There’s no question that the world economy has been shaky at best since the crash of 2008. Yet, politicians, central banks, et al., have, since then, regularly announced that “things are picking up.” One year, we hear an announcement of “green shoots.” The next year, we hear an announcement of “shovel-ready jobs.” And yet, year after year, we witness the continued economic slump. Few dare call it a depression, but, if a depression can be defined as “a period of time in which most people’s standard of living drops significantly,” a depression it is.
"You know what's funny? If we owed the state money, they'd come take it and they don't care whether we have a roof over our head. Our budget wouldn't be a factor. You can't say (to the state), 'Can you wait until I get my budget under control?'"
Here are some modestly optimistic musings on what may be next in the cards for Greece...
Simply put, a perfect storm of failing trends...
On Thursday, Ukraine struck a restructuring agreement on some $18 billion in Eurobonds with a group of creditors headed by Franklin Templeton. That's the good news. The bad news is that Ukraine also owes $3 billion to Vladimir Putin, and Vladimir Putin wants it back. All of it.
After forensically analyzing Morgan Stanley's balance sheet (which is very much like the rest of Wall Street's balance sheet) I can draw direct parallels to that of Lehman and Bear Stearns in 2007. It's a party!
Just over half a trillion dollars: that's how much cash US shale producers and other oil industry companies will need to repay in maturing debt over the next 5 years.
Earlier today FCX announced that in order to save its business, it would lay off 10% of its employees, and that it now expects $4 billion in capital expenditures for 2016, down from a prior estimate of $5.6 billion. Its 2015 capital expenditure budget currently stands at $6.3 billion. The resultant surge in the company, which exploded by 30% in the regular hours, made many wonder if there wasn't more to the story. The answer is: yes, there was, and moments ago none other than Carl Icahn announced an 88 million, or 8.46% stake in the copper miner, in a 13D which said that said the company was "undervalued" and that Icahn is now seeking a board seat.
War-torn Ukraine has reportedly reached a restructuring deal with a group of creditors headed by Franklin Templeton, according to the country’s finance minister Natalie Jaresko. The terms of the agreement call for a 20% writedown and a reprofiling that includes a maturity extension of four years and an across-the-board 7.75% coupon. Vladimir Putin isn't interested.
Aggressive Chinese Intervention Prevents Another Rout, Sends Stocks Soaring 5% In Last Trading Hour; US Futures JumpSubmitted by Tyler Durden on 08/27/2015 06:48 -0400
After a 5 day tumbling streak, which saw Chinese stock plunge well over 20% and 17% in just the first three days of this week, overnight the Shanghai Composite was hanging by a thread (and threat) until the last hour of trading. In fact, this is what the SHCOMP looked like until the very end: Up 2.6%, up 1.2%, up 2.8%, up 0.6%, up 2%... down 0.2%. And then the cavalry came in: "Heavyweight stocks like banks and insurance companies helped pull up the index, and it’s possibly China Securities Finance entering the market again to shore up stocks," Central China Sec. strategist Zhang Gang told Bloomberg by phone. Net result: the Composite, having been red just shortly before the close, soared higher by 156 points or 5.4%, showing the US stock market just how it's down.
Perhaps the biggest market moving event of the day, more so than the Durables data, was Bill Dudley's speech. However, at least based on the prepared remarks there is no discussion of the economy. From Bloomerg. Now all eyes turn to the Q&A which is where any questions relevant to the recent move in markets will most likely emerge.
The question on everyone's mind now is simply whether the correction is over, or is there more to come? The sharp "reflexive" rally that will occur this week is likely the opportunity to review portfolio holdings and make adjustments before the next decline. History clearly suggests that reflexive rallies are prone to failing and a retest of lows is common.
Yesterday's market tumble finally brought the S&P and Nasdaq alongside the Dow Jones into correction territory, send the broader index down 11% from its highs, even as a vast majority of S&P constituents already preceded the index and are either in correction or in bear market territory. And yet, following today's latest central bank intervention, this time in the long overdue Chinese interest rate cut (which will hardly have a lasting impact on either the economy or stock markets), the S&P correction may may prove to be short lived: S&P is poised to open about 4% higher, delivering the latest "Bullard" moment to the S&P, this time courtesy of China. Still, the question remains: was that it for the long overdue correction, and what comes next.
"Gold and silver will be your only lifeboats as they are no one’s liability in a world where everything including the money in your pocket is someone else’s liability.”
"The head of a Chinese exchange that trades minor metals was captured by angry investors in a dawn raid and turned over to Shanghai police, as the investors attempted to force the authorities to investigate why their funds have been frozen."