Merrill

Merrill

Why This Sucker Is Going Down - The Case Of Japan's Busted Bond Market

The world financial system is booby-trapped with unprecedented anomalies, deformations and contradictions. It’s not remotely stable or safe at any speed, and most certainly not at the rate at which today’s robo-machines and fast money traders pivot, whirl, reverse and retrace. Indeed, every day there are new ructions in the casino that warn investors to get out of harm’s way with all deliberate speed. And last night’s eruption in the Japanese bond market was a doozy.

As A Frenzied Wall Street Buys Shale Equity Offering At A Record Pace, Exxon's CEO Has A Stark Warning

Investors have pumped a whopping $9.2 billion in new equity into energy companies year to date, the most since Bloomberg records began in 1999. The euphoria won't last, and the equity issuance window is already closing: confirmation of this comes from none other than Exxon CEO Rex Tillerson who moments ago said that the "wave of oil equity issuances is destroying value", adding that "global economic conditions are not inspiring", that "demand won't solve it quickly" and that "we're still oversupplying the market."

Japan Braces For A "Turbulent, Volatile" 10-Year Auction With First Ever Negative Yield On Deck

"We expect the10y JGB auction on the 1st to be a new issue with a 0.1% coupon, but auction yields are likely to go into negative territory. We do not expect the bank sector to buy, and demand from dealers and foreign investors is unlikely to provide sufficient support. We expect the auction to be turbulent given investors are also unlikely to short futures and the possibility of a tail. "

NY Times To Hillary: Release Those Damn Bank Speech Transcripts

"Voters have every right to know what Mrs. Clinton told these groups. Public interest in these speeches is legitimate, and it is the public — not the candidate — who decides how much disclosure is enough. By stonewalling on these transcripts Mrs. Clinton plays into the hands of those who say she’s not trustworthy and makes her own rules."

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.