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Looking Forward

The world’s leading governments have become decidedly fascist and are rapidly heading in a totalitarian direction. There are a number of facets to this development, all of them disturbing: The elimination of personal privacy, the creation of capital controls, confiscation of wealth, the conversion to electronic banking as the sole form of currency, international taxation standards and the creation of a police state.

Insanity, Oddities, And Dark Clouds In Credit-Land

Distortions in financial markets keep growing, as central banks all over the world are desperately intensifying monetary pumping. What is currently happening in various bond markets as a result of this and other interventions is simply jaw-dropping insanity. It is not so much that it defies rational explanation – in fact, all of these moves can be explained. What makes the situation so troubling is the fact that investors seem to be oblivious to the enormous risks they are taking.  They are sitting on a powder keg.

Valeant Crashes On News Of Criminal Probe

The stock of infamous pharma rollup Valeant peaked almost exactly one year ago. Since then it has been one relentless, first slow then precipitous drop, which wiped out more than 90% of the company's market cap, forced the CEO to resign, led to various Congressional hearings and civil lawsuits after it became a symbol of all that is wrong with corporate America, and brought the company to the verge of a technical default. That was the good news: Now the bad - Valeant is now under criminal investigation.

Frontrunning: August 10

  • World stocks hit one-year peak, dollar sags on weak U.S. data (Reuters)
  • Trump's remarks on gun rights, Clinton unleash torrent of criticism (Reuters)
  • Newly Released Emails Highlight Clinton Foundation’s Ties to State Department (WSJ)
  • One-in-five U.S. Republicans want Trump to drop out: Reuters/Ipsos poll (Reuters)
  • Soaring Debt Has U.S. Companies as Vulnerable to Default as 2008 (BBG)
  • BOJ to defend QQE in Sept policy assessment (Reuters)

US Futures Flat; Bonds Rise, Dollar And Oil Slide Over US Productivity Collapse Fears

Following yesterday's muted action which saw the S&P500 close unchanged, it has been more of the same listless trading overnight, with US equity index futures little changed as the Nikkei fell on the back of a stronger Yen, while government bonds rose and European stocks reversed early gains following the BOE failed bond monetization operation. Crude oil dropped for a second day after Saudi Arabia told OPEC that it pumped a record 10.67 million barrels of oil a day,

Chinese Bond Yields Tumble To 2009 Lows As Spooked Investors Rush Out Of Potential Defaults

The biggest (unspoken of) bubble in the world, just got bubblier. Following the lowest 10Y China government bond auction yield since records began in 2004, a surge of foreign inflows (seeking yield) combined with domestic flight-to-safety from the increasingly default-ridden corporate bond sector has sent China's government bond yields to 2009 lows.

James Grant: Negative Interest Rates Will End... Badly

“Radical monetary policy begets more radical policy... It seems to me, at some point, markets or voters will put a stop to this.” If and when that time comes, Grant notes that investors will be looking for physical stores of wealth, explaining "the case for gold is not as a hedge against monetary disorder, because we have monetary disorder, but rather an investment in monetary disorder."