Monetization

Monetization

Rotten To The Core

Brexit and financial markets’ subsequent reactions expose the corruption at the heart of the world’s socio-political systems...

The End Game Of Bubble Finance - Political Revolt

During Friday’s bloodbath we heard a CNBC anchor lady assuring her (scant) remaining audience that Brexit wasn’t a big sweat. That’s because it is purportedly a political crisis, not a financial one. Here’s a news flash. That’s all about to change. The era of Bubble Finance was enabled by a political abdication nearly 50 years ago. But as Donald Trump rightly observed in the wake of Brexit, the voters are about to take back their governments, meaning that the financial elites of the world are in for a rude awakening.

"Today Is The Appetizer For Monday"

"Monday is where we’re going to see a truer-look at “where the bodies are buried” and a more accurate “price discovery” process than what we’re seeing today (as we’re washing out all the delta one flows which are dwarfing client trading)…lots of discipline being displayed thus far, with low turnovers and folks not chasing.  "

"Whatever It Takes" Wasn't Enough

Bond manager Jeffrey Gundlach made headlines this week with the comments “central banks are losing control.” I would suggest that central bankers actually lost control back in 2012. Mario Draghi’s “whatever it takes” pledge actually amounted to concerted central bank intervention to shield global markets and economies from the intensifying forces of the downside of a historic Credit Cycle. The global Credit boom persevered for a few more years, right along with historic market distortions and economic maladjustment. Downside risks have grown significantly.

Why Google Is Sliding

"We recently conducted checks with two leading search engine marketing (SEM) agencies/platforms, which in aggregate have visibility into ~$5 billion in annual search spending (the vast majority of which, of course, is on Google). At a high level, these early data points suggest that a slight deceleration in the y/y growth rate for search marketing spend in 2Q16 vs. 1Q16 is possible."

Will Brexit Give The US Negative Interest Rates?

One of the oddest things in this increasingly odd world is the spread of negative interest rates everywhere but in the US. One answer is that the Bank of Japan and the European Central Bank are buying up all the high-quality (and increasing amounts of low-quality) debt in their territories, thus forcing down rates, while the US Fed has stopped its own bond buying program. The other answer is that this is just one of those periodic anomalies that persist for a while and then get arbitraged away. And Brexit might be the catalyst for that phase change.

European Peripheral Bond Risk Explodes: Forget Brexit, "Now It's Italy's Turn"

If there was any doubt that Brexit was "relevant" then the surges in European peripheral bond risk, despite massive bond-buying by The ECB, should send shivers up and down the status quo huggers that are shrugging the referendum decision off because "central banks will provide liquidity." However, it's not just The UK that EU officials need to worry about, as The Globalist notes, Germany will have to change its policies if it wants to avoid exit of other countries from the eurozone.

Tyranny Of The PhDs

Sad to say, you haven’t seen nothin’ yet. The world is drifting into financial entropy, and it is going to get steadily worse. That’s because the emerging stock market slump isn’t just another cyclical correction; it’s the opening phase of the end-game. That is, the end game of the PhD Tyranny.

Global Stocks Sharply Lower As Bond Yields Hit New Record Lows; Oil Slides Below $50

Global stocks, U.S. index futures are sharply lower pressured by fears of another day of record low bond yields, as investors start to worry about numerous risk catalysts in the coming weeks, from the Brexit vote to Fed meeting. The Dollar spot index rose for the second day in a row, pushing commodities lower for their first two-day decline since May 24, while WTI has dipped back under $50.

Deutsche Bank's Shocking ECB Rant: Warns Of Social Unrest And Another Great Depression

"In the 1920s the Reichsbank thought it could have 2,000 printing presses running day and night to finance government spending without creating inflation. Around the same time the Federal Reserve allowed more than a third of US deposits to be destroyed via bank failures, in the belief that banking crises where self-correcting. The Great Depression followed.... Today the behaviour of the European Central Bank suggests that it too has gone awry."

Japan Is First To Panic; Won’t Be The Last

The most widely-reported result of the recent G-7 meeting was Japan’s attempt to convince the other major economies to admit that a crisis is imminent and take appropriately radical steps. The response seems to have been a bunch of blank stares. What does this mean? In a nutshell, the next phase of the global economic crisis has begun.

In Stunning Reversal, IMF Blames Globalization For Spreading Inequality, Causing Market Crashes

In a stunning reversal for an organization that rests at the bedrock of the modern "neoliberal" (a term the IMF itself uses generously), aka capitalist system, overnight IMF authors Jonathan D. Ostry, Prakash Loungani, and Davide Furceri issued a research paper titled "Neoliberalism: Oversold?" whose theme is a stunning one: it accuses neoliberalism, and its immediate offshoot, globalization and "financial openness", for causing not only inequality, but also making capital markets unstable.