Risk Management

85% Of Wall Street Expects a "Dovish Hike Signal" From Yellen Tomorrow

Earlier this week, Citi's head of G10 FX strat Steven Englander conducted a survey among 350 participants asking them what they expect from Janet Yellen's Jackson Hole speech. According to the vast majority, or 85% of the respondents, Yellen will lean toward one 2016 rate hike with hiking risk “overwhelmingly” in December even as September hiking risk is seen as “modestly underpriced."

What Janet Yellen Will Say At Next Week's Jackson Hole Meeting: BofA's Preview

"Yellen might argue that conditions are increasingly being met to further normalize rates before the end of the year, consistent with the latest communication from the FOMC. However, we do not expect guidance on the exact timing of the next hike.Yellen might argue that conditions are increasingly being met to further normalize rates before the end of the year, consistent with the latest communication from the FOMC. However, we do not expect guidance on the exact timing of the next hike."

Goldman Turns Outright Bearish: Says To "Sell" Stocks Over Next 3 Months

For those who believe that Goldman is just another incarnation of Dennis Gartman and are still bearish, you may want to close out any remaining short positions because moments ago, Goldman just released a new report in which the firm has gone outright bearish, with a "tactical downgrade to equities for the next 3 months."

Hillary Clinton Is In Deep Trouble: "Hordes Of Wall Street Executives" Descend Upon Philly

We believe Hillary Clinton lost the Presidency this past week. While the explosive DNC leaks will undoubtably have a long lasting effect, this post will barely reference the leaks. Rather, it will explain how recent decisions by the Hillary campaign played right into Trump’s hands by essentially waving a gigantic middle finger to the 73% of Americans who think the country is headed in the wrong direction.

Morgan Stanley Beats Despite 9% Drop In Revenue, Helped By Cost-Cutting, Strong FICC; Shares Jump

Following the example set by the other banks, earlier today Morgan Stanley, the last big bank to report earnings,  said its profit fell 12% in Q2 on a 9% drop in revenue even as the company weathered volatile markets that affected its investing and corporate clients. The EPS of $0.75, however, beat sharply lowered expectations of $0.60 on the back of sharp cost-cutting measures, pushing its shares up 3% in the premarket.

'Elevator Down' Looms As Market Reaches 3-Standard Deviation Extreme

While prices are increasing, that increase in price is coming at the expense of declining volume, providing insight to the “conviction” of participants to the advance of the market. Stocks are incredibly vulnerable. Only 28 stocks in the S&P 500 (less than 6 percent of the index) are at new highs. Less than 72 percent of the stocks in the S&P 500 are even in uptrends.

Charting The Epic Collapse Of The World's Most Systemically Dangerous Bank

It’s been almost 10 years in the making, but the fate of one of Europe’s most important financial institutions appears to be sealed. But, if the deaths of Lehman Brothers and Bear Stearns were quick and painless, the coming demise of Deutsche Bank has been long, drawn out, and painful.

"Deutsche Bank Poses The Greatest Risk To The Global Financial System": IMF

"Deutsche Bank appears to be the most important net contributor to systemic risks, followed by HSBC and Credit Suisse. The relative importance of Deutsche Bank underscores the importance of risk management, intense supervision of G-SIBs and the close monitoring of their cross-border exposures, as well as rapidly completing capacity to implement the new resolution regime."

August 15th - The Date Which Will Live In Monetary Infamy

August 15, 2016 will mark the 45th anniversary of President Nixon’s decision to close the gold window. U.S. citizens and the government are now beholden to the consequences of years of accumulated debt and weak productivity growth that have occurred since that day. Now, seven years after the end of the financial crisis and recession, these consequences are in plain sight. The Fed finds themselves crippled under an imprudent zero interest rate policy and unable to raise interest rates due to fear of stoking another crisis.

Goldman Sees A UK Recession, Shocked By A Fed "Tightening Cycle Unlike Any In Modern History"

Looking at the UK, Goldman says "we expect a recession – albeit mild by historical standards – in the first half of next year. The weaker outlook will also weigh on the inflation outlook. Meanwhile, back in the US, "our forecasted path for the funds rate now looks quite unlike any tightening cycle in modern Fed history—one increase, followed by an extended pause, followed by gradual but steady increases over the subsequent three years."