Credit Crisis

Mass Layoffs To Return With A Vengeance

Remember the mass layoffs of 2008-2009? The US economy shed millions of jobs quickly and relentlessly, as companies died and the rest fought for survival. Then the Fed and the US government flooded the banks and the corporate sector with bailouts and handouts. The nightmare of 2008 soon became a golden era of 'recovery'. Well, 2016 is showing us that that era is over. And as stock prices cease to rise, and in fact fall within many industries, layoffs are beginning to make a return as companies jettison costs in attempt to reduce losses.

Gold Money's picture

If equities sell off another 20% like 2008, gold would not follow them down in a  "dollar short squeeze or flight to quality". There is now a very different real interest rate and energy price setup and gold doesn't have the same macro correlations as before.

Gold In 2016: "Economic Power Is Shifting"

An unseen bubble at the heart of the financial system is deflating with unknown consequences. When bubbles deflate, and here we are talking about one in the hundreds of trillions, bad debts are usually exposed. Even though much of the reduction in outstanding OTC derivatives is due to consolidation of positions following the Frank Dodd Act, much of it is not. When free markets reassert themselves, and they always do, the disruption promises to be substantial. We appear to be in the early stages of this event. If so, demand for physical gold can be expected to escalate rapidly as a financial crisis unfolds.

 

Despite Lifting Of Export Ban, Moody's "Bombshell" Sparks Panic In Energy Credit Markets

The Senate and House passed the spending bill this week, which the President signed into law on the same day. Embedded in the law is a provision to lift the 40-year old crude export ban. The lifting of the crude export ban is a historic milestone, but seemingly less relevant for US E&Ps, Midstream and Oilfield Services as compared to a year and a half ago when WTI-Brent spreads were close to $9.00/bbl vs. the current spread of $0.80/bbl. Nevertheless, there is still a negative long-term impact on refiners should spreads re-widen.

The Global Economic Reset Has Begun

The U.S. is now experiencing the next stage of the great reset. Two pillars were put in place on top of an already existing pillar by the central banks in order to maintain a semblance of stability after the 2008 crash.  This faux stability appears to have been necessary in order to allow time for the conditioning of the masses towards greater acceptance of globalist initiatives, to ensure the debt slavery of future generations through the taxation of government generated long term debts, and to allow for internationalists to safely position their own assets.  The three pillars are now being systematically removed by the same central bankers. Why? They are simply ready to carry on with the next stage of the controlled demolition of the American structure as we know it.

Did Merrill Lynch Just Cancel Christmas?

From "Thundering Herd" to thundering-mad. Having recently laid off 100s of staff and cut compensation plans, AdvisorHub reports that Mother Merrill may be canceling Christmas for its roughly 14,500 brokers - "we’re hearing that in many regions the Bank of America-owned brokerage firm has sent out word that there will be no Merrill-financed holiday parties this year." Such Grinch-like moves have little precedent, and brokers in some areas have retaliated.

Central Banks Continue To Rule Equity And Commodity Markets

Until pro-growth, low taxation and less regulation policy changes are enacted, we don’t foresee any changes to central bank policy nor the unsustainable market divergences and asset price distortions. Expect more media propaganda on how great the economy is while the reality is another story. Early signs are that retail sales this holiday season are poor. Nobody can predict when reality will set in and equity markets revert back to pre QE levels in 2008/09. The longer this charade continues, the lower equity markets will eventually go, and in the short-term so will commodities. Then the super cycle in commodities will begin anew. Much this will hinge on next fall’s election cycle.

Will 2017 Be The Year Of The EM Corporate Debt Crisis?

"The liquidity picture for EM corporates in 2017 looks less appealing, due to a 38% yoy increase in USD bond maturities (to USD122bn) and lingering uncertainty on commodity prices (an important component of the corporate sectors’ cash flow) and FX (a headwind for domestic-oriented players). A further depletion in cash buffers and reduced appetite for certain portions of the EM corporate universe may lead to increased refinancing stress in 2017."

Swap Spreads Just Hit A New Record Negative Low: Goldman's Explanation Why

Having detailed the "perverted nonsense" that is the collapsing and negative US swap spreads (here, here, here, and here) and noted money manager's concerns that the big question remains whether there is "something bigger brewing under the surface that so far hasn’t been pinpointed yet," it appears Goldman Sachs feels the need to 'explain' the anomaly in what appears an effort to calm fears about the broken money markets. Of course, we don’t have to figure out what the “market” is saying about a negative spread because it isn’t saying anything other than “something” is wrong and even Goldman admits this signals funding and balance sheet strains are worsening since August.