Deutsche Bank

While the company's stock price may have rebounded strong today after tumbling by 25% in the past few days, hoping the worst is behind it the company's Credit Default Swaps sing a different tune, and as of moments ago, with the CDS spread blowing out to 440 bps, suggested Valeant default risk is now a whopping 33%.

It takes ignorance on an almost unbelievable level to try to claim that “nothing is happening” in the financial world right now.

As WSJ reports, "Bank of America Corp. is expected to announce layoffs in its global banking and global markets unit as early as Tuesday, according to people familiar with the matter."

"Rate cuts should not be seen as goodies that the RBI gives out stingily after much public pleading"...

Unlike previous gold probe cases, this one will have major consequences. How do we know? Because just like in LIBOR-gate, just like in FX-gate, it is the biggest rat of all, Swiss megabank UBS, that is about to turn on its former criminal peers.  As Bloomberg reported earlier "UBS was granted conditional leniency in Swiss antitrust probe of possible manipulation of precious metal prices." Why would UBS do this? The same reason UBS did so on at least on two prior occasions: the regulators have definitive proof it is involved, and gave it the option to turn evidence and to rat out its cartel peers, or face even more massive financial penalties. UBS, as usual, choice the former.

Absent some entirely magical economic developments, Janet Yellen looks set to be an unlucky Fed chairman. There is a growing risk that the fabric of the financial system may start to unravel during her tenure. Today’s investors are not exactly a lucky generation. Assuming they’ve survived two precipitous declines in stock markets in the course of a decade, they’re now faced with overpriced stocks, overpriced bonds, overpriced everything.

"It was our Black Monday. The big question is when will they come back, because managers have been really quite reliant on Sama for business in recent years."

CATALAN SEPARATISTS CLOSE TO 50% OF VOTES: EXIT POLL

With Janet Yellen choking back the vomit as she shifted The Fed's stance to a "hawkish hold," markets remain just as confused (and disconnected) as they were after The FOMC's "dovish hold." The problem, as Deutsche explains, is The Fed's reliance on 'conventional' inflation dynamics (and its mean-reversion - higher in this case) as opposed to actual market expectations (which are collapsing), leaving them open to a major Type II policy error -  the risk of rejecting something that is, in actuality, true. The Fed's credibility is teetering on the brink as inflation 'reflexivity' - that is, Fed expectations strengthen the dollar, depress risk in general and commodities in particular, with lower commodities driving headline inflation lower - raises the prospect that the Fed fails to raise rates at all in 2016.

For those unaware, a fifth of Spain's GDP is voting on whether to secede from the country on Sunday. Here is everything you need to know about the Catalan black swan.

When you tie the reflexivity problem in with the fact that the excessive use of counter-cyclical policy is leading to the creation of ever larger asset bubbles by effectively short circuiting the market's natural ability to purge speculative excess and correct the misallocation of capital, what you get is a never-ending loop whereby the consequences of unconventional monetary policy serve as the excuse for doubling and tripling down on those same policies.

News That Matters

Our freedom and prosperity ends when we adopt the counterparty theft of central bank’s monopoly money.

The fallout from the emissions scandal that triggered a harrowing plunge in Volkswagen's shares and now threatens to derail the German economy continues as Detusche Bank delivers a sobering assessment, the Green party blames Berlin, BaFin lanches an investigation, and the town of Wolfsburg panics.