Once more in this new normal in which we 'live', the necessary creative destruction of capitalism is eschewed in favor of saving a zombie company that the CEO admitted was "overwhelmed." The good news for American taxpayers is that it is Canadian taxpayers - via a generous $1.3 billion 'investment' by the Quebec government - that are bailing out private-jet-maker Bombardier. Following aircraft projects plagued by overruns, missed deadlines, and scant interest from airlines, Bombardier posted a $4.9billion loss in Q3. Well never mind that, Quebec taxpayers now own 49.5% of the challenged CSeries program.
"... judging from market-based implied measures of longer-term inflation expectations, the effectiveness of the ECB’s announcements has proved limited so far."
- Goldman Sachs
It appears even Goldman Sachs was surprised by the recent rally in US equities - especially in light of the explicit hawkishness of The Fed yesterday. In a trading note this morning, the bank says that market risks are real and rising (but are not overwhelming) as it explains, we assume with no intent at humor or sarcasm, that they "prefer to think of the recent equity rally as 'macro-free' rather than 'low quality'," reiterating their view of the cycle and of markets as "fundamentally upbeat." They do, however, admit over the last month, the likelihood of a drawdown in the US equity market further increased, and remains at mildly elevated levels.
Don't call us, we'll call you: "This is an Iraqi affair and the government did not ask the U.S. Department of Defense to be involved in direct operations. We have enough soldiers on the ground."
Venezuela has two immediate bond payments due this and next week amounting to $3.5 billion. Where did the near-insolvent country obtain the funds needed to make these debt payments? The answer: it has been dumping its gold, which its former ruler Chavez worked hard in 2011 to repatriate from London, and which its current president Maduro, just four short years later, is busy sending back to its creditors.
For the past few weeks we have been detailing the tightening of China capital controls and what that may mean for Bitcoin (most recently here). It appears the outflows (that offshore Yuan weakness relative to onshore Yuan suggests) are accelerating as Bitcoin just traded above $314 (up from around $200 when we first warned about China) - near the highest since December 2014.
"This is not our war. I cannot condemn in strong enough terms this ill-advised US military escalation in the Middle East. Whoever concluded that it is a good idea to send US troops into an area already being bombed by Russian military forces should really be relieved of duty."
Here is our question: on May 7, the Price-to-Sales ratio of the stock market was 1.8264x. As of this moment it is higher at 1.8408x. So, dear Janet, can you please confirm what the attached chart shows, namely that "equity market valuations" are now even higher than when you said they were "generally quite high", and if so, should we still be buying stocks and why?
7 Year Auction: Record Low Dealers, Jump In Bid To Cover Kills Bitter Taste From Yesterday's Poor 5-YearSubmitted by Tyler Durden on 10/29/2015 13:12 -0400
With very strong demand for the belly of the curve, today's auction puts to rest any concerns about a buyers' strike.
For generations, single family housing development was a driver of US economic growth. Today, there is no single family housing industry to speak of. These 7 charts derived from this week’s release of new house sales data from the Census Bureau illustrates just how bad things are.
"The rise in household savings rates amid so much central bank support is paradoxical to us, and mimics what we highlighted in the credit market earlier this year. Companies in Europe are deleveraging, not releveraging"