Until minutes ago, this week's rebound in global equities appeared to be running out of steam as oil retreated from a two-week high and a dollar slide ended. However, as noted just around 6am, Reuters reported, citing as it usually does various "anonymous sources", that in a radical departure from its long-held policy of not cutting production, Saudi Arabia was prepared to cut production on condition that Iran freezes output, which led to an instant spike in crude.
"My goal is for my children to always be happy, to never experience pain, or sadness, or disappointment. To always get what they want, and to never have to hear the word ‘No.’" ...But spoiled kids take greater and greater risks, do dumber and dumber things, because there are never any consequences for their actions.
The corporate mainstream media faux journalists scorn and ridicule anyone who makes the case we are currently in the midst of another Great Depression. They are paid to peddle a recovery narrative to keep the masses ignorant, sedated, and distracted by latest adventures of Caitlyn Jenner and the Kardashians. An impartial assessment of the facts reveals today’s Depression to be every bit as dreadful for the average American as it was in the 1930s
Paper, digital and financial proxies for gold are not real gold. Hence the importance of owning coins and bars either in one’s possession or in allocated and segregated storage in the safest vaults in the world.
After a muted end to August, September started off on the strong foot overnight following a surprising beat in China's official manufacturing PMI print, which rose above 50 to the highest level in almost two years. That, together with a record rebound in the UK PMI, bolstered investor confidence, fueling gains in stocks and industrial metals. The dollar advanced against most of its peers while bonds retreated before Friday’s payrolls report.
"The problem with Cassandras, such as Gross and Jim Grant and Stanley Druckenmiller, among a host of others, is that we/they can be compared to a broken watch that is right twice a day but wrong for the other 1,438 minutes. But believe me: This watch is ticking because of high global debt and out-of-date monetary/fiscal policies that hurt rather than heal real economies. Sooner rather than later, Yellen’s smooth shot from the fairway will find the deep rough."
"She is opening the door to creating even greater asset bubbles as have the BOJ and ECB and SNB by purchasing corporate bonds and stocks," Gross said of Yellen's hint that she may buy even more assets: "This is not capitalism. This is providing a walker or a wheelchair for an ailing economy. It may never walk normally again if monetary policy continues in this direction."
Action this week by Illinois' biggest public pension fund to lower its expected rate of return, could "cripple" the state's already fragile finances, Governor Rauner has warned. "If the (TRS) board were to approve a lower assumed rate of return taxpayers will be automatically and immediately on the hook for potentially hundreds of millions of dollars in higher taxes or reduced services... the unforeseen and unknown automatic cost increases would have a devastating impact."
We can pretend fundamentals don’t matter and sure in the day to day profit taking of Citadel and the like they really don’t matter. But, while the PhDs may talk big about this new world economy where a move to universal welfare means jobs and wages don’t matter - well that is nonsense. Jobs and wages matter and they will always matter.
As another week comes to a close, we continue to wrestle with a market that remains detached from underlying economic data and clings to recent levels of over overbought, overextended and low reward/risk outcomes. Of course, in the final stages of a bull market, this is what has historically been the case.