Merrill

Merrill

Donald Trump Is Right: Here Are 100 Reasons Why We Need To Audit The Federal Reserve

When a leading nominee for President gets something exactly right, we should applaud them for it.  In this case, Donald Trump’s call to audit the Federal Reserve is dead on correct.  Most Americans don’t realize this, but the Federal Reserve has far more power over the economy than anyone else does – including Barack Obama.  The funny thing is that the Federal Reserve is not even part of the federal government.  It is an independent private central bank that was designed by very powerful Wall Street interests a little over 100 years ago.  It is at the heart of the debt-based financial system which is eating away at America like cancer, and it has no direct accountability to the American people whatsoever.

The Good, The Bad, & The Ugly

The OPEX game is back in full swing and brought back hope amongst signs of bullish capitulation everywhere.... but there is plenty of bad (and even ugly) to consider.

It Was Never About Oil, Part 2: It Was Always Leverage & Volatility

Unfortunately, we remain stuck in the cleanup phase so long as economists and their ability to direct policy continue to suggest the Great Recession was anything other than systemic revelation along these lines; a permanent rift between what was and what can be. It is and was never about oil; only now that oil projects volatility into the dying days of eurodollar leverage.

Frontrunning: February 4

  • EU Slashes 2016 Inflation Forecast to 0.5% as Growth Seen Slower (BBG)
  • Bank of England cuts UK growth forecasts (FT)
  • Investors Cast Wary Eye on Fed Rate Increases (WSJ)
  • U.N. halts Syria talks as government closes in on Aleppo (Reuters)
  • Credit Suisse Drops as Investment Bank Slump Deepens Losses (BBG)
  • Six OPEC states ready for emergency meeting with non-OPEC members — Venezuela's minister (TASS)

The Keynesian Monetary Quacks Are Lost - Grasping For The Bogeyman Of 1937

What’s a Keynesian monetary quack to do when the economy and markets fail to remain “on message” within a few weeks of grandiose declarations that this time, printing truckloads of money has somehow “worked”, in defiance of centuries of experience, and in blatant violation of sound theory? In the weeks since the largely meaningless December rate hike, numerous armchair central planners, many of whom seem to be pining for even more monetary insanity than the actual planners, have begun to berate the Fed for inadvertently summoning that great bugaboo of modern-day money cranks, the “ghost of 1937”.

US Economy: On A Knife's Edge

We may not yet have final confirmation that a recession is imminent, but so far nothing suggests that the danger has receded.

25 Years Of Fed Fueled M&A - The Enabling Of A Banking Oligopoly

Between 1990 and 2010, eventually 37 banks would become JP Morgan Chase, Bank of America, Wells Fargo, and Citigroup. The “Big Four” retail banks in the United States collectively hold 45% of all customer bank deposits for a total of $4.6 trillion... as the biggest got biggest-er all thanks to the very visible hand of The Fed's free money.

John Paulson Puts Up Personal Holdings To Secure Credit Line As AUM Plunges

Back in August we noted that John Paulson managed to get himself and his investors involved in two rather dubious "firsts" in 2015: Puerto Rico became the first US commonwealth in history to default, and Greece became the first developed country to default to the IMF. Paulson had invested in Puerto Rican and Greek assets. Now, amid a client exodus, the billionaire is putting up his own holdings to secure a longstanding line of credit with HSBC.

Chinese Stocks Face Derivatives-Driven Trigger Of Doom

Despite the collapse in Chinese stocks, Bloomberg reports annual sales of Chinese equity-linked structured notes across AsiaPac rose to a record (prompting Korea's financial regulator to warn investors in August that their holdings had become too concentrated in notes tied to the China H-Shares index). When banks sell the structured products to investors, they take on an exposure that's similar to purchasing a put option on the index... which needs to be hedged via index futures; and if BofAML is right, Chinese stocks in Hong Kong are poised for a fresh wave of selling now that HSCEI has crossed 8,000 as banks are forced to hedge.

Someone Is Trying To Corner The Copper Market

It may not be as sexy as gold and silver, but sometimes even doctor copper needs a little squeeze and corner love as well, and according to Bloomberg, that is precisely what someone is trying to do. One company whose identity is unknown, is "hoarding as much as half the copper available in warehouses tracked by the London Metal Exchange."