10 Year Bond
"The escape options are a mixture of the ineffectual, the limited, the risky, the foolhardy or the excessively slow. As Japan’s recent experiments have demonstrated, upping the monetary dosage alone is not enough to cure the affliction. Indeed, to the extent that monetary stimulus only encourages a further wave of risk-taking within financial markets – often outside of the mainstream banking system - it may only perpetuate unstable deflationary stagnation."
SocGen Looks At The Devastation Across Markets, Sarcastically Concludes It Is "Time For A US Rate Hike"Submitted by Tyler Durden on 12/14/2015 09:53 -0400
"The solution to uncertainty is cheaper valuations. If problems are priced in, investors can afford to look through near terms concerns and focus on the longer term. Worryingly, we have exactly the opposite situation today. Average stock valuations are close to historical highs – so we have lots of risk and little in the way of valuation cushion.... Time for a US rate rise then?"
The Ghost Cities Finally Died: For China's Steel Industry "The Outlook Is The Worst Ever Amid Unprecedented Losses"Submitted by Tyler Durden on 10/29/2015 22:35 -0400
In late 2014 something happened: for whatever reason the most unregulated aspect of China's financial system, its shadow banks, not only stopped lending money but actually went into reverse, thus putting a lid on China's Total Social Financing expansion, which had been the world's "under the radar" growth dynamo for so many years. At that moment not only did China's ghost cities officially die, but it meant an imminent collapse for China's steel industry. That collapse has arrived.
The world’s financial system is saturated with speculations fostered by nearly two-decades of central bank credit inflation. Just since 2006, the footings of central bank balance sheets have expanded from $6 trillion to upwards of $22 trillion. That’s all combustible monetary fuel that cannot be recalled; it can only be liquidated in the course of a monumental meltdown in the casino. So, yes, after the carnage of the past few days the global sovereign bond index has lost $625 billion since the bond bubble peak in late March. Call that spring training.
That last meeting didn’t end well...
According to Citigroup, the revenues from trading fixed income securities has been decreasing since the end of the global financial crisis, but this trend might very well be reverted soon as investors are desperately trying to protect their assets from erosion.
Dear Mr. Market,
I’m writing to you about the sharp lift in equity valuations over the past month...
The only question on traders' minds today, with the lack of any macro news out of the US (except for the DOE crude oil inventory update at 10:30am Eastern expecting a build of 3.5MM, down from 6.33MM last week, and the 10 Year bond auction at 1pm) is which Greek trip abroad is more important: that of FinMin Varoufakis to Belgium where he will enter the lion's den of Eurogroup finance ministers at 3:30pm GMT, or that of the foreign minister Kotzias who has already arrived in Moscow, and where we already got such blockbuster statements as:
LAVROV: RUSSIA WILL CONSIDER AID REQUESTS, IF GREECE MAKES THEM; KOTZIAS: GREECE IS WILLING TO MEDIATE BETWEEN EU, RUSSIA
Or perhaps both are critical, as what happens in Brussels will surely impact the outcome of the Greek trip to Russia?
Switzerland`s 10-Year Bond Yield is now negative 15 basis points. Yes even neutral Switzerland`s bond market has been broken...
At 30 basis points yield, a short on this German Bund via the futures market is basically a call option on the utter destruction of this Massive Yield Chasing Strategy on behalf of financial institutions...
Euro Crash Continues Sending Stocks Higher, Yields To Record Lows; Crude Stabilizes On New King's CommentsSubmitted by Tyler Durden on 01/23/2015 08:03 -0400
Today's market action is largely a continuation of the QE relief rally, where - at least for the time being - the market bought the rumor for over 2 years and is desperate to show it can aslo buy the news. As a result, the European multiple-expansion based stock ramp has resumed with the Eurostoxx advancing for a 7th day to extend their highest level since Dec. 2007. As we showed yesterday, none of the equity action in Europe is based on fundamentals, but is the result of multiple expansion, with the PE on European equities now approaching 20x, a surge of nearly 70% in the past 2 years. But the real story is not in equities but in bonds where the perfectly expected frontrunning of some €800 billion in European debt issuance over the next year, taking more than 100% of European net supply, has hit new record level.
History literally appears to be repeating. The mainstream media and our politicians are promising Americans that everything is going to be okay somehow, and that seems to be good enough for most people. But the signs that another massive financial crisis is on the horizon are everywhere.
Greece may be on the verge of a Grexit, crude may be taking out all key technical support levels, and US stocks will still close higher. But let the USDJPY slide and watch as the levitation ends with a bang. And tumble overnight is precisely what the USDJPY did, pushing not only the Nikkei lower by 1.6% but also leading to what is shaping up to be an unrecord, also known as red, open in the S&P - this surely calls for a "Markets in Turmoil" flashing siren on the 9th floor of the New York Fed.
First the Japanese central bank proceeds to monetize all new debt issuance and is on route to holding 50% of all 10 Year bond equivalents within 2 years, sending the Yen year plummeting to 7 years lows daily, and then - just like Europe - Japan gets cold feet and realizes that the next steps are USDJPY 145+, meaning a complete collapse of the Japanese economy and a full on FX, if not shooting, war in Asia. So what does Japan's finance minister Aso do? Why he talks the Yen higher, in the process completely confounding the FX algos, and risking a full blown collapse in the Nikkei just 3 weeks ahead of the Japanese snap elections.
If the last three days all started with a rout in futures before the US market open only to ramp higher all day, today it may well be the opposite, when shortly after Europe opened it was the ECB's turn to talk stocks higher, when literally within minutes of the European market's open, ECB's Coeure said that:
- COEURE SAYS ECB WILL START WITHIN DAYS TO BUY ASSETS
Which was today's code word for all is clear, and within minutes US futures, which until that moment had languished unchanged, soared by 25 points. So will today be more of the same and whatever early action was directed by the central bankers will be faded into a weekend in which only more bad news can come out of Ebola-land?