- Dow's Freakish Bounce Makes Investors Whole, Can't Erase Doubts (BBG)
- R.I.P. Dollar Rally as Dovish Fed Spurs Worst Slump Since 2011 (BBG)
- Global Currencies Soar, Defying Central Bankers (WSJ)
- Oil hits 2016 high above $42 on production and demand outlook (Reuters)
- The U.S. Is Exporting Its Oil Everywhere (BBG)
- Hillary Clinton’s Allies Launch Plan to Undercut Donald Trump Now (WSJ)
What remains most remarakable about Horseman Capital is that even as it modestly boosted its gross exposure to 59%, as of February the fund's net short exposure has risen from what was a previous record of 76%, to a whopping -88%, an unprecedented record even for one of the world's most bearish hedge funds!
- Angry White Males Propel Donald Trump—and Bernie Sanders (WSJ)
- Trump Beats Back Attacks and Tightens Hold on Primary Race (BBG)
- Fed Likely to Stand Pat on Rates, Keep Options Open for April or June (Hilsenrath)
- Draghi Stimulus Fails in Stock Market as Swings Match 2008 (BBG)
- Sabine Oil wins pipeline ruling in a blow to pipeline operators (Reuters)
Just two days ago, everything was awesome - oil was up, stocks were up, financials were 'winning' - and then question started about why credit risk hadn't rallied like stocks. But today we get our slap back to reality as Citi CFO unleashes the following: CITIGROUP SEES INVESTMENT BANKING REVENUE DOWN 25%, FIXED INCOME, EQUITY TRADING REV DOWN 15% YOY. The stock is rapidly giving up its "everything's fine" gains as Citi "hopes" for more rate hikes... but does not expect them.
- Global Stocks Drop on Renewed Concerns About China (WSJ)
- Iron Ore's Rally Stalls as Goldman to Citigroup Forecast Retreat (BBG)
- EU and Turkey close to groundbreaking migrant deal (FT)
- Carney's `Brexit' Stance Under Fire as BOE Accused of Bias (BBG)
- Oil edges lower after Kuwait dents hopes for output freeze (Reuters)
Bears Exit Hibernation As Rally Fizzles On Dismal Chinese Trade Data; Commodities Slide; Gold HigherSubmitted by Tyler Durden on 03/08/2016 07:49 -0400
Those algos who scrambled to paint yesterday's closing tape with that last second VIX slam sending the S&P back over 2,000, forgot one thing - the same thing that China also ignored - central bankers can not print trade, something we have repeated since 2011. The world got a harsh reminder of this last night when China reported the third largest drop in exports in history, which crashed by over 25%, the third biggest drop on record, and no, it was not just the base effect from last February's spike, as otherwise the combined January-February data would offset each other, instead it was a joint disaster, meaning one can't blame the Lunar New Year either. In short, one can't really blame anything aside from the real culprit: despite all the lipstick that has been put on it, global trade is grinding to a halt.
US financials are tumbling after The Fed proposed a rule that would limit banks with $500 bln or more of assets from having net credit exposure to a “major counterparty” in excess of 15% of the lender’s tier 1 capital. Bloomberg reports that The Fed's governors plan to vote today on the proposal. The implications of this are significant in that it will force some banks to unwind exposures and delever against one another (most notably with potential affect the repo market which governs much of the liquidity transmission mechanisms). Guggenheim's Jaret Seiberg warns the proposal is likely to be "stringent," though less onerous than the Dec 2011 proposal... which Goldman Sachs more specifically warned that it could destroy 300,000 jobs.
- Shares fall on G20 disappointment, Fed hike worries (Reuters)
- China cuts reserve requirement ratio for fifth time since Feb. 2015 (Reuters)
- China Stocks Tumble Toward 15-Month Low as Stimulus Bets Unwind (BBG)
- S&P 500 Futures Signal 2nd Day of Stock Losses; Valeant Slides (BBG)
- Valeant fundamental risks are too severe to suggest the stock is poised for a lasting rebound (WSJ)
It is now all up to the ECB: "If they lowball or grudgingly meet expectations, we could face another December 4 move because market participants will see it as the equivalent of a ‘last ease in the cycle announcement’, basically ECB throwing in the towel. If they move aggressively they will catch market off guard and unwind the view that policymakers see themselves as powerless."
Why Traders Are Frustrated: "At Any Given Time There Are No Rational Explanations For What’s Going On"Submitted by Tyler Durden on 02/25/2016 12:34 -0400
"A casualty of this current volatility is that at any given time there are no rational explanations for what’s going on. Back and forth swings of meaningful proportion are characterized, by necessity, with a random reason generator. If we don’t do so we’d have to admit to a much deeper systemic defect."
"We have come to the point in Japanese monetary policy—and soon perhaps in the West—where it is hard to tell sense from nonsense."
When a leading nominee for President gets something exactly right, we should applaud them for it. In this case, Donald Trump’s call to audit the Federal Reserve is dead on correct. Most Americans don’t realize this, but the Federal Reserve has far more power over the economy than anyone else does – including Barack Obama. The funny thing is that the Federal Reserve is not even part of the federal government. It is an independent private central bank that was designed by very powerful Wall Street interests a little over 100 years ago. It is at the heart of the debt-based financial system which is eating away at America like cancer, and it has no direct accountability to the American people whatsoever.
WTI crude prices are up almost 6% this morning with April (the new front-month) trading above $33.50 - testing post-DOE plunge stops. The irony of the ramp is that it comes amid terrible global PMIs (demand), a report from IEA of oil staying in glut for longer than expected (supply), and warnings from Abu Dhabi's biggest bank that $20 oil is possible. Oh well, we are sure the algos know what they are doing... despite veterans of the 1980s oil glut warning it could take 7 to 10 years to emerge from the current slump.