any insurance or annuity salesman, or the guy running your 401k.
Funny you'd mention the guy running my IRA (I'm self-employed). I just spoke with him and he gave me shit for only kicking in $1k last year. I told him I had had other spare money during the year, but I'd had the opportunity to get a guaranteed 5% return last year, so I'd taken it. He perked right up and got a little smirk, and asked me what that opportunity was. I told him I'd paid off my HELOC and put extra on the principal of my mortgage. Wiped the smirk right off his face. I like the guy, or I wouldn't deal with him, but it was one of those illuminating moments. And I'm thinking he has no sensation below the navel.
Surely you know already... Belgium
It would be cheaper to Drone the Bankers and HedgeFund Elite!
These are autonomous vehicles now.
They can be programmed to do anything.
Once they are programmed "that might be that" I might add.
What's the matter stealing a billion a year in his mini ponzi scheme isn't enough for Ray? Can't be paying people interest on their money for Christ sake....you have to give it to crooks on Wall Street!
How do you pay for a 500 billion dollar fighter jet that doesn't fly without an equity bubble?
Fed must raise rates to support that.
Can't afford a loss of confidence in the dollar.
That's why Mish is wrong and Zero Hedge is spot on. George W Bush and Dick Cheney destroyed the dollar thus destroying the economy.
All everyone got in return was the biggest war since World War II. "Gottaay for that."
We used to do that with gold.
They are getting worried that the Fed will raise rates.
And they might....but only to create a downturn which in turn, will cause the Fed to PRINT EVEN MOAR after this grave mistake.
You can't 100% taper a Ponzi scheme.
Arrest Ray Dalio for being a financial pervert.
SURE it is! Everytime the Fed even hints at a rate increase, the market goes due south! If they ever did raise rates for real, it would in effect be a margin call.
HAHAHAHA Like the fed will actually raise rates :)
They can’t. AMERICA WOULD BE FINISHED!
I wonder how many would suddenly realize the house of cards would be flat out on the table before it actually happened.
But the fed won’t do it and there will be another short squeeze of the herd who tought they could get rich shorting the crap out of the market.
According to Natixis:
http://www.ge.tt/5osnEOC2/v/0?c
March 13, 2015
What are the differences in economies where debt ratios are very high?
Debt ratios (public, private and total) are at present extremely high in a vast majority of OECD countries. How does this change the functioning of these countries' economies?
• Fiscal policy becomes more restrictive and can hardly become very counter-cyclical due to high public debt ratios;
• The private sector deleverages, and monetary policy can no longer use the credit channel;
• Central banks have an incentive to conduct expansionary monetary policies to facilitate deleveraging.
In countries where debt ratios are very high, we can therefore expect to see:
• Weaker growth (a restrictive fiscal policy, private-sector deleveraging);
• Deeper recessions (lack of counter-cyclical capacity of fiscal and monetary policies);
• And yet a sharp rise in asset prices (equities, real estate), due to expansionary monetary policies and long-term interest rates that are lower than growth rates.
Paradoxically, excessive debt ratios can be positive for equities and real estate.
0.25% rate hike...come on...IT'S NUFFIN
there is only ONE reason the fed could possibly raise rates.
to destroy china and russian financial markets.
That was Sarcasm......I hope.
This is one of the reasons that China/Russia have created an alternative to a system that is controlled and all but the Bankers lose....all the time. Yes, other MINION make money by selling their souls.......Those should face crimes against Humanity........But Alas...TEAM USA is not a member.
http://dictionary.reference.com/browse/minion
The Fed "is wrong, always wrong,...
NO FED is always CORRECT, but the chap does not get it.
If the market is scared by 25 pips rate increase:) than would be happen with markets if IR moves 100 pips up??? Amen:)
1987th drawdown of 30% in one day would be just a small correctuion, or?:)
Why to wait it if there is a lot no-brainer sell shorts!!!
Read here more:
http://prudentvalueinvestor.blogspot.com
if the fed raises rates it willl be to chase money into equities. if they do this it will most certainly be the end. the only buyer of bonds will be the fed but 100s of billions in savings will get a boost. is this the helicopter of choice for the fed?
Bwahaha. Like I said earlier, I double dog dare ya!