Dallas Fed

Soon After We Sounded The Alarm, Canada's Regulator Warns Local Banks Are Underreserved To Energy Losses

Two months after we first suggested that Canadian lenders are woefully underreserved to future oil and gas loan losses, we are happy to announce that Canada's regulator has heard our warning, and as the WSJ reported, "Canada’s banking regulator is urging the country’s major banks to review their accounting practices to ensure they have sufficient reserves as the commodity-price collapse takes a toll on the economy."

What’s The Frequency Janet?

To now dismiss Fed policy causation as “correlation theory” is laughable. The markets are now so intertwined and Fed dependent the observation of whether correlation is causality has been rendered moot. Without the Fed – there is no market. That’s now a proven fact. Period.

Will The Fed Follow The BoJ Down The NIRP Rabbit Hole?

At this point, one wonders why any central banker would chase down the NIRP rabbit hole only to find themselves the protagonist in the latest retelling of "Krugman in Wonderland," but alas, the experiment continues. The only question now is this: will the FOMC take the plunge? Here's a chronological list of Fed NIRP commentary.

The Liquidity Endgame Begins: Whiting's Revolver Cut By $1.2 Billion As Banks Start Slashing Credit Lines

Whiting, the largest oil producer in North Dakota's Bakken shale formation, had $2.7 billion left on a loan revolver at the end of 2015. Its CEO Volcker said on Thursday he expects Whiting will have "at least $1.5 billion" left on the loan after the redetermination, implying a cut of $1.2 billion. What is most troubling is that as recently as late February, or just a few weeks ago, the company said it expected a cut of no more than 30%, which would have been roughly $800 million.

The "Surprising" Answer What Energy Companies Have Spent Their Newly Issued Equity Proceeds On

While the recent Weatherford example was indeed grotesque and extreme in its inherent conflicts of interest, some readers wondered if this was perhaps an isolated case. The answer: a resounding no: as the following table shows, the vast majority of new equity proceeds have been used almost entirely to pay down revolvers and existing debt, and to allow banks to reduce their exposure to these oil and gas companies.

Stocks Squeeze Higher On "Super Tuesday" As Poor Macro Is Offset By Jack Lew's Soothing Words

With markets happy to put February in the history books because it marked the fourth consecutive monthly decline in global stocks, we move on to March 1st, which doubles down as 'Super Tuesday' in the US when Trump's presidential candidacy will almost certainly be sealed and a day in which stocks decided to join the super fun by super surging overnight on nothing but bad global macro and economic which however was promptly ignored and instead the focus was on ongoing central bank intervention and even more jawboning.

"We Are In A Recession": Dallas Fed Respondents Admit The U.S. Economy Is In Freefall

For those interested in hearing some horror stories from ground zero of America's recession, look no further than Texas, where the best recap of sentiment on the ground comes straight from the Dallas Fed respondents, who have not been this depressed since the Global Financial Crisis. "We are in a recession. Oil prices are a symptom, not the cause."

Dallas Fed Hovers Near 'Lehman' Levels Despite Surge In Hope

The diversified "we're not just oil" economy continues to collapse. Missing expectations for the 17th month of the last 20, Dallas Fed printed -31.9, now in contraction for 14 straight months. While New Orders, Capacity Utilization, Inventories, Prices Paid, Prices Received, Wages, Employment, Hours Worked and CapEx all fell, but future expectations "hope" rose notably from -24.0 to -2.1 (but obviously still a negative expectation).

Key Events In The Coming "Payrolls" Week

The week was supposed to start off quiet on the macro news front, but the PBOC spoiled that with an unprecedented Monday, Feb 29 RRR cut, its fifth since the start of 2015. In any case, it slowly builds up to the week's biggest event on Friday, when the BLS reports February payrolls and will be hard pressed to find all the seasonal adjustments it needs to cover for not only the lost jobs in the devastated energy sector but, as we reported over the weekend, the sudden dramatic air pocket in Silicon Valley jobs.

China's Panicked RRR Cut Leads To Feeble Stock Rebound; Gold Resumes Climb

After the G-20 ended in a wave of global disappointment, leading to the biggest Yuan devaluation in 8 weeks, and sending Chinese stocks into a tailspin on concerns the PBOC has forsaken its stock market as well as speculation the housing bubble is now sucking up excess liquidity which in turn pushed global market deep in the red to start the week, it was the PBOC's turn to scramble in a panicked reaction to sliding risk exactly one month after Japan unveiled its own desperation NIRP, and as reported before unexpectedly cut its Reserve Requirement Ratio by 0.5% to 17.0%, the first such cut in 2016 and the 5th since the start of 2015.

Now It's China's Turn To Crash: Shanghai Plunges 6.4% Overnight

In recent weeks Chinese stocks remained relatively resilient, levitating quietly day after day. That all changed overnight when the Shanghai Composite plunged by 6.4% with the drop accelerating into the close. This was the biggest drop in over a month and was big enough to almost wipe out the entire 10% rebound from the January lows in one session.