El-Erian Says "The Market Believes Central Banks Are Our Best Friends Forever", Just Don't Show It "Figure 4"Submitted by Tyler Durden on 11/21/2015 16:38 -0500
Liquidity in the junk (and all other markets) is evaporating, and according to Citi the spread between an illiquid and liquid junk bond portfolio just hit 100 bps, the most in the history of the series. Meanwhile according to Mohamed El-Erian "The market is comfortable that whenever we hit a hiccup, the Fed is going to come back in," he said. "It's very deeply embedded that central banks are our best friends forever."
If The Economy Is Fine, Why Are So Many Hedge Funds, Energy Companies And Large Retailers Imploding?Submitted by Tyler Durden on 11/19/2015 09:12 -0500
If the U.S. economy really is in “great shape”, then why do all of the numbers keep telling us that we are in a recession? In 2008, stocks didn’t crash until well after the U.S. economy as a whole started crashing, and the same thing is apparently happening this time around as well.
- Soothing Fed sounds send shares, emerging markets higher (Reuters)
- Belgian Police Conduct Raids in Connection With Paris Attacks (WSJ)
- The Paris Attacks Can’t Lead to a Closed Europe (BBG)
- Alleged Mastermind of Paris Attacks Was ‘Emir of War’ (WSJ)
- U.S. Eyes Russia-Iran Split in Bid to End Syria Conflict (WSJ)
- Despite tensions, Asia-Pacific nations close ranks against terrorism (Reuters)
"...the only thing worse than a market with collapsing valuations is a market with no valuations and no liquidity. If stock in a company is worth what somebody will pay for it, what is the stock of a company worth when there is no place to sell it?"
BlackRock Liquidates Its Macro Hedge Fund Following Worst Loss Since Inception, Surge In RedemptionsSubmitted by Tyler Durden on 11/18/2015 09:16 -0500
BlackRock Inc., the world’s largest asset manager, is winding down a global macro hedge fund after losses and investor redemptions eroded assets. The reason for the liquidation: losses of 9.4% this year, cited by Bloomberg according to an October investor document, leading to the worst year for the asset manager since inception in 2003. The fund, which had $4.6 billion in assets just two years ago, has shrunk to less than $1 billion as of Nov. 1.
Perhaps those accusing Bridgewater of being the market-moving catalyst did have a point, because after posting a total AUM of $10.8 billion at June, this total declined by a whopping 31% to just $7.5 billion as of September 30.
Washington’s capacity to foster crony capitalist larceny and corruption never ceases to amaze. But as we recently noted, Wall Street’s shameless thievery from US taxpayers is about to get a whole new definition.
- Euro zone growth weak in October, China services rally (Reuters)
- Stocks Rise With European Bonds on Stimulus Outlook; Euro Falls (BBG)
- VW Sinks Deeper Into Crisis as Scandal Spreads to More Cars (BBG)
- Republicans ask IRS to audit Clinton charity's finances (Reuters)
- PBOC Inadvertently Boosts Stocks With Dated Zhou Comments (BBG)
- As China’s Economy Slows, Consumers Pick Up Some of the Slack (WSJ)
- Plane crashes in South Sudan, witnesses say dozens killed (Reuters)
As FT reports, "some of the European Central Bank’s top decision-makers met banks and asset managers days before major policy decisions, and on one occasion just hours before, copies of their diaries reveal."
The 100 largest CEO retirement funds are worth a combined $4.9 billion. That’s equal to the entire retirement account savings of 41 percent of American families - more than 50 million families and more than 116 million people.
Sorry Fed, here is why your attempt at terminal reflation was doomed from day one.
"The ability of corporations to take a 1% to 2% revenue line [gain] and turn it into 5% to 6% profit growth is waning. They’ve run out of rabbits to pull out."
Whether one calls it the latest glitch in the matrix, or yet another "market peak" indicator, the outcome will be the same.
The second tech bubble, one which has seen nearly 200 tech "unicorns" rising out of the ZIRP ashes in the past few years and promptly attaining valuations of over $1 billion, is bursting. WSJ reports that investment bankers cautioned Dropbox that the San Francisco company might be unable to go public at its latest private round "valuation" of $10 billion.
- Great News: China’s GDP Growth Beats Forecasts as Stimulus Supports Spending (BBG)
- Oh wait, maybe not: China GDP: Deflategate Comes to Beijing (WSJ)
- Actually, definitely not: Shanghai rebar falls to record low after weak China GDP (Reuters)
- But who cares: European Shares Gain on Earnings as Bonds Drop, Metals Decline (BBG)