Petrobras reported a record loss for the fourth quarter, a horrendous performance that raises questions about the company’s ability to handle its mountain of debt.
Following two days of rangebound moves, where Monday's modest market rebound was undone by the Tuesday just as modest decline (despite the early surge higher on the latest "bullish for stocks" European terrorism), overnight equity action continued to be more of the same, and as of this moment S&P 500 futures were unchanged, while European stocks were modestly higher. But while equities remain surprisingly uneventful despite loud warnings by both JPM and Goldman now that another bout of volatility and equity downside is coming, in FX there has been a substantial change, one which has seen the US dollar rise for a fourth day, the longest winning streak in a month, driven by the latest round of hawkish Fed jawboning courtesy of the Chicago Fed's Charlie Evens yesterday, which in turn has pushed down prices of oil, gold and copper.
Risk assets are up because "investors reassessed" the ECB announcement. Really? That's what happened? Real world investors stayed up till the wee hours last night and en masse concluded that they had just gotten it completely wrong yesterday? How about this for an alternative explanation: the allocation heads at one or two European mega-insurance firms were informed that they would be supporting risk assets this morning, the Narrative machine got into gear, and real world investors do what they always do, they play the Common Knowledge Game.
While Asia was up on China's bad data, and Europe was higher again this morning to catch up for the Friday afternoon US surge, US equity futures may have finally topped off and are now looking at this week's critical data, namely the BOJ's decision tomorrow (where Kuroda is expected to do nothing), and the Fed's decision on Wednesday where a far more "hawkish announcement" than currently priced in by the market, as Goldman warned last night, is likely, in what would put an end to the momentum and "weak balance sheet" rally.
The ECB panicked. Not only did QE fail to ignite inflation, the second order indications, modeled or real, suggest the real economy is in much, much worse shape than thought just a few months ago. The timing is not coincidental, as again there was a palpable global change starting around mid-year last year, cemented by the events of August and now January.
Less than 24 hours after European stocks tumbled on initial disappointment by Draghi's announcement that rates will not be cut further, mood has changed dramatically and the result has been that after "reassessing" the ECB kitchen sink stimulus, risk has soared overnight with both Asian and European stocks surging. As of this moment European bourses are all broadly higher led by banks, with the DAX and FTSE both up over 2.7%, while the Stoxx 600 is higher by 2.3% as of this writing.
It's no coincidence that three major BRICS nations are simultaneously under attack - on myriad levels: Russia, China and Brazil. The concerted strategy by the Masters of the Universe who dictate the rules in the Wall Street/Beltway axis is to undermine by all means the BRICS's collective effort to produce a viable alternative to the global economic/financial system, which for the moment is subjected to casino capitalism. It's unlikely Lula, by himself, will be able to stop them.
What this picture shows is that government, economists, and presstitutes are allied against citizens achieving any financial independence from personal saving. Policymakers have a crackpot economic policy and those with control over your life value their scheme more than they value your welfare. This is the fate of people in the so-called democracies. But the greed, fraud, and self-serving behavior of Western financial systems, aided and abeted by governments, could be leading to such a breakdown of economic life that the idea of a private financial system will become as abhorent in the future as Nazism is today.
Italy is no Greece...it's worse!
Global Stocks, Oil Continue Streamrolling Shorts On Last Minute Hopes For G-20 Stimulus AnnouncementSubmitted by Tyler Durden on 02/26/2016 08:00 -0400
With the conclusion of this weekend's G-20 unknown, and many still expecting a major stimulus, the squeeze will likely continue into the close of trading ahead of the weekend when nobody will want to be caught short into what may end up being another global coordinated intervention to prop up markets. “With a lot of policy events coming there is a fair chance of more stimulus plans so the markets can squeeze higher,” said Benno Galliker, a trader at Luzerner Kantonalbank AG. "The big reversal shows that there is some expectation building up into those events."
A decade ago John Perkins exposed the world to the ugly reality of Washington's "Economic Hit Men." Now he is back, exposing the fact that the evil empire has the world in the grip of a "death economy," concluding that "we need a revolution" in order "to bury the death economy and birth the life economy." But, as Paul Craig Roberts adds, don’t look to politicians, neoliberal economists, and presstitutes for any help.
Italy is big enough to matter (it is the eight largest economy on the planet), but so uneventful that most does not pay any attention to what is going on there. We contend that Italy will, during the next year or two, be on everyone’s radar screen as it has the potential to derail the European project for real.
Europeans don't trust financial institutions...
In what could well be a final act of desperation, central banks are abdicating effective control of the economies they have been entrusted to manage. First came zero interest rates, then quantitative easing, and now negative interest rates – one futile attempt begetting another. Just as the first two gambits failed to gain meaningful economic traction in chronically weak recoveries, the shift to negative rates will only compound the risks of financial instability and set the stage for the next crisis.
Biggest Short Squeeze In 7 Years Continues After Bullard Hints At More QE, OECD Cuts Global ForecastsSubmitted by Tyler Durden on 02/18/2016 08:00 -0400
Just when traders thought that the biggest and most violent 3-day short squeeze in 7 years was about to end a squeeze that has resulted in 3 consecutve 1%+ sessions for the S&P for the first time since October 2011, overnight we got one of the Fed's biggest faux-hakws, St. Louis Fed's Jim Bullard, who said that it would be "unwise" to continue hiking rates at this moment, and hinted that "if needed", the most natural option for the Fed going forward would be to do further Q.E.