Japan

Why The Dollar Is Rising As The Global Monetary Bubble Craters

The inevitable death of the dollar may have been delayed. The reason is simply that the other three big economies of the world - Japan, China and Europe - are in even more disastrous condition. Worse still, their governments and central banks are actually more clueless than Washington, and are conducting policies that are flat out lunatic - meaning that their faltering economies will be facing even more destructive punishment from policy makers in the days ahead. The current malignant monetary regime does not merely imply that the Wall Street casino is a dangerous place for your money. No, it screams get out of harms’ way. Now!

US Attacks "Closest Ally" UK For "Constant Accommodation" With China

The UK has announced it’s joining the Asian Infrastructure Investment Bank, China’s answer to the Asian Development Bank over which Beijing feels the US has undue influence. US wonders aloud if "constant accommodation" is the best way to engage a "rising power".

How The ECB Is Distorting Euro Money Markets

Central banks' ability to distort markets, inhibit price discovery, and create systemic risk is alive and well as ECB asset purchases ripple through euro money markets. "The ECB’s liquidity bazooka will likely create the conditions for all rates money markets to stay in negative territory. This would represent a very challenging environment for investors, especially those focusing on the euro money markets, whose resilience to negative rates has not fully tested yet," Barclays warns.

Albert Edwards' "WOW!" Chart, Or Why "Draghi Makes Greenspan Look Like A Rank Amateur"

"Mario Draghi and the ECB’s manipulation of asset prices makes Greenspan’s Fed look like a rank amateur. More shocking though than the plunge in the euro, and more shocking even that 25% of sovereign eurozone bonds now trade in negative territory, is what has happened to eurozone equity valuations. For, as we approach the sixth anniversary of the US cyclical bull market, the PE expansion of eurozone equities is simply off the scale!" - Albert Edwards

US "Urges" Vietnam To Stop Helping Russian Bombers Re-Fuel

It appears Washington is losing some control among its allies. Amid a flurry of high-level visits to Vietnam last year, the US has been pouring in aid and assistance in health, education, landmines clearance, scholarships and nuclear energy. The reason is now becoming clear. As Reuters reports, Vietnam has been allowing Russia to use a former US military base to refuel nuclear-capable bombers as it rattles its sabre over the Asia-Pac region.. and America would like that to stop: "we have urged Vietnamese officials to ensure that Russia is not able to use its access to Cam Ranh Bay to conduct activities that could raise tensions in the region." All that was missing was the "or else."

Fed Will Open "Pandora's Box" With Rate Hike, UBS Warns

"While equity prices look expensive relative to real economic activity, they are arguably cheap relative to bond valuations. S&P 500 earning yields are similar to BB/B bond yields, as opposed to A/BBB yields historically, indicating excessive yield-seeking behavior in the face of reduced bond market liquidity," UBS cautions.

Bank Of Korea Unexpectedly Cuts Interest Rate To Record Low 1.75%, 24th Central Bank To Ease In 2015

The currency war salvos just keep on coming.  Moments ago the BOK unexpectedly (the move was predicted by just 2 of 17 economists polled by Bloomberg) cut its policy rate from 2.00% to a record low 1.75%, in what is clearly a full-blown retaliation against the collapse currency of its biggest export competitor, Japan, whose currency has cratered to a level that many in South Korea believe has become a direct subsidy for its competing exports. As such the only question is why the BOK didn't cut earlier. And following the surprise rate cut by Thailand earlier today, the "surprise" South Korean rate cut means there are now 24 easing policy actions by central banks in 2015 alone.

Currency Wars... Are Not Working

While none of the current batch of currency-devaluing Central Bankers would admit that their policies are designed to weaken the currency, enhance competitiveness, and hail a new bright future of growth for their nation (by printing money), it is clear that is the chosen textbook-based path chosen. However, as the following charts show, it's not working...

Everyone Is Guessing When It Comes To Oil Prices

Predicting and diagnosing the trajectory of oil prices has become something of a cottage industry in the past year. But along with all of the excess crude flowing from the oil patch, there is also an abundance of market indicators that while important, tend to produce a lot of noise that makes any accurate estimate nearly impossible.