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"You Can Take Your Scottish Freedom... But You'll Never Take Our Gold"





We can see it now, a wine-stained David Cameron staggers slowly towards Hadrian's Wall eying the hordes of Scottish gentlefolk staring at him; he glances back at his supporters (who cheer somewhat begrudgingly) before rapidly returning his eyes to the Scots and proclaiming... "you can take your freedom; but you'll never take our... Gold." As Reuters reports, an independent Scotland could lay claim to a part of the United Kingdom's 310-tonne gold reserves if votes go in favour of the "Yes" campaign this month, with ownership of Britain's bullion hoard up for negotiation along with other assets.

 
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No! The US Is Not 'Decoupling'





It's that time of year again... when sell-side strategists and status-quo narrative defenders aggregate en masse around the 'outperformance' of the US economy compared with the rest of the world (which - they note - explains why US stocks are outperforming as the US is the cleanest shirt) and declare - unequivocally - the US has decoupled. The only problem with that meme - it's total and utter rubbish in the increasingly interconnected world in which we live, wage currency war, and trade with one another... as the following chart shows, its simply a temporal issue, not a structural decoupling...

 
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Calling A Top In The Narrative Of Central Bank Omnipotence





“At This Point You Just Have to Laugh”. In every important respect, the Fed and the ECB and their brethren are no longer central banks at all. They are Ministries of Markets, no different from a Ministry of Industry or – even more eerily similar – the Ministry of Culture you would find in most European governments. At this point the Narrative hegemony is complete. There’s no longer even a cursory bow to the idea that fundamentals matter. So I’m calling a top. Not a top in markets, because I honestly have no idea what’s going to happen next. But I’m calling a top in the Narrative of Central Bank Omnipotence because it has, in fact, reached its asymptotic limit of influence and belief.

 
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How The Fed "Mysteriously" Eliminated $7 Trillion In US Debt





Anyone looking at the Federal Reserve's own data set, that provided with the generous "free" funding of the US taxpayer by way of the St. Louis Fed's FRED database, will notice something quite welcome, if magical: total US debt held by the public - that which is not part of intragovernment holdings, read Social Security - has mysteriously collapsed from $12 trillion to $5 trillion. Somehow, with nobody looking, the Fed managed to reduce US total debt by $7 trillion.

 
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You Are Welcome, Fed





Before... and after.

 
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It Will Cost Taxpayers $5 Billion To Help Obama Create An ISIS Strategy





We can hear the narrative now... how can Congress turn down President Obama's demands for $5 billion to pay for a 'counter-terrorism' fund that could be used to support operations against Islamic State targets in Iraq and Syria... if they do, are they not supporting terrorism? As The Hill reports, White House press secretary Josh Earnest floated the $5 billion counterterrorism fund as something that “would strengthen the hand of this president and future presidents for dealing with urgent situations like this." We await Wednesday night's unveiling of the long-awaited strategy...

 
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Much Dollar Ado About Nothing In Stocks & Bonds





Today some very significant moves across asset-classes - despite the apparent close-to-close 'blahness' of stocks (Dow, S&P, Trannies small red, Nasdaq green) and bonds (30Y unch, 5Y +2bps) from Friday's close. The USD surged to fresh 15-month highs, ripping another 0.6% higher as GBP, EUR (1.28xx), and JPY (106.xx) all faded dramatically. US equity markets entirely decoupled from JPY (in fact became negatively correlated) and US Treasury yields ripped higher - tick for tick with USDJPY's rise. Gold and silver slipped 1% on the day, copper limped higher (after an early plunge) and oil rebounded to close with a small loss near $93 (Brent under $100 for first time in 14 months). Late-day news of 'delayed' sanctions sparked the standard post-EU-close buying panic, regained S&P 2,000 (and Futs hit VWAP), and ensured Friday's bad-news-is-good-news jobs meme stands.

 
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John Hussman's "Exit Rule For Bubbles"





History teaches clear lessons about how this episode will end – namely with a decline that wipes out years and years of prior market returns. The fact that few investors – in aggregate – will get out is simply a matter of arithmetic and equilibrium. The best that investors can hope for is that someone else will be found to hold the bag, but that requires success at what I’ll call the Exit Rule for Bubbles: you only get out if you panic before everyone else does. Look at it as a game of musical chairs with a progressively contracting number of greater fools.

 
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Anxious EU Leaders Delay Russian Sanctions For "Few Days"





Whether it is confidence in Poroshenko's statements that "the ceasefire is holding" or fears over Russia's threats of "asymmetric" retaliation, Europe's leaders - having convinced the Finns not to veto - emerged from their emergency meeting and declared tough new funding sanctions on Russia's big three oil companies... will be "delayed a few days." It would seem - as we noted earlier - Europe is debating whether or not it can last the winter cold better than Russia can withstand the funding lock.

 
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Consumer Credit Surges Most In Three Years





If you like living beyond your means, you can keep on living beyind your means. US Consumer credit grew by over $26 billion in July - smashing expectations of $17.35bn - and rising by the most since 2011. As usual, the leap was led by non-revolving credit (rising $20.6 billion) as auto and student loans continue to surge.

 
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The Top 10 Questions Everyone Should Ask About Alibaba





With the Alibaba roadshow kicking off this week, ConvergEx's Nick Colas reviews the second-order implications of this historic transaction. Over the next two weeks investors will have to consider important issues, such as which stocks money managers will sell to fund their BABA purchase and what securities (stocks and ETFs) hedge funds may short to pair against an Alibaba long position. And consider: "Do big IPOs signal a market top?" Also, with an estimated $7 billion in fresh cash and a valuable public stock post-IPO, BABA will also be able to play the M&A game aggressively. Just consider its corporate North Star: "Our mission is to make it easy to do business anywhere" (the first line of the S-1 summary). In short, Colas concludes Alibaba really is a big deal (at 27.3x trailing EV/EBITDA).

 
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Trump Entertainment Files Bankruptcy For Fourth Time: Even The Donald Is Embarrassed To Be Associated





While the closing of Trumpe Entertainment was well-known, and a bankruptcy was speculated, as of moments ago it is now fact:

TRUMP ENTERTAINMENT SAID TO PLAN CHAPTER 11 BANKRUPTCY FILING

Which means the Trump Entertainment brand, or whatever it will be called soon, has filed for bankruptcy for record 4 times in its brief but volatile history. It will certainly will not file for a 5th time.

 
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The US Strikes Back.. With Its Own Anti-ISIS Propaganda Video





It's not just airstrikes. The US State Department has recently launched an internet-based propaganda strategy as part of its "Think Again Turn Away" psyops campaign targeting young Muslim recruits for ISIS. As WaPo reports, the US government-made video titled "Welcome To ISIL-Land" and others like it aim to counter militant propaganda using their own graphic images against them. "The point, obviously, of this is to target potential recruits, potential sympathizers, to show the brutality" of IS, said State Department spokeswoman Marie Harf, "to point out the fallacies, point out the inconsistencies." However, critics note this could backfire...

 
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US Bonds, Stocks Tumble As Dollar Surges On EUR, JPY, GBP Weakness





Turmoil! S&P 500 loses 2,000 and EURUSD breaks to 14-month lows with a 1.28 handle

US equity markets are volatile this morning but appear to have now entirely decoupled from USDJPY as it careens headlong to new 5-year highs  running stops to 106.00. US Treasury yields are tracking the collapse of JPY closely since the US open. EURUSD is also plunging (as did GBP this morning). Abe will be happy as JPY collapses so Nikkei futures surge... is this 'great rotation' from every asset in the world into the Alibaba IPO?

 
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Miami Hospital Reports Potential Ebola Case





While details of the case and patient are not immediately known, the Centers for Disease Control and Prevention said earlier that a potential case of Ebola is being treated at a Miami-are hospital. This comes as the WHO reports a surge of "many thousands of new cases" in Liberia in recent days and fears rise that the dreadful disease could be spread by animals.

 
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