This is the paradox for Norway: the country needs to buy NOK in order to fund stimulus and support the economy. But by doing so, the Norges Bank is putting upward pressure on the currency at a time when it really needs to depreciate. In other words, what Norway must do to pay for stimulus (buy kroner) is indirectly hurting the economy by keeping the NOK from depreciating and functioning as a counter cyclical buffer.
Saudi Arabia - which was busy playing headline hockey with Russia this morning over a rumored 5% production cut proposal - is running out of money. Yes, we know, that sounds absurd. But believe it or not, the country whose monarch recently rented the entire Four Seasons hotel for a 48 hour stay in Washington DC, is in fact going broke. And at a fairly rapid clip.
Last week, we noted that Italy is rushing to defuse a €200 billion time bomb in the country’s banking sector as investors fret over banks’ exposure to souring loans. On Wednesday we learn that Italy has indeed managed to strike a deal with Brussels to help alleviate banks’ NPL burden but the agreement falls well short of the type of comprehensive "solution" the market was hoping to see.
"Russia has approximately 12-18 months left at the current oil price before the country reaches a point of no return..."
“It’s falling faster than any other currency as we see panic selling in the ruble after it breached the 80 per USD level. Some investors are selling at any price,”
One thing policy makers should have learned after watching Greece unravel last summer is that capital controls almost always backfire. Once the market (not to mention the populace) senses panic, it's all downhill from there and make no mistake, there's blood in the water here.
S&P's Downgrade (By A German Analyst) Is A "Politically-Motivated" Decision Aimed At Polish AuthoritiesSubmitted by Tyler Durden on 01/19/2016 13:50 -0400
The Standard and Poor’s rating agency, notorious for its controversial assessments, has this time bashed Poland in the wake of the anti-Polish frenzy whipped up by the European media. To be more precise, Poland was assailed by a German S&P analyst who lowered Poland’s rating from A- to BBB+, despite the economic data that by no means warrant such an evaluation.
With Brent and WTI having dipped below $30 (today’s rebound notwithstanding), and with some grades going for less than zero in the US, the question on everyone’s mind is simply this: can oil continue to move lower? According to the IEA, the answer is “an emphatic yes.”
"Your fund made 5.6% net last month, to finish the year up 20.45% net. Gains came from the short book.... Your fund remains long bonds, short equities."
President Barack Obama’s final State of the Union address came up short of the facts on several topics. Obama apparently omitted part of his presidency in boasting of nearly 900,000 manufacturing jobs “in the past six years.” Over his entire time in office, manufacturing jobs have gone down by 230,000.
Apparently, the market isn't buying the notion that a Saudi Aramco IPO will be enough to shore up Riyadh's fiscal fiasco...
The collapse of China's economy will have serious implications for India, the country's top investment banker warns. With exports in free fall and the government caught between fiscal retrenchment and the need to keep the economy afloat, it could be a rough year for the country Goldman swears will be a top economic performer in 2016.
"Saudi Aramco confirms that it has been studying various options to allow broad public participation in its equity through the listing in the capital markets of an appropriate percentage of the Company’s shares and/or the listing of a bundle its downstream subsidiaries."
Market psychology established in recent years is reversing. Market volatility is rising and will remain pervasive for a while as psychology, the change in direction of Fed policy, and the increases in general uncertainties, will all conspire to shape an environment ripe for sharp spikes in volatility which will be further amplified by rickety market liquidity.
On the heels of a tumultuous weekend that saw Saudi Arabia cut diplomatic ties with Iran after the Saudi embassy was torched by protesters angry at the execution of a prominent Shiite cleric, CDS spreads for the kingdom have blown out to six-year wides while the implied odds of the riyal peg finally breaking are hitting new record highs.