Should Gary Gensler truly be Clinton's chief financial officer, and should Hillary become America's next president, then ladies and gentlemen, in the fine tradition started by Hank Paulson who nearly brought the entire wastern world to ruin, the next US Treasury Secretary will be the following fine former Goldman Sachs employee and "champion for everyday Americans."
Late last year, Grexit "expert" Willem Buiter decided that he was a greater expert on the topic of monetary metals than on geopolitics by stating that "Gold Is A 6,000 Year Old Bubble." Now, he has decided that after gold, it is best to just do away with any physical currency altogether and the time to ban cash has arrived.
Just as the S&P appeared set to blast off to a forward GAAP PE > 21.0x, here comes Greece and drags it back down to a far more somber 20.0x. The catalyst this time is an FT article according to which officials of now openly insolvent Greece have made an informal approach to the International Monetary Fund to delay repayments of loans to the international lender, but were told that no rescheduling was possible. The result if a drop in not only US equity futures which are down 8 points at last check, but also yields across the board with the German 10Y Bund now just single basis points above 0.00% (the German 9Y is now < 0), on its way to -0.20% at which point it will lead to a very awkward "crossing the streams" moment for the ECB.
Capitol Locked-Down After Mailman Lands Gyrocopter On Lawn To Deliver Campaign Reform Letter To CongressSubmitted by Tyler Durden on 04/15/2015 13:51 -0400
Update: *LOCKDOWN LIFTED AT U.S. CAPITOL AFTER GYRO COPTER ARREST
US Capitol Police have locked-down buildings after a man landed a gyrocopter on the lawn. As The Tampa Bay Times reports, the man is a mailman from Ruskin named Doug Hughes who was attempting to deliver campaign reform messages to Congress.
Without the support of the ECB, the country’s banking system would be shut off from international markets and likely collapse.
- Shale Oil Boom Could End in May After Price Collapse (BBG)
- Oil above $58 on U.S. shale output report, Mideast (Reuters)
- Ackman Says Student Loans Are the Biggest Risk in the Credit Market (BBG)
- Alibaba Disputes U.S. Group’s Claim it Tolerates Fake Goods on Taobao (WSJ)
- Petrobras takes steps to avert a technical default (FT)
- Yen’s Drop Is Approaching Its Limit, Says Abe Adviser Hamada (BBG)
- 'Slicing and dicing': How some U.S. firms could win big in 2016 elections (Reuters)
- Fed official warns ‘flash crash’ could be repeatedv (FT)
While today's macro calendar is empty with no central bank speakers or economic news (just the monthly budget (deficit) statement this afternoon), it’s a fairly busy calendar for us to look forward to this week as earnings season kicks up a gear in the US as mentioned while Greece headlines and the G20 finance ministers meeting on Thursday mark the non-data related highlights.
Everyone was shocked by yesterday's Chinese March trade update which showed that while imports slid largely as expected, it was the 15% drop in exports, the largest in over a year, that prompted many to wonder just how big the global trade slump really is, masked by what has now become pervasive, global QE. This was the worst performance, exports and imports combined, since late 2009. Below is a selection of responses by Wall Street analysts trying to justify how - with global equities, if only in local currency terms, at all time highs - China can be doing so badly.
China Stocks Soar To 7 Year High After Collapse In Exports; US Futures Slip On Continuing Dollar SurgeSubmitted by Tyler Durden on 04/13/2015 06:55 -0400
If there was any doubt that global trade is stalling, it was promptly wiped out following the latest abysmal Chinese trade data which saw exports tumble by 15% - the most in over a year - on expectations of a 8% rebound, with the trade surplus coming in at CNY18.2 billion, far below the lowest estimate. While unnecessary, with the Chinese GDP growth rate this Wednesday already expect to print at a record low, this was further evidence of weak demand both at home and abroad. Weakness was seen in most key markets, and the strength of China's currency was partly to blame, which again brings up China's CNY devaluation and ultimately QE, which as we wrote some time ago, is the ultimate endgame in the global reflation trade which, at least for now until the CBs begin active money paradropping to everyone not just the 0.01%, is only leading to inflation in stocks and deflation in everything else.v
“In my 30-year career, it’s one of the most unattractive risk-return propositions that I’ve seen,” DoubleLine's Bonnie Baha says. Between abysmally low yields, heightened rate sensitivity heading into a rate hike cycle, and balance sheet re-leveraging on the part of US corporations, it’s a bad time to be betting on corporate credit.
"The fair value of hedges held by 57 U.S. companies in the Bloomberg Intelligence North America Independent Explorers and Producers index rose to $26 billion as of Dec. 31, a fivefold increase from the end of September," Bloomberg writes, noting that the very same Wall Street banks on the hook for the hedges also financed the shale boom.
"I’m The First To Say: I Can’t Do It" - The Energy Junk-Bond Implosion Just Claimed Its First VictimSubmitted by Tyler Durden on 04/09/2015 15:47 -0400
The universe of entities who have blown up in the past year trading oil and commodities is getting increasingly more crowded and includes among them such former luminaries as one-time oil trading god (if mostly in the eyes of Citigroup) Andy Hall. However, until now there not been any prominent casualties among the group of indirect investors in the energy space, those investing in the stocks or debt of energy names, and especially those most at risk from the oil price collapse: junk bond investors. That changed today when as WSJ reported earlier, Kamunting Street, which managed about $1 billion at its peak, announced it was returning capital to investors, as a result of plunging oil prices and wrong way junk bond bets tied to hard-hit energy companies which had gone sour over the past nine months.
After Viacom's "Shocker", These Companies Are Most At Risk Of Early Terminating Their Stock Buyback ProgramsSubmitted by Tyler Durden on 04/07/2015 20:01 -0400
Yesterday afternoon Viacom revealed that as part of its "Strategic Realignment to Create Efficiencies and Drive Long-Term Growth" it would do something which the market loathes: it would stop its buybacks. Specifically it said that "Viacom will temporarily pause share purchases under its current $20 billion stock repurchase program in order to stay within its target leverage ratio." What Viacom meant was that just like IBM, its net debt ratio had likewise soared in the past several years, and had reached a level where the Baa2/BBB-rated company was on the verge of being cut to junk status. So is Viacom a harbinger for the broader market, a market which as we reported previously only, had a tremendous month of February only because of a record $100 billion in announced stock buybacks? The answer: a resounding yes.
To answer an age-old question, namely who is smarter - credit or equity investors, and specifically, whether credit investors know something that equity investors do not, Citi examined whether credit or equity is leading the price action in the energy sector. It found that the credit and equity markets are responding to energy headlines at the same pace, in other words under the New Paranormal, both equity and credit investors have become equally dumb.
- Samaras Says He’d Join Alliance to Keep Greece in Euro (BBG)
- Tensions with Warren camp could loom over Clinton campaign (Reuters)
- Ackman Report on Herbalife in China Figures in Probe (WSJ)
- Al Shabaab storms Kenyan university, 14 reported killed (Reuters)
- Iraq’s Four-Mile Line of Supertankers Fuels Shipping-Rates Surge (BBG)
- Menendez's fate could sharpen Republicans' edge in Senate (Reuters)
- IRS Chief Chides Ted Cruz Over 'Abolish the IRS' Mantra (BBG)
- Yemen Houthi fighters backed by tanks reach central Aden (Reuters)