It had been a relatively quiet session overnight when as reported previously, the geopolitical situation in the middle east changed dramatically in a moment, when NATO-member country Turkey downed a Russian fighter jet allegedly over Turkish territory even though the plane crashed in Syria, and whose pilots may have been captured by local rebel forces. The news promptly slammed Turkish assets and FX, sending the Lira tumbling, pushing lower European stocks and US equity futures while sending 2 Year German Bunds to record negative yields.
The Federal Reserve has been telegraphing to markets that they are going to raise the fed funds rate by 25 basis points next month at its December Fed Meeting.
Amid souring bets on Brazil and the general malaise across EM, PIMCO has been dethroned as the king of emerging market bonds. A fund run by Ireland-incorporated Stone Harbor has overtaken PIMCO's EM Local Bond Fund as the world's largest emerging market fixed income fund by AUM as rollercoaster bets on Brazil and the departure of both El-Erian and Gross weighs on investor sentiment.
Confused About What Mario Draghi Will Do Next? Here's The Official Decision Tree From His Former EmployerSubmitted by Tyler Durden on 11/11/2015 13:06 -0500
Now that there are "no taboos," and assuming the ECB doesn't take our advice on the '52 Mantles or the lumber, the only question is whether the central bank will pair a depo rate cut with the PSPP expansion (in whatever form it takes)....
Another Former Goldmanite Becomes Fed President: Neel "Chump" Kashkari Replaces Uber-Dove KocherlakotaSubmitted by Tyler Durden on 11/10/2015 10:58 -0500
Goldman Sachs -> Treasury -> PIMCO -> The Fed
- World stocks on course for best month in four years (Reuters)
- Global Stocks Up Amid Stimulus Hopes (WSJ)
- BOJ Refrains From Adding Stimulus Even as Inflation, Growth Wane (BBG)
- U.S. Avoids Debt Default as Congress Passes Fiscal Plan (BBG)
- China naval chief says minor incident could spark war in South China Sea (Reuters)
- Exclusive Club: No High-Frequency Traders Allowed at Luminex (WSJ)
Back in September we explained why, contrary to both conventional wisdom and the BOJ's endless protests to the contrary, neither the BOJ nor the ECB have any interest in boosting QE at this - or any other point - simply because with every incremental bond they buy, the time when the two central banks run out of monetizable debt comes closer. Since then the ECB has jawboned that it may boost QE (but it has not done so), and overnight as reported previously, the BOJ likewise did not expand QE despite many, including Goldman Sachs, expecting it would do just that.
- Fed puts December rate hike firmly on the agenda (Reuters)
- Charting the Markets: A More Hawkish Fed Rattles Investors (BBG)
- China to modernize and improve fiscal and tax systems (Reuters)
- Deutsche Bank to Cut 35,000 Jobs in Overhaul (WSJ)
- Deutsche Bank Said to Near $200 Million Sanctions Settlement (BBG)
- Barclays profits drop as it abandons cost-cutting targets (FT)
Illinois To Delay Pension Payments Amid Budget Woes: "For All Intents And Purposes, We Are Out Of Money Now"Submitted by Tyler Durden on 10/14/2015 21:47 -0500
ILLINOIS WILL DELAY PENSION PAYMENT BECAUSE OF CASH SHORTAGE
In medicine, they have something called the Hippocratic Oath. It requires physicians to swear to uphold certain ethical standards. In modern fund management, there is no Hippocratic Oath. Whereas doctors are expected to “First, do no harm”, in modern fund management, iatrogenic illnesses hold sway. An iatrogenic illness is one that is caused by the physician himself. Fund management doctors seem to be doing the best they can to kill their own patients. Science has a word for this, too. It’s called parasite. There is a solution to all this insanity.
- Playboy to Drop Nudity as Internet Fills Demand (NYT)
- Stock futures fall on weak China trade data (Reuters)
- Any Hall is down 20% YTD (WSJ)
- Global Stocks Slide With Metals After Chinese Imports Tumble (BBG)
- Clinton's tack to the left to be on display in Democratic debate (Reuters)
- Switzerland Said to Impose 5% Leverage Ratio on Big Banks (BBG)
- AB InBev, SABMiller brew up $100 billion deal (Reuters)
WTI Crude is back above $50 to its highest in almost 3 months following a 10%-plus gain on the week (the 2nd best since Jan 2009). This surge has sparked the biggest surge in European and US Oil & Gas stocks since 2008 as Bloomberg notes, output from the world’s biggest consumer drops and Shell and PIMCO claim the worst may be over (while Goldman sees "lower for longer" suggesting this rally is a squeeze). However, while Energy stocks and raw materials are soaring, credit markets remain notably less impressed.
Investors should hope for the best while making preparations for less benign scenarios. This can be achieved by reducing leverage and speculation and having a healthy allocation to physical precious metals in the safest vaults in the world.
- Global stocks eye biggest rally in four years on Fed relief (Reuters)
- FOMC Minutes Sap Confidence in Fed's 2015 Rate Hike Resolve (BBG)
- Glencore to cut annual zinc production by a third (FT)
- Tea Party wave that lifted Republicans threatens to engulf them (Reuters)
- Why Kevin McCarthy Came to Quit Speaker Race (WSJ)
- A U.S. Recession Just Got a Little More Likely (BBG)