The table below, courtesy of State Street's "Mr Risk", looks at key events occuring in 7 year cycles, finds that every recent multiple of the year 2015 going back in 7 year increments brings with it some major adverse market event, and asks: is it 2015's turn?
The following story is guaranteed to make you sick. Once again, we’re shown that following trillions in taxpayer funded bailouts and backstops, TBTF Wall Street banks immediately went ahead and focused all their attention obtaining loopholes in order to transfer risk and make billions upon billions of dollars in the financial matrix, as opposed to adding any benefit whatsoever to society.
News That Matters...
Gold’s reaction to China’s devaluation was impressive. Sure, it came at a time when gold was oversold and due a bounce, but, even so, a rise from $1,080 an ounce to $1,125 is not to be sniffed at – particularly as it went in the face of what other metals were doing.
Take a step back from the media, and Wall Street commentary, for a moment and make an honest assessment of the financial markets today. If our job is to "bet" when the "odds" of winning are in our favor, then exactly how "strong" is the fundamental hand you are currently betting on? This "time IS different" only from the standpoint that the variables are not exactly the same as they have been previously. Of course, they never are, and the result will be "...the same as it ever was."
Moments ago, following the earlier DOE report of an unexpected jump in oil inventories which caught all algos by surprise, oil collapsed to a $40 handle - a price not seen since 2009. So what does this mean for S&P 500 earnings in general, and energy earnings in particular? Nothing short of a total wipeout as the following chart, showing energy EPS with a 4 month lag vs oil prices, from Citigroup reveals.
Druckenmiller’s fund recently bought $300 million worth of SPDR Gold Trust (GLD), an ETF that tracks the price of gold. It’s a huge bet, even for a big-time trader like Druckenmiller. He put 20% of his fund’s money into this trade, and it’s his largest position.
The central bank has injected new capital into the China Development Bank (CDB), which provides medium and long term financing to major national projects, in a bid to reinforce its capital adequacy.
PBoC Injection Shows China Worries About Outflows- WSJ
- Oil moves nearer six-year low on Japan data, oversupply (Reuters)
- Commodity Slide Spurs Treasuries as Emerging Markets Extend Drop (BBG)
- Because 7 years is "just right" - BOE Official Says Don’t Wait Too Long on Rates (WSJ)
- How Medicare Rewards Copious Nursing-Home Therapy (WSJ)
- Millennials Are Developing Parents’ Taste for Jaguars, Cadillacs (BBG) ... and even more debt
- Mexican Billionaire’s Firms Swept Up in U.S. Probe of Citigroup (BBG)
The hard data runs completely counter to the uptick in GDP growth shown by Fed's models.
"It’s not how I want my epitaph to read, but it’s not a shameful thing helping people finance themselves. It’s not a bad thing."
- China central bank under pressure to weaken yuan further (Reuters)
- Currency Rout Goes Global as Jen Sees Risk of 50% Loss on China (BBG)
- Europe Stocks Fall Most in Two Weeks as China Sparks Growth Fear (BBG)
- German Yields Drop to Record as China Boosts Bonds Around World (BBG)
- FT to Japan, Economist to Italy: Agnelli Family Raises Stake in Economist as Pearson Exits (BBG)
- Goldman Sachs to Give Out ‘Secret Sauce’ on Trading (WSJ)
- Greece's Preliminary Bailout Deal Faces German Turbulence (BBG)
It appears that after the great collapse of 2014, oil trading "god" Andy Hall refused to learn from his mistakes, and was convinced that oil would promptly rebound up to its historic levels. He was wrong, and as Reuters reports, after two consecutive months of 3% losses in May and June at which point he was up just 2% for the year, July was by far the cruelest month in history for the oil trader, a month in which he suffered a whopping 17% loss, one which lowered his aum by $500 million to $2.8 billion.